<PAGE> 1
PROXY STATEMENT
PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or
section 240.14a-12
HECLA MINING COMPANY
(Name of Registrant as Specified in Its Charter)
MICHAEL B. WHITE, SECRETARY
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per Each Party to the Controversy Pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee Computed on Table Below Per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of Each Class of Securities to Which Transaction Applies:
(2) Aggregate Number of Securities to Which Transaction Applies:
(3) Per Unit Price or Other Underlying Value of Transaction Computed Pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed Maximum Aggregate Value of Transaction:
(5) Total fee paid:
[ ] Fee Paid Previously with Preliminary Materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule, or Registration Statement No:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[HECLA LOGO] March 28, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Hecla Mining Company, which will be held at the corporate offices, located at
6500 Mineral Drive in Coeur d'Alene, Idaho, on Friday, May 10, 1996, at 10 a.m.,
Pacific Daylight Time.
The annual meeting will involve the election of two directors and the
selection of auditors for 1996. In addition, reports of the Corporation's
operations and other matters of interest will be made at the meeting. For
information with respect to these matters, please refer to the Notice of Meeting
and Proxy Statement which are enclosed. Your Board of Directors respectfully
recommends that you vote to elect the directors nominated and vote to approve
the auditors.
It is important that your shares be represented at the meeting whether or
not you are personally able to attend. You are therefore urged to complete,
date and sign the accompanying proxy and mail it in the enclosed postage-paid
envelope as promptly as possible.
Thank you for your cooperation.
Sincerely,
/s/ Arthur Brown
------------------------------
Arthur Brown
Chairman, President and
Chief Executive Officer
<PAGE> 3
HECLA MINING COMPANY
6500 MINERAL DRIVE
COEUR D'ALENE, IDAHO 83814-8788
_________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 10, 1996
To the Shareholders of
HECLA MINING COMPANY:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Hecla
Mining Company (the "Corporation") will be held at the corporate offices located
at 6500 Mineral Drive in the City of Coeur d'Alene, State of Idaho, on Friday,
May 10, 1996, at 10 a.m., Pacific Daylight Time, for the following purposes:
(1) To elect two members of the Board of Directors of the
Corporation to serve for three-year terms or until their respective
successors are elected and have qualified;
(2) To consider and vote upon the selection of Coopers &
Lybrand L.L.P. as independent auditors of the Corporation for the fiscal
year ending December 31, 1996; and
(3) To transact such other business as may properly come before
the Annual Meeting or any postponements or adjournments thereof.
The close of business on March 18, 1996, has been fixed as the record date
for the determination of the shareholders entitled to notice of, and to vote at,
the Annual Meeting and at any postponements or adjournments thereof. The stock
transfer books of the Corporation will not be closed.
By Order of the Board of Directors
MICHAEL B. WHITE
Secretary
March 28, 1996
______________________________________________________________________________
Whether or not you plan to attend the Annual Meeting, please complete,
sign and date the accompanying proxy and mail it at once in the enclosed enve-
lope, which requires no additional postage if mailed in the United States. Your
proxy will be revocable, either in writing or by voting in person at the Annual
Meeting, at any time prior to its exercise.
______________________________________________________________________________
<PAGE> 4
HECLA MINING COMPANY
6500 MINERAL DRIVE
COEUR D'ALENE, IDAHO 83814-8788
(208) 769-4100
_______________
P R O X Y S T A T E M E N T
RELATING TO
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 10, 1996
_______________
INTRODUCTION
This Proxy Statement is being furnished by the Board of Directors of Hecla
Mining Company, a Delaware corporation (the "Corporation"), to holders of shares
of the Corporation's Common Stock, par value $0.25 per share (the "Common
Stock"), in connection with the solicitation by the Board of Directors of
proxies to be voted at the Annual Meeting of Shareholders of the Corporation to
be held on Friday, May 10, 1996, and any postponements or adjournments thereof
(the "Annual Meeting"), for the purposes set forth in the accompanying Notice of
Annual Meeting. This Proxy Statement is first being mailed to shareholders on
or about March 28, 1996.
PURPOSES OF ANNUAL MEETING
ELECTION OF DIRECTORS
At the Annual Meeting, shareholders entitled to vote (see "Voting at
Annual Meeting") will be asked to consider and to take action on the election of
two directors to the Corporation's Board of Directors, each to serve for a
three-year term. See "Election of Directors."
SELECTION OF INDEPENDENT AUDITORS
At the Annual Meeting, shareholders also will be asked to consider and to
take action on the selection of Coopers & Lybrand L.L.P. as independent auditors
of the Corporation for the fiscal year ending December 31, 1996. See "Approval
of Auditors."
VOTING AT ANNUAL MEETING
GENERAL
The Board of Directors of the Corporation has fixed the close of business
on March 18, 1996, as the record date (the "Record Date") for determination of
the shareholders entitled to notice of, and to vote at, the Annual Meeting. As
of the Record Date, there were issued and outstanding 51,147,544 shares of
Common Stock entitled to vote. A majority of such shares will constitute a
quorum for the transaction of business at the Annual Meeting. The holders of
record on the Record Date of the shares entitled to be voted at the Annual
Meeting are entitled to cast one vote per share on each matter submitted to a
vote at the Annual Meeting. Directors are elected by a plurality of the votes
cast by the holders of the Common Stock at a meeting at which a quorum is
present. "Plurality" means that the individuals who receive the largest number
of votes cast are elected as directors up to the maximum number of directors to
be chosen at the meeting. Consequently, any shares not voted (whether by
abstention, broker nonvotes or otherwise) have no impact in the election of
directors except to the extent the failure to vote for an individual results in
another individual receiving a
<PAGE> 5
larger number of votes. The approval of the independent auditors requires the
favorable vote of the holders of a majority of the shares present at the
meeting, provided a quorum is present. Any shares which are not voted (whether
by abstentions, broker nonvotes or otherwise) will not count toward the required
total and will have the same effect as shares voted against such approval.
PROXIES
Shares of Common Stock which are entitled to be voted at the Annual
Meeting and which are represented by properly executed proxies will be voted in
accordance with the instructions indicated in such proxies. If no instructions
are indicated on any proxy, the shares represented by such proxy will be voted:
(1) FOR the election of each of the two nominees for election as directors; (2)
FOR the approval of the selection of independent auditors; and (3) in the
discretion of the proxy holder as to any other matters which may properly come
before the Annual Meeting. A shareholder who has executed and returned a proxy
may revoke it at any time before it is voted at the Annual Meeting by executing
and returning a proxy bearing a later date, by giving written notice of
revocation to the Secretary of the Corporation or by attending the Annual
Meeting and voting in person. Attendance in person at the Annual Meeting will
not, in itself, be sufficient to revoke a proxy.
The Corporation will bear all the costs and expenses relating to the
solicitation of proxies, including the costs of preparing, printing and mailing
this Proxy Statement and accompanying material to shareholders. In addition to
the solicitation of proxies by use of the mails, the directors, officers and
employees of the Corporation, without additional compensation, may solicit
proxies personally or by telephone or otherwise. Arrangements will be made with
brokerage firms and other custodians, nominees and fiduciaries for forwarding
solicitation materials to the beneficial owners of the shares of Common Stock
held by such persons, and the Corporation will reimburse such brokerage firms,
custodians, nominees and fiduciaries for reasonable out-of-pocket expenses
incurred by them in connection with such activities.
ELECTION OF DIRECTORS
In accordance with the Corporation's Certificate of Incorporation, its
Board of Directors is divided into three classes. The terms of office of the
directors in each of such classes expire at different times. The term of
Messrs. Leland O. Erdahl and W. A. Griffith will expire at the Annual Meeting of
Shareholders in 1996. Mr. Griffith will not stand for reelection to the Board
due to his retirement from the Board upon expiration of his current term in
accordance with the Corporation's By-Laws. Mr. Erdahl and Mr. Thomas J. O'Neil
have been designated by the Board of Directors of the Corporation as nominees
for election as directors of the Corporation each for a three-year term expiring
in 1999. The terms of Messrs. Arthur Brown, John E. Clute and Joe Coors Jr.,
will expire in 1997. Mr. Ted Crumley was elected by the Board of Directors at
its regular meeting held November 9, 1995, to fill a vacancy created by the
decision of Mr. Richard Stoehr not to stand for reelection to the Board in May
1995. The terms of Messrs. Ted Crumley, Charles L. McAlpine and Jorge E.
Ordonez C. will expire in 1998.
<PAGE> 6
It is intended that the proxies solicited hereby will be voted FOR elec-
tion of the nominees for director listed below, unless authority to do so has
been withheld. The Board of Directors knows of no reason why any of its
nominees will be unable or unwilling to accept election. However, if any
nominee becomes unable to accept election, the Board will either reduce the
number of directors to be elected or select substitute nominees submitted by the
Directors Nominating Committee of the Board of Directors. If substitute
nominees are selected, proxies will be voted in favor of such nominees.
NOMINEES
The nominees for director for terms which will expire in 1999 are as
follows:
<TABLE>
<CAPTION>
Year First
Age at Became
Principal Occupation and Other Directorships May 10, 1996 Director
- -------------------------------------------- ------------ -----------
<S> <C> <C>
LELAND O. ERDAHL. Consultant from November 1984
to July 1987 and from January 1992 to 1995;
President of Stolar, Inc. (geologic imaging and
radio communications) from July 1987 to January
1992; President of Albuquerque Uranium Corporation
from November 1987 to 1992; President and Chief
Executive Officer of Ranchers Exploration and
Development Corporation ("Ranchers") from July 1983
to July 1984; held various positions as an officer
of Ranchers since 1970; Trustee, John Hancock Mutual
Funds; Director, Canyon Resources Corporation;
Director, Freeport McMoRan Copper & Gold Inc.;
Director, Original Sixteen to One Mine, Inc.;
Director, Santa Fe Ingredients Co. Inc.; Director,
Santa Fe Ingredients Co. of California, Inc.;
Director, Uranium Resources Inc. . . . . . . . . . . . . 67 1984
THOMAS J. O'NEIL. Executive Vice President -
Operations, Cleveland-Cliffs Inc., since
October 1995; employed by Cleveland-Cliffs Inc.
as an officer since November 1991; employed
as an officer of certain operating subsidiaries
of Cyprus Minerals Corporation from October 1987
through November 1991; Director and Chairman,
Lake Superior and Ishpeming Railroad (subsidiary
of Cleveland-Cliffs Inc.) . . . . . . . . . . . . . . . . 56 ------
</TABLE>
<PAGE> 7
REMAINING DIRECTORS
The remaining directors whose present terms of office will continue after
the meeting and will expire in 1997 are as follows:
<TABLE>
<CAPTION>
Year First
Age at Became
Principal Occupation and Other Directorships May 10, 1996 Director
- -------------------------------------------- ------------ -----------
<S> <C> <C>
ARTHUR BROWN. Chairman of the Board of Directors
of the Corporation since June 1987; also, Chief
Executive Officer of the Corporation since May 1987;
President of the Corporation since May 1986; Chief
Operating Officer of the Corporation from May 1986
to May 1987; Executive Vice President of the
Corporation from May 1985 to May 1986; held various
positions as an officer of the Corporation since 1980;
employed by the Corporation since 1967; Director,
Idaho Independent Bank; Director, American Colloid
Company (an American industrial minerals company);
Director, CalMat Co. (a construction materials supply
company); Director, Southern Africa Minerals
Corporation (a Canadian mining company) . . . . . . . . . 55 1983
JOHN E. CLUTE. Dean, Gonzaga University School of
Law since August 1991; Senior Vice President, Human
Resources and General Counsel of Boise Cascade
Corporation (manufacturer of paper and forest products),
1982 to 1991; employed by Boise Cascade Corporation in
various other capacities commencing March 1965; Director,
The Jundt Growth Fund, Inc., and Jundt Funds, Inc. . . . 61 1981
JOE COORS JR. Chairman of the Board, Coors Ceramics
Company since 1985; Chairman, Air Force Memorial
Foundation; President and Director, ACX Technologies,
Inc.; Trustee, Colorado School of Mines . . . . . . . . . 54 1990
</TABLE>
<PAGE> 8
The remaining directors whose present terms of office will continue after
the meeting and will expire in 1998 are as follows:
<TABLE>
<CAPTION>
Year First
Age at Became
Principal Occupation and Other Directorships May 10, 1996 Director
- -------------------------------------------- ------------ -----------
<S> <C> <C>
CHARLES L. McALPINE. President of Arimathaea
Resources Inc. (Canadian gold exploration company)
from December 1982 to June 1992; former President
of Jerome Gold Mines Corporation (Canadian gold
exploration company); President of Campbell
Chibougamau Mines Ltd. (Canadian copper-gold
mining company) from 1969 to 1979; Director, First
Tiffany Resource Corporation and Holmer Gold
Mines Limited; Director, Goldstake Explorations Inc.;
Director, SRS Capital Corp. . . . . . . . . . . . . . . . 62 1989
JORGE E. ORDONEZ C. Director, Altos Hornos de
Mexico, S.A. de C.V.; Managing Director, Minera
Carbonifera Rio Escondido, S.A. de C.V.; Managing
Director, Grupo Acerero del Norte, S.A. de C.V.;
President, Minera Montoro S.A. de C.V.; President
and Chief Executive Officer, Ordonez Profesional S.C. . . 56 1994
TED CRUMLEY. Senior Vice President and Chief
Financial Officer of Boise Cascade Corporation
(manufacturer of paper and forest products), 1994 to
present; Vice President and Controller of Boise
Cascade Corporation, 1990 to 1994; Director, Boise
Cascade Office Products Corporation . . . . . . . . . . 51 1995
</TABLE>
<PAGE> 9
CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
The Board of Directors met four times during 1995 and each director,
except Mr. Crumley who was appointed to the board in November 1995, attended all
of such meetings. The standing committees of the Board of Directors are the
Executive, Audit, Compensation, Directors Nominating and Finance committees.
All such committees, except Finance, met during 1995; each director attended
100% of such meetings of the committees on which he served.
The Executive Committee, the members of which are Messrs. Brown (Chair-
man), Clute, Erdahl and Griffith, met once in 1995. The Executive Committee is
empowered with the same authority as the Board of Directors in the management of
the business of the Corporation, except for certain matters enumerated in the
Corporation's By-Laws which are specifically reserved to the full Board of
Directors.
The Audit Committee, the members of which are Messrs. Erdahl (Chairman),
McAlpine and Ordonez, met twice in 1995. The Audit Committee's principal
functions are to meet with the Corporation's independent auditors to review the
financial statements contained in the Annual Report, to review the Corporation's
system of internal accounting controls, and to report to the Board of Directors
thereon.
The Compensation Committee, the members of which are Messrs. Clute
(Chairman), Coors, Erdahl and Griffith, met three times in 1995. The
Compensation Committee's principal functions are to make recommendations to the
Board of Directors concerning the compensation of executive officers of the
Corporation and to administer the Corporation's stock-based plans.
The Directors Nominating Committee, the members of which are Messrs.
Griffith (Chairman), Clute and Erdahl, met twice in 1995. The Directors
Nominating Committee reviews and recommends to the Board of Directors nominees
for election as directors at the Annual Meeting of Shareholders and nominees to
fill vacancies on the Board of Directors. The Directors Nominating Committee
will consider persons recommended by shareholders as nominees for election as
directors, which recommendations are submitted in writing to the Secretary of
the Corporation and include a statement as to the qualifications and willingness
of such persons to serve on the Corporation's Board of Directors.
The Finance Committee, the members of which are Messrs. Coors (Chairman),
Crumley, McAlpine and Ordonez, did not meet in 1995. The principal functions of
the Finance Committee are to develop and set the Corporation's long-term invest-
ment policies and to review the performance of the investment manager of the
Corporation's Pension Trusts.
COMPENSATION OF DIRECTORS
The Corporation compensates directors who are not employees of the
Corporation for their services in the amount of $1,000 for each directors'
meeting attended, a retainer fee of $2,000 per calendar quarter and $800 for
attending any meeting of any Committee of the Board.
<PAGE> 10
In August 1994, the Corporation adopted a new Deferred Compensation Plan
for directors which commenced January 1, 1995 (the "1994 Plan"). The prior
plans were terminated and all amounts deferred thereunder were rolled over into
the 1994 Plan. The 1994 Plan provides that all directors fees and retainers may
be deferred; interest is to be credited monthly on all deferred accounts at 1.23
times the Moody's long-term bond rate; distributions may be made at the election
of the director on a lump-sum, annual or monthly basis; distributions for
unforeseeable financial emergencies are permitted before and after retirement;
and a grantor trust is established to receive distributions from the Corporation
to provide for the obligations of the Corporation pursuant to the 1994 Plan.
Interest accrued in 1995 for the accounts of directors, under the 1994 Plan,
amounted to an aggregate of $8,775.
In March 1995, the Corporation adopted the Hecla Mining Company Stock Plan
for Nonemployee Directors (the "Directors Stock Plan"), which became effective
following shareholder approval on May 5, 1995, and is subject to termination by
the Board of Directors at any time. Pursuant to the Directors Stock Plan, each
nonemployee director is credited with 1,000 shares of the Common Stock on
May 30 of each year. Nonemployee directors joining the Board of Directors after
May 30 of any year are credited with a pro rata number of shares based upon the
date they join the Board. All credited shares are held in a grantor trust, the
assets of which are subject to the claims of the Corporation's creditors, until
delivered under the Directors Stock Plan. Delivery of the shares from the trust
occurs upon the earliest of (i) death or disability; (ii) retirement from the
Board; (iii) a cessation of the director's service for any other reason; or (iv)
a Change in Control of the Corporation (as defined). Subject to certain
restrictions, directors may elect delivery of the shares on such date or in
annual installments thereafter over 5, 10 or 15 years. The shares of Common
Stock credited to nonemployee directors pursuant to the Directors Stock Plan may
not be sold until at least six months following the date they are credited. The
maximum number of shares of Common Stock which may be credited pursuant to the
Directors Stock Plan is 120,000. Each nonemployee director of the Corporation
was credited with 1,000 shares of Common Stock on May 30, 1995, except Mr.
Crumley, who became a Director on November 9, 1995, and was credited with 539
shares.
COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Overall Policy
- --------------
Compensation of the Corporation's executive officers rests in the
discretion of the Board of Directors, and the Compensation Committee of the
Board of Directors is charged with considering specific information and making
recommendations to the full Board with respect to compensation matters. The
Compensation Committee is currently comprised of four nonemployee directors who
are appointed annually by the Corporation's Board of Directors. The
Compensation Committee's consideration of and recommendations regarding
executive compensation are guided by a number of factors including overall
corporate performance and returns to shareholders. The overall objectives of
the Corporation's executive
<PAGE> 11
compensation package are to attract and to retain the best possible executive
talent, to motivate the Corporation's executives to achieve goals consistent
with the Corporation's business strategy, to provide an identity between
executive and shareholder interests through stock-based plans, and finally to
provide a compensation package that recognizes an executive's individual
contributions in addition to the Corporation's overall business results.
The Compensation Committee periodically reviews the Corporation's
executive compensation program. The Compensation Committee met three times in
1995 to consider various components of the executive compensation program. In
making recommendations concerning executive compensation, the Committee reviews
reports published by independent compensation consultants assessing compensation
programs and reviews the Corporation's executive compensation, corporate
performance, stock price appreciation and total return to shareholders against
a peer group of public corporations made up of the Corporation's most direct
competitors for executive talent. Because most executive skills and expertise
are transferable between industries and business segments, the Compensation
Committee believes the Corporation's most direct competitors for executive
talent are not necessarily limited to those companies included in the peer group
established for comparing shareholder returns. Thus, the Corporation's peer
group used for compensation analysis includes, but is not limited to, the
selected peer groups identified in the Performance Graph shown on page . The
Compensation Committee's periodic review permits an ongoing evaluation of the
link between the Corporation's performance and its executive compensation in the
context of the compensation programs of other companies.
The Compensation Committee recommends to the Board of Directors
compensation levels and programs for the Chief Executive Officer and all Vice
Presidents, including the individuals whose compensation is detailed in this
proxy statement. In reviewing individual performance of executives whose
compensation is detailed in this proxy statement, the Compensation Committee
takes into account the views of Mr. Brown, the Corporation's Chief Executive
Officer.
The key elements of the Corporation's executive compensation consist of
base salary, annual cash performance payments, and stock-based grants. The
Compensation Committee's policies with respect to each of these elements,
including the basis for the compensation awarded to Mr. Brown, are discussed
below. In addition, while the elements of compensation described below are
considered separately, the Compensation Committee takes into account the full
compensation package afforded by the Corporation to the individual executive,
including deferred compensation, pension benefits, supplemental retirement
benefits, severance plans, insurance and other benefits, as well as the programs
described below. While the Committee takes into consideration all of the
performance and other factors set forth below in setting base salaries, the
Committee's deliberations for setting base salaries are essentially subjective,
and no set quantitative formula determines the base salary level of any of the
named executives. The Corporation has also adopted a performance payment plan
(described below) utilizing a quantitative formula to determine an executive's
eligibility for annual performance payments in addition to base salary.
The Committee has analyzed the potential impact on the Company's executive
compensation program of new Section 162(m) of the Internal Revenue Code and the
<PAGE> 12
regulations thereunder, which generally disallows deductions for compensation in
excess of $1 million per year to the five most highly compensated executives of
a public company. Based upon its analysis, the Committee expects that none of
the compensation payable pursuant to the program as now in effect will be non-
deductible as a result of Section 162(m).
Base Salaries
- -------------
Base salaries for new executive officers are initially determined by
evaluating the responsibilities of the position held and the experience of the
individual, and by reference to the competitive marketplace for executive
talent, including a comparison to base salaries for comparable positions at
other companies both in the respective peer groups and more broadly.
Annual salary adjustments which are made in May of each year for a 12-
month period from June 1 to May 31, are determined by evaluating the performance
of the Corporation and of each executive officer, and also taking into account
new responsibilities for any particular officer. In the case of executive
officers who are responsible for a particular business unit, such unit's
financial, operating, cost containment and productivity results are also
considered by the Committee. The Compensation Committee, where appropriate,
also considers other corporate performance measures, including changes in market
share, productivity, cost control, safety, environmental awareness and
improvements in relations with customers, suppliers and employees. The
Compensation Committee places a premium on business efficiency because certain
sectors of the Corporation's businesses do not control the prices at which their
products are sold. Base salaries for all executive officers, including those
named in the Summary Compensation Table, were increased commencing June 1, 1995,
based upon the considerations described above.
With respect to the increase in base salary granted to Mr. Brown in 1995,
the Compensation Committee took into account a comparison of base salaries of
chief executive officers of the 1995 peer group companies, the Corporation's
success in meeting its return on equity goals in 1994, the performance of the
Common Stock and the assessment by the Compensation Committee of Mr. Brown's
individual performance. The Compensation Committee also took into account the
longevity of Mr. Brown's service to the Corporation and its belief that Mr.
Brown is an excellent representative of the Corporation to the public by virtue
of his stature in the community and the industry.
Annual Performance Payment
- --------------------------
In August 1994, the Corporation adopted a formal short-term performance
payment plan based on the recommendation of the Compensation Committee. Under
the plan, executive officers (eight in 1995) were eligible for annual cash
payments based upon a formula established in the plan covering the calendar year
1995 and generally described below. The plan formula for 1995 contains an
overall corporate performance element, a departmental performance element, and
an individual performance element. Each of these elements was assigned a
percentage weight described below, such that all elements combined total 100%.
For 1995, corporate performance, for all executives other than Mr. Brown, was
assigned a 50% weight, departmental performance was assigned a 40% weight, and
<PAGE> 13
individual performance was assigned a 10% weight. Mr. Brown's performance
payment was tied 100% to corporate performance. The Compensation Committee,
based upon recommendations from the Corporation's senior management, established
targeted performance goals in key areas called "key success factors" for the
Corporation element. For 1995, the key success factors and measures for the
Corporation included gold, silver and industrial minerals production (50%), cash
flow before capital expenditures (20%), gold and silver reserves (20%) and
relative share price (10%). Departmental factors may vary for each department,
but include such factors as cost management, internal customer service and
production goals for metal and industrial mineral operating divisions. Payments
under the plan are determined by the application of a performance formula to
these key success factors. At the first quarterly Board meeting after the end
of each year, actual performance results are compared against the targeted
performance goals as a percentage of targeted goals for the various key success
factors. Actual performance must reach at least 90% of the targeted goals to be
included in the performance formula. The key success factors and the percentage
weights assigned to each of the elements may be varied from year to year at the
discretion of the Compensation Committee. The corporate and departmental
performance elements are tied to a formula, while the individual performance
element is discretionary and not based upon any specific formula. Individual
performance payments for all eligible executives other than the Chief Executive
Officer are based in significant part upon the recommendations of the Chief
Executive Officer. The Compensation Committee reviews and approves individual
performance payments for all eligible executives.
The plan provides that no performance payments may be awarded based upon
any of the corporate key success factors if the Corporation does not achieve a
net profit before taxes and preferred dividends. However, payments derived from
the departmental and individual performance elements may nevertheless be
available pursuant to the plan.
Although certain of the targeted corporate success factors goals were
attained for 1995, since the Corporation did not achieve a net profit before
taxes and preferred dividends in 1995, no performance payments were granted in
1995 to any executive with respect to corporate performance. Since Mr. Brown
was only eligible for a corporate performance payment in 1995, he received no
performance payment. Payments for all executives other than Mr. Brown were
awarded in 1995 on the basis of departmental and individual performance. For
the named executives the amounts are set forth in the Summary Compensation Table
under Annual Compensation - Bonus.
Stock-Based Grants
- ------------------
The Corporation currently has two stock-based compensation plans, which
are intended to give the Corporation a competitive advantage in attracting,
retaining and motivating its officers and key employees and are intended to
provide the Corporation with the ability to provide incentives more directly
linked to the profitability of the Corporation's business and increases in
shareholder value.
The 1987 Nonstatutory Stock Option Plan was approved by the shareholders
in 1987 and provides that stock options may be granted to the Corporation's
officers and key employees, including the individuals whose compensation is
<PAGE> 14
detailed in this Proxy Statement. The Compensation Committee sets the size of
the stock option grants based on factors, including competitive compensation
data similar to those used to determine base salaries. The Compensation
Committee can elect not to award options. The plan expires in 1997 and
presently only 6,748 shares remain available for option grants under the 1987
plan. All options granted under the 1987 plan have been granted at the fair
market value of the stock on the date of the grant.
In May 1995, the shareholders of the Corporation approved the
Corporation's 1995 Stock Incentive Plan which provides for a variety of stock-
based grants to the Corporation's officers and key employees, including the
individuals whose compensation is detailed in this Proxy Statement. The plan is
administered by the Compensation Committee of the Board of Directors. The plan
provides for the grant of stock options, stock appreciation rights, restricted
stock and performance units to eligible officers and key employees of the
Corporation. Stock options under the plan are required to be granted at 100% of
the market value of the stock on the date of the grant. The term of such
options are determined by the Compensation Committee but may not be longer than
ten years from the date of grant. The Compensation Committee elected not to
award any stock-based grants during 1995 pursuant to the 1995 Stock Incentive
Plan.
In 1995, Mr. Brown was granted options to purchase 15,000 shares of Common
Stock under the 1987 Nonstatutory Stock Option Plan at an exercise price of
$9.375, which price was the fair market value of the stock on the date of grant.
Mr. Brown owns 17,962 shares of Common Stock and holds options to purchase an
additional 108,000 shares under the 1987 Plan. The Compensation Committee
believes that significant equity interests in the Corporation held by the
Corporation's management align the interests of shareholders and management and
took this into account in granting additional options to Mr. Brown. No awards
to any other officers or employees were made during 1995 pursuant to the 1987
Nonstatutory Stock Option Plan.
Conclusion
- ----------
The Corporation's executive compensation is linked to individual,
departmental and corporate performance and stock price appreciation. In 1995,
as in previous years, a significant portion of the Corporation's executive
compensation consisted of these performance-based variable elements. The
Compensation Committee intends to continue the policy of linking executive
compensation to corporate performance and returns to shareholders, recognizing
that the ups and downs of the business cycle, particularly in the long-depressed
price periods for a large portion of the Corporation's products, from time to
time may result in an imbalance for a particular period. The Compensation
Committee adjusts for factors such as these, which are beyond an executive's
control, by exercising its qualitative judgment rather than employing strict
quantitative formulas.
February 15, 1996 John E. Clute, Chairman
Joe Coors Jr.
Leland O. Erdahl
William A. Griffith
<PAGE> 15
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(1)
HECLA MINING COMPANY, S&P 500,
S&P GOLD MINING AND PEER GROUPS
Atlas Corporation and Sunshine Mining Company were deleted from the 1996 peer
group index and replaced with Amax Gold Inc. and Hemlo Gold Mines Inc., to
obtain a better correlation between the market capitalization of the
companies in the 1996 Peer Group and that of the Corporation.
[GRAPH 1]
1. The total return for each of the Corporation, the two Peer Groups, S&P
500 and the S&P Gold Index assumes that $100 was invested on
December 31, 1990, and the reinvestment of dividends on a quarterly
basis.
2. 1995 Peer Group: Atlas Corporation, Battle Mountain Gold Company,
Coeur d'Alene Mines Corporation, Echo Bay Mines Ltd., Homestake Mining
Company, Pegasus Gold Inc. and Sunshine Mining Company.
3. 1996 Peer Group: Amax Gold Inc., Battle Mountain Gold Company,
Coeur d'Alene Mines Corporation, Echo Bay Mines Ltd., Hemlo Gold Mines
Inc., Homestake Mining Company and Pegasus Gold Inc.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1990 1991 1992 1993 1994 1995
S&P 500 Index 100.00 130.34 140.25 154.32 156.42 214.99
S&P Gold Index 100.00 81.21 75.82 138.84 112.16 126.21
1995 Peer Group 100.00 87.48 63.65 132.75 104.56 96.65
1996 Peer Group 100.00 86.60 63.78 115.48 95.31 91.50
Hecla Mining Company 100.00 129.41 91.18 136.76 119.12 80.88
</TABLE>
<PAGE> 16
EXECUTIVE COMPENSATION
COMPENSATION FOR 1995
The following table sets forth information regarding the aggregate
compensation for the fiscal years ended December 31, 1993, 1994 and 1995, paid
or accrued for (i) the Chief Executive Officer of the Corporation and (ii) the
four most highly paid executive officers of the Corporation.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
Annual Long-
Compensation(2) Other Term
Annual Compen-
Name and Principal Compen- sation
Position Year sation(3) Awards
---------------- --------- -------
Salary Bonus(4) Options
<S> <C> <C> <C> <C> <C>
Arthur Brown: Chairman, 1995 $380,625 $ -0- $44,146 15,000
President & Chief 1994 $350,000 $ -0- $20,062 11,000
Executive Officer 1993 $320,000 $40,000 $93,908 -0-
Ralph R. Noyes: 1995 $201,000 $ -0- $11,030 -0-
Vice President - Metal 1994 $177,917 $ 7,500 $ 4,771 9,500
Mining(5) 1993 $163,334 $20,000 $26,062 -0-
J. Gary Childress: 1995 $178,667 $18,700 $17,946 -0-
Vice President - 1994 $157,917 $34,552 $51,544 9,500
Industrial Minerals(6) 1993 -- -- -- --
Michael B. White: 1995 $149,917 $18,600 $ 8,999 -0-
Vice President - 1994 $135,834 $ 8,000 $ 5,886 6,500
General Counsel & 1993 $124,167 $10,000 $12,744 -0-
Secretary
John P. Stilwell: 1995 $139,583 $31,300 $ 6,262 -0-
Vice President - 1994 $116,667 $ -0- $ 2,923 6,500
Treasurer 1993 $ 97,293 $10,000 $ 1,452 -0-
</TABLE>
1. Information for deleted columns is not required, because no compensation
was paid by the Corporation that would require disclosure under any such
deleted column.
2. The annual compensation set forth in the table is based upon salaries of
the chief executive officer and other named executives established in
May of each year for 12-month periods from June 1 to May 31. This table
reflects compensation paid to or earned by the executive officers during
the fiscal year ending December 31 of each year.
<PAGE> 17
3. "Other Annual Compensation" for the last fiscal year includes the
following for Messrs. Brown, Noyes, Childress, White and Stilwell: (i)
matching contributions under the Corporation's Deferred Compensation
Plan of $7,789, $3,551, $2,434, $2,811 and $2,247 for each named
executive, respectively; (ii) the above market portion of interest
accrued under the Corporation's Deferred Compensation Plan of $31,656,
$2,205, $827, $1,837 and $763 on behalf of each named executive,
respectively; (iii) matching contributions under the Corporation's
Capital Accumulation Plan of $1,875, $1,875, $1,875 $1,689 and $1,600
for each named executive, respectively; (iv) the dollar value benefit of
premium payments for term life insurance coverage of $1,539, $-0-, $357,
$214 and $179 for each named executive, respectively; (v) the dollar
value of use of automobiles owned by the Corporation of $402, $2,649,
$438, $1,598 and $1,473 for each named executive, respectively; (vi)
personal tax service provided by consultants at the expense of the
Corporation for Mr. Brown, $885; Mr. Noyes, $750; and Mr. White, $850;
and (vii) imputed interest of $8,790 on a loan to Mr. Childress.
4. For 1995, amounts shown represent performance payments pursuant to the
Corporation's Performance Payment Plan, described in the narrative
Report of the Compensation Committee above. 1995 Performance Payments
were delivered on March 1, 1996.
5. Mr. Noyes resigned from this position effective January 1, 1996.
6. Mr. Childress commenced employment in this position in February 1995.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rate of Stock
Price Appreciation
Individual Grants for Option Term(2)
% of
Total
Options
Granted
to Exercise
Employees or Base
Options in Fiscal Price: Expiration
Name Granted Year $/Share Date 5% 10%
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arthur Brown 15,000 100.0% $9.375 2/10/95 $88,442 $224,123
Ralph R. Noyes -0- 0.0% N/A N/A $ -0- $ -0-
J. Gary Childress -0- 0.0% N/A N/A $ -0- $ -0-
Michael B. White -0- 0.0% N/A N/A $ -0- $ -0-
John P. Stilwell -0- 0.0% N/A N/A $ -0- $ -0-
</TABLE>
<PAGE> 18
1. All options granted were coupled with a Tax Offset bonus which, upon
exercise, would approximately equal the federal and state income taxes
incurred in exercising the options. All options were first exercisable
on August 10, 1995, and were granted with an exercise price equal to the
fair market value of the Common Stock on the date of grant.
2. The Potential Realizable Value shown in the table represents the maximum
gain if held for the full ten-year term at each of the assumed annual
appreciation rates. Gains, if any, are dependent upon the actual
performance of the Common Stock and the timing of any sale of the Common
Stock received upon exercising the options.
<PAGE> 19
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES(1)
The following table shows information concerning the exercise of stock options
during fiscal year 1995 by each of the named executive officers and the fiscal
year-end value of unexercised options.
<TABLE>
<CAPTION>
Shares
Acquired Number of Value of
on Value Unexercised Unexercised In-
Exercise Realized Options at the-Money-Options
Name (#) ($) FY-End (#) at FY-End
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arthur Brown -0- -0- 108,000 -0-
Ralph R. Noyes -0- -0- 38,000 -0-
J. Gary Childress -0- -0- 9,500 -0-
Michael B. White -0- -0- 15,000 -0-
John P. Stilwell -0- -0- 13,000 -0-
</TABLE>
1. The Corporation's 1987 Nonstatutory Stock Option Plan (the "1987 Plan"),
adopted by the Board of Directors on February 13, 1987, and approved by
the shareholders of the Corporation at the 1987 Annual Meeting of
Shareholders, provides for the grant, from time to time, to officers and
key employees of the Corporation or its subsidiaries, of nonstatutory
stock options to purchase up to an aggregate of 500,000 shares of Common
Stock. The 1987 Plan also provides that the Board may grant tandem
stock appreciation rights and/or tax offset bonuses with any such
nonstatutory stock option. All nonstatutory stock options granted under
the 1987 Plan to date have been granted with tax offset bonuses.
Pursuant to the terms of the 1987 Plan, the exercise price per share of
all nonstatutory stock options shall not be less than fifty percent
(50%) of the fair market value of the Common Stock on the date of grant
of such options. All options granted under the 1987 Plan have been
granted at the fair market value of the Common Stock on the date of
grant. Options are exercisable beginning six (6) months after the date
of the grant.
RETIREMENT PLAN
The officers of the Corporation participate in the Hecla Mining Company
Qualified Retirement Plan (the "Retirement Plan"), which covers substantially
all employees of the Corporation, except for certain hourly employees who are
covered by separate plans. Contributions to the Retirement Plan, and the
related expense or income, are based on general actuarial calculations and,
accordingly, no portion of the Corporation's contributions, and related expenses
or income, is specifically attributable to the Corporation's officers. The
Corporation was not required to make a contribution for 1995. The Corporation
also has an unfunded Supplemental Retirement Benefit Plan adopted in November
1985 (the "Supplemental Plan") under which the amount of any benefits not
payable under the Retirement Plan by reason of the limitations imposed by the
Internal Revenue Code and/or the Employee Retirement Income Security Act, as
amended, (the "Acts") and the loss,
<PAGE> 20
if any, due to a deferral of salary made under the Corporation's Deferred
Compensation Plan for Officers and/or the Capital Accumulation Plan will be paid
out of the general funds of the Corporation to any employee who may be adversely
affected. Under the Acts, the current maximum annual pension benefit payable by
the Plan to any employee is $120,000 subject to specified adjustments. Upon
reaching the normal retirement age of 65, each participant is eligible to
receive annual retirement benefits in monthly installments for life equal to,
for each year of credited service, 1% of final average annual earnings (defined
as the highest average earnings of such employee for any 36 consecutive calendar
months during the final 120 calendar months of service) up to the applicable
covered compensation level (which level is based on the Social Security maximum
taxable wage base) and 1 1/2% of the difference, if any, between final average
annual earnings and the applicable covered compensation level. The Retirement
Plan and Supplemental Plan define earnings for purposes of the plans to be "a
wage or salary for services of employees inclusive of any bonus or special pay
including gainsharing programs, contract miner's bonus pay, and the equivalent."
The following table shows estimated aggregate annual benefits under the
Retirement Plan and the Supplemental Plan payable upon retirement to a
participant who retires in 1996 at age 65 having the years of service and final
average annual earnings as specified. The table assumes Social Security covered
compensation levels as in effect on January 1, 1996:
<TABLE>
<CAPTION>
Final Average Years of Credited Service
Annual Earnings 5 10 15 20 25 30
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
75,000 4,936 9,871 14,807 19,742 24,678 29,614
100,000 6,811 13,621 20,432 27,242 34,053 40,864
125,000 8,686 17,371 26,057 34,742 43,428 52,114
150,000 10,560 21,119 31,679 42,238 52,798 63,358
175,000 12,436 24,871 37,309 49,724 62,178 74,614
200,000 14,311 28,621 42,932 57,242 71,553 85,864
225,000 16,186 32,371 48,557 64,742 80,928 97,114
250,000 18,061 36,121 54,182 72,242 90,303 108,364
275,000 19,936 39,871 59,807 79,742 99,678 119,614
300,000 21,811 43,621 65,432 87,242 109,053 130,864
325,000 23,686 47,371 71,057 94,742 118,428 142,114
350,000 25,561 51,121 76,682 102,242 127,803 153,364
375,000 27,436 54,871 82,307 109,742 137,178 164,614
400,000 29,311 58,621 87,932 117,242 146,553 175,864
</TABLE>
Benefits listed in the pension table are not subject to any deduction for
Social Security or other offset amounts. As of December 31, 1995, the following
executive officers have completed the indicated number of full years of credited
service: A. Brown, 28 years; J. G. Childress, 9 years; R. R. Noyes, 19 years;
J. P Stilwell, 10 years; and M. B. White, 15 years.
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT ARRANGEMENT AND OTHER
MANAGEMENT ARRANGEMENTS
The Corporation has entered into employment agreements (collectively, the
"Agreements") with Messrs. Booth, Brown, Childress, Heatherly, Langstaff,
<PAGE> 21
Stilwell and White (collectively, the "Executives" and individually, an
"Executive"). Mr. Heatherly's retirement terminated his Agreement as of
February 1, 1996. Mr. Noyes resigned from the Corporation effective January 1,
1996, terminating his Agreement as of that date.
The Agreements were recommended to the Board of Directors by the
Compensation Committee and were approved by the Board of Directors on the basis
of such recommendation. The Agreements, which are substantially identical
except for compensation provisions, provide that each of the Executives shall
serve in such executive position as the Board of Directors may direct. The
Agreements become effective only upon a "Change of Control" of the Corporation
(the "Effective Date"). The term of employment under the Agreements is two
years from the Effective Date. The Agreements are automatically renewed for an
additional year in November of each year unless the Corporation gives notice of
nonrenewal 60 days prior to the renewal date. Under the Agreements, a Change of
Control of the Corporation is deemed to occur if a person (including a "group"
under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended the
"Exchange Act") becomes the beneficial owner of 20% or more of the voting power
of the Corporation or if, as the result of a tender offer, merger, proxy fight
or similar transaction, the persons who were previously directors of the
Corporation cease to constitute a majority of the Board. The Agreements are
intended to ensure that, in the event of a Change of Control, each Executive
will continue to receive payments and other benefits equivalent to those he was
receiving at the time of a Change of Control for the duration of the term of the
Agreement. The Agreements also provide, among other things, that should an
Executive's employment be terminated by the Corporation or by the Executive for
good reason (other than death, incapacity or misconduct) after the Effective
Date of the Agreement, he would receive from the Corporation for the remaining
term of his employment, payable in a lump sum, a defined amount generally
equivalent to his then annual base salary rate. The Corporation would also
maintain such Executive's participation in all benefit plans and programs (or
provide equivalent benefits if such continued participation was not possible
under the terms of such plans and programs) and pay him the full retirement
benefits to which he would have been entitled had his employment not been
terminated. An Executive whose employment has terminated would not be required
to seek other employment in order to receive the defined benefits. The
Agreements also provide that the Corporation will make an additional gross-up
payment if necessary to place the Executive in the same after-tax position as if
no excise tax were imposed by the Internal Revenue Code. Pursuant to the
Agreements between the Corporation and each of its named executive officers, if
a Change of Control occurred and the named executive officers were each
terminated as of December 31, 1995, the named executive officers would be
entitled to the following estimated cash payments pursuant to the Agreements:
Mr. Brown, $2,026,150; Mr. Childress, $486,150; Mr. White $402,357; and Mr.
Stilwell, $392,909. The named executive officers would also be entitled to
lump-sum payments representing the difference in pension and supplemental
retirement benefits to which they would be entitled on (i) the date of actual
termination, and (ii) the end of the two-year employment period under the
Agreements.
Pursuant to a severance arrangement between the Corporation and Mr. Ralph
R. Noyes, who resigned at January 1, 1996, Mr. Noyes' base salary, life and
medical insurance coverages and certain other noncash benefits will be paid
<PAGE> 22
through December 1996. Mr. J. Gary Childress, Vice President - Industrial
Minerals, relocated to the Coeur d'Alene, Idaho, headquarters from the Mayfield,
Kentucky, headquarters of Kentucky-Tennessee Clay Company in February 1994. The
Corporation offset the substantial differential in housing costs between the two
locations by loaning Mr. Childress $150,000 at an interest rate of 5.86%, which
is currently outstanding and which is secured by a mortgage on his Idaho
residence.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Members of the Compensation Committee include Mr. William A. Griffith, who
retired from the Corporation in 1987 as Chairman and Chief Executive Officer of
the Corporation. Mr. Griffith will retire as a director after the Corporation's
1996 Annual Meeting of Shareholders.
SECURITY OWNERSHIP
The following table presents certain information regarding the number and
percentage of the shares of Common Stock beneficially owned (as such term is
defined in Rule 13d-3 under the Exchange Act) by each director of the
Corporation and by all directors and officers as a group, as of February 16,
1996. On that date, all of such persons together beneficially owned an
aggregate of less than 1% of the outstanding shares of the Corporation's Common
Stock. Except as otherwise indicated, the directors and officers have sole
voting and investment power with respect to the shares beneficially owned by
them. To the Corporation's knowledge, no person or entity owned more than 5% of
the Corporation's Common Stock as of February 16, 1996.
<PAGE> 23
<TABLE>
<CAPTION>
Number of Shares
of Common Stock
Named Executive Officer, and Nature of
Director or Nominee Beneficial Ownership
----------------------------------------------------------
<S> <C>
Arthur Brown......................... 125,962 (1)
William B. Booth..................... 10,570 (1)
J. Gary Childress ................... 9,500 (1)
John E. Clute........................ 1,300 (3)
Joe Coors Jr. ....................... 1,000 (3)
Ted Crumley ......................... 539 (3)
Leland O. Erdahl..................... 32,575 (1)
William A. Griffith.................. 2,006 (3)
Joseph T. Heatherly.................. 9,500 (1)
Jon T. Langstaff .................... 13,500 (1)
Charles L. McAlpine.................. 3,000 (3)
Ralph R. Noyes....................... 39,000 (1)
Jorge E. Ordonez C. ................. 1,000 (3)
John P. Stilwell..................... 13,105 (1)
Michael B. White..................... 15,618 (1)
All directors and executive officers
as a group (15 persons) ............. 278,175 (2)
</TABLE>
1. Includes the following number of shares of Common Stock
issuable upon the exercise by the following individuals of
currently exercisable options: Mr. Brown, 108,000;
Mr. Booth, 10,000; Mr. Childress, 9,500; Mr. Heatherly,
8,500; Mr. Langstaff, 13,500; Mr. Noyes, 38,000; Mr.
Stilwell, 13,000; and Mr. White, 15,000.
2. Includes 215,500 shares issuable upon the exercise of
currently exercisable options.
3. Includes 1,000 shares credited to each nonemployee director,
except in the case of Mr. Crumley, who was credited with 539
shares, all of which are held in trust pursuant to the
Corporation's Stock Plan for Nonemployee Directors. Each
director disclaims beneficial ownership of all shares held
in trust under the stock plan. See Compensation of
Directors.
APPROVAL OF AUDITORS
Coopers & Lybrand L.L.P., independent public accountants, have been
selected by the Board of Directors as independent auditors for the Corporation
for the fiscal year ending December 31, 1996, subject to approval by the
shareholders. Coopers & Lybrand L.L.P., or its predecessor firm, has served as
independent auditors for the Corporation since 1964. This firm is experienced
in the field of mining accounting and is well qualified to act in the capacity
of auditors. The selection of this firm was recommended to the Board of
Directors by its Audit Committee, composed of Messrs. Erdahl, McAlpine and
Ordonez, none of whom is an officer or employee of the Corporation. A
representative of Coopers & Lybrand L.L.P. is expected to be present at the
Annual Meeting to make a statement if he so desires and to be available to
respond to questions from shareholders.
<PAGE> 24
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE SELECTION OF
COOPERS & LYBRAND L.L.P. AS THE CORPORATION'S INDEPENDENT AUDITORS FOR 1996.
PROVISIONS OF THE CORPORATION'S BY-LAWS
WITH RESPECT TO SHAREHOLDER PROPOSALS AND NOMINATIONS
FOR ELECTION AS DIRECTORS
The Corporation's By-Laws establish procedures governing the eligibility of
nominees for election to the Board of Directors of the Corporation and the
proposal of business to be considered by the shareholders at an Annual Meeting.
For nominations or other business to be properly brought before an Annual
Meeting by a shareholder, the shareholder must have given timely notice thereof
in writing to the Secretary of the Corporation. To be timely, a shareholder's
notice shall be delivered to the Secretary at the principal executive offices of
the Corporation not less than 60 days nor more than 90 days prior to the first
anniversary of the preceding year's Annual Meeting; PROVIDED HOWEVER, that in
the event that the date of the Annual Meeting is advanced by more than 30 days
or delayed by more than 60 days from such anniversary date, notice by the
shareholder to be timely must be so delivered not earlier than the 90th day
prior to such Annual Meeting and not later than the close of business on the
later of the 60th day prior to such Annual Meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made.
Such shareholder's notice shall set forth (a) as to each person whom the
shareholder proposes to nominate for election or reelection as a director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Exchange Act, including such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director if elected; (b) as to any other business that the
shareholder proposes to bring before the meeting, who has not otherwise complied
with the rules and regulations under the Exchange Act for the inclusion of a
shareholder proposal in the Corporation's proxy materials, a brief description
of the business desired to be brought before the meeting, the reasons for
conducting such business at the meeting and any material interest in such
business of such shareholder and the beneficial owner, if any, on whose behalf
the proposal is made; and (c) as to the shareholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is made (i)
the name and address of such shareholder, as they appear on the Corporation's
books, and of such beneficial owner and (ii) the class and number of shares of
the Corporation which are owned beneficially and of record by such shareholder
and such beneficial owner. The Chairman of the meeting shall have the power and
duty to determine whether a nomination or any business proposed to be brought
before the meeting was made in accordance with the procedures set forth in the
By-Laws and, if any proposed nomination or business is not in compliance with
the By-Laws, to declare that such defective proposal shall be disregarded. The
Corporation will comply with Rule 14a-8 of the Exchange Act with respect to any
proposal that meets its requirements.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
The Corporation will review shareholder proposals intended to be included
in the Corporation's proxy materials for the 1997 Annual Meeting of Shareholders
<PAGE> 25
which are received by the Corporation at its principal executive offices no
later than November 21, 1996, subject to the By-Law provision discussed above.
Such proposals must be submitted in writing and should be sent to the attention
of the Secretary of the Corporation.
ANNUAL REPORT
The Corporation's Annual Report to Shareholders, including financial
statements, for the year ended December 31, 1995 (the "Annual Report"), is being
mailed to shareholders with this Proxy Statement. In addition, a shareholder of
record may obtain a copy of the Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 (the "Form 10-K"), without cost, upon
written request to the Secretary of the Corporation. The Annual Report and the
Form 10-K are not part of the proxy solicitation materials for the Annual
Meeting.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors is not aware
of any matters that will be presented for action at the Annual Meeting other
than those described above. However, should other business properly be brought
before the Annual Meeting, the Proxies will be voted thereon in the discretion
of the persons acting thereunder.
By Order of the Board of Directors
Michael B. White
Secretary
March 28, 1996
<PAGE> 26
<TABLE>
<CAPTION>
<S> <C> <C>
PROXY SOLICITED ON BEHALF OF HECLA MINING COMPANY ANNUAL MEETING OF SHAREHOLDERS
THE BOARD OF DIRECTORS 6500 Mineral Drive May 10, 1996
Coeur d'Alene, Idaho 83814-8788
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
FOR DIRECTOR LISTED IN ITEM 1 AND "FOR" PROPOSAL 2.
The undersigned, revoking any previous proxies, hereby appoints ARTHUR BROWN and MICHAEL B. WHITE, and each
of them, proxies of the undersigned, with full power of substitution, to attend the Corporation's Annual Meeting of
Shareholders on May 10, 1996, and any adjournments or postponements thereof, and there to vote the undersigned's shares
on the following matters as described in the Board of Directors Proxy Statement for such Meeting, a copy of which has been
received by the undersigned.
1. ELECTION OF DIRECTORS / / FOR all nominees listed below / / WITHHOLD AUTHORITY
/ / (except as marked to the contrary below) / / to vote for all nominees listed below
Leland O. Erdahl Thomas J. O'Neil
(INSTRUCTION: To withhold authority to vote for any individual nominee, put a line through that nominee's
name.)
2. PROPOSAL to approve the selection of Coopers & Lybrand L.L.P. as the independent auditors of the Corporation for
the fiscal year ending December 31, 1996.
/ / / / / /
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion on all other business that may properly come before the meeting or any adjournment or
adjournments thereof.
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
<S> <C>
This proxy will be voted as specified. If no specification is made, this Proxy will be voted FOR the election
of the two nominees for Directors and FOR the adoption of Proposals 2 and 3.
DATE , 1996 Signature
-------------------------------- ----------------------------------
Please mark, sign, date and promptly return the
proxy card using the enclosed envelope. Signature
----------------------------------
The proxy must be signed exactly as your
name or names appear on this card.
Executors, administrators, trustees,
partners, etc. should give full title as
such. If the signer is a corporation,
please sign full corporate name by duly
authorized officer(s), who should specify
the title(s) of such officer(s).
</TABLE>
