AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 26,
1995
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HECLA MINING COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 82-0126240
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION ORGANIZATION)
6500 MINERAL DRIVE
COEUR D'ALENE, IDAHO 83814
(208) 769-4100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MICHAEL B. WHITE, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
HECLA MINING COMPANY
6500 MINERAL DRIVE
COEUR D'ALENE, IDAHO 83814
(208) 769-4100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
Copies to:
DAVID A. KATZ, ESQ. BRICE T. VORAN, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ SHEARMAN & STERLING
51 WEST 52ND STREET COMMERCE COURT WEST, SUITE 4405
NEW YORK, NEW YORK 10019 TORONTO, ONTARIO, CANADA, M5L 1E8
(212) 403-1000 (416) 360-8484
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO
THE PUBLIC: From time to time after this Registration State-
ment becomes effective as determined by market conditions.
If the only securities being registered on this Form
are to be offered pursuant to dividend or interest reinvestment
plans, please check the following box. / /
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursu-
ant to Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities(3).........
Preferred Stock, par value
$0.25 per share(4)(5)....
Depositary Shares(5)....... (2) (2) (2) N/A
Common Stock, par value
$0.25 per share(6)(7)....
Warrants(8)................
Total...................... U.S.$100,000,000(9) 100% U.S.$100,000,000(9) U.S.$34,482.76(10)
</TABLE>
(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(o) under the
Securities Act of 1933, as amended, and exclusive of
accrued interest, if any.
(2) Not applicable pursuant to Form S-3 General Instruction
II.D.
(3) Subject to note (9) below, there are being registered
hereunder an indeterminate principal amount of Debt
Securities. If any Debt Securities are being issued at
an original issue discount, then the offering price
shall be in such greater principal amount as shall
result in an aggregate initial offering price not to
exceed U.S.$100,000,000, less the dollar amount of any
securities previously issued hereunder.
(4) Subject to note (9) below, there are being registered
hereunder an indeterminate number of shares of
Preferred Stock as may be sold, from time to time, by
the Registrant.
(5) Subject to note (9) below, there are being registered
hereunder an indeterminate number of Depositary Shares
to be evidenced by Depositary Receipts issued pursuant
to a Deposit Agreement. In the event the Registrant
elects to offer to the public fractional interests in
shares of Preferred Stock registered hereunder,<PAGE>
Depositary Receipts will be distributed to those
persons purchasing such fractional interests, and the
shares of Preferred Stock will be issued to the
depositary under the Deposit Agreement.
(6) Includes the preferred stock purchase rights associated
with the Common Stock.
(7) Subject to note (9) below, there are being registered
hereunder an indeterminate number of shares of Common
Stock as may be sold, from time to time, by the
Registrant. There are also being registered hereunder
an indeterminate number of shares of Common Stock as
shall be issuable upon conversion or redemption of
Preferred Stock or Debt Securities registered hereby or
upon exercise of Warrants registered hereby.
(8) Subject to note (9) below, there are being registered
hereunder an indeterminate amount and number of
Warrants, representing rights to purchase Debt
Securities, Preferred Stock or Common Stock registered
hereby.
(9) In no event will the aggregate initial offering price
of all securities issued from time to time pursuant to
this Registration Statement exceed $100,000,000, or its
equivalent if some or all of the securities are
denominated in one or more foreign currencies, foreign
currency units or composite currencies. Any securities
registered hereunder may be sold separately or as units
with other securities registered hereunder.
(10) The amount of registration fee, calculated in
accordance with Section 6(b) of the Securities Act of
1933, as amended, and Rule 457(o) promulgated
thereunder, is 1/29th of 1 per centum of the maximum
aggregate offering price at which the securities
registered pursuant to this Registration Statement are
proposed to be offered.<PAGE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
[LEGEND]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMEND-
MENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE AC-
CEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
[END LEGEND]
SUBJECT TO COMPLETION, DATED MAY 26, 1995
PROSPECTUS
HECLA MINING COMPANY
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
Hecla Mining Company ("Hecla" or the "Company") may
offer from time to time (i) unsecured debt securities ("Debt
Securities") consisting of debentures, notes and/or other evi-
dences of unsecured indebtedness in one or more series, (ii)
shares of preferred stock, par value $0.25 per share ("Pre-
ferred Stock"), in one or more series, or fractional interests
in shares of Preferred Stock represented by depositary shares
("Depositary Shares"), (iii) shares of common stock, par value
$0.25 per share ("Common Stock"), or (iv) warrants ("Warrants")
to purchase Debt Securities, Preferred Stock or Common Stock
(the Debt Securities, Preferred Stock, Depositary Shares, Com-
mon Stock and Warrants are collectively referred to as "Securi-
ties"), or any combination of the foregoing, at an aggregate
initial offering price not to exceed U.S.$100,000,000, or its
equivalent if some or all of the Securities are denominated in
one or more foreign currencies, at prices and on terms to be
determined at or prior to the time of sale in light of market
conditions at the time of sale. The Debt Securities may be
senior ("Senior Securities"), senior subordinated ("Senior
Subordinated Securities") or subordinated ("Subordinated Secu-
rities"). The Senior Securities will rank equally with all
other unsubordinated and unsecured indebtedness of the Company.<PAGE>
The Senior Subordinated Securities will be subordinate to all
existing and future Senior Indebtedness of the Company, as de-
fined in the Senior Subordinated Indenture described herein.
The Subordinated Securities will be subordinate to all existing
and future Senior Indebtedness (including any Senior Subordi-
nated Securities) as defined in the Subordinated Indenture de-
scribed herein. The Debt Securities of any series and Pre-
ferred Stock of any series may be convertible into or exchange-
able for Debt Securities of another series or other securities.
Specific terms of the particular Securities in re-
spect of which this Prospectus is being delivered will be set
forth in one or more accompanying Prospectus Supplements (each
a "Prospectus Supplement"), together with the terms of the of-
fering of the Securities and the initial price and the net
proceeds to Hecla from the sale thereof. The Prospectus Sup-
plement will set forth with regard to the particular Securi-
ties, without limitation, the following: (i) in the case of
Debt Securities, the specific designation, aggregate principal
amount, ranking as senior debt or subordinated debt, authorized
denomination, maturity, rate or method of calculation of in-
terest and dates for payment thereof, any exchangeability,
conversion, redemption, prepayment or sinking fund provisions,
the currency or currencies or currency unit or currency units
in which principal, premium, if any, or interest, if any, is
payable, any modification of the covenants and any other spe-
cific terms thereof; (ii) in the case of Preferred Stock, the
designation, number of shares, liquidation preference per
share, initial public offering price, dividend rate (or method
of calculation thereof), dates on which dividends will be pay-
able and dates from which dividends will accrue, any redemption
or sinking fund provisions, any conversion or exchange rights,
any other relative rights and whether Hecla has elected to of-
fer fractional interests in the Preferred Stock in the form of
Depositary Shares evidenced by depositary receipts; (iii) in
the case of Common Stock, the number of shares of Common Stock
and the terms of the offering and sale thereof; and (iv) in the
case of Warrants, the number and terms thereof, the designation
and the number of Securities issuable upon their exercise, the
exercise price, the terms of the offering and sale thereof and,
where applicable, the duration and detachability thereof. The
amounts payable by the Company in respect of Securities may be
calculated by reference to the value, rate or price of one or
more specified commodities, currencies or indices as set forth
in the Prospectus Supplement. The Prospectus Supplement will
also contain information, where applicable, about certain
United States federal income tax considerations relating to the
Securities covered by the Prospectus Supplement.
-2-<PAGE>
The Debt Securities, Debt Warrants and Common Stock
Warrants may be issued only in registered form, including in
the form of one or more global securities ("Global Securi-
ties"), unless otherwise set forth in the Prospectus Supple-
ment.
See "Risk Factors" at page 5 for a discussion of
certain considerations relevant to an investment in the Secu-
rities.
The outstanding Common Stock is listed on the New
York Stock Exchange (the "NYSE") under the symbol "HL". On May
25, 1995, the last reported sale price of the Common Stock on
the NYSE was US$10.75 per share. Any Common Stock offered will
be listed, subject to notice of issuance, on such exchanges.
The applicable Prospectus Supplement will contain information
about any listing of the other Securities on a securities ex-
change.
The Securities may be sold directly, through agents
designated from time to time or through underwriters or deal-
ers. If any agents of Hecla or any underwriters or dealers are
involved in the sale of the Securities, the names of such
agents, underwriters or dealers, any applicable commissions and
discounts, and the net proceeds to the Company will be set
forth in the applicable Prospectus Supplement. Such under-
writers may include Merrill Lynch & Co. and Salomon Brothers
Inc. See "Plan of Distribution" for possible indemnification
arrangements for agents, underwriters and dealers.
This Prospectus may not be used to consummate sales
of Securities unless accompanied by a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMIS-
SION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PRO-
SPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MAY 26, 1995
-3-<PAGE>
[Inside Cover]
No person is authorized to give any information or to
make any representations, other than those contained or incor-
porated by reference in this Prospectus or the accompanying
Prospectus Supplement, in connection with the offering contem-
plated hereby, and, if given or made, such information or rep-
resentations must not be relied upon as having been authorized
by the Company. Neither this Prospectus nor the accompanying
Prospectus Supplement constitutes an offer to sell or a solic-
itation of an offer to buy any securities in any jurisdiction
to any person to whom it is unlawful to make such offer or so-
licitation in such jurisdiction. Neither the delivery of this
Prospectus or the accompanying Prospectus Supplement, nor any
sale made hereunder or thereunder, shall, under any circum-
stances, create any implication that there has been no change
in the affairs of the Company since the date hereof or thereof
or that the information contained or incorporated by reference
herein or therein is correct as of any time subsequent to its
date.
AVAILABLE INFORMATION
Hecla is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy state-
ments and other information with the Securities and Exchange
Commission (the "Commission"), which can be inspected and cop-
ied at the public reference facilities maintained by the Com-
mission at 450 Fifth Street, N.W., Judiciary Plaza, Room 1024,
Washington, D.C. 20549; and at regional offices of the Commis-
sion at Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and at 7 World Trade Cen-
ter, 13th Floor, New York, New York 10048. Copies of such ma-
terials can be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Room 1024, Washington, D.C. 20549. Such
reports, proxy statements and other information concerning He-
cla also may be inspected at the offices of the New York Stock
Exchange, Inc. (the "NYSE") 20 Broad Street, New York, New York
10005, on which exchange certain of the Company's securities
are listed.
This Prospectus constitutes a part of a Registration
Statement on Form S-3 (together with all amendments thereto,
the "Registration Statement") filed by the Company with the
Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the infor-
mation contained in the Registration Statement, and reference<PAGE>
is hereby made to the Registration Statement and to the ex-
hibits thereto for further information with respect to the
Company and the shares of Common Stock offered hereby. Any
statements contained herein concerning the provisions of any
document are not necessarily complete, and in each instance
reference is made to the copy of such document filed as an ex-
hibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety
by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the
Commission (File No. 1-8491) are incorporated in this Prospec-
tus by reference and hereby made a part hereof: (i) the Com-
pany's Annual Report on Form 10-K for the year ended December
31, 1994; (ii) the Company's Proxy Statement, dated March 27,
1995, for the Annual Meeting of Stockholders held on May 5,
1995 (except for pages 5 through 14 thereof); (iii) the de-
scription of Common Stock contained in the Registration State-
ment on Form 8-B, dated May 6, 1983, filed under Section 12 of
the Exchange Act, including any amendment or report filed for
the purpose of updating such description; (iv) the description
of the Company's Preferred Share Purchase Rights contained in
the Registration Statement on Form 8-A, dated May 19, 1986,
filed under Section 12 of the Exchange Act, as amended by the
description contained in the Current Report on Form 8-K, dated
November 9, 1990, including any other amendment or report filed
for the purpose of updating such description; (v) the descrip-
tion of the Company's Series B Cumulative Convertible Preferred
Stock contained in the Registration Statement on Form 8-A,
dated June 18, 1993, filed under Section 12 of the Exchange
Act; (vi) the Company's Current Reports on Form 8-K dated
January 19, 1995, January 25, 1995, February 2, 1995, March 8,
1995 and May 17, 1995, and (vii) the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1995.
All reports and other documents subsequently filed by
the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act, prior to the termination of the offering of
the shares of Common Stock, shall be deemed to be incorporated
by reference herein and to be a part hereof from the date of
the filing of such reports and documents. Any statement con-
tained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or super-
seded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorpo-
rated by reference herein modifies or supersedes such state-
ment. Any such statement so modified or superseded shall not
-2-<PAGE>
be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
The Company will provide without charge to each per-
son to whom a copy of this Prospectus is delivered, on the
written or oral request of any such person, a copy of any or
all of the documents incorporated herein by reference, other
than exhibits to such documents (except for exhibits that are
specifically incorporated by reference herein). Requests for
such copies should be directed to the Company's principal ex-
ecutive offices located at 6500 Mineral Drive, Coeur d'Alene,
Idaho 83814-8788, to the attention of Mr. Michael B. White,
Secretary (telephone number (208) 769-4100).
IN CONNECTION WITH THE OFFERING OF CERTAIN SECURI-
TIES, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF SUCH SECURI-
TIES OR OTHER SECURITIES OF HECLA AT LEVELS ABOVE THOSE WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-3-<PAGE>
THE COMPANY
The Company, originally incorporated in 1891, is
principally engaged in the exploration, development, mining and
processing of precious and non-ferrous metals, including gold,
silver, lead and zinc, and certain industrial minerals. During
1994, the Company produced 127,878 ounces of gold and 1,642,913
ounces of silver. At December 31, 1994, the Company had ap-
proximately 2.1 million and 75.9 million contained ounces of
proven and probable gold and silver reserves, respectively.
The Company's principal metals properties include the
Grouse Creek gold mine (in which the Company owns an 80% in-
terest), located near Challis, Idaho, which began operations in
December 1994; the La Choya gold mine, located in Sonora,
Mexico, which began operations in January 1994; the American
Girl gold mine and the Oro Cruz gold project (in which the
Company owns a 47% interest), both located in Imperial County,
California, which were acquired in 1994; the Rosebud gold pro-
ject, located in Pershing County, Nevada, which was acquired in
1994; the Lucky Friday silver and lead mine, located near Mul-
lan, Idaho, which is a significant primary producer of silver
in the United States, and the related Gold Hunter silver
project for which the first phase of development was approved
in 1994; and the Greens Creek mine (in which the Company owns a
29.7% interest), located near Juneau, Alaska, a polymetallic
mine currently under redevelopment with commercial production
estimated to recommence by early 1997.
The Company's industrial minerals businesses consist
of Kentucky-Tennessee Clay Company (ball clay and kaolin divi-
sions), K-T Feldspar Corporation, Mountain West Products, Inc.
(bark and scoria) and Colorado Aggregate Company of New Mexico.
Hecla's industrial minerals segment is a leading producer of
three of the four basic ingredients required to manufacture
ceramic and porcelain products, including sanitaryware, pot-
tery, dinnerware, electric insulators and ceramic tile. At
current production rates, the Company has over 20 years of
proven and probable reserves of ball clay, kaolin and feldspar.
During the next several years, the Company intends to
concentrate its exploration efforts at or in the vicinity of
its existing and proposed mining properties, including Grouse
Creek, La Choya, Greens Creek, Rosebud, American Girl and Lucky
Friday. The Company and its joint venture partners own or
control significant land positions surrounding these existing
and proposed mining operations. In addition, the Company will
continue to evaluate acquisition and exploration opportunities,
primarily in the United States and Mexico.
-4-<PAGE>
The Company's principal executive offices are located
at 6500 Mineral Drive, Coeur d'Alene, Idaho 83814, and its tel-
ephone number at such address is (208) 769-4100.
RISK FACTORS
Prospective purchasers of Securities should carefully
read this Prospectus, any Prospectus Supplement delivered
herewith, and the documents incorporated by reference herein
and therein. Ownership of Securities involves certain risks.
In determining whether to purchase Securities, prospective in-
vestors should consider carefully the following risk factors
and other information contained in this Prospectus, in addition
to the other risk factors and information set forth in any
Prospectus Supplement delivered herewith.
METAL PRICE VOLATILITY
Because a significant portion of the Company's rev-
enues are derived from the sale of gold, silver, lead and zinc,
the Company's earnings are directly related to the prices of
these metals. Gold, silver, lead and zinc prices fluctuate
widely and are affected by numerous factors beyond the Com-
pany's control, including expectations for inflation, specula-
tive activities, the relative exchange rate of the U.S. dollar,
global and regional demand and production, political and eco-
nomic conditions and production costs in major producing re-
gions. The aggregate effect of these factors, all of which are
beyond the Company's control, is impossible for the Company to
predict. If the market price for these metals falls below the
Company's full production costs and remains at such level for
any sustained period, the Company will experience additional
losses and may determine to discontinue the development of a
project or mining at one or more of its properties. While the
Company has periodically used limited hedging techniques to
reduce a portion of the Company's exposure to the volatility of
gold, silver and zinc prices, there can be no assurance that it
will be able to do so as effectively in the future. See
"-- Hedging Activities."
The following table sets forth the average closing
prices of the following metals for 1980, 1985, 1990, and each
year thereafter and the present year through April 30, 1995.
-5-<PAGE>
<TABLE>
<CAPTION>
1980 1985 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gold<F1>
(per oz.).... $612.56 $317.26 $383.46 $362.18 $343.73 $359.77 $384.30 $382.06
Silver<F2>
(per oz.).... 20.63 6.14 4.82 4.04 3.94 4.30 5.29 4.91
Lead<F3>
(per lb.).... 0.41 0.18 0.37 0.25 0.25 0.18 0.22 0.28
Zinc<F4>
(per lb.).... 0.34 0.36 0.69 0.51 0.56 0.44 0.44 0.48
<FN>
<F1> London Final.
<F2> Handy & Harman.
<F3> London Metals Exchange -- Cash.
<F4> London Metals Exchange -- Special High Grade -- Cash.
</FN>
</TABLE>
On May 25, 1995, the closing prices of these metals
were: gold -- $385.80 per oz.; silver -- $5.57 per oz.; lead
-- $0.28 per lb.; and zinc -- $0.47 per lb. For more current
information regarding metals prices, reference is made to the
Prospectus Supplement.
METALS PRODUCTION
The Company's future gold production will be depen-
dent upon the Company's success in developing new reserves,
including the continued development of the Rosebud gold project
mine as well as exploration efforts at the Grouse Creek, La
Choya and the American Girl gold mines. See "-- Project De-
velopment Risks" and "-- Exploration." The Company's future
silver production will be dependent upon the Company's success
in developing new reserves, including the continued development
of the Lucky Friday Gold Hunter project and the Greens Creek
mine. If metals prices decline, the Company could determine
that it is not economically feasible to continue development of
a project or continue commercial production at some of its
properties. See "-- Metal Price Volatility."
PROJECT DEVELOPMENT RISKS
The Company from time to time engages in the develop-
ment of new ore bodies both at newly acquired properties and
presently existing mining operations (collectively "Development
Projects"). The Company's ability to sustain or increase its
present level of metals production is dependent in part on the
successful development of such new ore bodies and/or expansion
of existing mining operations. The economic feasibility of any
individual Development Project and all such projects collec-
tively is based upon, among other things, estimates of re-
serves, metallurgical recoveries, and capital and operating
-6-<PAGE>
costs of such Development Projects, and future metal prices.
Development Projects are also subject to the successful com-
pletion of final feasibility studies, issuance of necessary
permits and receipt of adequate financing.
Development Projects may have no operating history
upon which to base estimates of future operating costs and
capital requirements. Particularly for Development Projects,
estimates of reserves, metal recoveries, and cash operating
costs are to a large extent based upon the interpretation of
geologic data obtained from drill holes and other sampling
techniques and feasibility studies which derive estimates of
cash operating costs based upon anticipated tonnage and grades
of ore to be mined and processed, the configuration of the ore
body, expected recovery rates of metals from the ore, compar-
able facility and equipment costs, anticipated climate condi-
tions and other factors. As a result, it is possible that ac-
tual cash operating costs and economic returns of any and all
Development Projects may materially differ from the costs and
returns currently estimated.
The Company's estimated capital expenditures are
based upon currently available data and could increase or de-
crease depending upon a number of factors. One such factor is
that construction activities for certain Development Projects
may not commence until the Company has secured additional fi-
nancing and/or environmental approvals. If capital expendi-
tures exceed current estimates, secondary financing may be re-
quired. Moreover, there can be no assurance that such addi-
tional or secondary financing will be available. The commence-
ment of construction activities at such Development Projects
also depends on the receipt of all necessary permits and regu-
latory approvals. There can be no assurance, however, that all
of the necessary permits and regulatory approvals required for
such Development Projects will be issued in the time frame con-
templated by the Company.
EXPLORATION
Mineral exploration, particularly for gold and sil-
ver, is highly speculative in nature, involves many risks and
frequently is nonproductive. There can be no assurance that
the Company's mineral exploration efforts will be successful.
Once mineralization is discovered, it may take a number of
years from the initial phases of drilling until production is
possible, during which time the economic feasibility of pro-
duction may change. Substantial expenditures are required to
establish ore reserves through drilling to determine metal-
lurgical processes to extract the metals from the ore, and, in
the case of new properties, to construct mining and processing
-7-<PAGE>
facilities. As a result of these uncertainties, no assurance
can be given that the Company's exploration programs will re-
sult in the expansion or replacement of existing reserves that
are being depleted by current production.
RESERVES
The ore reserve figures presented or incorporated by
reference in this Prospectus and accompanying Prospectus Sup-
plement are, in large part, estimates made by the Company's
technical personnel, and no assurance can be given that the
indicated level of recovery of these metals will be realized.
Reserves estimated for properties that have not yet commenced
production may require revision based on actual production ex-
perience. Market price fluctuations of the various metals
mined by the Company, as well as increased production costs or
reduced recovery rates, may render ore reserves containing
relatively lower grades of mineralization uneconomic and may
ultimately result in a restatement of reserves. Moreover,
short-term operating factors relating to the ore reserves, such
as the need for sequential development of ore bodies and the
processing of new or different ore grades, may adversely affect
the Company's profitability in any particular accounting pe-
riod.
The metal prices used to determine mineral reserves
at a particular mine are typically set by the company managing
the mine. These metal prices may vary, depending on each com-
pany's assessment of metal prices over the near term and other
factors that such company believes relevant. Hecla sets metal
prices for its mineral reserve calculations, which approximate
current market prices, but these metal prices may vary from
current market prices based on a number of factors likely to
influence metal prices over the near term. The Company's es-
timates of proven and probable reserves at December 31, 1994
for the properties it operates are based on a gold price of
$395 per ounce, a silver price of $5.60 per ounce, a zinc price
of $0.46 per pound and a lead price of $0.28 per pound. Proven
and probable reserves at the American Girl mine at December 31,
1994, which are calculated by the mine manager, are based upon
a gold price of $400 per ounce. Proven and probable reserves
at December 31, 1994 at the Greens Creek mine, which are cal-
culated by the mine manager, are based upon a gold price of
$350 per ounce, a silver price of $4.70 per ounce, a zinc price
of $0.57 per pound, and a lead price of $0.28 per pound.
Declines in the market price of gold may also render
ore reserves containing relatively lower grades of gold min-
eralization uneconomic to exploit unless the utilization of
-8-<PAGE>
forward sales contracts or other hedging techniques is suffi-
cient to offset the effects of a drop in the market price of
the gold expected to be mined from such reserves. If the Com-
pany's realized price per ounce of gold, including hedging
benefits, were to decline substantially below the levels set
for calculation of reserves for an extended period, there could
be material delays in the development of new projects, in-
creased net losses, reduced cash flow, reductions in reserves
and asset write-downs.
In February 1995, the Company completed operations
and commenced reclamation and closure efforts at its Republic
Mine located in the Republic Mining District near Republic,
Washington. The Company made such determination when the eco-
nomic ore body at Republic was depleted. In the fourth quarter
of 1994, based on its periodic reviews of the status of various
mining properties, the Company recognized a $7.2 million write-
down of property, plant, equipment and supplies inventory at
the Republic Mine. See Note 5 to Consolidated Financial State-
ments in the Company's Form 10-K for the year ended December
31, 1994, incorporated herein by reference. See "Information
Incorporated by Reference."
In March 1995, the Financial Accounting Standards
Board Issued Statement of Financial Accounting Standards No.
121 ("SFAS #121") - "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed of".
This statement, which is effective for periods beginning after
December 15, 1995, establishes new accounting standards for,
among other things, the impairment of tangible long-lived as-
sets. The standard requires a company to review the recover-
ability of its assets by estimating the future undiscounted
cash flows expected to result from the use and eventual dispo-
sition of the asset. It is the opinion of the Company's man-
agement that the adoption of SFAS #121 will not have a material
effect on the consolidated results of operations or financial
condition of the Company.
COMPETITION FOR PROPERTIES
Because mines have limited lives based on proven ore
reserves, the Company is continually seeking to replace and
expand its reserves. The Company encounters strong competition
from other mining companies in connection with the acquisition
of properties producing or capable of producing gold, silver,
lead, zinc and industrial minerals. As a result of this com-
petition, some of which is with companies with greater finan-
cial resources than the Company, the Company may be unable to
acquire attractive mining properties on terms it considers ac-
ceptable. In addition, there are a number of uncertainties
-9-<PAGE>
inherent in any program relating to the location of economic
ore reserves, the development of appropriate metallurgical
processes, the receipt of necessary governmental permits and
the construction of mining and processing facilities. Accord-
ingly, there can be no assurance that the Company's programs
will yield new reserves to replace and expand current reserves.
JOINT VENTURE ARRANGEMENTS
The Grouse Creek gold mine, the Greens Creek mine,
the American Girl gold mine (including the Oro Cruz gold proj-
ect) are operated through joint ventures. The Company owns an
undivided interest in the assets of the ventures. Under the
joint venture agreements, the joint venture participants, in-
cluding the Company, are entitled to indemnification from the
other joint venture participants and are severally liable only
for the liabilities of the joint venturers in proportion to
their interest therein. If a joint venture participant de-
faults on its obligations under the terms of a joint venture
agreement (including as a result of insolvency), the Company
could incur losses in excess of its pro rata share of the joint
venture. In the event any joint venture participant so de-
faults, each agreement provides certain rights and remedies to
the remaining joint venture participants. These include the
right to force a dilution of the percentage interest of the
defaulting participant and the right to utilize the proceeds
from the sale of the defaulting parties' share of products
from, or its joint venture interest in the joint venture prop-
erties to satisfy the obligations of the defaulting partici-
pant. Based on the information available to the Company, the
Company has no reason to believe that any of its joint venture
participants in the above-described projects will be unable to
meet its financial obligations under the terms of the respec-
tive joint venture agreements.
The Company's estimates of its development costs and
capital expenditures assume that its joint venture participants
will not default in their obligations to contribute their re-
spective portions of such costs and expenditures. If there is
such a default, there can be no assurance that the Company's
financial resources will be sufficient to achieve planned lev-
els of expenditures at the joint ventures. Generally, the
manager for a particular project controls day-to-day operating
decisions and most other major decisions for the project.
Disagreement with a joint venture participant as to the major
decisions affecting a project's operations may have an adverse
impact on the project.
-10-<PAGE>
REGULATION OF MINING ACTIVITY
The mining operations of the Company are subject to
inspection and regulation by the Mine Safety and Health Admin-
istration of the Department of Labor ("MSHA") under provisions
of the Federal Mine Safety and Health Act of 1977. It is the
Company's policy to comply with the directives and regulations
of MSHA. In addition, the Company takes such necessary actions
as, in its judgment, are required to provide for the safety and
health of its employees. MSHA directives have had no material
adverse impact on the Company's results of operations or finan-
cial condition, and the Company believes that it is substan-
tially in compliance with the regulations promulgated by MSHA.
All of the Company's exploration, development, and
production activities in the United States, Mexico, and Canada
are subject to regulation under one or more of the various en-
vironmental laws. These laws address emissions to the air,
discharges to water, management of wastes, management of haz-
ardous substances, protection of natural resources, protection
of antiquities and reclamation of lands which are disturbed.
The Company believes that it is in substantial compliance with
applicable environmental regulations. Many of the regulations
also require permits to be obtained for the Company's activi-
ties; these permits normally are subject to public review pro-
cesses resulting in public approval of the activity. While
these laws and regulations govern how the Company conducts many
aspects of its business, management of the Company does not
believe that they have a material adverse effect on its results
of operations or financial condition at this time. The Com-
pany's projects are evaluated considering the cost and impact
of environmental regulation on the proposed activity. New laws
and regulations are evaluated as they develop to determine the
impact on, and changes necessary to, the Company's operations.
It is possible that future changes in these laws or regulations
could have a significant impact on some portion of the Com-
pany's business, causing those activities to be economically
reevaluated at that time. The Company believes that adequate
provision has been made for disposal of mine waste and mill
tailings at all of its operating and nonoperating properties in
a manner which complies with current federal and state envi-
ronmental requirements.
Environmental laws and regulation may also have an
indirect impact on the Company, such as increased cost for
electricity due to acid rain provisions of the Clean Air Act
Amendments of 1990. Charges by smelters to which the Company
sells its metallic concentrates and products have substantially
increased over the past several years because of requirements
that smelters meet revised environmental quality standards.
-11-<PAGE>
The Company has no control over the smelters' operations or
their compliance with environmental laws and regulations. If
the smelting capacity of the United States is significantly
reduced from its present level because of environmental re-
quirements or otherwise, it is possible that the Company's op-
erations could be adversely affected.
The Company is also subject to regulations under (i)
the Comprehensive Environmental Response, Compensation and Li-
ability Act of 1980 ("CERCLA" or "Superfund") which regulates
and establishes liability for the release of hazardous sub-
stances, and (ii) the Endangered Species Act ("ESA") which
identifies endangered species of plants and animals and regu-
lates activities to protect these species and their habitats.
Revisions to CERCLA and ESA are being considered by Congress;
the impact on the Company of these revisions is not clear at
this time.
PENDING LEGISLATION
During the past three years, the U.S. Congress con-
sidered a number of proposed amendments to the General Mining
Law of 1872, as amended (the "General Mining Law"), which gov-
erns mining claims and related activities on federal lands. In
1992, a holding fee of $100 per claim was imposed upon unpat-
ented mining claims located on federal lands. In October 1994,
a one year moratorium on processing of new patent applications
was approved. In addition, a variety of legislation is now
pending before the United States Congress to further amend the
General Mining Law. The proposed legislation would, among
other things, change the current patenting procedures, impose
royalties, and enact new reclamation, environmental controls
and restoration requirements. The royalty proposals range from
a 2% royalty on "net profits" from mining claims to an 8% roy-
alty on the modified gross income/net smelter returns. The
extent of any such changes is not presently known and the po-
tential impact on the Company as a result of congressional ac-
tion is difficult to predict. Although a majority of the
Company's existing mining operations occur on private or pat-
ented property, the proposed changes to the General Mining Law
could adversely affect the Company's ability to economically
develop mineral resources on federal lands. Approximately 46%
of the proven and probable gold reserves and approximately 21%
of the proven and probable silver reserves located at the
Grouse Creek project are located on fully patented mining
claims. The balance of such proven and probable mineral re-
serves are located within mineral claims for which the Company
has applied for patents and has received a first half of Min-
eral Entry Final Certificate. Upon the determination of the
mineral character of these claims by a Federal Mine Examiner,
-12-<PAGE>
the Company believes patents will be issued to the Company
covering these claims. Although there can be no assurance as
to the ultimate impact of legislative action on these claims or
the Company's ability to patent these claims under the existing
General Mining Law, the Company believes that the pending leg-
islation to amend the General Mining Law will not adversely
affect the ability of the Company to receive patents for the
Grouse Creek unpatented mining claims. The proven and probable
mineral reserves at the Oro Cruz and Rosebud properties are
located on claims that are unpatented.
ENVIRONMENTAL MATTERS AND LEGAL PROCEEDINGS
As further described in Note 8 of Notes to Consoli-
dated Financial Statements included in the Company's Form 10-K
for the year ended December 31, 1994, the Company has settled
the terms of its rights and liabilities with respect to the
Bunker Hill Superfund site near Kellogg, Idaho. As of December
31, 1994, the Company has accrued Superfund site remedial ac-
tion costs of $9.1 million based on current estimates of ag-
gregate costs. As also described in Note 8, the Company is a
defendant in a legal action filed in November 1990 by Star
Phoenix Mining Company ("Star Phoenix") and certain principals
of Star Phoenix, asserting that the Company breached the terms
of Star Phoenix's lease agreement for the Company's Star Morn-
ing Mine and that the Company interfered with certain contrac-
tual relationships of Star Phoenix relating to the Company's
1990 termination of such lease agreement. In June 1994, judg-
ment was entered by the Idaho State District Court against the
Company in the legal proceeding in the amount of $10.0 million
in compensatory damages and $10.0 million in punitive damages
based on a jury verdict rendered in the case in May 1994. The
Company's post-trial motions were denied by the District Court,
and the Company has appealed the judgment to the Idaho State
Supreme Court. Post-judgment interest will accrue during the
appeal period; the current interest rate is 10.5%. In order to
stay the ability of Star Phoenix to collect on the judgment
during the pending of the appeal, the Company posted an appeal
bond in the amount of $27.2 million representing 136% of the
District Court judgment. The Company pledged cash and cash
equivalents totaling $10.0 million as collateral for the $27.2
million bond. Although the ultimate outcome of the appeal of
the judgment is subject to the inherent uncertainties of any
legal proceeding, based on the Company's analysis of the fac-
tual and legal issues associated with the proceeding before the
District Court and based upon the opinions of outside counsel,
as of the date hereof, it is management's belief that the Com-
pany should ultimately prevail in this matter, although there
can be no assurance of such an outcome.
-13-<PAGE>
Although the ultimate disposition of these matters
and various other pending legal actions and claims is not
presently determinable, it is the opinion of the Company's
management, based upon the information available at this time,
that, as of the date hereof, the outcome of these suits and
proceedings will not have a material adverse effect on the re-
sults of operations or financial condition of the Company and
its subsidiaries.
TITLE TO PROPERTIES
The validity of unpatented mining claims, which con-
stitute a significant portion of the Company's undeveloped
property holdings in the United States, is often uncertain and
may be contested. Although the Company has attempted to ac-
quire satisfactory title to its undeveloped properties, the
Company, in accordance with mining industry practice, does not
generally obtain title opinions until a decision is made to
develop a property, with the attendant risk that some titles,
particularly titles to undeveloped properties, may be defec-
tive.
MINING RISKS AND INSURANCE
The business of mining is generally subject to a
number of risks and hazards, including environmental hazards,
industrial accidents, labor disputes, encountering unusual or
unexpected geologic formations, cave-ins, rockbursts, flooding
and periodic interruptions due to inclement or hazardous
weather conditions. Such risks could result in damage to, or
destruction of, mineral properties or producing facilities,
personal injury, environmental damage, delays in mining, mone-
tary losses and possible legal liability. Although the Company
maintains insurance within ranges of coverage consistent with
industry practice, no assurance can be given that such insur-
ance will be available at economically feasible premiums. In-
surance against environmental risks (including potential for
pollution or other hazards as a result of disposal waste prod-
ucts occurring from exploration and production) is not gener-
ally available to the Company or to other companies within the
industry. To the extent the Company is subject to environ-
mental liabilities, the payment of such liabilities would re-
duce the funds available to the Company. Should the Company be
unable to fund fully the cost of remedying an environmental
problem, the Company might be required to suspend operations or
enter into interim compliance measures pending completion of
the required remedy.
-14-<PAGE>
HEDGING ACTIVITIES
In the normal course of its business, the Company
uses forward sales commitments and commodity put and call op-
tion contracts to manage its exposure to fluctuations in the
prices of certain metals which it produces. Contract positions
are designed to ensure that the Company will receive a defined
minimum price for certain quantities of its production. Gains
and losses, and the related costs paid or premium received, for
contracts which hedge the sales prices of commodities are de-
ferred and included in income as part of the hedged transac-
tion. Revenues from the aforementioned contracts are recog-
nized at the time contracts are closed out by either delivery
of the underlying commodity or settlement of the net position
in cash. The Company is exposed to certain losses on forward
sales contracts, generally the amount by which the contract
price exceeds the spot price of a commodity, in the event of
nonperformance by the counterparties to these agreements. For
information concerning the Company's hedging activities as of
the most recent date available, see the Prospectus Supplement,
and the Notes to Consolidated Statements and Management's Dis-
cussion and Analysis of Financial Condition and Results of Op-
erations contained in the Company's most recent Annual Reports
on Form 10-K and Quarterly Reports on Form 10-Q incorporated by
reference herein.
SMELTING CAPACITY
The Company sells substantially all of its metallic
concentrates to smelters that are subject to extensive regu-
lations, including environmental protection laws. The Company
has no control over the smelters' operations or their compli-
ance with environmental laws and regulations. If the smelting
capacity available to the Company was significantly further
reduced because of environmental requirements or otherwise, it
is possible that the Company's operations could be adversely
affected.
FOREIGN OPERATIONS
The Company's La Choya gold mine is located in So-
nora, Mexico and the Company's K-T Mexico clay slurry plant is
located in Monterey, Mexico. The Company also has exploration
projects and mining investments in Mexico, Canada and Bolivia.
Such projects and investments could be adversely affected by
exchange controls, currency fluctuations, taxation and laws or
policies of either foreign countries or the United States af-
fecting foreign trade, investment and taxation, which, in turn,
could affect the Company's current or future foreign opera-
tions.
-15-<PAGE>
USE OF PROCEEDS
Hecla intends to apply the net proceeds from the sale
of the Securities to its general funds to be used for general
corporate purposes, including development of its metals and in-
dustrial minerals properties. The Company in the ordinary
course of its business regularly reviews the potential acqui-
sition of precious metal and industrial mineral properties and
companies that own precious metal and industrial mineral prop-
erties. Any specific allocations of the proceeds to a partic-
ular purpose that has been made at the date of any Prospectus
Supplement will be described therein. Pending the application
of the net proceeds, the Company expects to invest such pro-
ceeds in short-term, interest-bearing instruments or other
investment-grade securities.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges was
inadequate to cover fixed charges by $1.0 million in 1990,
$18.2 million in 1991, $57.6 million in 1992, $22.3 million in
1993, $26.0 million in 1994, $6.5 million in the first quarter
of 1994 and $2.5 million in the first quarter of 1995. How-
ever, earnings for these years reflect write-downs and other
non-cash charges of $30.9 million in 1990, $25.7 million in
1991, $59.0 million in 1992, $19.1 million in 1993, $34.0 mil-
lion in 1994, $3.0 million in the first quarter of 1994 and
$5.8 million in the first quarter of 1995. For purposes of
computing the ratio of earnings to fixed charges, earnings
consist of earnings before the cumulative effect of accounting
changes, income taxes and fixed charges, adjusted to exclude
capitalized interest. Fixed charges consist of total interest,
whether expensed or capitalized, dividends on preferred stock,
amortization of debt expense and one-third of rents, which is
deemed representative of an interest factor.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets
forth certain general terms and provisions of the Debt Securi-
ties to which any Prospectus Supplement may relate ("Offered
Debt Securities"). The particular terms of the Offered Debt
Securities and the extent to which such general provisions may
apply will be described in a Prospectus Supplement relating to
such Offered Debt Securities.
-16-<PAGE>
The Debt Securities will be general unsecured obli-
gations of Hecla and will constitute either senior debt securi-
ties or subordinated debt securities. In the case of Debt Se-
curities that will be senior debt securities ("Senior Debt Se-
curities"), the Debt Securities will be issued under an In-
denture (the "Senior Indenture") to be entered into between
Hecla and , as trustee under the Senior In-
denture. In the case of Debt Securities that will be subordi-
nated debt securities ("Subordinated Debt Securities"), the
Debt Securities will be issued under an Indenture (the "Subor-
dinated Indenture") to be entered into between Hecla and ,
as trustee under the Subordinated Indenture. The Senior In-
denture and the Subordinated Indenture are sometimes hereinaf-
ter referred to individually as an "Indenture" and collectively
as the "Indentures". Copies of the forms of the Indentures
have been filed as exhibits to the Registration Statement.
, as trustee under each of the Indentures
(and any successor thereto under each Indenture), is referred
to herein as the "Trustee". The forms of the Senior Indenture
and the Subordinated Indenture will be filed as exhibits to the
registration statement. The Indentures are subject to and
governed by the Trust Indenture Act of 1939, as amended. The
statements under this caption relating to the Debt Securities
and the Indentures are summaries only and do not purport to be
complete. Such summaries make use of terms defined in the In-
dentures. Wherever such terms are used herein or particular
provisions of the Indentures are referred to, such terms or
provisions, as the case may be, are incorporated by reference
as part of the statements made herein, and such statements are
qualified in their entirety by such reference. Certain defined
terms in the Indentures are capitalized herein. The italicized
references below apply to the section numbers in each of the
Indentures, unless otherwise indicated.
PROVISIONS APPLICABLE TO BOTH SENIOR
AND SUBORDINATED DEBT SECURITIES
General. The Indentures do not limit the aggregate
principal amount of Debt Securities which can be issued there-
under and provide that Debt Securities may be issued from time
to time thereunder in one or more series, each in an aggregate
principal amount authorized by Hecla prior to issuance. The
Debt Securities may be issued at various times with different
maturity dates and different principal repayment provisions,
may bear interest at different rates, may in currency units, be
payable in currencies other than United States dollars, in
composite currencies or in amounts determined by reference to
the price, rate or value of one or more specified commodities,
currencies or indices, and may otherwise vary, all as provided
in the Indentures. The Company has from time to time entered
-17-<PAGE>
into, and will in the future enter into, credit agreements to
fund its operations. Such credit agreements may be secured by
the assets of the Company, secured by the assets of the Com-
pany's subsidiaries or guaranteed by the Company's subsidiar-
ies. To the extent that such credit agreements are so secured
or guaranteed, the lenders under such credit agreements will
have priority over the Holders of the Debt Securities with re-
spect to the assets of the Company or its subsidiaries which
secure such credit agreements.
Unless otherwise indicated in a Prospectus Supple-
ment, the Debt Securities will not benefit from any covenant or
other provision that would afford Holders of such Debt Securi-
ties special protection in the event of a highly leveraged
transaction involving Hecla.
Reference is made to the applicable Prospectus Sup-
plement for the following terms of the Offered Debt Securities:
(i) the title and aggregate principal amount of the Offered
Debt Securities; (ii) the date or dates on which the Offered
Debt Securities will mature; (iii) the rate or rates (which may
be fixed or variable) per annum, if any, at which the Offered
Debt Securities will bear interest or the method of determining
such rate or rates; (iv) the date or dates from which such in-
terest, if any, will accrue and the date or dates at which such
interest, if any, will be payable; (v) the terms for redemption
or early payment, if any, including any mandatory or optional
sinking fund or analogous provision; (vi) the terms for con-
version or exchange, if any, of the Offered Debt Securities;
(vii) whether such Offered Debt Securities will be issued in
fully registered form or in bearer form or any combination
thereof; (viii) whether such Offered Debt Securities will be
issued in the form of one or more global securities and whether
such global securities are to be issuable in temporary global
form or permanent global form; (ix) information with respect to
book-entry procedures, if any; (x) the currency, currencies or
currency unit or units in which such Offered Debt Securities
will be denominated and in which the principal of, and premium
and interest, if any, on such Offered Debt Securities will be
payable; (xi) whether, and the terms and conditions on which,
Hecla or a Holder may elect that, or the other circumstances
under which, payment of principal of, or premium or interest,
if any, on such Offered Debt Securities is to be made in a
currency or currencies or currency unit or units other than
that in which such Offered Debt Securities are denominated;
(xii) any index or formula to be used to determine the amount
of payments of principal of (and premium, if any) and interest
on such Offered Debt Securities, and any commodities, curren-
cies, currency units or indices, or value, rate or price, rel-
evant to such determination; and (xiii) any other specific
-18-<PAGE>
terms of the Offered Debt Securities. (Section 301). Refer-
ence is also made to the applicable Prospectus Supplement for
information with respect to (x) the classification of the Of-
fered Debt Securities as Senior Debt Securities or Subordinated
Debt Securities, (y) the price (expressed as a percentage of
the aggregate principal amount of the Offered Debt Securities)
at which the Offered Debt Securities will be issued, if other
than 100 percent, and (z) any additional covenants that may be
included in the terms of the Offered Debt Securities.
No service charge will be made for any registration
of transfer or exchange of the Debt Securities, but Hecla may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Section
305).
Hecla currently conducts substantial operations
through subsidiaries, and the Holders of Debt Securities will
have a junior position to any claims of creditors and any pre-
ferred stockholders of the Company's subsidiaries. Claims of
creditors of such subsidiaries, including trade creditors, se-
cured creditors, taxing authorities and creditors holding
guarantees, and claims of holders of any preferred stock will
generally have priority as to the assets of such subsidiaries
over the claims and equity interest of the Company and, thereby
indirectly, the holders of indebtedness of the Company, in-
cluding the Debt Securities.
Offered Debt Securities may be sold at a discount
(which may be substantial) below their stated principal amount
bearing no interest or interest at a rate which at the time of
issuance is below market rates. Any material United States
federal income tax consequences and other special consider-
ations applicable thereto will be described in the Prospectus
Supplement relating to any such Offered Debt Securities.
If any of the Offered Debt Securities are sold for
any foreign currency or currency unit or if the principal of,
or premium or interest, if any, on any of the Offered Debt Se-
curities is payable in any foreign currency or currency unit,
the restrictions, elections, tax consequences, specific terms
and other information with respect to such Offered Debt Secu-
rities and such foreign currency or currency unit will be set
forth in the Prospectus Supplement relating thereto.
Covenants. The Indentures require the Company to
covenant, among other things, with respect to each series of
Debt Securities: (i) to duly and punctually pay the principal
of (and premium, if any) and interest, if any, on such series
of Debt Securities; (ii) to maintain an office or agency in
-19-<PAGE>
each Place of Payment where Debt Securities may be presented or
surrendered for payment, transferred or exchanged and where
notices to the Company may be served; (iii) if the Company
shall act as its own Paying Agent for any series of Debt Secu-
rities, to segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest, if any, so becoming due;
(iv) to deliver to the Trustee, within 120 days after the end
of each fiscal year, a written statement to the effect that the
Company has fulfilled all its obligations under the Indenture
throughout such year; (v) to preserve its corporate existence;
(vi) to maintain its properties; and (vii) to pay its taxes and
other claims, in each case, as required by the Indentures.
(Article Ten).
Events of Default. Unless otherwise provided with
respect to any series of Debt Securities, the following are
Events of Default under each Indenture with respect to the Debt
Securities of such series issued under such Indenture: (a)
failure to pay principal of (or premium, if any, on) any Debt
Security of such series when due; (b) failure to pay any in-
terest on any Debt Security of such series when due, continued
for 30 days; (c) failure to deposit any mandatory sinking fund
payment, when due, in respect of the Debt Securities of such
series; (d) failure to perform any other covenant of Hecla in
the applicable Indenture (other than a covenant included in the
applicable Indenture for the benefit of a series of Debt Secu-
rities other than such series), continued for 60 days after
written notice as provided in the applicable Indenture; (e)
certain events of bankruptcy, insolvency or reorganization; and
(f) any other Event of Default as may be established with re-
spect to Debt Securities of such series (including, without
limitation, any Event of Default arising out of a default which
results in the acceleration of certain indebtedness or a de-
fault in the payment of any amounts due on certain indebted-
ness). (Sections 301 and 501). If an Event of Default with
respect to any outstanding series of Debt Securities occurs and
is continuing, either the Trustee or the Holders of at least
25% in principal amount of the outstanding Debt Securities of
such series (subject to the following sentence, in the case of
an Event of Default described in clause (a), (b), (c) or (f)
above) or at least 25% in principal amount of all outstanding
Debt Securities under the applicable Indenture (subject to the
following sentence, in the case of other Events of Default) may
declare the principal amount of all the Debt Securities of the
applicable series (or of all outstanding Debt Securities under
the applicable Indenture, as the case may be) to be due and
payable immediately. If an Event of Default described in
clause (e) shall occur, the principal amount of the Debt Secu-
rities of all series ipso facto shall become and be immediately
-20-<PAGE>
due and payable without any declaration or other act on the
part of the Trustee or any Holder. At any time after a decla-
ration of acceleration has been made, but before a judgment has
been obtained, the Holders of a majority in principal amount of
the outstanding Debt Securities of such series (or of all out-
standing Debt Securities under the applicable Indenture, as the
case may be) may, under certain circumstances, rescind and an-
nul such acceleration. (Section 502). Depending on the terms
of other indebtedness of Hecla outstanding from time to time,
an Event of Default under an Indenture may give rise to cross
defaults on such other indebtedness of Hecla.
Each Indenture provides that the Trustee will, within
90 days after the occurrence of a default in respect of any
series of Debt Securities, give to the Holders of the Debt Se-
curities of such series notice of all uncured and unwaived de-
faults known to it; provided, however, that, except in the case
of a default in the payment of the principal of (or premium, if
any) or any interest on, or any sinking fund installment with
respect to, any Debt Securities of such series, the Trustee
will be protected in withholding such notice if it in good
faith determines that the withholding of such notice is in the
interest of the Holders of the Debt Securities of such series;
and provided, further, that such notice shall not be given un-
til at least 30 days after the occurrence of a default in the
performance, or breach, of any covenant or warranty of Hecla
under such Indenture other than for the payment of the princi-
pal of (or premium, if any) or any interest on, or any sinking
fund installment with respect to, any Debt Securities of such
series. For the purpose of this provision, "default" with re-
spect to Debt Securities of any series means any event which
is, or after notice or lapse of time, or both, would become, an
Event of Default with respect to the Debt Securities of such
series. (Section 602).
The Holders of a majority in principal amount of the
outstanding Debt Securities of any series (or, in certain
cases, all outstanding Debt Securities under the applicable
Indenture) have the right, subject to certain limitations, to
direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee with respect to the Debt Se-
curities of such series (or of all outstanding Debt Securities
under the applicable Indenture). (Section 512). Each Inden-
ture provides that in case an Event of Default shall occur and
be continuing with respect to the Debt Securities of any se-
ries, the Trustee shall exercise such of its rights and powers
under the applicable Indenture and use the same degree of care
and skill in their exercise as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
-21-<PAGE>
(Section 601). Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers
under either Indenture at the request of any of the Holders of
the Debt Securities unless they shall have offered to the
Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in com-
pliance with such request. (Section 603).
The Holders of a majority in principal amount of the
outstanding Debt Securities of any series (or, in certain
cases, all outstanding Debt Securities under the applicable
Indenture) may on behalf of the Holders of all Debt Securities
of such series (or of all outstanding Debt Securities under the
applicable Indenture) waive any past default under the appli-
cable Indenture, except a default in the payment of the prin-
cipal of (or premium, if any) or interest on any Debt Security
or in respect of a provision which under the applicable Inden-
ture cannot be modified or amended without the consent of the
Holder of each outstanding Debt Security affected. (Section
513). The Holders of a majority in principal amount of the
outstanding Debt Securities affected thereby may on behalf of
the Holders of all such Debt Securities waive compliance by
Hecla with certain restrictive provisions of the Indentures.
(Section 1008).
Hecla is required to furnish to the Trustee annually
a statement as to the performance by Hecla of certain of its
obligations under each Indenture and as to any default in such
performance. (Section 1007).
Modification. Modifications and amendments of each
Indenture may be made by Hecla and the Trustee with the consent
of the Holders of a majority in principal amount of the out-
standing Debt Securities under the applicable Indenture af-
fected thereby; provided, however, that no such modification or
amendment may, without the consent of the Holder of each out-
standing Debt Security affected thereby, (a) change the stated
maturity date of the principal of, or any installment of in-
terest on, any Debt Security, (b) reduce the principal amount
of, or the premium (if any) or interest on, any Debt Security,
(c) change the Place of Payment or currency, currencies, or
currency unit or units of payment of principal of, or premium
(if any) or interest on, any Debt Security, (d) impair the
right to institute suit for the enforcement of any payment on
or with respect to any Debt Security or (e) reduce the per-
centage in principal amount of outstanding Debt Securities the
consent of whose Holders is required for modification or
amendment of the Indentures or for waiver of compliance with
certain provisions of the Indentures or for waiver of certain
defaults. (Section 902).
-22-<PAGE>
Each Indenture provides that Hecla and the Trustee
may, without the consent of any Holders of Debt Securities,
enter into supplemental indentures for the purposes, among
other things, of adding to Hecla's covenants, securing the Debt
Securities, adding additional Events of Default, establishing
the form or terms of Debt Securities or curing ambiguities or
inconsistencies in the applicable Indenture, provided such ac-
tion to cure ambiguities or inconsistencies shall not adversely
affect the interests of the Holders of the Debt Securities in
any material respect. (Section 901).
Consolidation, Merger and Sale of Assets. Hecla,
without the consent of any Holders of outstanding Debt Securi-
ties, may consolidate with or merge into, or convey, transfer
or lease its assets substantially as an entirety to, any Per-
son, provided that the Person formed by such consolidation or
into which Hecla is merged or which acquires or leases the as-
sets of Hecla substantially as an entirety is a corporation,
partnership or trust organized under the laws of any United
States jurisdiction and assumes by supplemental indenture
Hecla's obligations on the Securities and under the Indentures,
that after giving effect to the transaction, no Event of De-
fault, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have occurred and
be continuing, and that certain other conditions are met. Upon
compliance with these provisions by a successor Person, Hecla
will (except in the case of a lease) be relieved of its obli-
gations under the Indentures and the Debt Securities. (Article
Eight).
Discharge and Defeasance. Hecla may terminate its
obligations under each Indenture with respect to Debt Securi-
ties of any series, other than its obligation to pay the prin-
cipal of (and premium, if any) and interest on such Debt Secu-
rities and certain other obligations, if it (i) irrevocably
deposits or causes to be irrevocably deposited with the Trustee
as trust funds money or U.S. Government Obligations maturing as
to principal and interest sufficient to pay the principal of,
any interest on, and any mandatory sinking funds in respect of,
all outstanding Debt Securities of such series on the stated
maturity of such payments or on any redemption date, (ii) has
delivered to the Trustee an opinion of counsel to the effect
that the Holders of Debt Securities of such series will not
recognize income, gain or loss for United States federal income
tax purposes as a result of such discharge and will be subject
to United States federal income tax on the same amount and in
the same manner and at the same time as would have been the
case if such discharge had not occurred, and (iii) complies
with any additional conditions specified to be applicable with
respect to the covenant defeasance of Debt Securities of such
-23-<PAGE>
series, and no Default or Event of Default with respect to the
Debt Securities of such issue shall have occurred and be con-
tinuing on the date of such deposit or, in so far as they re-
late to certain events of bankruptcy or insolvency, at any time
in the period ending on the 91st day after the date of such
deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period). (Sec-
tion 401).
The terms of any series of Debt Securities may also
provide for legal defeasance pursuant to each Indenture. In
such case, if Hecla (a) irrevocably deposits or causes to be
irrevocably deposited money or U.S. Government Obligations as
described above and complies with the other provisions de-
scribed above (except that the opinion referred to in clause
(ii) in the preceding paragraph must be based on a ruling by
the Internal Revenue Service or other change under applicable
federal income tax law), (b) makes a request to the Trustee to
be discharged from its obligations on the Debt Securities of
such series and (c) complies with any additional conditions
specified to be applicable with respect to legal defeasance of
Securities of such series, then Hecla shall be deemed to have
paid and discharged the entire indebtedness on all the out-
standing Debt Securities of such series and the obligations of
Hecla under the applicable Indenture and the Debt Securities of
such series to pay the principal of (and premium, if any) and
interest on the Debt Securities of such series shall cease,
terminate and be completely discharged, and the Holders thereof
shall thereafter be entitled only to payment out of the money
or U.S. Government Obligations deposited with the Trustee as
aforesaid, unless Hecla's obligations are revived and rein-
stated because the Trustee is unable to apply such trust fund
by reason of any legal proceeding, order or judgment. (Sec-
tions 403 and 404).
Form, Exchange, Registration and Transfer. Debt Se-
curities are issuable in definitive form as Registered Debt
Securities, as Bearer Debt Securities or both. Unless other-
wise indicated in an applicable Prospectus Supplement, Bearer
Debt Securities will have interest coupons attached. Debt Se-
curities are also issuable in temporary or permanent global
form. (Section 301).
Registered Debt Securities of any series will be ex-
changeable for other Registered Debt Securities of the same
series and of a like aggregate principal amount and tenor of
different authorized denominations. In addition, with respect
to any series of Bearer Debt Securities, at the option of the
Holder, subject to the terms of the applicable Indenture,
Bearer Debt Securities (with all unmatured coupons, except as
-24-<PAGE>
provided below, and all matured coupons in default) of such
series will be exchangeable into Registered Securities of the
same series of any authorized denominations and of a like ag-
gregate principal amount and tenor. Bearer Debt Securities
surrendered in exchange for Registered Debt Securities between
a Regular Record Date or a Special Record Date and the relevant
date for payment of interest shall be surrendered without the
coupon relating to such date for payment of interest, and in-
terest accrued as of such date will not be payable in respect
of the Registered Debt Security issued in exchange for such
Bearer Debt Security, but will be payable only to the Holder of
such coupon when due in accordance with the terms of the ap-
plicable Indenture. (Section 305).
In connection with its sale during the restricted
period (as defined below), no Bearer Debt Security (including a
Debt Security in permanent global form that is either a Bearer
Debt Security or exchangeable for Bearer Debt Securities) shall
be mailed or otherwise delivered to any location in the United
States (as defined under "-- Limitations on Issuance of Bearer
Debt Securities") and a Bearer Debt Security may be delivered
outside the United States in definitive form in connection with
its original issuance only if prior to delivery the Person en-
titled to receive such Bearer Debt Security furnishes written
certification, in the form required by the applicable Inden-
ture, to the effect that such Bearer Debt Security is owned by:
(a) a Person (purchasing for its own account) who is not a
United States Person (as defined under "-- Limitations on Is-
suance of Bearer Debt Securities"); (b) a United States Person
who (i) is a foreign branch of a United States financial in-
stitution purchasing for its own account or for resale or (ii)
acquired such Bearer Debt Security through the foreign branch
of a United States financial institution and who for purposes
of the certification holds such Bearer Debt Security through
such financial institution on the date of certification and, in
either case, such United States financial institution certifies
to Hecla or the distributor selling the Bearer Debt Security
within a reasonable time stating that it agrees to comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder, or (c) a United States
or foreign financial institution for purposes of resale within
the "restricted period" as defined in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7). A financial in-
stitution described in clause (c) of the preceding sentence
(whether or not also described in clauses (a) and (b)) must
certify that it has not acquired the Bearer Debt Security for
purpose of resale, directly or indirectly, to a United States
person or to a person within the United States or its posses-
sions. In the case of a Bearer Debt Security in permanent
-25-<PAGE>
global form, such certification must be given in connection
with notation of a beneficial owner's interest therein in con-
nection with the original issuance of such Debt Security or
upon exchange of a portion of a temporary global Security.
(Section 303). See "-- Limitations on Issuance of Bearer Debt
Securities".
Debt Securities may be presented for exchange as
provided above, and Registered Debt Securities may be presented
for registration of transfer (with the form of transfer en-
dorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent designated by
Hecla for such purpose with respect to any series of Debt Secu-
rities and referred to in an applicable Prospectus Supplement,
without a service charge and upon payment of any taxes and
other governmental charges as described in the applicable In-
denture. Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be,
being satisfied with the documents of title and identity of the
Person making the request. Hecla has appointed the Trustee as
Security Registrar. (Section 305). If a Prospectus Supplement
refers to any transfer agents (in addition to the Security
Registrar) initially designated by Hecla with respect to any
series of Debt Securities, Hecla may at any time rescind the
designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, except
that, if Debt Securities of a series are issuable solely as
Registered Debt Securities, Hecla will be required to maintain
a transfer agent in each Place of Payment for such series and,
if Debt Securities of a series are issuable as Bearer Debt Se-
curities, Hecla will be required to maintain (in addition to
the Security Registrar) a transfer agent in a Place of Payment
located outside the United States for Registered Securities of
such series. Hecla may at any time designate additional
transfer agents with respect to any series of Debt Securities.
(Section 1002).
In the event of any redemption in part, Hecla shall
not be required to (i) issue or register the transfer of or ex-
change Debt Securities of any series during a period beginning
at the opening of business 15 days prior to the selection of
Debt Securities of that series for redemption and ending on the
close of business on (A) if Debt Securities of the series are
issuable only as Registered Debt Securities, the day of mailing
of the relevant notice of redemption and (B) if Debt Securities
of the series are issuable as Bearer Debt Securities, the day
of the first publication of the relevant notice of redemption
except that, if Securities of the series are also issuable as
Registered Debt Securities and there is no publication, the day
of mailing of the relevant notice of redemption; (ii) register
-26-<PAGE>
the transfer of or exchange any Registered Debt Security, or
portion thereof, called for redemption, except the unredeemed
portion of any Registered Debt Security being redeemed in part;
or (iii) exchange any Bearer Debt Security called for redemp-
tion, except to exchange such Bearer Debt Security for a Reg-
istered Debt Security of that series and like tenor which is
simultaneously surrendered for redemption. (Section 305).
Payment and Paying Agents. Unless otherwise indi-
cated in an applicable Prospectus Supplement, payment of prin-
cipal of and any premium and interest on Bearer Debt Securities
will be payable, subject to any applicable laws and regulations
in the designated currency or currency unit, at the offices of
such Paying Agents outside the United States as Hecla may des-
ignate from time to time, at the option of the Holder, by check
or by transfer to an account maintained by the payee with a
bank located outside the United States; provided, however, that
the written certification described above under "-- Form, Ex-
change, Registration and Transfer" has been delivered prior to
the first actual payment of interest. (Section 307). Unless
otherwise indicated in an applicable Prospectus Supplement,
payment of interest on Bearer Debt Securities on any Interest
Payment Date will be made only against surrender to the Paying
Agent of the coupon relating to such Interest Payment Date.
(Section 1001). No payment with respect to any Bearer Debt
Security will be made at any office or agency of Hecla in the
United States or by check mailed to any address in the United
States or by transfer to any account maintained with a bank
located in the United States, nor shall any payments be made in
respect of Bearer Debt Securities upon presentation to Hecla or
its designated Paying Agents within the United States. Not-
withstanding the foregoing, payments of principal of and any
premium and interest on Bearer Debt Securities denominated and
payable in U.S. dollars will be made at the office of Hecla's
Paying Agent in the Borough of Manhattan, The City of New York,
if (but only if) payment of the full amount thereof in U.S.
dollars at all offices or agencies outside the United States is
illegal or effectively precluded by exchange controls or other
similar restrictions. (Section 1002).
Unless otherwise indicated in an applicable Prospec-
tus Supplement, payment of principal of and any premium and
interest on Registered Debt Securities will be made in the
designated currency or currency unit at the office of such
Paying Agent or Paying Agents as Hecla may designate from time
to time, except that at the option of Hecla payment of any in-
terest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security
Register. Unless otherwise indicated in an applicable Pro-
spectus Supplement, payment of any installment of interest on
-27-<PAGE>
Registered Debt Securities will be made to the Person in whose
name such Registered Debt Security is registered at the close
of business on the Regular Record Date for such interest.
(Section 307).
Unless otherwise indicated in an applicable Prospec-
tus Supplement, the Corporate Trust Office of the Trustee in
the Borough of Manhattan, The City of New York will be desig-
nated as a Paying Agent for Hecla for payments with respect to
Debt Securities which are issuable solely as Registered Debt
Securities, and Hecla will maintain a Paying Agent outside the
United States for payments with respect to Debt Securities
(subject to limitations described above in the case of Bearer
Debt Securities) which are issuable solely as Bearer Debt Se-
curities, or as both Registered Debt Securities and Bearer Debt
Securities. Any Paying Agents outside the United States and
any other Paying Agents in the United States initially desig-
nated by Hecla for the Debt Securities will be named in an ap-
plicable Prospectus Supplement. Hecla may at any time desig-
nate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which
any Paying Agent acts, except that, if Debt Securities of a
series are issuable solely as Registered Debt Securities, Hecla
will be required to maintain a Paying Agent in each Place of
Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, Hecla will be required to main-
tain (i) a Paying Agent in the Borough of Manhattan, The City
of New York for principal payments with respect to any Regis-
tered Debt Securities of the series (and for payments with re-
spect to Bearer Debt Securities of the series in the circum-
stances described above, but not otherwise), and (ii) a Paying
Agent in a Place of Payment located outside the United States
where Securities of such series and any coupons appertaining
thereto may be presented and surrendered for payment; provided
that if the Debt Securities of such series are listed on the
International Stock Exchange of the United Kingdom and the Re-
public of Ireland Limited, the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such
stock exchange shall so require, Hecla will maintain a Paying
Agent in London, Luxembourg or any other required city located
outside the United States, as the case may be, for the Securi-
ties of such series. (Section 1002).
All moneys paid by Hecla to a Paying Agent for the
payment of principal of and any premium or interest on any Debt
Security which remain unclaimed at the end of three years after
such principal, premium or interest shall have become due and
payable will (subject to applicable escheat laws) be repaid to
Hecla and the Holder of such Debt Security or any coupon will
-28-<PAGE>
thereafter look only to Hecla for payment thereof. (Section
1003).
Temporary Global Securities. If so specified in an
applicable Prospectus Supplement, all or any portion of the
Debt Securities of a series which are issuable as Bearer Debt
Securities will initially be represented by one or more tempo-
rary global Debt Securities, without interest coupons, to be
deposited with a common depositary in London for the Euroclear
System ("Euroclear") and CEDEL S.A. ("CEDEL") for credit to the
designated accounts. On and after the date determined as pro-
vided in any such temporary global Debt Security and described
in an applicable Prospectus Supplement, each such temporary
global Debt Security will be exchangeable for definitive Bearer
Debt Securities, definitive Registered Debt Securities or all
or a portion of a permanent global security, or any combination
thereof, as specified in an applicable Prospectus Supplement,
but, unless otherwise specified in an applicable Prospectus
Supplement, only upon written certification in the form and to
the effect described under "-- Form, Exchange, Registration and
Transfer". No Bearer Debt Security delivered in exchange for a
portion of a temporary global Security will be mailed or oth-
erwise delivered to any location in the United States in con-
nection with such exchange. (Section 304).
Unless otherwise specified in an applicable Prospec-
tus Supplement, interest in respect of any portion of a tempo-
rary global Debt Security payable in respect of an Interest
Payment Date occurring prior to the issuance of definitive Debt
Securities or a permanent global Debt Security will be paid to
each of Euroclear and CEDEL with respect to the portion of the
temporary global Debt Security held for its account. Each of
Euroclear and CEDEL will undertake in such circumstances to
credit such interest received by it in respect of a temporary
global Debt Security to the respective accounts for which it
holds such temporary global Debt Security only upon receipt in
each case of written certification in the form and to the ef-
fect described above under "-- Form, Exchange, Registration and
Transfer" as of the relevant Interest Payment Date regarding
the portion of such temporary global Debt Security on which
interest is to be so credited. (Section 304).
Permanent Global Securities. If any Debt Securities
of a series are issuable in permanent global form, the appli-
cable Prospectus Supplement will describe the circumstances, if
any, under which beneficial owners of interests in any such
permanent global Debt Securities may exchange such interests
for Debt Securities of such series and of like tenor and prin-
cipal amount in any authorized form and denomination. No
Bearer Debt Security delivered in exchange for a portion of a
-29-<PAGE>
permanent global Debt Security shall be mailed or otherwise
delivered to any location in the United States in connection
with such exchange. (Section 305). A Person having a benefi-
cial interest in a permanent global Debt Security will, except
with respect to payment of principal of and any premium and
interest on such permanent global Debt Security, be treated as
a Holder of such principal amount of Outstanding Debt Securi-
ties represented by such permanent global Debt Security as
shall be specified in a written statement of the Holder of such
permanent global Debt Security or, in the case of a permanent
global Debt Security in bearer form, of the operator of Euro-
clear or CEDEL which is provided to the Trustee by such Person.
Principal of and any premium and interest on a permanent global
Debt Security will be payable in the manner described in the
applicable Prospectus Supplement. (Section 203).
Book-Entry Debt Securities
Debt Securities of a series may be issued in whole or
in part in global form that will be deposited with, or on be-
half of, a depository identified in the Prospectus Supplement.
Global securities may be issued in either registered or bearer
form and in either temporary or permanent form (each a "Global
Security"). Unless otherwise provided in the Prospectus
Supplement, Debt Securities that are represented by a Global
Security will be issued in denominations of $1,000 and any in-
tegral multiple thereof, and will be issued in registered form
only, without coupons. Payments of principal of (and premium,
if any) and interest, if any, on Debt Securities represented by
a Global Security will be made by the Company to the applicable
Trustee and then by such Trustee to the depository.
The Company anticipates that any Global Securities
will be deposited with, or on behalf of, The Depository Trust
Company ("DTC"), New York, New York, that such Global Securi-
ties will be registered in the name of DTC's nominee, and that
the following provisions will apply to the depository arrange-
ments with respect to any such Global Securities. Additional
or differing terms of the depository arrangements will be de-
scribed in the Prospectus Supplement.
So long as DTC or its nominee is the registered owner
of a Global Security, DTC or its nominee, as the case may be,
will be considered the sole holder of the Debt Securities rep-
resented by such Global Security for all purposes under the
applicable Indenture. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled
to have Debt Securities represented by such Global Security
registered in their names, will not receive or be entitled to
receive physical delivery of Debt Securities in certificated
-30-<PAGE>
form and will not be considered the owners or holders thereof
under the applicable Indenture. The laws of some states re-
quire that certain purchasers of securities take physical de-
livery of such securities in certificated form; accordingly,
such laws may limit the transferability of beneficial interest
in a Global Security.
If (i) DTC is at any time unwilling or unable to
continue as depository and a successor depository is not ap-
pointed by the Company within 90 days following notice to the
Company, (ii) the Company determines, in its sole discretion,
not to have any Debt Securities represented by one or more
Global Securities, or (iii) an Event of Default under the ap-
plicable Indenture has occurred and is continuing, then the
Company will issue individual Debt Securities in certificated
form in exchange for beneficial interests in such Global Secu-
rities. In any such instance, an owner of a beneficial inter-
est in a Global Security will be entitled to physical delivery
of individual Debt Securities in certificated form of like
tenor and rank, equal in principal amount to such beneficial
interest and to have such Debt Securities in certificated form
registered in its name. Unless otherwise provided in the Pro-
spectus Supplement, Debt Securities to issued in certificated
form will be issued in denominations of $1,000 or any integral
multiple thereof, and will be issued in registered form only,
without coupons.
The following is based on information furnished by
DTC:
DTC will act as securities depository for the Debt
Securities. The Debt Securities will be issued as fully
registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully registered Debt
Security certificate is issued with respect to each $150
million of principal amount of the Debt Securities of a
series, and an additional certificate will be issued with
respect to any remaining principal amount of such series.
DTC is a limited-purpose trust company organized un-
der the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act
of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates
-31-<PAGE>
the settlement among Participants of securities transac-
tions, such as transfers and pledges, in deposited secu-
rities through electronic computerized book-entry changes
in Participants' accounts, thereby eliminating the need
for physical movement of securities certificates. Direct
Participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned
by a number of its Direct Participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc.
and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others such
as securities brokers and dealers, banks and trust compa-
nies that clear through or maintain a custodial relation-
ship with a Direct Participant, either directly or indi-
rectly ("Indirect Participants"). The rules applicable to
DTC and its Participants are on file with the Commission.
Purchases of Debt Securities under the DTC system
must be made by or through Direct Participants, which will
receive a credit for the Debt Securities on DTC's records.
The ownership interest of each actual purchaser of each
Debt Security ("Beneficial Owner") is in turn recorded on
the Direct and Indirect Participants' records. A Benefi-
cial Owner does not receive written confirmation from DTC
of its purchaser, but such Beneficial Owner is expected to
receive a written confirmation providing details of the
transaction, as well as periodic statements of its hold-
ings, from the Direct or Indirect Participant through
which such Beneficial Owner entered into the transaction.
Transfers of ownership interests in Debt Securities are
accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners
do not receive certificates representing their ownership
interest in Debt Securities, except in the event that use
of the book-entry system for the Debt Securities is dis-
continued.
To facilitate subsequent transfers, the Debt Securi-
ties are registered in the name of DTC's partnership nom-
inee, Cede & Co. The deposit of the Debt Securities with
DTC and their registration in the name of Cede & Co. ef-
fects no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Debt Se-
curities; DTC records reflect only the identity of the
Direct Participants to whose accounts Debt Securities are
credited, which may or may not be the Beneficial Owners.
The Participants remain responsible for keeping account of
their holding on behalf of their customers.
-32-<PAGE>
Delivery of notices and other communications by DTC
to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners are governed by ar-
rangements among them, subject to any statutory or regu-
latory requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If
less than all of the Securities within an issue are being
redeemed, DTC's practice is to determine by lot the amount
of the interest of each Direct Participant in such issue
to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with
respect to the Debt Securities. Under its usual proce-
dures, DTC mails a proxy (an "Omnibus Proxy") to the is-
suer as soon as possible after the record date. The Om-
nibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts the
Debt Securities are credited on the record date (identi-
fied on a list attached to the Omnibus Proxy).
Payment of principal (and premium, if any) and in-
terest, if any, on the Debt Securities will be made to
DTC. DTC's practice is to credit Direct Participants'
accounts on the payable date in accordance with their re-
spective holdings as shown on DTC's records unless DTC has
reason to believe that it will not receive payment on the
payable date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and cus-
tomary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in
"street name" and will be the responsibility of such Par-
ticipant and not of DTC, the Paying Agent or the Company,
subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal (and
premium, if any) and interest to DTC is the responsibility
of the Company or the Paying Agent, disbursement of such
payments to Direct Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Par-
ticipants.
DTC may discontinue providing its services as securi-
ties depository with respect to the Debt Securities at any
time by giving reasonable notice to the Company or the
Paying Agent. Under such circumstances, in the event that
a successor securities depository is not appointed, Debt
Security certificates are required to be printed and de-
livered.
-33-<PAGE>
The Company may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor
securities depository). In that event, Debt Security cer-
tificates will be printed and delivered.
The information in this section concerning DTC and
DTC's book-entry system has been obtained from sources (in-
cluding DTC) that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
Unless stated otherwise in the Prospectus Supplement,
the underwriters or agents with respect to a series of Debt
Securities issued as Global Securities will be Direct Partici-
pants in DTC.
None of the Company, any underwriter or agent, the
applicable Trustee or any applicable Paying Agent will have any
responsibility or liability for any aspect of the records re-
lating to, or payments made on account of beneficial interests
in a Global Security, or for maintaining, supervising or re-
viewing any records relating to such beneficial interest.
Limitations on Issuance of Bearer Debt Securities.
In compliance with United States federal tax laws and regula-
tions, Bearer Debt Securities (including securities in perma-
nent global form that are either Bearer Debt Securities or ex-
changeable for Bearer Debt Securities) will not be offered or
sold during the restricted period (as defined in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)) (gener-
ally, the first 40 days after the closing date, and, with re-
spect to unsold allotments, until sold) within the United
States or to United States Persons (each as defined below)
other than to an office located outside the United States of a
United States financial institution (as defined in Section
1.165-12(c)(1)(v) of the United States Treasury Regulations),
purchasing for its own account or for resale or for the account
of certain customers, that provides a certificate stating that
it agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Code and the United States
Treasury Regulations thereunder, or to certain other Persons
described in Section 1.163-5(c)(2)(i)(D)(1)(iii)(B) of the
United States Treasury Regulations. Moreover, such Bearer Debt
Securities will not be delivered in connection with their sale
during the restricted period within the United States. Any
underwriters, agents and dealers participating in the offering
of Bearer Debt Securities must covenant that they will not of-
fer or sell during the restricted period any Bearer Debt Secu-
rities within the United States or to United States Persons
-34-<PAGE>
(other than the persons described above) or deliver in connec-
tion with the sale of Bearer Debt Securities during the re-
stricted period any Bearer Debt Securities within the United
States and that they have in effect procedures reasonably de-
signed to ensure that their employees and agents who are di-
rectly engaged in selling the Bearer Debt Securities are aware
of the restrictions described above. No Bearer Debt Security
(other than a temporary global Bearer Debt Security) will be
delivered in connection with its original issuance nor will
interest be paid on any Bearer Debt Security until receipt by
Hecla of the written certification described above under "Form,
Exchange, Registration and Transfer". Each Bearer Debt Secu-
rity, other than a temporary global Bearer Debt Security, will
bear a legend to the following effect: "Any United States
person who holds this obligation will be subject to limitations
under the United States income tax laws, including the limita-
tions provided in Sections 165(j) and 1287(a) of the Internal
Revenue Code."
As used herein, "United States Person" means any
citizen or resident of the United States, any corporation,
partnership or other entity created or organized in or under
the laws of the United States and any estate or trust the in-
come of which is subject to United States federal income taxa-
tion regardless of its source, and "United States" means the
United States of America (including the states and the District
of Columbia) and its possessions.
Conversion Rights
The terms and conditions, if any, on which Offered
Debt Securities are convertible into Common Stock of the Com-
pany will be set forth in the Prospectus Supplement relating
thereto. Such terms will include the conversion price, the
conversion period, provisions as to whether conversion will be
at the option of the holder or the Company, the events requir-
ing an adjustment of the conversion price and provisions af-
fecting conversion in the event of the redemption of the Con-
vertible Debt Securities, and such terms may include provisions
under which the number of shares of Common Stock to be received
by the holders of the Offered Debt Securities would be calcu-
lated according to the market price of the Common Stock as of a
time stated in the Prospectus Supplement.
Exchangeable Securities
If so provided in the Prospectus Supplement, Debt
Securities may be issued as Debt Securities exchangeable at the
option of the holders thereof for equity or debt securities of
an issuer other than the Company ("Exchange Securities"). The
-35-<PAGE>
issuer of securities for which the Exchange Securities are ex-
changeable, the time period or periods during which the Ex-
change Securities are exchangeable and the exchange rate or
rates at which the Exchange Securities are exchangeable will be
set forth in the Prospectus Supplement. Unless otherwise pro-
vided in the Prospectus Supplement, in lieu of delivering Ex-
change Securities upon such exchange, the Company may elect to
pay to the holders in cash an amount representing the market
value of such Exchange Securities determined as provided in the
Prospectus Supplement. Unless otherwise provided in the Pro-
spectus Supplement, the Company will deposit any Exchange Se-
curities with an escrow agent pursuant to the terms of an es-
crow agreement to be entered into between the Company and the
escrow agent. The specific terms of the escrow agreement with
respect to a series of Debt Securities will be described in the
Prospectus Supplement relating to such series.
The particular terms of any series of Exchange Secu-
rities will be described in the Prospectus Supplement relating
to such series. The Prospectus Supplement will also described
any special federal income tax consequences and other consid-
erations applicable to such series of Exchange Securities.
Meetings. The Indentures contain provisions for
convening meetings of the Holders of Debt Securities of a se-
ries. A meeting may be called at any time by the Trustee, and
also, upon request, by Hecla or the Holders of at least 10% in
principal amount of the Outstanding Debt Securities of such
series, in any such case upon notice given as described under
"-- Notices" below. Except for any consent that must be given
by the Holder of each Outstanding Debt Security affected
thereby, as described under "-- Modification" above, any reso-
lution presented at a meeting or adjourned meeting at which a
quorum is present may be adopted by the affirmative vote of the
Holders of a majority in principal amount of the Outstanding
Debt Securities of that series; provided, however, that, except
for any consent that must be given by the Holder of each Out-
standing Debt Security affected thereby, as described under "--
Modification" above, any resolution with respect to any re-
quest, demand, authorization, direction, notice, consent,
waiver or other action that may be made, given or taken by the
Holders of a specified percentage, which is less than a major-
ity in principal amount of the Outstanding Debt Securities of a
series, may be adopted at a meeting or adjourned meeting duly
reconvened at which a quorum is present by the affirmative vote
of the Holders of such specified percentage in principal amount
of the Outstanding Debt Securities of that series. Subject to
the proviso set forth above, any resolution passed or decision
taken at any meeting of Holders of Debt Securities of any se-
ries duly held in accordance with the Indenture will be binding
-36-<PAGE>
on all Holders of Debt Securities of that series and any re-
lated coupons. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be Persons
holding or representing a majority in principal amount of the
Outstanding Debt Securities of a series. (Article Thirteen of
the Senior Indenture and Article Fourteen of the Subordinated
Indenture).
Notices. Except as otherwise provided in the Inden-
tures, notices to Holders of Bearer Debt Securities will be
given by publication at least twice in a daily newspaper in The
City of New York and London or other capital city in Western
Europe and in such other city or cities as may be specified in
such Securities. Notices to Holders of Registered Debt Secu-
rities will be given by mail to the addresses of such Holders
as they appear in the Security Register. (Section 107).
The Trustee. Each Indenture contains certain limi-
tations on the right of the Trustee, as a creditor of Hecla, to
obtain payment of claims in certain cases and to realize on
certain property received with respect to any such claims, as
security or otherwise. (Section 613). The Trustee is permit-
ted to engage in other transactions, except that, if it ac-
quires any conflicting interest and there is a default under
the Debt Securities, it must eliminate such conflict or resign.
(Section 608).
The Trustee is a party to Hecla's committed revolving
credit facility. The Company maintains depository and other
normal banking relationships with the Trustee. In addition,
the Trustee acts as the registrar, transfer agent, conversion
agent and dividend disbursing agent for the Preferred Stock and
also acts as the transfer agent, registrar and dividend dis-
bursing agent for the Common Stock.
Governing Law. The Indentures are, and the Debt Se-
curities will be, governed by and construed in accordance with
the laws of the State of New York.
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
Senior Debt Securities will be issued under the Se-
nior Indenture and will rank pari passu with all other unse-
cured and unsubordinated debt of Hecla, and will be senior in
right of payment to all existing and future debt of Hecla that
is, by its terms, expressly subordinated to the Senior Debt
Securities.
-37-<PAGE>
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
General. Subordinated Debt Securities will be issued
under the Subordinated Indenture and will rank pari passu with
certain other subordinated debt of Hecla that may be outstand-
ing from time to time and will rank junior to all Senior In-
debtedness of Hecla (including any Senior Debt Securities) that
may be outstanding from time to time.
Subordination. The payment of the principal (and
premium, if any) and interest on the Subordinated Debt Securi-
ties is expressly subordinated, to the extent and in the manner
set forth in the Subordinated Indenture, in right of payment to
the prior payment in full of all Senior Indebtedness of Hecla.
(Section 1301 of the Subordinated Indenture).
In the event of any dissolution or winding up, or
total or partial liquidation or reorganization of Hecla,
whether in bankruptcy, reorganization, insolvency, receivership
or similar proceeding, the holders of Senior Indebtedness will
be entitled to receive payment in full of all amounts due or to
become due on or in respect of all Senior Indebtedness before
the Holders of the Subordinated Debt Securities are entitled to
receive any payment on account of principal (or premium, if
any) or interest on the Subordinated Debt Securities. (Section
1302 of the Subordinated Indenture).
Unless otherwise indicated in the applicable Pro-
spectus Supplement, no payment in respect of the Subordinated
Debt Securities shall be made if, at the time of such payment,
there exists a default in payment of all or any portion of any
Senior Indebtedness, and such default shall not have been cured
or waived in writing or the benefits of such subordination in
the Subordinated Indenture shall not have been waived in writ-
ing by or on behalf of the holders of such Senior Indebtedness.
In addition, unless otherwise provided in the applicable Pro-
spectus Supplement, during the continuance of any event of de-
fault (other than a default referred to in the immediately
preceding sentence) with respect to any Senior Indebtedness
permitting the holders to accelerate the maturity thereof and
upon written notice thereof given to the Trustee, with a copy
to Hecla (the delivery of which shall not affect the validity
of the notice to the Trustee), by any holder of Senior Indebt-
edness or its representative, then, unless and until such an
event of default shall have been cured or waived or shall have
ceased to exist, no payment shall be made by Hecla with respect
to the principal of or interest on the Subordinated Debt Secu-
rities or to acquire any of the Subordinated Debt Securities or
on account of the redemption provisions for the Subordinated
Debt Securities; provided, however, that if the holders of the
-38-<PAGE>
Senior Indebtedness to which the default relates have not de-
clared such Senior Indebtedness to be immediately due and pay-
able within 180 days after the occurrence of such default (or
have declared such Senior Indebtedness to be immediately due
and payable and within such period have rescinded such decla-
ration of acceleration), then Hecla will be required to resume
making any and all required payments in respect of the Subor-
dinated Debt Securities (including any missed payments). Only
one such payment blockage period may be commenced within any
consecutive 365-day period with respect to the Subordinated
Debt Securities. No event of default which existed or was
continuing on the date of the commencement of any 180-day pay-
ment blockage period with respect to the Senior Indebtedness
initiating such payment blockage period shall be, or be made,
the basis for the commencement of a second payment blockage
period by a holder or representative of such Senior Indebted-
ness, whether or not within a period of 365 consecutive days,
unless such event of default shall have been cured or waived
for a period of not less than 90 consecutive days (and, in the
case of any such waiver, no payment shall be made by Hecla to
the holders of Senior Indebtedness in connection with such
waiver other than amounts due pursuant to the terms of the Se-
nior Indebtedness as in effect at the time of such default).
(Section 1302 of the Subordinated Indenture).
The term "Senior Indebtedness" is defined in the
Subordinated Indenture as Indebtedness, either outstanding as
of the date of the Subordinated Indenture or issued subsequent
to the date of the Subordinated Indenture, that is not subor-
dinated by its terms in right of payment to any other Indebt-
edness of Hecla or pari passu with Subordinated Debt Securities
of any series, provided that the term "Senior Indebtedness"
shall not include (i) Indebtedness of Hecla to any Subsidiary
for money borrowed or advanced from such Subsidiary or (ii)
amounts owed (except to banks and other financial institutions)
for goods, materials or services purchased in the ordinary
course of business.
The term "Indebtedness", as applied to any Person, is
defined in the Subordinated Indenture as all indebtedness,
whether or not represented by bonds, debentures, notes or other
securities, created or assumed by such Person for the repayment
of money borrowed, and obligations, computed in accordance with
generally accepted accounting principles, as lessee under
leases that should be, in accordance with generally accepted
accounting principles, treated as capital leases. All Indebt-
edness of others guaranteed as to payment of principal by such
Person or in effect guaranteed by such Person through a con-
tingent agreement to purchase such Indebtedness shall also be
deemed to be Indebtedness of such Person.
-39-<PAGE>
If Subordinated Debt Securities are issued under the
Subordinated Indenture, the aggregate principal amount of Se-
nior Indebtedness outstanding as of a recent date will be set
forth in the applicable Prospectus Supplement. The Subordi-
nated Indenture does not restrict the amount of Senior Indebt-
edness that Hecla may incur.
DESCRIPTION OF PREFERRED STOCK
As stated below under "Capital Stock", pursuant to
the Company's Restated Certificate of Incorporation, the Board
of Directors of Hecla may provide for the issuance of up to
5,000,000 shares of Preferred Stock in one or more series. As
of December 31, 1994, there were 2,300,000 shares of Convert-
ible Preferred Stock issued and outstanding and an additional
2,000,000 shares of Series A Junior Participating Preferred
Stock initially reserved for issuance upon exercise of the
Rights described below. Hecla's Board of Directors is autho-
rized, without any further vote or action by Hecla's stockhold-
ers, to divide the Preferred Stock into series and, with re-
spect to each series, to determine the dividend rights, div-
idend rates, conversion rights, voting rights (which may be
greater or lesser than the voting rights of the Common Stock),
redemption rights and terms, liquidation preferences, sinking
fund rights and terms, the number of shares constituting the
series and the designation of each series. Upon issuance
against full payment of the purchase price therefor, shares of
Preferred Stock offered hereby will be fully paid and non-
assessable. The descriptions of the Preferred Stock set forth
below and the description of the terms of a particular series
of Preferred Stock that will be set forth in a Prospectus Sup-
plement do not purport to be complete and are qualified in
their entirety by reference to Hecla's Restated Certificate of
Incorporation, the certificate of resolution establishing des-
ignation, preferences and rights relating to such series or the
Rights Agreement referred to below.
The specific terms of a particular series of Pre-
ferred Stock offered hereby will be described in a Prospectus
Supplement relating to such series and will include the fol-
lowing:
(i) The maximum number of shares to constitute the
series and the distinctive designation thereof;
(ii) The annual dividend rate, if any, on shares of
the series, whether such rate is fixed or variable or
both, the date or dates from which dividends will begin to
accrue or accumulate and whether dividends will be cumu-
lative;
-40-<PAGE>
(iii) Whether the shares of the series will be re-
deemable and, if so, the price at and the terms and con-
ditions on which the shares of the series may be redeemed,
including the time during which shares of the series may
be redeemed and any accumulated dividends thereon that the
holders of shares of the series shall be entitled to re-
ceive upon the redemption thereof;
(iv) The liquidation preference, if any, applicable
to shares of the series;
(v) Whether the shares of the series will be subject
to operation of a retirement or sinking fund and, if so,
the extent and manner in which any such fund shall be ap-
plied to the purchase or redemption of the shares of the
series for retirement or for other corporate purposes, and
the terms and provisions relating to the operation of such
fund;
(vi) The terms and conditions, if any, on which the
shares of the series shall be convertible into, or ex-
changeable for, shares of any other class or classes of
capital stock of Hecla or another corporation or any se-
ries of any other class or classes, or of any other series
of the same class, including the price or prices or the
rate or rates of conversion or exchange and the method, if
any, of adjusting the same;
(vii) The voting rights, if any, on the shares of the
series;
(viii) The currency or units based on or relating to
currencies in which such series is denominated and/or in
which payments will or may be payable;
(ix) The methods by which amounts payable in respect
of such series may be calculated and any commodities,
currencies or indices, or price, rate or value, relevant
to such calculation;
(x) Whether fractional interests in shares of the
series will be offered in the form of Depositary Shares as
described below under "Description of Depositary Shares";
and
(xi) Any other preferences and relative, participat-
ing, optional or other special rights or qualifications,
limitations or restrictions thereof.
-41-<PAGE>
DESCRIPTION OF COMMON STOCK
Subject to the prior rights of any shares of Pre-
ferred Stock that may from time to time be outstanding, holders
of Common Stock are entitled to share ratably in such dividends
as may be lawfully declared by the Board of Directors and paid
by Hecla and, in the event of liquidation, dissolution or
winding-up of Hecla, are entitled to share ratably in all as-
sets remaining after payment of liabilities.
The Common Stock is entitled to one vote per share
held of record on each matter submitted to a vote of stock-
holders. The holders of Common Stock have no preemptive rights
to purchase any securities of Hecla or cumulative voting
rights. Preferred stock purchase rights are issuable in re-
spect of all shares of Common Stock issued prior to certain
events. See "Capital Stock -- Rights". All outstanding shares
of Common Stock are validly issued, fully paid and nonassess-
able. Hecla is not prohibited by its Restated Certificate of
Incorporation from repurchasing shares of its Common Stock.
Any such repurchases would be subject to any limitations on the
amount available for such purpose under applicable corporate
law, any applicable restrictions under the terms of any out-
standing Preferred Stock or indebtedness and, in the case of
market purchases, such restrictions on the timing, manner and
amount of such purchases as might apply in the circumstances
under applicable securities laws.
The outstanding Common Stock is listed on the New
York Stock Exchange under the symbol "HL". Any Common Stock
offered will be listed, subject to notice of issuance, on such
exchange.
The transfer agent, registrar and dividend disbursing
agent for the Common Stock is American Stock Transfer & Trust
Company.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus
Supplement of certain provisions of the Deposit Agreement (as
defined below) and of the Depositary Shares (as defined below)
and Depositary Receipts (as defined below) does not purport to
be complete and is subject to and qualified in its entirety by
reference to the forms of Deposit Agreement and Depositary Re-
ceipts relating to each series of Preferred Stock which have
been or will be filed with the Commission in connection with
the offering of such series of Preferred Stock.
-42-<PAGE>
GENERAL
Hecla may, at its option, elect to offer fractional
interests in shares of Preferred Stock, rather than shares of
Preferred Stock. In the event such option is exercised, Hecla
will provide for the issuance by a Depositary to the public of
receipts for depositary shares ("Depositary Shares"), each of
which will represent fractional interests of a particular se-
ries of Preferred Stock (which will be set forth in the Pro-
spectus Supplement relating to a particular series of Preferred
Stock).
The shares of any series of Preferred Stock under-
lying the Depositary Shares will be deposited under a separate
Deposit Agreement (the "Deposit Agreement") between Hecla and a
bank or trust company selected by Hecla having its principal
office in the United States and having a combined capital and
surplus of at least $50,000,000 (the "Depositary"). The Pro-
spectus Supplement relating to a series of Depositary Shares
will set forth the name and address of the Depositary. Subject
to the terms of the Deposit Agreement, each owner of Depositary
Shares will be entitled, in proportion to the applicable frac-
tional interests in shares of Preferred Stock underlying such
Depositary Shares, to all the rights and preferences of the
Preferred Stock underlying such Depositary Shares (including
dividend, voting, redemption, conversion and liquidation
rights).
The Depositary Shares will be evidenced by depositary
receipts issued pursuant to the Deposit Agreement (the "Depos-
itary Receipts"). Depositary Receipts will be distributed to
those persons purchasing the fractional interests in shares of
the related series of Preferred Stock in accordance with the
terms of the offering for Preferred Stock described in the re-
lated Prospectus Supplement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or
other cash distributions received in respect of Preferred Stock
to the record holders of Depositary Shares relating to such
Preferred Stock in proportion, as nearly as practicable, to the
numbers of such Depositary Shares owned by such holders on the
relevant record date, subject to any applicable tax withhold-
ing. The Depositary shall distribute only such amount, how-
ever, as can be distributed without attributing to any holder
of Depositary Shares a fraction of one cent, and any balance
not so distributed shall be added to and treated as part of the
next sum received by the Depositary for distribution to record
holders of Depositary Shares.
-43-<PAGE>
In the event of a distribution other than in cash,
the Depositary will distribute property received by it to the
record holders of Depositary Shares entitled thereto, unless
the Depositary determines that it is not feasible to make such
distribution, in which case the Depositary may, with the ap-
proval of Hecla, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution,
including the sale of such property and distribution of the net
proceeds from such sale to such holders, subject to any ap-
plicable tax withholding.
Any subscription or similar rights offered by Hecla
to holders of Preferred Stock will be made available to the
holders of Depositary Shares in such manner as the Depositary
may determine, with the approval of Hecla.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the
Depositary Shares is subject to redemption, the Depositary
Shares will be redeemed from the proceeds received by the De-
positary resulting from the redemption, in whole or in part, of
such series of the Preferred Stock held by the Depositary. The
Depositary shall mail notice of redemption not less than 30 and
not more than 60 days prior to the date fixed for redemption to
the record holders of the Depositary Shares to be so redeemed
at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal
to the applicable fraction of the redemption price per share
payable with respect to such series of the Preferred Stock.
Whenever Hecla redeems shares of Preferred Stock held by the
Depositary, the Depositary will redeem as of the same redemp-
tion date the number of Depositary Shares relating to shares of
Preferred Stock so redeemed. If less than all of the Deposi-
tary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata as may be deter-
mined by the Depositary.
After the date fixed for redemption, the Depositary
Shares so called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the Depositary
Shares will cease, except the right to receive the moneys, se-
curities or other property payable upon such redemption and any
money, securities or other property to which the holders of
such Depositary Shares were entitled, including any accrued and
unpaid dividends payable in connection with such redemption,
upon such redemption upon surrender to the Depositary of the
Depositary Receipts evidencing such Depositary Shares.
-44-<PAGE>
VOTING OF PREFERRED STOCK
Upon receipt of notice of any meeting at which the
holders of the applicable Preferred Stock are entitled to vote,
the Depositary will mail the information contained in such no-
tice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same
date as the record date for the Preferred Stock) will be en-
titled, subject to any applicable restrictions, to instruct the
Depositary as to the exercise of the voting rights pertaining
to the number of shares of Preferred Stock underlying such
holder's Depositary Shares. The Depositary will endeavor, in-
sofar as practicable, to vote the number of shares of Preferred
Stock underlying such Depositary Shares in accordance with such
instructions, and Hecla will agree to take all action which may
be deemed necessary by the Depositary in order to enable the
Depositary to do so.
AMENDMENT AND TERMINATION OF DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depos-
itary Shares and any provision of the Deposit Agreement may at
any time be amended by agreement between Hecla and the Deposi-
tary. However, any amendment which materially and adversely
alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved
by the record holders of at least a majority of the Depositary
Shares then outstanding. A Deposit Agreement may be terminated
by Hecla or the Depositary only if (i) all outstanding Deposi-
tary Shares relating thereto have been redeemed or (ii) there
has been a final distribution in respect of the Preferred Stock
of the relevant series in connection with any liquidation, dis-
solution or winding up of Hecla and such distribution has been
distributed to the holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
Hecla will pay all transfer and other taxes and gov-
ernmental charges arising solely from the existence of the de-
positary arrangements. Hecla will pay charges of the Deposi-
tary in connection with the initial deposit of any Preferred
Stock and any redemption of such Preferred Stock. Holders of
Depositary Shares will pay transfer and other taxes and gov-
ernmental charges and such other charges as are expressly pro-
vided in the Deposit Agreement to be for their accounts.
-45-<PAGE>
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering
to Hecla notice of its election to do so, and Hecla may at any
time remove the Depositary, any such resignation or removal to
take effect upon the appointment of a successor Depositary and
its acceptance of such appointment. Such successor Depositary
must be appointed within 60 days after delivery of the notice
of resignation or removal and must be a bank or trust company
having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
MISCELLANEOUS
The Depositary will forward to the holders of Depos-
itary Shares all reports and communications from Hecla which
are delivered to the Depositary and which Hecla is required to
furnish to the holders of the applicable Preferred Stock.
Neither the Depositary nor Hecla will be liable if it
is prevented or delayed by law or any circumstance beyond its
control in performing its obligations under the Deposit Agree-
ment. The obligations of Hecla and the Depositary under the
Deposit Agreement will be limited to performance in good faith
of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any De-
positary Shares or Preferred Stock unless satisfactory indem-
nity is furnished. They may rely upon written advice of coun-
sel or accountants, or information provided by persons pre-
senting Preferred Stock for deposit, holders of Depositary
Shares or other persons believed to be competent and on docu-
ments believed to be genuine.
DESCRIPTION OF WARRANTS
Hecla may issue Warrants to purchase Debt Securities
("Debt Warrants") and Warrants to purchase Common Stock or
Preferred Stock ("Stock Warrants"). Warrants may be issued
independently of or together with any other Securities and may
be attached to or separate from such Securities. Each series
of Warrants will be issued under a separate Warrant Agreement
(each a "Warrant Agreement") to be entered into between Hecla
and a Warrant Agent ("Warrant Agent"). The Warrant Agent will
act solely as an agent of Hecla in connection with the Warrant
of such series and will not assume any obligation or relation-
ship of agency for or with holders or beneficial owners of
Warrants. The following sets forth certain general terms and
provisions of the Warrants offered hereby. Further terms of
the Warrants and the applicable Warrant Agreement will be set
forth in the applicable Prospectus Supplement.
-46-<PAGE>
DEBT WARRANTS
The applicable Prospectus Supplement will describe
the terms of any Debt Warrants, including the following: (i)
the title of such Debt Warrants; (ii) the offering price for
such Debt Warrants, if any; (iii) the aggregate number of such
Debt Warrants; (iv) the designation and terms of such Debt Se-
curities purchasable upon exercise of such Debt Warrants; (v)
if applicable, the designation and terms of the Securities with
which such Debt Warrants are issued and the number of such Debt
Warrants issued with each such Security; (vi) if applicable,
the date from and after which such Debt Warrants and any Secu-
rities issued therewith will be separately transferable; (vii)
the principal amount of Debt Securities purchasable upon exer-
cise of a Debt Warrant and the price at which such principal
amount of Debt Securities may be purchased upon exercise;
(viii) the date on which the right to exercise such Debt War-
rants shall commence and the date on which such right shall
expire; (ix) if applicable, the minimum or maximum amount of
such Debt Warrants which may be exercised at any one time; (x)
whether the Debt Warrants represented by the Debt Warrant cer-
tificates or Debt Securities that may be issued upon exercise
of the Debt Warrants will be issued in registered or bearer
form; (xi) information with respect to book-entry procedures,
if any; (xii) the currency, currencies or currency unit or
units in which the offering price, if any, and the exercise
price are payable; (xiii) if applicable, a discussion of cer-
tain United States federal income tax considerations; (xiv) the
antidilution provisions of such Debt Warrants, if any; (xv) the
redemption or call provisions, if any, applicable to such Debt
Warrants; and (xvi) any additional terms of the Debt Warrants,
including terms, procedures and limitations relating to the
exchange and exercise of such Debt Warrants.
STOCK WARRANTS
The applicable Prospectus Supplement will describe
the terms of any Stock Warrants, including the following: (i)
the title of such Stock Warrants; (ii) the offering price, if
any, of such Stock Warrants; (iii) the aggregate number of such
Stock Warrants; (iv) the designation and terms of the Common
Stock or Preferred Stock purchasable upon exercise of such
Stock Warrants; (v) if applicable, the designation and terms of
the Securities with which such Stock Warrants are issued and
the number of such Stock Warrants issued with each such Secu-
rity; (vi) if applicable, the date from and after which such
Stock Warrants and any Securities issued therewith will be
separately transferrable; (vii) the number of shares of Common
Stock or Preferred Stock purchasable upon exercise of a Stock
Warrant and the price at which such shares may be purchased
-47-<PAGE>
upon exercise; (viii) the date on which the right to exercise
such Stock Warrants shall commence and the date on which such
right shall expire, including Hecla's right to accelerate the
exercisability of Stock Warrants to purchase Common Stock; (ix)
if applicable, the minimum or maximum amount of such Stock
Warrants which may be exercised at any one time; (x) the cur-
rency, currencies or currency unit or units in which the of-
fering price, if, any, and the exercise price are payable; (xi)
if applicable, a discussion of certain United States federal
income tax considerations; (xii) the antidilution provisions,
if any, of such Stock Warrants; (xiii) the redemption or call
provisions, if any, applicable to such Stock Warrants; and
(xiv) any additional terms of such Stock Warrants, including
terms, procedures and limitations relating to the exchange and
exercise of such Stock Warrants.
CAPITAL STOCK
As of the date hereof, Hecla is authorized by its
Restated Certificate of Incorporation to issue 100,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock.
As of May 31, 1995, there were 2,300,000 shares of Series B
Cumulative Convertible Preferred Stock ("Convertible Preferred
Stock") issued and outstanding and an additional 2,000,000
shares of Preferred Stock designated by the Board of Directors
of Hecla as Series A Junior Participating Preferred Stock (the
"Series A Preferred Stock"). Shares of Series A Preferred
Stock have been initially reserved for issuance upon exercise
of the Rights hereinafter described. See "-- Rights". On
April 30, 1995, there were (i) 48,235,388 shares of Common
Stock issued and outstanding and (ii) 7,395,420 shares of Com-
mon Stock reserved for issuance upon conversion of the Con-
vertible Preferred Stock. In addition, as of May 8, 1995,
2,793,279 shares of Common Stock were authorized and remained
available for issuance under Hecla's stock option plans, other
employee benefit plans and stock warrants.
SERIES B PREFERRED STOCK
The Series B Preferred Stock ranks senior to the
Common Stock and any shares of Series A Junior Participating
Preferred Shares issued pursuant to the Rights with respect to
payment of dividends and amounts upon liquidation, dissolution
or winding-up. While any shares of Series B Preferred Stock
are outstanding, Hecla may not authorize the creation or issue
of any class or series of stock that ranks senior to the Series
B Preferred Stock as to dividends or upon liquidation, disso-
lution or winding-up without the consent of the holders of at
least 66 2/3% of the outstanding shares of Series B Preferred
Stock and any other series of Preferred Stock ranking on a
-48-<PAGE>
parity with the Series B Preferred Stock as to dividends and
upon liquidation, dissolution or winding-up (a "Parity Stock"),
voting as a single class without regard to series.
Holders of shares of Series B Preferred Stock are
entitled to receive, when, as and if declared by the Board of
Directors of Hecla out of assets of Hecla legally available
therefor, cumulative cash dividends at the rate per annum of
$3.50 per share of Series B Preferred Stock.
Hecla will not (i) declare, pay or set apart funds
for the payment of any dividend or other distribution with re-
spect to any Junior Stock (as defined below) or (ii) redeem,
purchase or otherwise acquire for consideration any Junior
Stock or Parity Stock through a sinking fund or otherwise (ex-
cept by conversion into or exchange for shares of Junior Stock
and other than a redemption or purchase or other acquisition of
shares of Common Stock of Hecla made for purposes of an em-
ployee incentive or benefit plan of Hecla or any subsidiary),
unless all accrued and unpaid dividends with respect to the
Series B Preferred Stock and any Parity Stock at the time such
dividends are payable have been paid or funds have been set
apart for payment of such dividends. As used herein, (i) the
term "dividend" does not include dividends payable solely in
shares of Junior Stock on Junior Stock, or in options, warrants
or rights to holders of Junior Stock to subscribe for or pur-
chase any Junior Stock, and (ii) the term "Junior Stock" means
the Common Stock, any Series A Junior Participating Preferred
Shares issued pursuant to the Rights, and any other class of
capital stock of Hecla now or hereafter issued and outstanding
that ranks junior as to the payment of dividends or amounts
payable upon liquidation, dissolution and winding-up to the
Series B Preferred Stock.
The Series B Preferred Stock is not redeemable prior
to July 1, 1996. On and after such date, the Series B Pre-
ferred Stock is redeemable at the option of Hecla, in whole or
in part, at $52.45 per share if redeemed during the twelve-
month period beginning July 1, 1996 declining to $50.00 per
share July 1, 2003 and thereafter, plus, in each case, all
dividends accrued and unpaid on the Convertible Preferred Stock
up to the date fixed for redemption.
The holders of shares of Series B Preferred Stock
will be entitled to receive, in the event of any liquidation,
dissolution or winding-up of Hecla, whether voluntary or in-
voluntary, $50.00 per share of Series B Preferred Stock plus an
amount per share of Series B Preferred Stock equal to all div-
idends (whether or not earned or declared) accrued and unpaid
thereon to the date of final distribution to such holders (the
-49-<PAGE>
"Liquidation Preference"), and no more. Until the holders of
the Series B Preferred Stock have been paid the Liquidation
Preference in full, no payment will be made to any holder of
Junior Stock upon the liquidation, dissolution or winding-up of
Hecla.
Except as indicated below or in the Series B Pre-
ferred Certificate of Designations, or except as otherwise from
time to time required by applicable law, the holders of Series
B Preferred Stock will have no voting rights and their consent
shall not be required for taking any corporate action. When
and if the holders of Series B Preferred Stock are entitled to
vote, each holder will be entitled to one vote per share. If
the equivalent of six quarterly dividends payable on the Series
B Preferred Stock have not been declared and paid or set apart
for payment, whether or not consecutive, the number of direc-
tors then constituting the Board of Directors of Hecla shall be
increased by two and the holders of the Series B Preferred
Stock and any other series of Parity Stock similarly affected,
voting as a single class without regard to series, will be en-
titled to elect such two additional directors at the next an-
nual meeting and each subsequent meeting, until such time as
all cumulative dividends have been paid in full.
Each share of Series B Preferred Stock will be con-
vertible, in whole or in part at the option of the holders
thereof, into shares of Common Stock at a conversion price of
$15.55 per share of Common Stock (equivalent to a conversion
rate of approximately 3.2154 shares of Common Stock for each
share of Series B Preferred Stock), subject to adjustment as
described below (the "Conversion Price").
The Conversion Price is subject to adjustment upon
certain events, including (i) dividends (and other distribu-
tions) payable in Common Stock on any class of capital stock of
Hecla, (ii) the issuance to all holders of Common Stock of
certain rights or warrants (other than the Rights or any simi-
lar rights issued under any successor shareholders rights plan)
entitling them to subscribe for or purchase Common Stock or
securities which are convertible into Common Stock, (iii) sub-
divisions, combinations and reclassifications of Common Stock,
and (iv) distributions to all holders of Common Stock of evi-
dences of indebtedness of Hecla or assets (including securi-
ties, but excluding those dividends, rights, warrants and dis-
tributions referred to above and dividends and distributions
paid in cash out of the profits or surplus of Hecla).
-50-<PAGE>
WARRANTS TO PURCHASE COMMON STOCK
As a result of the Company's acquisition of Equinox
Resources Ltd. in March 1994, warrants issued by Equinox on
December 8, 1992 in connection with Equinox's acquisition of
another company ("Equinox Warrants") were assumed by Hecla.
The Equinox Warrants are exercisable for a total of 226,131
shares of Common Stock at an exercise price of Canadian $11.33
per share (equivalent to U.S.$8.36 using the exchange rate on
April 30, 1995). The Equinox Warrants expire on August 31,
1996. If the Common Stock trades higher than Canadian $16.67
for 20 consecutive trading days, upon Hecla's election and no-
tice to warrantholders, the holders of Equinox Warrants must
exercise their warrants or lose the right to exercise. The
terms of the Equinox Warrants are set forth in the warrant
transfer agency agreement made as of December 8, 1992 between
Equinox and Montreal Trust Company of Canada, which agreement
has been assumed by the Company.
RIGHTS
Upon the terms and subject to the conditions of the
Rights Agreement, a holder of a Right is entitled to purchase
one one-hundredth of a Series A Preferred Share at an exercise
price of $47.50. The Rights are currently represented by the
certificates for the Common Stock and are not transferable
apart therefrom. Transferable Rights certificates will be is-
sued at the earlier of (i) the tenth day after the public an-
nouncement that any person or group has acquired beneficial
ownership of 15% or more of the Common Stock (an "Acquiring
Person") or (ii) the tenth day after a person commences, or
announces an intention to commence, a tender or exchange offer
the consummation of which would result in any person or group
becoming an Acquiring Person. The 15% threshold for becoming
an Acquiring Person may be reduced by the Board of Directors of
Hecla to not less than 10% prior to any such acquisition.
The Rights are subject to adjustment in several cir-
cumstances. In particular, (i) in the event Hecla is acquired
in a merger or other business combination transaction, each
Right will entitle its holder to purchase, at the exercise
price of the Right, that number of shares of common stock of
the acquiror which at the time of such transaction would have a
market value of two times the exercise price of the Rights and
(ii) in the event any person or group becomes an Acquiring
Person, each holder of a Right (other than Rights beneficially
owned by the Acquiring Person, which will become void) will
thereafter have the right to receive upon exercise that number
of shares of Common Stock having a market value of two times
the exercise price of the Right.
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All the outstanding Rights may be redeemed by Hecla
for $0.05 per Right prior to the tenth day following the date
on which it was announced that a person or group became an Ac-
quiring Person. Under certain circumstances, the Board of Di-
rectors of the Company may decide to exchange each Right (ex-
cept Rights held by an Acquiring Person) for one share of Com-
mon Stock. The Rights will expire on May 19, 1996 unless ear-
lier redeemed.
As long as the Rights are attached to and evidenced
by the certificates representing the Common Stock, Hecla will
continue to issue one Right with each share of Common Stock
that shall become outstanding. A Right is presently attached
to each issued and outstanding share of Common Stock. So long
as the Rights are outstanding, the Company will issue one Right
with each new share of Common Stock issued.
The Rights have certain antitakeover effects. The
Rights may cause substantial dilution to a person or group that
attempts to acquire the Company on terms not approved by the
Board of Directors of the Company. The Rights should not in-
terfere with any merger or other business combination approved
by the Board of Directors of the Company since the Rights may
be redeemed by the Company prior to the consummation of such
transactions.
The Rights Agreement is attached as an exhibit to the
Company's Registration Statement on Form 8-A dated May 19,
1986. The Rights Agreement was amended effective November 29,
1990 and such amendment is attached as an exhibit to the Com-
pany's Current Report on Form 8-K dated November 9, 1990 (as
amended, the "Rights Agreement"). The description of the
Rights found in each of the foregoing Form 8-A and Form 8-K has
been incorporated by reference herein and copies of such Forms
can be obtained in the manner set forth under "Information In-
corporated By Reference."
CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF
INCORPORATION AND BY-LAWS
Certain provisions in the Company's Restated Certif-
icate of Incorporation and By-Laws may in certain circumstances
have an antitakeover effect. These provisions (1) classify the
Board of Directors into three classes, as nearly equal in num-
ber as possible, each of which serve for three years, with one
class being elected each year; (2) provide that directors may
be removed only for cause and only with the approval of the
holders of at least 80% of the voting power of the capital
stock of the Company entitled to vote generally in the election
of directors (the "Voting Stock"); (3) provide that any vacancy
-52-<PAGE>
on the Board of Directors shall be filled only by the remaining
directors then in office, though less than a quorum; (4) re-
quire that shareholder action be taken at an annual or special
meeting of shareholders and prohibit shareholder action by
consent; (5) provide that special meetings of shareholders of
the Company may be called only by the Board of Directors pur-
suant to a resolution adopted by a majority of the entire Board
of Directors; and (6) provide that the shareholder vote re-
quired to alter, amend or repeal the foregoing provisions is
80% of the then-outstanding Voting Stock.
It would be possible, within the limitations imposed
by applicable law and the applicable rules of the New York
Stock Exchange upon which the Common Stock is listed, for the
Board of Directors to authorize the issuance of one or more
series of Preferred Stock with voting rights (including class
voting rights) or other rights, powers and preferences which
could impede the success of a proposed merger, tender offer,
proxy contest or other attempt to gain control of the Company.
In a takeover or similar situation, the issuance by the Board
of Directors of Preferred Stock having voting rights could di-
lute the voting power of the shares of Common Stock held by a
potential acquiror. Moreover, if the Preferred Stock were to
be issued with class voting rights such an issuance could po-
tentially confer veto power over the proposed transaction on a
party friendly to the Company's management.
The Restated Certificate of Incorporation also re-
quires the approval by the holders of 80% of the then-
outstanding Voting Stock as a condition for mergers and certain
other business combinations of the Company ("Business Combina-
tions") with any holder of more than 12 1/2% of such Voting
Stock (an "Interested Shareholder") unless the transaction is
either approved by at least a majority of the members of the
Board of Directors who are unaffiliated with the Interested
Shareholder and were directors before the Interested Share-
holder became an Interested Shareholder (the "Continuing Di-
rectors") or certain minimum price and procedural requirements
are met.
While the foregoing provisions contained in the Cer-
tificate of Incorporation and By-Laws as well as those in the
Rights Plan are intended to encourage persons seeking to ac-
quire control of the Company to initiate such an acquisition
through arm's-length negotiations with the Board of Directors,
they could also have the effect of discouraging a third party
from making a tender offer (including an offer at a substantial
premium over the then-current market value of the Common Stock)
or otherwise attempting to obtain control of the Company even
though such an attempt might be beneficial to the Company and
-53-<PAGE>
its shareholders. Since such provisions may have the effect of
giving the Board of Directors more bargaining powers in nego-
tiations with potential acquirors, they could also result in
the Board of Directors using such bargaining power not only to
try to negotiate a favorable price for an acquisition but also
to negotiate more favorable terms for the management or the
Board of Directors.
THE DELAWARE GENERAL CORPORATION LAW
The Company is a Delaware corporation subject to
Section 203 of the Delaware General Corporation Law (the "Del-
aware Law"). Section 203 provides that, subject to certain
exceptions specified therein, a corporation shall not engage in
any business combination with any "interested stockholder" for
a three-year period following the date that such stockholder
becomes an interested stockholder unless (i) prior to such
date, the board of directors of the corporation approved either
the business combination or the transaction which resulted in
the stockholder becoming an interested stockholder, (ii) upon
consummation of the transaction which resulted in the stock-
holder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the cor-
poration outstanding at the time the transaction commenced
(excluding certain shares), or (iii) on or subsequent to such
date, the business combination is approved by the board of di-
rectors of the corporation and by the affirmative vote of at
least 66-2/3% of the outstanding voting stock which is not
owned by the interested stockholder. Except as specified in
Section 203 of the Delaware Law, an interested stockholder is
defined to include (x) any person that is the owner of 15% or
more of the outstanding voting stock of the corporation, or is
an affiliate or associate of the corporation and was the owner
of 15% or more of the outstanding voting stock of the corpora-
tion, at any time within three years immediately prior to the
relevant date and (y) the affiliates and associates of any such
person. Under certain circumstances, Section 203 of the Dela-
ware Law makes it more difficult for an "interested stockhold-
er" to effect various business combinations with a corporation
for a three-year period, although the stockholders may elect to
exclude a corporation from the restrictions imposed thereunder.
The Company's Restated Certificate of Incorporation does not
exclude the Company from the restrictions imposed under Section
203 of the Delaware Law.
FEDERAL TAX CONSIDERATIONS AS A
REAL PROPERTY HOLDING CORPORATION
The Company believes that the Company would likely
constitute a United States real property holding corporation
-54-<PAGE>
within the meaning of the Internal Revenue Code of 1986, as
amended (the "Code"). Under certain provisions of the Code and
Treasury Regulations thereunder, gain realized by a non-United
States person who would not ordinarily be subject to U.S. fed-
eral income tax on gains would, under certain circumstances, be
subject to tax (the "special tax") on gain realized on the dis-
position (and possible withholding tax on the proceeds from
such disposition (the "withholding tax")) of Securities, not-
withstanding such non-United States person's lack of other
connections with the United States. However, because the Com-
mon Stock of the Company is "regularly traded on an established
securities market" (within the meaning of Section 897(c)(3) of
the Code), under the Code and Temporary Treasury Regulations
now in effect, the special tax and the withholding tax would
apply to the disposition by a non-U.S. person of an interest in
a class of Securities that is not regularly traded on an es-
tablished securities market only if on the date such interest
was acquired by such person it had a fair market value greater
than the fair market value on that date of 5% of the regularly
traded class of Securities with the lowest fair market value.
However, if such non-regularly traded class of Securities is
convertible into a regularly traded class of Securities, the
special tax and the withholding tax would apply to the dispo-
sition of an interest in such non-regularly traded class of
Securities only if on the date such interest was acquired by
such person it had a fair market value greater than the fair
market value on that date of 5% of the regularly traded class
of Securities into which it is convertible. The special tax
(but, except in certain circumstances, not the withholding tax)
would likewise apply to a disposition of an interest in a class
of Securities that is regularly traded on an established secu-
rities market by a non-U.S. person who beneficially owns, di-
rectly or indirectly, more than 5% of such class of Securities
at any time during the five-year period immediately preceding
the disposition of the interest.
Certain United States federal tax consequences of an
investment in a class of Securities will, to the extent ap-
propriate under the circumstances, be described in the Prospec-
tus Supplement relating thereto. Each prospective holder of
Securities is urged to consult its own tax advisors regarding
the United States federal tax consequences of an investment in
such Securities, as well as the tax consequences under the laws
of any state, local or other United States or non-United States
taxing jurisdiction.
PLAN OF DISTRIBUTION
Hecla may sell the Securities in and/or outside the
United States: (i) through underwriters or dealers which may
-55-<PAGE>
include Merrill Lynch & Co. and Salomon Brothers Inc; (ii) di-
rectly to a limited number of purchasers or to a single pur-
chaser; or (iii) through agents. The applicable Prospectus
Supplement with respect to the Offered Securities will set
forth the terms of the offering of the Offered Securities, in-
cluding the name or names of any underwriters or agents, the
purchase price of the Offered Securities and the proceeds to
Hecla from such sale, any delayed delivery arrangements, any
underwriting discounts and other items constituting underwrit-
ers' compensation, any initial public offering price and any
discounts or concessions allowed or reallowed or paid to deal-
ers. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If underwriters are used in the sale, the Offered
Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the
time of sale. The Securities may be offered to the public ei-
ther through underwriting syndicates represented by one or more
managing underwriters or directly by one or more firms acting
as underwriters. The underwriter or underwriters with respect
to a particular underwritten offering of Securities to be named
in the Prospectus Supplement relating to such offering and, if
an underwriting syndicate is used, the managing underwriter or
underwriters will be set forth on the cover of such Prospectus
Supplement. Unless otherwise set forth in the Prospectus Sup-
plement relating thereto, the obligations of the underwriters
to purchase the Offered Securities will be subject to condi-
tions precedent and the underwriters will be obligated to pur-
chase all the Offered Securities if any are purchased.
If dealers are utilized in the sale of Offered Secu-
rities in respect of which this Prospectus is delivered, Hecla
will sell such Offered Securities to the dealers as principals.
The dealers may then resell such Offered Securities to the
public at varying prices to be determined by such dealers at
the time of resale. The names of the dealers and the terms of
the transaction will be set forth in the Prospectus Supplement
relating thereto.
If an agent is used in an offering of Offered Secu-
rities, the agent will be named, and the terms of the agency
will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise indicated in such Prospectus Sup-
plement, an agent will act on a best efforts basis for the pe-
riod of its appointment.
-56-<PAGE>
The Securities may be sold directly by Hecla or
through agents designated by Hecla from time to time. Any
agent involved in the offer or sale of the Offered Securities
in respect to which this Prospectus is delivered will be named,
and any commissions payable by Hecla to such agent will be set
forth, in the Prospectus Supplement relating thereto. Unless
otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of
its appointment.
The Securities may be sold directly by Hecla to in-
stitutional investors or others, who may be deemed to be under-
writers within the meaning of the Securities Act with respect
to any resale thereof. The terms of any such sales, including
the terms of any bidding or auction process, will be described
in the Prospectus Supplement relating thereto.
If so indicated in the applicable Prospectus Supple-
ment, Hecla will authorize agents, underwriters or dealers to
solicit offers from certain types of institutions to purchase
Offered Securities from Hecla at the public offering price set
forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject only to
those conditions set forth in the applicable Prospectus Sup-
plement, and the Prospectus Supplement will set forth the com-
mission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled un-
der agreements entered into with Hecla to indemnification by
Hecla against certain civil liabilities, including liabilities
under the Securities Act, or to contribution with respect to
payments which such agents, dealers or underwriters may be re-
quired to make in respect thereof. Agents, dealers and under-
writers may be customers of, engage in transactions with, or
perform services for Hecla in the ordinary course of business.
The Securities other than shares of Common Stock may
or may not be listed on a national securities exchange. No
assurances can be given that there will be an active trading
market for the Common Stock or a market for any such other Se-
curities.
LEGAL OPINIONS
Certain legal matters in connection with the Securi-
ties offered hereby will be passed upon for Hecla by Wachtell,
Lipton, Rosen & Katz, New York, New York, and, unless otherwise
-57-<PAGE>
specified in the applicable Prospectus Supplement, for any un-
derwriters or agents by Shearman & Sterling, Toronto, Canada
and New York, New York.
EXPERTS
The consolidated balance sheets as of December 31,
1993 and 1994 and the consolidated statements of operations,
changes in shareholders' equity and cash flows for each of the
three years in the three-year period ended December 31, 1994
included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1994, incorporated by reference in this
Prospectus have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting
and auditing.
-58-<PAGE>
TABLE OF CONTENTS
Page
Prospectus
Available Information.............................. 1
Information Incorporated by Reference.............. 2
The Company........................................ 4
Risk Factors....................................... 5
Use of Proceeds.................................... 16
Ratio of Earnings to Fixed Charges................. 16
Description of Debt Securities..................... 16
Description of Preferred Stock..................... 40
Description of Common Stock........................ 42
Description of Depositary Shares................... 42
Description of Warrants............................ 46
Capital Stock...................................... 48
Certain Provisions of the Restated Certificate
of Incorporation and By-Laws..................... 52
Federal Tax Considerations as a Real
Property Holding Corporation..................... 54
Plan of Distribution............................... 55
Legal Opinions..................................... 57
Experts............................................ 58
-59-<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses payable by Hecla in connection with the
offering described in this Registration Statement (other than
underwriting discounts and commissions) are estimated (other
than the Commission's registration fee) as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee $ 34,482.76
Printing expenses................................... 100,000.00
Accounting fees and expenses........................ 40,000.00
Legal fees and expenses............................. 80,000.00
Blue Sky qualification fees and expenses............ 15,000.00
Trustee's and Warrant Agent's fees.................. 30,000.00
Fees of rating agencies............................. 60,000.00
Miscellaneous....................................... 12,517.24
Total..................................... $372,000.00
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article IX of the registrant's Certificate of Incor-
poration provides:
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section I. Limitation of Liability. A director of the
Corporation shall not be personally liable to the Corporation
or its shareholders for monetary damages for breach of fidu-
ciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or
its shareholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the Delaware General Corpo-
ration Law, or (iv) for any transaction from which the director
derived any improper personal benefit. If the Delaware General
Corporation Law is amended after approval by the shareholders
of this article to authorize corporate action further elimi-
nating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be elimi-
nated or limited to the fullest extent permitted by the Dela-
ware General Corporation Law, as so amended. This paragraph
shall not eliminate or limit the liability of a director for
any act or omission which occurred prior to the effective date
of its adoption. Any repeal or modification of this paragraph
by the shareholders of the Corporation shall not adversely af-
fect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.<PAGE>
SECTION II. Indemnification and Insurance. A. Right to
Indemnification of Director, Officers and Employees. Each
person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or pro-
ceeding, whether civil, criminal, administrative or investiga-
tive (hereinafter a "proceeding"), by reason of the fact that
he or she is or was a director, officer or employee of the
Corporation or is or was serving at the request of the Corpo-
ration as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee ben-
efit plan (hereinafter an "indemnitee"), whether the basis of
such proceeding is alleged action in an official capacity as a
director, officer or employee or in any other capacity while
serving as a director, officer or employee, shall be indemni-
fied and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any
such amendment only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than
permitted prior thereto), against all expense, liability and
loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith
and such indemnification shall continue as to an indemnitee who
has ceased to be a director, officer or employee and shall in-
ure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that, except as provided in
paragraph (b) hereof with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any
such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding
(or part thereof) was authorized by the board of directors of
the Corporation. The right to indemnification conferred in
this Section shall be a contract right and shall include the
right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposi-
tion (hereinafter an "advancement of expenses"); provided,
however, that, if the Delaware General Corporation Law re-
quires, an advancement of expenses incurred by an indemnitee in
his or her capacity as a director or officer (and not in ay
other capacity in which service was or is rendered such indem-
nitee, including, without limitation, service to an employee
benefit plan) shall be made only upon delivery to the Corpora-
tion or an undertaking (hereinafter an "undertaking"), by or on
behalf of such indemnitee, to repay all amounts so advanced if
it shall ultimately be determined by final judicial decision
from which there is no further right to appeal (hereinafter a
"final adjudication") that such indemnitee is not entitled to
II-2<PAGE>
be indemnified for such expenses under this Section or other-
wise.
B. Right of Indemnitee to Bring Suit. If a claim under
paragraph (a) of this Section is not paid in full by the Cor-
poration within sixty days after a written claim has been re-
ceived by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period
shall be twenty days, the indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such
suit, or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertak-
ing, the indemnitee shall be entitled to be paid also the ex-
pense of prosecuting or defending such suit. In (i) any suit
brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to en-
force a right to an advancement of expenses) it shall be a de-
fense that, and (ii) in any suit by the Corporation to recover
an advancement of expenses pursuant to the terms of an under-
taking the Corporation shall be entitled to recover such ex-
penses upon a final adjudication that, the indemnitee has not
met the applicable standard of conduct set forth in the Dela-
ware General Corporation Law. Neither the failure of the Cor-
poration (including its board of directors, independent legal
counsel, or its shareholders) to have made a determination
prior to the commencement of such suit that indemnification of
the indemnitee is proper in the circumstances because the in-
demnitee has met the applicable standard of conduct set forth
in the Delaware General Corporation Law, nor an actual deter-
mination by the Corporation (including its board of directors,
independent legal counsel, or its shareholders) that the in-
demnitee has not met such applicable standard of conduct, shall
create a presumption that the indemnitee has not met the ap-
plicable standard of conduct or, in the case of such a suit
brought by the indemnitee, be a defense to such suit. In any
suit brought by the indemnitee to enforce a right to indemni-
fication or to an advancement of expenses hereunder, or by the
Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified, or to such ad-
vancement of expenses, under this Section or otherwise shall be
on the Corporation.
C. Non-Exclusivity of Rights. The rights to indemnifi-
cation and to the advancement of expenses conferred in this
Section shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, this
Certificate of Incorporation, By-Law, agreement, vote of
shareholders or disinterested directors or otherwise. The
II-3<PAGE>
Corporation is authorized to enter into contracts of indemni-
fication.
D. Insurance. The Corporation may maintain insurance,
at its expense, to protect itself and any director, officer,
employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against
any expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such ex-
pense, liability or loss under the Delaware General Corporation
Law.
E. Indemnification of Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by
the board of directors, grant rights to indemnification, and to
the advancement of expenses, to any agent of the Corporation to
the fullest extent of the provisions of this Section with re-
spect to the indemnification and advancement of expenses of
directors, officers and employees of the Corporation.
Article VII of the registrant's Bylaws provides identi-
cally.
The registrant also maintains a directors' and officers'
liability insurance policy for directors and officers of the
Company and its subsidiaries.
II-4<PAGE>
ITEM 16. EXHIBITS
EXHIBIT
NO. DOCUMENT
3.1(a) Certificate of Incorporation of the Registrant as
amended to date.*
3.1(b) Certificate of Amendment of Certificate of
Incorporation of the Registrant, dated as of May
16, 1991.*
3.2 By-Laws of the Registrant as amended to date.*
4.1(a) Certificate of Designations, Preferences and
Rights of Series A Junior Participating Preferred
Stock.*
4.1(b) Certificate of Designations, Preferences and
Rights of Series B Cumulative Convertible Pre-
ferred Stock.*
4.2(a) Rights Agreement dated as of May 9, 1986 between
Hecla Mining Company and Manufacturers Hanover
Trust Company, which includes the form of
Certificate of Designation setting forth the terms
of the Series A Junior Participating Preferred
Stock of Hecla Mining Company as Exhibit A, the
form of Right Certificate as Exhibit B and the
summary of Rights to Purchase Preferred Shares as
Exhibit C.*
4.2(b) Amendment, dated as of November 29, 1990 to the
Rights Agreement dated as of May 9, 1986 between
Hecla Mining Company and Manufacturers Hanover
Trust Company.*
4.2(c) Second Amendment to Rights Agreement dated
September 30, 1991, between Hecla Mining Company
and Manufacturers Hanover Trust Company.*
4.2(d) Hecla Mining Company Notice Letter to
Shareholders, being holders of Rights
Certificates, appointing American Stock Transfer &
Trust Company as Rights Agent, successor to Manu-
facturers Hanover Trust Company, effective
September 30, 1991, pursuant to Section 21 of the
Rights Agreement.*
4.3(a) Form of Deposit Agreement.+
4.3(b) Form of Depositary Receipt (included in Exhibit
4.3(a)).+
<PAGE>
4.3(c) Form of Indenture between Hecla and
___________________, Trustee, with respect to
Senior Debt Securities ("Senior Indenture").+
4.3(d) Form of Indenture between Hecla and
____________________, Trustee, with respect to
Subordinated Debt Securities ("Subordinated
Indenture").+
4.3(e) Form of Debt Warrant Agreement.+
4.3(f) Form of Debt Warrant Certificate (included as
Exhibit A to Exhibit 4.3(e) hereto).+
4.3(g) Form of Preferred Stock Warrant Agreement.+
4.3(h) Form of Preferred Stock Warrant Certificate
(included as Exhibit A to Exhibit 4.3(g) hereto).+
4.3(i) Form of Common Stock Warrant Agreement.+
4.3(j) Form of Common Stock Warrant Certificate (included
as Exhibit A to Exhibit 4.3(i) hereto).+
5. Legal opinion of Wachtell, Lipton, Rosen & Katz.+
12. Statement of Computation of Ratio of Earnings to
Fixed Charges.
23.1 Consent of Coopers & Lybrand to incorporation by
reference of their report dated February 3, 1995
on the consolidated financial statements of the
Registrant.
23.2 Consent of Wachtell, Lipton, Rosen & Katz
(included in Exhibit 5).
24. Power of Attorney.
+To be filed by Amendment.
*These exhibits were filed as indicated on the following
table and are incorporated herein by this reference thereto:
Corresponding Exhibit in Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current
Exhibit in Report on Form 8-K, Proxy Statement or Registration
This Report Statement, as Indicated
3.1(a) 3.1 (10-K for 1987 -- File No. 1-849110)
3.1(b) 3.1(b) (10-K for 1991 -- File No. 1-8491)
3.2 2 (Current Report on Form 8-K Dated November 9, 1990 --
File No. 1-8491)<PAGE>
4.1(a) 4.1(d)(e) (Quarterly Report on Form 10-Q for the quar-
ter ended June 30, 1993 -- File No. 1-8491)
4.1(b) 4.5 (Quarterly Report on Form 10-Q for the quarter
ended June 30, 1993 -- File No. 1-8491)
4.2(a) 1 (Current Report on Form 8-K Dated May 23, 1986 --
File No. 1-8491)
4.2(b) 1 (Current Report on Form 8-K Dated November 9, 1990 --
File No. 1-8491)
4.2(c) 4.1(c) (10-K for 1991 -- File No. 1-8491)
4.2(d) 4.1(d) (10-K for 1991 -- File No. 1-8491)<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide of-
fering thereof.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by sec-
tion 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the reg-
istration statement (or the most recent post-
effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in
the information set forth in the registration state-
ment;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any mate-
rial change to such information in the registration
statement;
provided, however, that paragraphs (i) and (ii) above
do not apply if the information required to be in-
cluded in a post-effective amendment by those para-
graphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of
the Exchange Act that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any lia-
bility under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration state-
ment relating to the securities offered therein, and the<PAGE>
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, offic-
ers and controlling persons of the registrant pursuant to the
provisions described under Item 15 above, or otherwise, the
registrant has been advised that, in the opinion of the Com-
mission, such indemnification is against public policy as ex-
pressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such li-
abilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person
of the registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or con-
trolling person in connection with the securities being regis-
tered, the registrant will, unless, in the opinion of its
counsel, the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under
the Securities Act of 1933, the information omitted from
the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement
as of the time it was declared effective.
(2) For the purpose of determining any liability
under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such se-
curities at that time shall be deemed to be the initial
bona fide offering thereof.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds
to believe that it meets all of requirements for filing on Form
S-3, and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly autho-
rized, in the City of Coeur d'Alene, State of Idaho, on the
26th day of May, 1995.
HECLA MINING COMPANY
By: /s/ ARTHUR BROWN
Arthur Brown
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the fol-
lowing persons in the capacities and on the dates indicated:
<TABLE>
Name Capacity Date
<CAPTION>
<S> <C> <C>
/s/ ARTHUR BROWN Chairman, President and Chief May 26, 1995
Arthur Brown Executive Officer (principal
executive officer)
/s/ JOHN P. STILWELL Vice President Finance and May 26, 1995
John P. Stilwell Treasurer (principal
financial officer)
/s/ JOSEPH T. HEATHERLY Vice President -- Controller May 26, 1995
Joseph T. Heatherly (chief accounting officer)
* Director May 26, 1995
John E. Clute
* Director May 26, 1995
Joseph Coors, Jr.
* Director May 26, 1995
Leland O. Erdahl
* Director May 26, 1995
William A. Griffith
* Director May 26, 1995
Charles L. McAlpine<PAGE>
* Director May 26, 1995
Jorge E. Ordonez
/s/ MICHAEL B. WHITE Attorney-in-fact for the May 26, 1995
Michael B. White persons marked above with an *
/TABLE
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DOCUMENT
3.1(a) Certificate of Incorporation of the Registrant as
amended to date.*
3.1(b) Certificate of Amendment of Certificate of
Incorporation of the Registrant, dated as of May
16, 1991.*
3.2 By-Laws of the Registrant as amended to date.*
4.1(a) Certificate of Designations, Preferences and
Rights of Series A Junior Participating Preferred
Stock.*
4.1(b) Certificate of Designations, Rights and
Preferences for Series B Cumulative Convertible
Preferred Stock.*
4.2(a) Rights Agreement dated as of May 9, 1986 between
Hecla Mining Company and Manufacturers Hanover
Trust Company, which includes the form of
Certificate of Designation setting forth the terms
of the Series A Junior Participating Preferred
Stock of Hecla Mining Company as Exhibit A, the
form of Right Certificate as Exhibit B and the
summary of Rights to Purchase Preferred Shares as
Exhibit C.*
4.2(b) Amendment, dated as of November 29, 1990 to the
Rights Agreement dated as of May 9, 1986 between
Hecla Mining Company and Manufacturers Hanover
Trust Company.*
4.2(c) Second Amendment to Rights Agreement dated
September 30, 1991, between Hecla Mining Company
and Manufacturers Hanover Trust Company.*
4.2(d) Hecla Mining Company Notice Letter to
Shareholders, being holders of Rights
Certificates, appointing American Stock Transfer &
Trust Company as Rights Agent, successor to Manu-
facturers Hanover Trust Company, effective
September 30, 1991, pursuant to Section 21 of the
Rights Agreement.*<PAGE>
4.3(a) Form of Deposit Agreement.+
4.3(b) Form of Depositary Receipt (included in Exhibit
4.3(a)).+
4.3(c) Form of Indenture between Hecla and
___________________, Trustee, with respect to
Senior Debt Securities ("Senior Indenture").+
4.3(d) Form of Indenture between Hecla and
____________________, Trustee, with respect to
Subordinated Debt Securities ("Subordinated
Indenture").+
4.3(e) Form of Debt Warrant Agreement.+
4.3(f) Form of Debt Warrant Certificate (included as
Exhibit A to Exhibit 4.3(e) hereto).+
4.3(g) Form of Preferred Stock Warrant Agreement.+
4.3(h) Form of Preferred Stock Warrant Certificate
(included as Exhibit A to Exhibit 4.3(g) hereto).+
4.3(i) Form of Common Stock Warrant Agreement.+
4.3(j) Form of Common Stock Warrant Certificate (included
as Exhibit A to Exhibit 4.3(i) hereto).+
5. Legal opinion of Wachtell, Lipton, Rosen & Katz.+
12. Statement of Computation of Ratio of Earnings to
Fixed Charges.
23.1 Consent of Coopers & Lybrand to incorporation by
reference of their report dated February 3, 1995
on the consolidated financial statements of the
Registrant.
23.2 Consent of Wachtell, Lipton, Rosen & Katz
(included in Exhibit 5).
24. Power of Attorney.
+To be filed by Amendment.
*These exhibits were filed as indicated on the following
table and are incorporated herein by this reference thereto:
-2-<PAGE>
Corresponding Exhibit in Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current
Exhibit in Report on Form 8-K, Proxy Statement or Registration
This Report Statement, as Indicated
3.1(a) 3.1 (10-K for 1987 -- File No. 1-849110)
3.1(b) 3.1(b) (10-K for 1991 -- File No. 1-8491)
3.2 2 (Current Report on Form 8-K Dated November 9, 1990 --
File No. 1-8491)
4.1(a) 4.1(d)(e) (Quarterly Report on Form 10-Q for the quar-
ter ended June 30, 1993 -- File No. 1-8491)
4.1(b) 4.5 (Quarterly Report on Form 10-Q for the quarter
ended June 30, 1993 -- File No. 1-8491)
4.2(a) 1 (Current Report on Form 8-K Dated May 23, 1986 --
File No. 1-8491)
4.2(b) 1 (Current Report on Form 8-K Dated November 9, 1990 --
File No. 1-8491)
4.2(c) 4.1(c) (10-K for 1991 -- File No. 1-8491)
4.2(d) 4.1(d) (10-K for 1991 -- File No. 1-8491)
-3-
Exhibit 12.
<TABLE>
HECLA MINING COMPANY
FIXED CHARGE COVERAGE RATIO CALCULATION
For the years ended December 31, 1990, 1991, 1992, 1993, 1994
and the three months ended March 31, 1994 and 1995
(In thousands, except ratios)
<CAPTION>
1st Qtr 1st Qtr
1990 1991 1992 1993 1994 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C>
Net loss
before income
taxes and
cumulative effect
of changes in
accounting
principles (398) (18,077) (55,518) (18,720) (24,248) (5,582) (2,414)
Add: Fixed
Charges 6,224 7,136 7,036 9,385 10,857 3,181 2,323
Less: Capitalized
Interest (591) (145) (2,070) (3,533) (1,751) (965) (58)
Net income (loss)
before income taxes
and cumulative
effect of changes
in accounting
principles & fixed
charges 5,235 (11,086) (50,552) (12,868) (15,142) (3,366) (149)
Fixed charges:
Preferred stock
dividends -- -- -- 4,070 8,050 2,013 2,012
Interest portion
of rentals -- -- -- -- 166 -- 146
Interest expense 6,073 6,985 6,905 5,224 2,606 1,149 165
Amortization of
Lyons 151 151 131 91 35 19 --
Total fixed
charges 6,224 7,136 7,036 9,385 10,857 3,181 2,323
Fixed Charge
Ratio (a) (a) (a) (a) (a) (a) (a)<PAGE>
Inadequate
coverage 989 18,222 57,588 22,253 25,999 6,547 2,472
Writedowns & other
non-cash charges:
DD&A (b) (mining
activity) 25,688 21,161 13,774 13,526 14,233 2,620 5,642
DD&A (b) (corporate) 794 737 851 669 524 182 83
Provision for
closed operations 3,916 3,764 13,608 2,327 11,353 240 56
Reduction in
carrying value of
mining properties 502 41 30,791 2,561 7,864 -- --
30,900 25,703 59,024 19,083 33,974 3,042 5,781
(a) Earnings for period were inadequate to cover fixed charges.
(b) DD&A is an abbreviation for "depreciation, depletion and amorization".
</TABLE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on
Form S-3 (File No. 33 ) of our report dated February 3,
1995, on our audit of the consolidated financial statements of
Hecla Mining Company and subsidiaries. We also consent to the
reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Spokane, Washington
May 24, 1995
Exhibit 24.
POWER OF ATTORNEY
Each of the undersigned directors of Hecla Mining
Company (the "Corporation") hereby appoints and constitutes
Arthur Brown, John P. Stilwell and Michael B. White, and each
of them, as his true and lawful attorneys-in-fact and agents,
with full power of substitution and revocation, in his name and
on his behalf, to do any and all acts and things and to execute
any and all instruments which they and each of them may deem
necessary or advisable to enable the Corporation to comply with
the Securities Act of 1933, as amended (the "Act"), and any
rules, regulations or requirements of the Securities and Ex-
change Commission in respect thereof, in connection with the
registration under the Act of shares of common stock, shares of
preferred stock, depositary shares, debt securities (including
senior debt securities and subordinated debt securities which
may be convertible or exchangeable into other securities) and/
or warrants to purchase shares of common stock, shares of pre-
ferred stock and/or debt securities, in each case of the Cor-
poration (collectively, "Securities"), having an aggregate
maximum offering price of $100 million, which Securities are to
be offered from time to time pursuant to Rule 415 of the Act
(or any successor rule thereto), including power and authority
to sign his name in any and all capacities (including his ca-
pacity as a Director of the Corporation) to a Registration
Statement on Form S-3 or such other form as may be appropriate,
and to any and all amendments, including post-effective amend-
ments, to such Registration Statement, and to any and all in-
struments or documents filed as part of or in connection with
such Registration Statement or any amendments thereto; and the
undersigned hereby ratifies and confirms all that said
attorneys-in-fact and agents, or any of them, shall lawfully do
or cause to be done by virtue thereof.
This Power of Attorney automatically ends as to each
appointee upon the termination of his service with the Corpora-
tion.
In witness thereof, the undersigned have executed
this Power of Attorney on this 5th day of May, 1995.
/s/ John E. Clute /s/ Joe Coors, Jr.
John E. Clute Joe Coors, Jr.
/s/ Leland O. Erdahl /s/ William A. Griffith
Leland O. Erdahl William A. Griffith
/s/ Charles L. McAlpine /s/ Jorge E. Ordonez C.
Charles L. McAlpine Jorge E. Ordonez C.
