SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 10, 1996
____________
HECLA MINING COMPANY
_____________________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Delaware 1-8491 82-0126240
______________________________________________________________________
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
6500 Mineral Drive, Coeur d'Alene, Idaho 83814-8788
______________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (208) 769-4100
______________________________________________________________________
Page 1 of 7<PAGE>
ITEM 5. OTHER EVENTS.
On May 10, 1996, the Board of Directors of Hecla
Mining Company (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstand-
ing share of common stock, par value $0.25 per share (the
"Common Shares"), of the Company. The dividend is payable on
May 20, 1996 (the "Record Date") to the stockholders of
record on that date. Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a
share of Series A Junior Participating Preferred Stock, par
value $0.25 per share (the "Preferred Shares"), of the Com-
pany at a price of $50.00 per one one-hundredth of a Pre-
ferred Share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company
and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agent").
Until the earlier to occur of (i) 10 days following
a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired
beneficial ownership of 15% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announce-
ment of an intention to make, a tender offer or exchange of-
fer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the out-
standing Common Shares (the earlier of such dates being
called the "Distribution Date"), the Rights will be evi-
denced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share cer-
tificate with a copy of this Summary of Rights attached
thereto.
The Rights Agreement provides that, until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with
the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or
new issuance of Common Shares will contain a notation incor-
porating the Rights Agreement by reference. Until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without
such notation or a copy of this Summary of Rights being
attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribu-
tion Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of
Page 2 of 7<PAGE>
record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribu-
tion Date. The Rights will expire on May 19, 2006 (the
"Final Expiration Date"), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed or ex-
changed by the Company, in each case, as described below.
The Purchase Price payable, and the number of Pre-
ferred Shares or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Pre-
ferred Shares of certain rights or warrants to subscribe for
or purchase Preferred Shares at a price, or securities con-
vertible into Preferred Shares with a conversion price, less
than the then-current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding reg-
ular periodic cash dividends paid out of earnings or retained
earnings or dividends payable in Preferred Shares) or of sub-
scription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of
one one-hundredths of a Preferred Share issuable upon exer-
cise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock divi-
dend on the Common Shares payable in Common Shares or subdi-
visions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment
of $1 per share but will be entitled to an aggregate dividend
of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation pay-
ment of $100 per share but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the
Common Shares. Finally, in the event of any merger, consoli-
dation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights
are protected by customary antidilution provisions.
Page 3 of 7<PAGE>
Because of the nature of the Preferred Shares'
dividend, liquidation and voting rights, the value of the one
one-hundredth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a
merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company
which at the time of such transaction will have a market
value of two times the exercise price of the Right. In the
event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall
be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will there-
after be void), will thereafter have the right to receive
upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares, the
Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio
of one Common Share, or one one-hundredth of a Preferred
Share (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth
of a Preferred Share, which may, at the election of the Com-
pany, be evidenced by depositary receipts) and in lieu there
of, an adjustment in cash will be made based on the market
price of the Preferred Shares on the last trading day prior
to the date of exercise.
At any time prior to the acquisition by a person or
group of affiliated or associated persons of beneficial
ownership of 15% or more of the outstanding Common Shares,
the Board of Directors of the Company may redeem the Rights
in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be
made effective at such time on such basis with such condi-
tions as the Board of Directors in its sole discretion
Page 4 of 7<PAGE>
may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemp-
tion Price.
The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the
holders of the Rights, including an amendment to lower cer-
tain thresholds described above to not less than the greater
of (i) the sum of .001% and the largest percentage of the
outstanding Common Shares then known to the Company to be
beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%, except that from and after
such time as any person or group of affiliated or associated
persons becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to
receive dividends.
The Rights have certain anti-takeover effects. The
Rights will cause substantial dilution to a person or group
that attempts to acquire the Company on terms not approved by
the Company's Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired.
The Rights should not interfere with any merger or other
business combination approved by the Board of Directors since
the Rights may be redeemed by the Company at the Redemption
Price prior to the time that a person or group has acquired
beneficial ownership of 15% or more of the Common Shares.
The Rights Agreement, dated as of May 10, 1996,
between the Company and the Rights Agent, specifying the
terms of the Rights and the form of press release announcing
the declaration of the Rights are attached hereto as exhibits
and are hereby incorporated herein by reference. The forego-
ing description of the Rights is qualified in its entirety by
reference to such exhibits.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMA-
TION AND EXHIBITS.
(c) Exhibits.
4. Rights Agreement, dated as of May 10, 1996,
between Hecla Mining Company and American
Stock Transfer & Trust Company which includes
the Form of Right Certificate as Exhibit A and
the Summary of Rights to Purchase Preferred
Shares as Exhibit B. Pursuant to the Rights
Agreement, printed Right Certificates will not
Page 5 of 7<PAGE>
be mailed until as soon as practicable after
the earlier of the tenth day after public
announcement that a person or group has
acquired beneficial ownership of 15% or more
of the Common Shares or the tenth business day
(or such later date as may be determined by
action of the Board of Directors) after a per-
son commences, or announces its intention to
commence, a tender offer or exchange offer the
consummation of which would result in the
beneficial ownership by a person or group of
15% or more of the Common Shares.
20. Press release dated May 10, 1996.
6 of 7<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned there-
unto duly authorized.
HECLA MINING COMPANY
Dated: May 17, 1996 By /s/ John P. Stilwell
____________________________
Name: John P. Stilwell
Title: Vice President -
Chief Financial Officer
and Treasurer
7 of 7<PAGE>
EXHIBIT INDEX
Exhibit No. Title
___________ _____
4. Rights Agreement, dated as of May 10, 1996,
between Hecla Mining Company and American Stock
Transfer & Trust Company which includes the Form
of Right Certificate as Exhibit A and the Summary
of Rights to Purchase Preferred Shares as Exhibit
B. Pursuant to the Rights Agreement, printed
Right Certificates will not be mailed until as
soon as practicable after the earlier of the
tenth day after public announcement that a person
or group has acquired beneficial ownership of 15%
or more of the Common Shares or the tenth busi-
ness day (or such later date as may be determined
by action of the Board of Directors) after a per-
son commences, or announces its intention to com-
mence, a tender offer or exchange offer the con-
summation of which would result in the beneficial
ownership by a person or group of 15% or more of
the Common Shares.
20. Press release dated May 10, 1996.
EXHIBIT 4
_____________________________________________________________
HECLA MINING COMPANY
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF MAY 10, 1996
_____________________________________________________________<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions......................... 1
Section 2. Appointment of Rights Agent................. 7
Section 3. Issue of Right Certificates................. 7
Section 4. Form of Right Certificates.................. 10
Section 5. Countersignature and Registration........... 11
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates................. 12
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights................. 14
Section 8. Cancellation and Destruction of
Right Certificates........................ 16
Section 9. Availability of Preferred Shares............ 16
Section 10. Preferred Shares Record Date................ 18
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights................ 18
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares....................... 32
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power................ 33
Section 14. Fractional Rights and Fractional Shares..... 35
-i-<PAGE>
Page
Section 15. Rights of Action............................ 37
Section 16. Agreement of Right Holders.................. 38
Section 17. Right Certificate Holder Not Deemed a
Stockholder............................... 39
Section 18. Concerning the Rights Agent................. 40
Section 19. Merger or Consolidation or Change of
Name of Rights Agent...................... 41
Section 20. Duties of Rights Agent...................... 42
Section 21. Change of Rights Agent...................... 45
Section 22. Issuance of New Right Certificates.......... 47
Section 23. Redemption.................................. 48
Section 24. Exchange.................................... 49
Section 25. Notice of Certain Events.................... 52
Section 26. Notices..................................... 53
Section 27. Supplements and Amendments.................. 55
Section 28. Successors.................................. 55
Section 29. Benefits of this Agreement.................. 56
Section 30. Severability................................ 56
-ii-<PAGE>
Page
Section 31. Governing Law............................... 56
Section 32. Counterparts................................ 57
Section 33. Descriptive Headings........................ 57
Signatures ............................................ 57
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Preferred
Shares
-iii-<PAGE>
Agreement, dated as of May 10, 1996, between Hecla
Mining Company, a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Company (the "Rights Agent").
The Board of Directors of the Company has autho-
rized and declared a dividend of one preferred share purchase
right (a "Right") for each Common Share (as hereinafter de-
fined) of the Company outstanding on May 20, 1996 (the
"Record Date"), each Right representing the right to purchase
one one-hundredth of a Preferred Share (as hereinafter de-
fined), upon the terms and subject to the conditions herein
set forth, and has further authorized and directed the issu-
ance of one Right with respect to each Common Share that
shall become outstanding between the Record Date and the ear-
liest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are hereinafter de-
fined).
Accordingly, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby
agree as follows:
Section 1. Certain Definitions. For purposes of
this Agreement, the following terms have the meanings indi-
cated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together with
all Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the Com-
mon Shares of the Company then<PAGE>
outstanding, but shall not include the Company, any Subsid-
iary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of
the Company, or any entity holding Common Shares for or pur-
suant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as
the result of an acquisition of Common Shares by the Company
which, by reducing the number of shares outstanding, in-
creases the proportionate number of shares beneficially owned
by such Person to 15% or more of the Common Shares of the
Company then outstanding; provided, however, that if a Person
shall become the Beneficial Owner of 15% or more of the Com-
mon Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share pur-
chases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person
shall be deemed to be an "Acquiring Person". Notwithstanding
the foregoing, if the Board of Directors of the Company de-
termines in good faith that a Person who would otherwise be
an "Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvert-
ently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would
no longer be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
-2-<PAGE>
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities Ex-
change Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial
Owner" of and shall be deemed to "beneficially own" any secu-
rities:
(i) which such Person or any of such Person's Af-
filiates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's Af-
filiates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
group members with respect to a bona fide public offer-
ing of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Benefi-
cial Owner of, or to beneficially own, securities ten-
dered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Af-
filiates or Associates until such tendered
-3-<PAGE>
securities are accepted for purchase or exchange; or (B)
the right to vote pursuant to any agreement, arrangement
or understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to benefi-
cially own, any security if the agreement, arrangement
or understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act
and (2) is not also then reportable on Schedule 13D un-
der the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or in-
directly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than cus-
tomary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by
the proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Ben-
eficial Ownership to the contrary, the phrase "then outstand-
ing," when used with reference to a Person's Beneficial
-4-<PAGE>
Ownership of securities of the Company, shall mean the number
of such securities then issued and outstanding together with
the number of such securities not then actually issued and
outstanding which such Person would be deemed to own benefi-
cially hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in
New York are authorized or obligated by law or executive or-
der to close.
(e) "Close of business" on any given date shall
mean 5:00 P.M., New York City time, on such date; provided,
however, that if such date is not a Business Day it shall
mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to
the Company shall mean the shares of common stock, par value
$0.25 per share, of the Company. "Common Shares" when used
with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
-5-<PAGE>
(h) "Final Expiration Date" shall have the meaning
set forth in Section 7 hereof.
(i) "Person" shall mean any individual, firm, cor-
poration or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(j) "Preferred Shares" shall mean shares of Series
A Junior Participating Preferred Stock, par value $0.25 per
share, of the Company having the rights and preferences set
forth in the Certificate of Designations previously filed
with the Secretary of State of the State of Delaware.
(k) "Redemption Date" shall have the meaning set
forth in Section 7 hereof.
(l) "Shares Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
(m) "Subsidiary" of any Person shall mean any cor-
poration or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
-6-<PAGE>
Section 2. Appointment of Rights Agent. The Com-
pany hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a) Un-
til the earlier of (i) the tenth day after the Shares Acqui-
sition Date or (ii) the tenth business day (or such later
date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than
the Company, any Subsidiary of the Company, any employee ben-
efit plan of the Company or of any Subsidiary of the Company
or any entity holding Common Shares for or pursuant to the
terms of any such plan) of, or of the first public announce-
ment of the intention of any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any
such plan) to commence, a tender or exchange offer the con-
summation of which would result in any Person becoming the
Beneficial Owner of Common Shares aggregating 15% or more of
the then outstanding Common Shares (including any such date
which is after the date of this
-7-<PAGE>
Agreement and prior to the issuance of the Rights; the ear-
lier of such dates being herein referred to as the "Distribu-
tion Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Right Certifi-
cates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only
in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares
as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a
Right Certificate, in substantially the form of Exhibit A
hereto (a "Right Certificate"), evidencing one Right for each
Common Share so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of
Rights to Purchase Preferred Shares, in substantially the
form of Exhibit B hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Record Date,
at the address of such holder shown on the records of the
Company. With respect
-8-<PAGE>
to certificates for Common Shares outstanding as of the
Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights
attached thereto. Until the Distribution Date (or the ear-
lier of the Redemption Date or the Final Expiration Date),
the surrender for transfer of any certificate for Common
Shares outstanding on the Record Date, with or without a copy
of the Summary of Rights attached thereto, shall also consti-
tute the transfer of the Rights associated with the Common
Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
Shares referred to in the last sentence of this paragraph
(c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expira-
tion Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agree-
ment between Hecla Mining Company and American Stock
Transfer & Trust Company, as Rights Agent, dated as of
May 10, 1996 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive of-
fices of Hecla Mining Company. Under certain circum-
stances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. Hecla
Mining Company will mail to the holder of this certifi-
cate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights
-9-<PAGE>
Agreement, Rights issued to any Person who becomes an
Acquiring Person (as defined in the Rights Agreement)
may become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute
the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases
or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights as-
sociated with the Common Shares which are no longer outstand-
ing.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit A hereto
and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regula-
tion made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time
be listed, or to
-10-<PAGE>
conform to usage. Subject to the provisions of Section 22
hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein
(the "Purchase Price"), but the number of such one one-
hundredths of a Preferred Share and the Purchase Price shall
be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer,
its President, any of its Vice Presidents, or its Treasurer,
either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall
be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such
Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the
same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate
-11-<PAGE>
may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books
for registration and transfer of the Right Certificates is-
sued hereunder. Such books shall show the names and ad-
dresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certifi-
cates.
Section 6. Transfer, Split Up, Combination and Ex-
change of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of Sec-
tion 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of busi-
ness on the earlier of the Redemption Date or the Final Expi-
ration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have
become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be trans-
ferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-hundredths of a
Preferred Share
-12-<PAGE>
as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be trans-
ferred, split up, combined or exchanged at the principal of-
fice of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up, combi-
nation or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's re-
quest, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon sur-
render to the Rights Agent and cancellation of the Right Cer-
tificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Cer-
tificate so lost, stolen, destroyed or mutilated.
-13-<PAGE>
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) The registered holder of any
Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent
at the principal office of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business on May 19,
2006 (the "Final Expiration Date"), (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), or (iii) the time at which such Rights
are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth
of a Preferred Share purchasable pursuant to the exercise of
a Right shall initially be $50.00, and shall be subject to
adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate represent-
ing exercisable Rights, with the form of election to purchase
duly executed, accompanied by payment of the
-14-<PAGE>
Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax required to be paid by
the holder of such Right Certificate in accordance with Sec-
tion 9 hereof by certified check, cashier's check or money
order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any trans-
fer agent of the Preferred Shares certificates for the number
of Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all
such requests, or (B) requisition from the depositary agent
depositary receipts representing such number of one one-
hundredths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when ap-
propriate, requisition from the Company the amount of cash to
be paid in lieu of issuance of fractional shares in ac-
cordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights
-15-<PAGE>
equivalent to the Rights remaining unexercised shall be is-
sued by the Rights Agent to the registered holder of such
Right Certificate or to his duly authorized assigns, subject
to the provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or ex-
change shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or
in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and re-
tirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the Com-
pany otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the
Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the
Company.
Section 9. Availability of Preferred Shares. The
Company covenants and agrees that it will cause to be re-
served and kept available out of its authorized and unissued
Preferred Shares or any Preferred Shares held in its trea-
sury, the number of
-16-<PAGE>
Preferred Shares that will be sufficient to permit the exer-
cise in full of all outstanding Rights in accordance with
Section 7. The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
Preferred Shares delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and non-
assessable shares.
The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any
Preferred Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which
may be payable in respect of any transfer or delivery of
Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the Pre-
ferred Shares in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or to deliver any certificates or
depositary receipts for Preferred Shares upon the exercise of
any Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax is
due.
-17-<PAGE>
Section 10. Preferred Shares Record Date. Each
person in whose name any certificate for Preferred Shares is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the Preferred Shares transfer books of the
Company are closed, such person shall be deemed to have be-
come the record holder of such shares on, and such certifi-
cate shall be dated, the next succeeding Business Day on
which the Preferred Shares transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred Shares for which the
Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distribu-
tions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Com-
pany, except as provided herein.
Section 11. Adjustment of Purchase Price, Number
of Shares or Number of Rights. The Purchase Price, the num-
ber of Preferred Shares covered by each Right and the number
of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.
-18-<PAGE>
(a)(i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on
the Preferred Shares payable in Preferred Shares, (B) subdi-
vide the outstanding Preferred Shares, (C) combine the out-
standing Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a re-
classification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corpora-
tion), except as otherwise provided in this Section 11(a),
the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivi-
sion, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall
be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares transfer books
of the Company were open, he would have owned upon such exer-
cise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, how-
ever, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company issuable
upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in
the event any Person
-19-<PAGE>
becomes an Acquiring Person, each holder of a Right shall
thereafter have a right to receive, upon exercise thereof at
a price equal to the then current Purchase Price multiplied
by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such
number of Common Shares of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that
product by (y) 50% of the then current per share market price
of the Company's Common Shares (determined pursuant to Sec-
tion 11(d) hereof) on the date of the occurrence of such
event. In the event that any Person shall become an Acquir-
ing Person and the Rights shall then be outstanding, the Com-
pany shall not take any action which would eliminate or di-
minish the benefits intended to be afforded by the Rights.
From and after the occurrence of such event, any
Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Ac-
quiring Person) shall be void and any holder of such Rights
shall thereafter have no right to exercise such Rights under
any provision of this Agreement. No Right Certificate shall
be issued pursuant to Section 3 that represents Rights ben-
eficially owned by an Acquiring Person whose Rights would be
void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at
any time upon
-20-<PAGE>
the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or
any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate; and any Right Cer-
tificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
(iii) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or autho-
rized but unissued to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii),
the Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exercise
of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares, the
Company shall substitute, for each Common Share that would
otherwise be issuable upon exercise of a Right, a number of
Preferred Shares or fraction thereof such that the current
per share market price of one Preferred Share multiplied by
such number or fraction is equal to the current per share
market price of one Common Share as of the date of issuance
of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all hold-
ers of Preferred Shares entitling them (for a period expiring
-21-<PAGE>
within 45 calendar days after such record date) to subscribe
for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares") or securities convertible
into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or
having a conversion price per share, if a security convert-
ible into Preferred Shares or equivalent preferred shares)
less than the then current per share market price of the Pre-
ferred Shares (as defined in Section 11(d)) on such record
date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Preferred
Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conver-
sion price of the convertible securities so to be offered)
would purchase at such current market price and the denomina-
tor of which shall be the number of Preferred Shares out-
standing on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the con-
vertible securities so to be offered are initially convert-
ible); provided, however, that in no event shall the consid-
eration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock
of the Company issuable
-22-<PAGE>
upon exercise of one Right. In case such subscription price
may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Direc-
tors of the Company, whose determination shall be described
in a statement filed with the Rights Agent. Preferred Shares
owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, op-
tions or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date
for the making of a distribution to all holders of the Pre-
ferred Shares (including any such distribution made in con-
nection with a consolidation or merger in which the Company
is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or sub-
scription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Shares on
such record date, less the fair market value (as determined
in good faith by the Board of Directors of the
-23-<PAGE>
Company, whose determination shall be described in a state-
ment filed with the Rights Agent) of the portion of the as-
sets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one Pre-
ferred Share and the denominator of which shall be such cur-
rent per share market price of the Preferred Shares; pro-
vided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the ag-
gregate par value of the shares of capital stock of the Com-
pany to be issued upon exercise of one Right. Such adjust-
ments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.
(d)(i) For the purpose of any computation hereun-
der, the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) im-
mediately prior to such date; provided, however, that in the
event that the current per share market price of the Security
is determined during a period following the announcement by
the issuer of such Security of (A) a dividend or distribution
on such Security payable in shares of such Security or secu-
rities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to
the
-24-<PAGE>
expiration of 30 Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in
each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price
per share equivalent of such Security. The closing price for
each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trad-
ing on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction report-
ing system with respect to securities listed on the principal
national securities exchange on which the Security is listed
or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Deal-
ers, Inc. Automated Quotations System ("NASDAQ") or such
other system then in use, or, if on any such date the Secu-
rity is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a profes-
sional market maker making a market in the Security selected
by the Board of Directors of the Company. The term "Trading
Day" shall mean a day on which the principal national securi-
ties exchange
-25-<PAGE>
on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is
not listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares
shall be determined in accordance with the method set forth
in Section 11(d)(i). If the Preferred Shares are not pub-
licly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the cur-
rent per share market price of the Common Shares as deter-
mined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transac-
tion occurring after the date hereof), multiplied by one hun-
dred. If neither the Common Shares nor the Preferred Shares
are publicly held or so listed or traded, "current per share
market price" shall mean the fair value per share as deter-
mined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed
with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided, how-
ever, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward
and taken into account in any subsequent
-26-<PAGE>
adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest one one-millionth
of a Preferred Share or one ten-thousandth of any other share
or security as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by
this Section 11 shall be made no later than the earlier of
(i) three years from the date of the transaction which re-
quires such adjustment or (ii) the date of the expiration of
the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant
to Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred
Shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to
the Preferred Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price here-
under shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a Pre-
ferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further
-27-<PAGE>
adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment
of the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evi-
dence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (cal-
culated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price
and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Pur-
chase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
one one-hundredths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such ad-
justment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights
-28-<PAGE>
(calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date
for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereaf-
ter, but, if the Right Certificates have been issued, shall
be at least 10 days later than the date of the public an-
nouncement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Sec-
tion 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Cer-
tificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjust-
ment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of
the holders of record of Right Certificates on the record
date specified in the public
-29-<PAGE>
announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths of a
Preferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may con-
tinue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-
hundredth of the then par value, if any, of the Preferred
Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may val-
idly and legally issue fully paid and nonassessable Preferred
Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made ef-
fective as of a record date for a specified event, the Com-
pany may elect to defer until the occurrence of such event
the issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock
or securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any,
issuable
-30-<PAGE>
upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right
to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those ad-
justments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision
of the Preferred Shares, issuance wholly for cash of any Pre-
ferred Shares at less than the current market price, issuance
wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Pre-
ferred Shares, dividends on Preferred Shares payable in Pre-
ferred Shares or issuance of rights, options or warrants re-
ferred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Shares shall not be tax-
able to such stockholders.
(n) In the event that at any time after the date
of this Agreement and prior to the Distribution Date, the
Company shall (i) declare or pay any dividend on the Common
Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclas-
sification or otherwise than by payment
-31-<PAGE>
of dividends in Common Shares) into a greater or lesser num-
ber of Common Shares, then in any such case (A) the number of
one one-hundredths of a Preferred Share purchasable after
such event upon proper exercise of each Right shall be deter-
mined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such
event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and
the denominator of which is the number of Common Shares out-
standing immediately after such event, and (B) each Common
Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in
this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combina-
tion or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as pro-
vided in Section 11 or 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such adjustment, and
a brief statement of the facts accounting for such adjust-
ment, (b) file with the Rights Agent and with each transfer
agent for the Common Shares or the Preferred Shares a copy of
such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25
hereof.
-32-<PAGE>
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. In the event, directly
or indirectly, at any time after a Person has become an Ac-
quiring Person, (a) the Company shall consolidate with, or
merge with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the Com-
pany and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c)
the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one
or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other
than the Company or one or more of its wholly-owned Subsid-
iaries, then, and in each such case, proper provision shall
be made so that (i) each holder of a Right (except as other-
wise provided herein) shall thereafter have the right to re-
ceive, upon the exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of Common Shares
of such other Person (including the Company as successor
thereto or as the surviving corporation) as shall equal the
result obtained by (A) multiplying the then
-33-<PAGE>
current Purchase Price by the number of one one-hundredths of
a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per
share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares shall thereafter be
liable for, and shall assume, by virtue of such consolida-
tion, merger, sale or transfer, all the obligations and du-
ties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such
issuer; and (iv) such issuer shall take such steps (includ-
ing, but not limited to, the reservation of a sufficient num-
ber of its Common Shares in accordance with Section 9 hereof)
in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be ap-
plicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the
Rights. The Company shall not consummate any such consolida-
tion, merger, sale or transfer unless prior thereto the Com-
pany and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing. The Com-
pany shall not enter into any transaction of the kind re-
ferred to in this Section 13 if at the time of such transac-
tion there are any rights, warrants, instruments or securi-
ties outstanding or any agreements or arrangements which, as
a result of the consummation of such transaction, would
eliminate or
-34-<PAGE>
substantially diminish the benefits intended to be afforded
by the Rights. The provisions of this Section 13 shall simi-
larly apply to successive mergers or consolidations or sales
or other transfers.
Section 14. Fractional Rights and Fractional
Shares. (a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal con-
solidated transaction reporting system with respect to secu-
rities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with re-
spect to securities listed on the principal national securi-
ties exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to
-35-<PAGE>
trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights se-
lected by the Board of Directors of the Company. If on any
such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as deter-
mined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share)
upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than frac-
tions which are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary re-
ceipts, pursuant to an appropriate agreement between the Com-
pany and a depositary selected by it; provided that such
agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and prefer-
ences to which they are entitled as beneficial owners of the
Preferred Shares represented by such depositary receipts. In
lieu of fractional Preferred Shares that are not integral
multiples
-36-<PAGE>
of one one-hundredth of a Preferred Share, the Company shall
pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market
value of one Preferred Share. For the purposes of this Sec-
tion 14(b), the current market value of a Preferred Share
shall be the closing price of a Preferred Share (as deter-
mined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right (ex-
cept as provided above).
Section 15. Rights of Action. All rights of ac-
tion in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are
vested in the respective registered holders of the Right Cer-
tificates (and, prior to the Distribution Date, the regis-
tered holders of the Common Shares); and any registered
holder of any Right Certificate (or, prior to the Distribu-
tion Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Shares),
may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding
-37-<PAGE>
against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifi-
cally acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obliga-
tions under, and injunctive relief against actual or threat-
ened violations of the obligations of any Person subject to,
this Agreement.
Section 16. Agreement of Right Holders. Every
holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
the Common Shares;
(b) after the Distribution Date, the Right Cer-
tificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office of the
Rights Agent, duly endorsed or accompanied by a proper in-
strument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in
-38-<PAGE>
whose name the Right Certificate (or, prior to the Distribu-
tion Date, the associated Common Shares certificate) is reg-
istered as the absolute owner thereof and of the Rights evi-
denced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common
Shares certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be con-
strued to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stock-
holders (except as provided in Section 25 hereof), or to re-
ceive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
-39-<PAGE>
Section 18. Concerning the Rights Agent. The Com-
pany agrees to pay to the Rights Agent reasonable compensa-
tion for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable ex-
penses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Com-
pany also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful misconduct
on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the
premises.
The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered
or omitted by it in connection with, its administration of
this Agreement in reliance upon any Right Certificate or cer-
tificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowl-
edged, by the proper person or persons, or otherwise upon the
advice of counsel as set forth in Section 20 hereof.
-40-<PAGE>
Section 19. Merger or Consolidation or Change of
Name of Rights Agent. Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any corpora-
tion succeeding to the stock transfer or corporate trust pow-
ers of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided, that
such corporation would be eligible for appointment as a suc-
cessor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of
the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been coun-
tersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent
shall be changed and at
-41-<PAGE>
such time any of the Right Certificates shall have been coun-
tersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Cer-
tificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force pro-
vided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal coun-
sel (who may be legal counsel for the Company), and the opin-
ion of such counsel shall be full and complete authorization
and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opin-
ion.
(b) Whenever in the performance of its duties un-
der this Agreement the Rights Agent shall deem it necessary
or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action here-
under, such fact
-42-<PAGE>
or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of
the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary
of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such cer-
tificate.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any re-
sponsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersigna-
ture thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this
Agreement or in any
-43-<PAGE>
Right Certificate; nor shall it be responsible for any change
in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Section 3, 11, 13,
23 or 24, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with re-
spect to the exercise of Rights evidenced by Right Certifi-
cates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization
or reservation of any Preferred Shares to be issued pursuant
to this Agreement or any Right Certificate or as to whether
any Preferred Shares will, when issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, ex-
ecute, acknowledge and deliver or cause to be performed, ex-
ecuted, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be re-
quired by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and di-
rected to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice
President,
-44-<PAGE>
the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action
taken or suffered by it in good faith in accordance with in-
structions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any stockholder, direc-
tor, officer or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which
the Company may be interested, or contract with or lend money
to the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
Section 21. Change of Rights Agent. The Rights
Agent or any successor
-45-<PAGE>
Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed
to the Company and to each transfer agent of the Common
Shares or Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any succes-
sor Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Pre-
ferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If
the Rights Agent shall resign or be removed or shall other-
wise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writ-
ing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Cer-
tificate (who shall, with such notice, submit his Right Cer-
tificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of
the State of New York (or of any other state of the United
States so long as such corporation is authorized to do busi-
ness as a banking institution in the State of New York), in
good
-46-<PAGE>
standing, having an office in the State of New York, which is
authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or exami-
nation by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital
and surplus of at least $10 million. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been origi-
nally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to
the successor Rights Agent any property at the time held by
it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to
give any notice provided for in this Section 21, however, or
any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the ap-
pointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase
-47-<PAGE>
Price and the number or kind or class of shares or other se-
curities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Direc-
tors of the Company may, at its option, at any time prior to
such time as any Person becomes an Acquiring Person, redeem
all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transac-
tion occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such con-
ditions as the Board of Directors in its sole discretion may
establish.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the
Rights pursuant to paragraph (a) of this Section 23, and
without any further action and without any notice, the right
to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after
such action of the Board of Directors ordering the redemption
of the Rights, the Company shall mail a
-48<PAGE>
notice of redemption to all the holders of the then outstand-
ing Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribu-
tion Date, on the registry books of the transfer agent for
the Common Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its Af-
filiates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors
of the Company may, at its option, at any time after any Per-
son becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not in-
clude Rights that have become void pursuant to the provisions
of Section 11(a)(ii) hereof) for Common Shares at an exchange
ratio of one Common Share per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar trans-
action occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Not-
withstanding the foregoing, the Board of Directors shall not
be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of
-49-<PAGE>
the Company, any employee benefit plan of the Company or any
such Subsidiary, or any entity holding Common Shares for or
pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Benefi-
cial Owner of 50% or more of the Common Shares then outstand-
ing.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which
the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall
be effected pro rata based on the number of Rights (other
than Rights which have become
-50-<PAGE>
void pursuant to the provisions of Section 11(a)(ii) hereof)
held by each holder of Rights.
(c) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or autho-
rized but unissued to permit any exchange of Rights as con-
templated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the
Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary
to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exchange of a Right, a number of Preferred
Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number
or fraction is equal to the current per share market price of
one Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates
which evidence fractional Common Shares. In lieu of such
fractional Common Shares, the Company shall pay to the regis-
tered holders of the Right Certificates with regard to which
such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current mar-
ket value of a whole Common Share. For the purposes of this
paragraph (d), the current market value
-51-<PAGE>
of a whole Common Share shall be the closing price of a Com-
mon Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case
the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Shares or
to make any other distribution to the holders of its Pre-
ferred Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preferred Shares rights
or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclas-
sification of its Preferred Shares (other than a reclas-
sification involving only the subdivision of outstanding Pre-
ferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsid-
iaries (taken as a whole) to, any other Person, (v) to effect
the liquidation, dissolution or winding up of the Company, or
(vi) to declare or pay any dividend on the Common Shares pay-
able in Common Shares or to effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each
holder of a Right
-52-<PAGE>
Certificate, in accordance with Section 26 hereof, a notice
of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such reclassifica-
tion, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares
and/or Preferred Shares, if any such date is to be fixed, and
such notice shall be so given in the case of any action cov-
ered by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of the Preferred
Shares for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) In case the event set forth in Section
11(a)(ii) hereof shall occur, then the Company shall as soon
as practicable thereafter give to each holder of a Right Cer-
tificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands autho-
rized by this Agreement to be given or made by the Rights
Agent or by the holder of any Right Certificate to or
-53-<PAGE>
on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as fol-
lows:
Hecla Mining Company
6500 Mineral Drive
Coeur D'Alene, Idaho 83814
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by
the Company or by the holder of any Right Certificate to or
on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as fol-
lows:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Attn: Executive Vice President
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of
any Right Certificate shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry
books of the Company.
-54-<PAGE>
Section 27. Supplements and Amendments. The Com-
pany may from time to time supplement or amend this Agreement
without the approval of any holders of Right Certificates in
order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or incon-
sistent with any other provisions herein, or to make any
other provisions with respect to the Rights which the Company
may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company
and the Rights Agent; provided, however, that from and after
such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would ad-
versely affect the interests of the holders of Rights. With-
out limiting the foregoing, the Company may at any time prior
to such time as any Person becomes an Acquiring Person amend
this Agreement to lower the thresholds set forth in Sections
1(a) and 3(a) to not less than the greater of (i) the sum of
.001% and the largest percentage of the outstanding Common
Shares then known by the Company to be beneficially owned by
any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Sub-
sidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan) and (ii) 10%.
Section 28. Successors. All the covenants and pro-
visions of this Agreement by or for the benefit of the Com-
pany or the Rights Agent shall bind and inure to the
-55-<PAGE>
benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing
in this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equi-
table right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provi-
sions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be af-
fected, impaired or invalidated.
Section 31. Governing Law. This Agreement and
each Right Certificate issued hereunder shall be deemed to be
a contract made under the laws of the State of Delaware and
for all purposes shall be governed by and construed in ac-
cordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
-56-<PAGE>
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such coun-
terparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are in-
serted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and attested, all as of
the day and year first above written.
HECLA MINING COMPANY
Attest:
By: /s/ Michael B. White By: /s/ Arthur Brown
_____________________ _____________________
Michael B. White Arthur Brown
Corporate Secretary Chairman and Chief
Executive Officer
Attest: AMERICAN STOCK TRANSFER &
TRUST COMPANY
By: /s/ Susan Silber By: /s/ Herbert J. Lemmer
_________________ ______________________
Name and Title: Name and Title:
Susan Silber Herbert J. Lemmer
Assistant Secretary Vice President
-57-<PAGE>
Exhibit A
Form of Right Certificate
Certificate No. R- Rights
NOT EXERCISABLE AFTER MAY 19, 2006 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.
Right Certificate
HECLA MINING COMPANY
This certifies that , or regis-
tered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of May 10, 1996 (the "Rights
Agreement"), between Hecla Mining Company, a Delaware corpo-
ration (the "Company"), and American Stock Transfer & Trust
Company (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date (as such term is defined
in the Rights Agreement) and prior to 5:00 P.M., New York
City time, on May 19, 2006 at the principal office of the
Rights Agent, or at the office of its successor as Rights
Agent, one one-hundredth of a fully paid non-assessable share
of Series A Junior Participating Preferred Stock, par value
$0.25 per share (the "Preferred Shares"), of the Company, at
a purchase price of $50.00 per one one-hundredth of a Pre-
ferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by
this Right Certificate (and the number of one one-hundredths
of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of May 20, 1996,
based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and
the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and ad-
justment upon the happening of certain events.
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement,
which terms, provisions and conditions are hereby <PAGE>
incorporated herein by reference and made a part hereof and
to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obliga-
tions, duties and immunities hereunder of the Rights Agent,
the Company and the holders of the Right Certificates. Cop-
ies of the Rights Agreement are on file at the principal ex-
ecutive offices of the Company and the above-mentioned of-
fices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate
or Right Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate num-
ber of Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have en-
titled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exer-
cised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate (i) may be redeemed
by the Company at a redemption price of $.01 per Right or
(ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value
$0.25 per share.
No fractional Preferred Shares will be issued upon
the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one--
hundredth of a Preferred Share, which may, at the election of
the Company, be evidenced by depositary receipts), but in
lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate shall be en-
titled to vote or receive dividends or be deemed for any pur-
pose the holder of the Preferred Shares or of any other secu-
rities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of direc-
tors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corpo-
rate action, or to receive notice of meetings or other ac-
tions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by
this Right Certificate shall have been exercised as provided
in the Rights Agreement.
A-2<PAGE>
This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been counter-
signed by the Rights Agent.
WITNESS the facsimile signature of the proper of-
ficers of the Company and its corporate seal. Dated as
of .
ATTEST: HECLA MINING COMPANY
By:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By:
Authorized Signature
A-3<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells,
assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated:
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the Na-
tional Association of Securities Dealers, Inc., or a com-
mercial bank or trust company having an office or correspon-
dent in the United States.
-------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
Signature
A-4<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: HECLA MINING COMPANY
The undersigned hereby irrevocably elects to exer-
cise Rights represented by this Right Cer-
tificate to purchase the Preferred Shares issuable upon the
exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evi-
denced by this Right Certificate, a new Right Certificate for
the balance remaining of such Rights shall be registered in
the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated:
A-5<PAGE>
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the Na-
tional Association of Securities Dealers, Inc., or a com-
mercial bank or trust company having an office or correspon-
dent in the United States.
A-6<PAGE>
Form of Reverse Side of Right Certificate -- continued
-------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
Signature
-------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the
name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in
the Form of Assignment or the Form of Election to Purchase,
as the case may be, is not completed, the Company and the
Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as defined in the
Rights Agreement) and such Assignment or Election to Purchase
will not be honored.
A-7<PAGE>
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On May 10, 1996, the Board of Directors of Hecla
Mining Company (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstand-
ing share of common stock, par value $0.25 per share (the
"Common Shares"), of the Company. The dividend is payable on
May 20, 1996 (the "Record Date") to the stockholders of
record on that date. Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a
share of Series A Junior Participating Preferred Stock, par
value $0.25 per share (the "Preferred Shares"), of the Com-
pany at a price of $50.00 per one one-hundredth of a Pre-
ferred Share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company
and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agent").
Until the earlier to occur of (i) 10 days following
a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired ben-
eficial ownership of 15% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announce-
ment of an intention to make, a tender offer or exchange of-
fer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the out-
standing Common Shares (the earlier of such dates being
called the "Distribution Date"), the Rights will be evi-
denced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share cer-
tificate with a copy of this Summary of Rights attached
thereto.
The Rights Agreement provides that, until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with
the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or
new issuance of Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration
B-1<PAGE>
of the Rights), the surrender for transfer of any certifi-
cates for Common Shares outstanding as of the Record Date,
even without such notation or a copy of this Summary of
Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed
to holders of record of the Common Shares as of the close
of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribu-
tion Date. The Rights will expire on May 19, 2006 (the "Fi-
nal Expiration Date"), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed or ex-
changed by the Company, in each case, as described below.
The Purchase Price payable, and the number of Pre-
ferred Shares or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Pre-
ferred Shares of certain rights or warrants to subscribe for
or purchase Preferred Shares at a price, or securities con-
vertible into Preferred Shares with a conversion price, less
than the then-current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding reg-
ular periodic cash dividends paid out of earnings or retained
earnings or dividends payable in Preferred Shares) or of sub-
scription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of
one one-hundredths of a Preferred Share issuable upon exer-
cise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock divi-
dend on the Common Shares payable in Common Shares or subdi-
visions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment
of $1 per share but will be entitled to an aggregate dividend
of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation pay-
ment of $100 per share but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with
B-2<PAGE>
the Common Shares. Finally, in the event of any merger, con-
solidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights
are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' div-
idend, liquidation and voting rights, the value of the one
one-hundredth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a
merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company
which at the time of such transaction will have a market
value of two times the exercise price of the Right. In the
event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall
be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will there-
after be void), will thereafter have the right to receive
upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares, the
Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio
of one Common Share, or one one-hundredth of a Preferred
Share (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth
of a Preferred Share, which may, at the election of the Com-
pany, be evidenced by depositary receipts) and in lieu there-
of, an adjustment in cash will be made based on the market
price of the Preferred Shares on the last trading day prior
to the date of exercise.
At any time prior to the acquisition by a person or
group of affiliated or
B-3<PAGE>
associated persons of beneficial ownership of 15% or more of
the outstanding Common Shares, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time
on such basis with such conditions as the Board of Directors
in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the hold-
ers of the Rights, including an amendment to lower certain
thresholds described above to not less than the greater of
(i) the sum of .001% and the largest percentage of the out-
standing Common Shares then known to the Company to be ben-
eficially owned by any person or group of affiliated or asso-
ciated persons and (ii) 10%, except that from and after such
time as any person or group of affiliated or associated per-
sons becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to re-
ceive dividends.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated May __, 1996. A
copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorpo-
rated herein by reference.
B-4
EXHIBIT 20
[HECLA MINING COMPANY LETTERHEAD]
NEWS RELEASE
FOR IMMEDIATE RELEASE
May 10, 1996
HECLA SHAREHOLDERS ELECT NEW DIRECTOR,
BOARD APPROVES RIGHTS PLAN AND PREFERRED DIVIDEND
COEUR D'ALENE, IDAHO -- At today's annual meeting
held at corporate headquarters in Coeur d'Alene, Idaho, Hecla
Mining Company (HL & HL-PrB:NYSE) shareholders elected Thomas
J. O'Neil to Hecla's board of directors. O'Neil is executive
vice president of operations for Cleveland-Cliffs Incorporated,
a major iron ore mining company. He is also the former head of
the Department of Mining and Geological Engineering at the Uni-
versity of Arizona, and holds a Ph.D. in mining engineering.
Shareholders also reelected Leland O. Erdahl to the board.
Erdahl first became a Hecla director in 1984.
At its regular meeting today, Hecla's board of direc-
tors declared a dividend distribution of one Preferred Share
Purchase Right on each outstanding share of Hecla common stock.
The dividend distribution will be made on May 20, 1996, to
shareholders of record on that date. These new Preferred Share
Purchase Rights, which will expire on May 19, 2006, trade
together with Hecla's common stock and replace existing rights
that will expire on May 19, 1996.
Arthur Brown said, "The Rights are designed to assure
that all of Hecla's shareholders receive fair and equal treat-
ment in the event of any proposed takeover of the company.
These Rights will guard against any abusive tactics by someone
to gain control of Hecla without paying all shareholders a con-
trol premium."
The Rights will be exercisable only if a person or
group acquires 15% or more of Hecla's common stock or announces
a tender offer which would result in ownership of 15% or more
of the common stock. The Rights are not exercisable at this
time, and shareholders will not receive certificates for the
Rights until they become exercisable. The Rights distribution
is not taxable to shareholders. Shareholders holding common
stock will receive a notice by mail containing further informa-
tion concerning the Rights.
(more)<PAGE>
HECLA SHAREHOLDERS ELECT DIRECTOR, BOARD APPROVES PAGE 2
RIGHT PLAN AND PREFERRED DIVIDEND
The board also announced the appointment of George R.
Johnson to the position of Vice President - Metal Mining.
Johnson was previously Manager - Metal Mines, U.S. Operations.
He first joined Hecla in 1983 and holds a degree in mining
engineering from the University of Washington. Additionally,
the directors named John P. Stilwell as Chief Financial
Officer. Stilwell is currently Vice President - Finance and
Treasurer. He joined Hecla in 1985 and has a MBA in finance
and accounting and is also a certified public accountant.
In other business, the board of directors approved a
$2 million dividend payment to preferred shareholders of record
on June 12, 1996, payable on July 1, 1996.
Hecla Mining Company, headquartered in Coeur d'Alene,
Idaho, is one of the United States' best-known silver produc-
ers. The company also produces gold and is a major supplier of
ball clay, kaolin and other industrial minerals. Hecla's
operations are principally in the U.S. and Mexico.
-HL-
Contact: Vicki Veltkamp, manager - corporate communications,
208-769-4144
Hecla's Home Page can be accessed on the Internet at:
http://www.hecla-mining.com
A free fax on Hecla news releases can be obtained from
BusinessWire NewsOnDemand at 800-344-7826
