<PAGE> 1
PROXY STATEMENT
PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or
section 240.14a-12
HECLA MINING COMPANY
(Name of Registrant as Specified in Its Charter)
MICHAEL B. WHITE, SECRETARY
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box): N/A
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per Each Party to the Controversy Pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee Computed on Table Below Per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of Each Class of Securities to Which Transaction Applies:
(2) Aggregate Number of Securities to Which Transaction Applies:
(3) Per Unit Price or Other Underlying Value of Transaction Computed Pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed Maximum Aggregate Value of Transaction:
(5) Total fee paid:
[ ] Fee Paid Previously with Preliminary Materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule, or Registration Statement No:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
March 26, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders of Hecla Mining Company, which will be held at the
corporate offices, located at 6500 Mineral Drive in Coeur d'Alene,
Idaho, on Friday, May 9, 1997, at 10 a.m., Pacific Daylight Time.
The Annual Meeting will involve the election of three
directors and the selection of auditors for 1997. In addition,
reports of the Corporation's operations and other matters of
interest will be made at the meeting. For information with respect
to these matters, please refer to the Notice of Meeting and Proxy
Statement which are enclosed. Your Board of Directors respectfully
recommends that you vote to elect the directors nominated and vote
to approve the auditors.
It is important that your shares be represented at the meeting
whether or not you are personally able to attend. You are
therefore urged to complete, date and sign the accompanying proxy
and mail it in the enclosed postage-paid envelope as promptly as
possible.
Thank you for your cooperation.
Sincerely,
/s/ Arthur Brown
-------------------------------
Arthur Brown
Chairman, President and
Chief Executive Officer
<PAGE> 3
HECLA MINING COMPANY
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
_________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on
May 9, 1997
To the Shareholders of
HECLA MINING COMPANY:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
of Hecla Mining Company (the "Corporation") will be held at the
corporate offices located at 6500 Mineral Drive in the City of
Coeur d'Alene, State of Idaho, on Friday, May 9, 1997, at 10 a.m.,
Pacific Daylight Time, for the following purposes:
(1) To elect three members of the Board of Directors of
the Corporation to serve for three-year terms or until their
respective successors are elected and have qualified;
(2) To consider and vote upon the selection of Coopers &
Lybrand L.L.P. as independent auditors of the Corporation for
the fiscal year ending December 31, 1997; and
(3) To transact such other business as may properly come
before the Annual Meeting or any postponements or adjournments
thereof.
The close of business on March 17, 1997, has been fixed as the
record date for the determination of the shareholders entitled to
notice of, and to vote at, the Annual Meeting and at any
postponements or adjournments thereof. The stock transfer books of
the Corporation will not be closed.
By Order of the Board of Directors
MICHAEL B. WHITE
Secretary
March 26, 1997
- -------------------------------------------------------------------
Whether or not you plan to attend the Annual Meeting, please
complete, sign and date the accompanying proxy and mail it at once
in the enclosed envelope, which requires no additional postage if
mailed in the United States. Your proxy will be revocable, either
in writing or by voting in person at the Annual Meeting, at any
time prior to its exercise.
- -------------------------------------------------------------------
<PAGE> 4
HECLA MINING COMPANY
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
(208) 769-4100
_______________
P R O X Y S T A T E M E N T
Relating to
ANNUAL MEETING OF SHAREHOLDERS
to be held on May 9, 1997
_______________
INTRODUCTION
This Proxy Statement is being furnished by the Board of
Directors of Hecla Mining Company, a Delaware corporation (the
"Corporation"), to holders of shares of the Corporation's Common
Stock, par value $0.25 per share (the "Common Stock"), in
connection with the solicitation by the Board of Directors of
proxies to be voted at the Annual Meeting of Shareholders of the
Corporation to be held on Friday, May 9, 1997, and any
postponements or adjournments thereof (the "Annual Meeting"), for
the purposes set forth in the accompanying Notice of Annual
Meeting. This Proxy Statement is first being mailed to
shareholders on or about March 26, 1997.
PURPOSES OF ANNUAL MEETING
ELECTION OF DIRECTORS
At the Annual Meeting, shareholders entitled to vote (see
"Voting at Annual Meeting") will be asked to consider and to take
action on the election of three directors to the Corporation's
Board of Directors, each to serve for a three-year term. See
"Election of Directors."
SELECTION OF INDEPENDENT AUDITORS
At the Annual Meeting, shareholders also will be asked to
consider and to take action on the selection of Coopers & Lybrand
L.L.P. as independent auditors of the Corporation for the fiscal
year ending December 31, 1997. See "Approval of Auditors."
VOTING AT ANNUAL MEETING
GENERAL
The Board of Directors of the Corporation has fixed the close
of business on March 17, 1997, as the record date (the "Record
Date") for determination of the shareholders entitled to notice of,
and to vote at, the Annual Meeting. As of the Record Date, there
were issued and outstanding 55,079,239 shares of Common Stock
entitled to vote. A majority of such shares will constitute a
quorum for the transaction of business at the Annual Meeting. The
holders of record on the Record Date of the shares entitled to be
voted at the Annual Meeting are entitled to cast one vote per share
on each matter submitted to a vote at the Annual Meeting.
Directors are elected by a plurality of the votes cast by the
holders of the Common Stock at a meeting at which a quorum is
present. "Plurality" means that the individuals who receive the
<PAGE> 5
largest number of votes cast are elected as directors up to the
maximum number of directors to be chosen at the meeting.
Consequently, any shares not voted (whether by abstention, broker
nonvotes or otherwise) have no impact in the election of directors
except to the extent the failure to vote for an individual results
in another individual receiving a larger number of votes. The
approval of the independent auditors requires the favorable vote of
the holders of a majority of the shares present at the meeting,
provided a quorum is present. Any shares which are not voted
(whether by abstentions, broker nonvotes or otherwise) will not
count toward the required total and will have the same effect as
shares voted against such approval.
PROXIES
Shares of Common Stock which are entitled to be voted at the
Annual Meeting and which are represented by properly executed
proxies will be voted in accordance with the instructions indicated
in such proxies. If no instructions are indicated on any proxy,
the shares represented by such proxy will be voted: (1) FOR the
election of each of the three nominees for election as directors;
(2) FOR the approval of the selection of independent auditors; and
(3) in the discretion of the proxy holder as to any other matters
which may properly come before the Annual Meeting. A shareholder
who has executed and returned a proxy may revoke it at any time
before it is voted at the Annual Meeting by executing and returning
a proxy bearing a later date, by giving written notice of
revocation to the Secretary of the Corporation or by attending the
Annual Meeting and voting in person. Attendance in person at the
Annual Meeting will not, in itself, be sufficient to revoke a
proxy.
The Corporation will bear all the costs and expenses relating
to the solicitation of proxies, including the costs of preparing,
printing and mailing this Proxy Statement and accompanying material
to shareholders. In addition to the solicitation of proxies by use
of the mails, the directors, officers and employees of the
Corporation, without additional compensation, may solicit proxies
personally or by telephone or otherwise. Arrangements will be made
with brokerage firms and other custodians, nominees and fiduciaries
for forwarding solicitation materials to the beneficial owners of
the shares of Common Stock held by such persons, and the
Corporation will reimburse such brokerage firms, custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses
incurred by them in connection with such activities.
ELECTION OF DIRECTORS
In accordance with the Corporation's Certificate of
Incorporation, its Board of Directors is divided into three
classes. The terms of office of the directors in each class expire
at different times. The terms of Messrs. Arthur Brown,
John E. Clute and Joe Coors Jr., will expire at the Annual Meeting
of Shareholders in 1997. Messrs. Brown, Clute and Coors have been
designated by the Board of Directors of the Corporation as nominees
for election as directors of the Corporation each for a three-year
<PAGE> 6
term expiring in 2000. The terms of Messrs. Ted Crumley, Charles
L. McAlpine and Jorge E. Ordonez C. will expire in 1998. The terms
of Messrs. Leland O. Erdahl and Thomas J. O'Neil will expire in
1999.
It is intended that the proxies solicited hereby will be voted
FOR election of the nominees for directors listed below, unless
authority to do so has been withheld. The Board of Directors knows
of no reason why any of its nominees will be unable or unwilling to
accept election. However, if any nominee becomes unable to accept
election, the Board will either reduce the number of directors to
be elected or select substitute nominees submitted by the Directors
Nominating Committee of the Board of Directors. If substitute
nominees are selected, proxies will be voted in favor of such
nominees.
NOMINEES
The nominees for director for terms which will expire in 2000
are as follows:
Year First
Age at Became
Principal Occupation and Other Directorships May 9, 1997 Director
- -------------------------------------------- ----------- --------
ARTHUR BROWN. Chairman of the Board of Directors
of the Corporation since June 1987; also, Chief
Executive Officer of the Corporation since May
1987; President of the Corporation since
May 1986; Chief Operating Officer of the
Corporation from May 1986 to May 1987; Executive
Vice President of the Corporation from May 1985
to May 1986; held various positions as an officer
of the Corporation since 1980; employed by the
Corporation since 1967; Director, AMCOL
International Corporation (an American indus-
trial minerals company); Director, CalMat Co. (a
construction materials supply company); Director,
Idaho Independent Bank; Director, Southern Africa
Minerals Corporation (a Canadian mining company) . . . . 56 1983
JOHN E. CLUTE. Dean, Gonzaga University School
of Law since August 1991; Senior Vice President,
Human Resources and General Counsel of Boise
Cascade Corporation (manufacturer of paper and
forest products), 1982 to 1991; employed by Boise
Cascade Corporation in various other capacities
commencing March 1965; Director, The Jundt Growth
Fund, Inc.; Director, Jundt Funds, Inc. (Jundt
U.S. Emerging Growth Fund and Jundt Opportunity
Fund); Director, Skillnet Corporation (computer-
ized employment and personnel services) . . . . . . . . . 62 1981
JOE COORS JR. Chairman of the Board, Coors
Ceramics Company since 1985; Chairman, Air Force
Memorial Foundation; President and Director, ACX
Technologies, Inc.; Trustee, Colorado School of
Mines . . . . . . . . . . . . . . . . . . . . . . . . . 55 1990
<PAGE> 7
REMAINING DIRECTORS
The remaining directors whose present terms of office will
continue after the meeting and will expire in 1998 are as follows:
Year First
Age at Became
Principal Occupation and Other Directorships May 9, 1997 Director
- -------------------------------------------- ----------- --------
CHARLES L. McALPINE. President of Arimathaea
Resources Inc. (Canadian gold exploration
company) from December 1982 to June 1992;
President of Campbell Chibougamau Mines Ltd.
(Canadian copper-gold mining company) from 1969
to 1979; Director, First Tiffany Resource
Corporation; Director, Holmer Gold Mines Limited;
Director, Goldstake Explorations, Inc.; Director,
Postec Systems, Inc.. . . . . . . . . . . . . . . . . . . 63 1989
JORGE E. ORDONEZ C. Director, Altos Hornos de
Mexico, S.A. de C.V.; Director, Minera
Carbonifera Rio Escondido, S.A. de C.V.;
Director, Grupo Acerero del Norte, S.A. de C.V.;
Director, Fischer-Watt Gold Co., Inc.; President,
Minera Montoro S.A. de C.V.; President and Chief
Executive Officer, Ordonez Profesional S.C. . . . . . . . 57 1994
TED CRUMLEY. Senior Vice President and Chief
Financial Officer of Boise Cascade Corporation
(manufacturer of paper and forest products), 1994
to present; Vice President and Controller of
Boise Cascade Corporation, 1990 to 1994; other
positions held at Boise Cascade Corporation from
1972 to 1990; Director, Boise Cascade Office
Products Corporation, 1995 to present . . . . . . . . . . 52 1995
<PAGE> 8
The remaining directors whose present terms of office will
continue after the meeting and will expire in 1999 are as follows:
Year First
Age at Became
Principal Occupation and Other Directorships May 9, 1997 Director
- -------------------------------------------- ----------- --------
LELAND O. ERDAHL. Consultant from November 1984
to July 1987 and from January 1992 to 1995;
President of Stolar, Inc. (geologic imaging and
radio communications) from July 1987 to January
1992; President of Albuquerque Uranium
Corporation from November 1987 to 1992; President
and Chief Executive Officer of Ranchers
Exploration and Development Corporation
("Ranchers") from July 1983 to July 1984; held
various positions as an officer of Ranchers since
1970; Trustee, John Hancock Mutual Funds;
Director, Canyon Resources Corporation; Director,
Original Sixteen to One Mine, Inc.; Director,
Santa Fe Ingredients Co. Inc.; Director, Santa Fe
Ingredients Co. of California, Inc.; Director,
Uranium Resources Inc. . . . . . . . . . . . . . . . . . 68 1984
THOMAS J. O'NEIL. Executive Vice President -
Operations, Cleveland-Cliffs Inc., since October
1995; employed by Cleveland-Cliffs Inc. as an
officer since November 1991; employed as an
officer of certain operating subsidiaries of
Cyprus Minerals Corporation from October 1987
through November 1991; Director and Chairman,
Lake Superior and Ishpeming Railroad (subsidiary
of Cleveland-Cliffs Inc.) . . . . . . . . . . . . . . . . 57 1996
CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
The Board of Directors met five times during 1996 and each
director attended all of such meetings, with the exception of one
director who was unable to attend one board meeting. The standing
committees of the Board of Directors are the Executive, Audit,
Compensation, Directors Nominating and Finance committees.
The Executive Committee, the members of which are Messrs.
Brown (Chairman), Clute, Crumley and Erdahl, met twice in 1996.
The Executive Committee is empowered with the same authority as the
Board of Directors in the management of the business of the
Corporation, except for certain matters enumerated in the
Corporation's By-Laws which are specifically reserved to the full
Board of Directors.
The Audit Committee, the members of which are Messrs. McAlpine
(Chairman), Erdahl, O'Neil and Ordonez, met twice in 1996. The
Audit Committee's principal functions are to meet with the
Corporation's independent auditors to review the financial
statements contained in the Annual Report, to review the
Corporation's system of internal accounting controls, and to report
to the Board of Directors thereon.
<PAGE> 9
The Compensation Committee, the members of which are Messrs.
Clute (Chairman), Coors, Crumley and Erdahl met three times in
1996. The Compensation Committee's principal functions are to make
recommendations to the Board of Directors concerning the
compensation of executive officers of the Corporation and to
administer the Corporation's stock-based plans.
The Directors Nominating Committee, the members of which are
Messrs. Erdahl (Chairman), Clute, McAlpine and Ordonez, met twice
in 1996. The Directors Nominating Committee reviews and recommends
to the Board of Directors nominees for election as directors at the
Annual Meeting of Shareholders and nominees to fill vacancies on
the Board of Directors. The Directors Nominating Committee will
consider persons recommended by shareholders as nominees for
election as directors, which recommendations are submitted in
writing to the Secretary of the Corporation and include a statement
as to the qualifications and willingness of such persons to serve
on the Corporation's Board of Directors.
The Finance Committee, the members of which are Messrs. Coors
(Chairman), Crumley, O'Neil and Ordonez, met twice in 1996. The
principal functions of the Finance Committee are to develop and set
the Corporation's long-term investment policies and to review the
performance of the investment manager of the Corporation's Pension
Trusts.
COMPENSATION OF DIRECTORS
The Corporation compensates directors who are not employees of
the Corporation for their services in the amount of $1,000 for each
directors' meeting attended, a retainer fee of $2,000 per calendar
quarter and $800 for attending any meeting of any Committee of the
Board.
In August 1994, the Corporation adopted a new Deferred
Compensation Plan for directors which commenced January 1, 1995
(the "1994 Plan"). The prior plans were terminated and all amounts
deferred thereunder were rolled over into the 1994 Plan. The 1994
Plan provides that all directors fees and retainers may be
deferred; interest is to be credited monthly on all deferred
accounts at 1.23 times the Moody's long-term bond rate;
distributions may be made at the election of the director on a
lump-sum, annual or monthly basis; distributions for unforeseeable
financial emergencies are permitted before and after retirement;
and a grantor trust is established to receive distributions from
the Corporation to provide for the obligations of the Corporation
pursuant to the 1994 Plan. Interest accrued in 1996 for the
accounts of directors, under the 1994 Plan, amounted to an
aggregate of $10,379.
In March 1995, the Corporation adopted the Hecla Mining
Company Stock Plan for Nonemployee Directors (the "Directors Stock
Plan"), which became effective following shareholder approval on
May 5, 1995, and is subject to termination by the Board of
Directors at any time. Pursuant to the Directors Stock Plan, each
nonemployee director is credited with 1,000 shares of the Common
Stock on May 30 of each year. Nonemployee directors joining the
<PAGE> 10
Board of Directors after May 30 of any year are credited with a pro
rata number of shares based upon the date they join the Board. All
credited shares are held in a grantor trust, the assets of which
are subject to the claims of the Corporation's creditors, until
delivered under the Directors Stock Plan. Delivery of the shares
from the trust occurs upon the earliest of (i) death or disability;
(ii) retirement from the Board; (iii) a cessation of the director's
service for any other reason; or (iv) a Change in Control of the
Corporation (as defined). Subject to certain restrictions,
directors may elect delivery of the shares on such date or in
annual installments thereafter over 5, 10 or 15 years. The shares
of Common Stock credited to nonemployee directors pursuant to the
Directors Stock Plan may not be sold until at least six months
following the date they are credited. The maximum number of shares
of Common Stock which may be credited pursuant to the Directors
Stock Plan is 120,000. Each nonemployee director of the
Corporation was credited with 1,000 shares of Common Stock on May
30, 1996.
COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Overall Policy
- --------------
Compensation of the Corporation's executive officers rests in
the discretion of the Board of Directors, and the Compensation
Committee of the Board of Directors is charged with considering
specific information and making recommendations to the full Board
with respect to compensation matters. The Compensation Committee
is currently comprised of four nonemployee directors who are
appointed annually by the Corporation's Board of Directors. The
Compensation Committee's consideration of and recommendations
regarding executive compensation are guided by a number of factors
including overall corporate performance and returns to
shareholders. The overall objectives of the Corporation's
executive compensation package are to attract and to retain the
best possible executive talent, to motivate the Corporation's
executives to achieve goals consistent with the Corporation's
business strategy, to provide an identity between executive and
shareholder interests through stock-based plans, and finally to
provide a compensation package that recognizes an executive's
individual contributions in addition to the Corporation's overall
business results.
The Compensation Committee periodically reviews the
Corporation's executive compensation program. The Compensation
Committee met three times in 1996 to consider various components of
the executive compensation program. In making recommendations
concerning executive compensation, the Committee reviews reports
published by independent compensation consultants assessing
compensation programs and reviews the Corporation's executive
compensation, corporate performance, stock price appreciation and
total return to shareholders against a peer group of public
corporations made up of the Corporation's most direct competitors
for executive talent. Because most executive skills and expertise
<PAGE> 11
are transferable between industries and business segments, the
Compensation Committee believes the Corporation's most direct
competitors for executive talent are not limited to those companies
included in the peer group established for comparing shareholder
returns. Thus, the Corporation's peer group used for compensation
analysis includes, but is not limited to, the selected peer group
identified in the Performance Graph shown on page _______. The
Compensation Committee's periodic review ensures an ongoing
evaluation of the correlation between the Corporation's performance
and its executive compensation in the context of and in comparison
to the compensation programs of other companies.
The Compensation Committee recommends to the Board of
Directors compensation levels and programs for the Chief Executive
Officer and all Vice Presidents, including the individuals whose
compensation is detailed in this Proxy Statement. In reviewing
individual performance of executives whose compensation is detailed
in this Proxy Statement, the Compensation Committee takes into
account the views of Mr. Brown, the Corporation's Chief Executive
Officer.
The key elements of the Corporation's executive compensation
consist of base salary, annual cash performance payments, and
stock-based grants. The Compensation Committee's policies with
respect to each of these elements, including the basis for the
compensation awarded to Mr. Brown, are discussed below. In
addition, while the elements of compensation described below are
considered separately, the Compensation Committee takes into
account the full compensation package afforded by the Corporation
to the individual executive, including deferred compensation,
pension benefits, supplemental retirement benefits, severance
plans, insurance and other benefits, as well as the programs
described below. While the Committee takes into consideration all
of the performance and other factors set forth below in setting
base salaries, the Committee's deliberations for setting base
salaries are essentially subjective, and no set quantitative
formula determines the base salary level of any of the named
executives. The Corporation adopted a performance payment plan in
1994 utilizing a quantitative formula to determine an executive's
eligibility for annual performance payments in addition to base
salary.
The Committee analyzed the potential impact on the Company's
executive compensation program of Section 162(m) of the Internal
Revenue Code and the regulations thereunder, which generally
disallows deductions for compensation in excess of $1 million per
year to the five most highly compensated executives of a public
company. Based upon its analysis, the Committee expects that all
of the compensation payable pursuant to its compensation program
now in effect will be deductible.
<PAGE> 12
Base Salaries
- -------------
Base salaries for new executive officers are initially
determined by evaluating the responsibilities of the position held
and the experience of the individual, and by reference to the
competitive marketplace for executive talent, including a
comparison to base salaries for comparable positions at other
companies including those in the peer group.
Annual salary adjustments which are made in May of each year
for a 12-month period from June 1 to May 31, are determined by
evaluating the performance of the Corporation and of each executive
officer, and also taking into account new responsibilities for any
particular officer. In the case of executive officers who are
responsible for a particular business unit, such unit's financial,
operating, cost containment and productivity results are also
considered by the Committee. The Compensation Committee, where
appropriate, also considers other corporate performance measures,
including changes in market share, productivity, cost control,
safety, environmental awareness and improvements in relations with
customers, suppliers and employees. The Compensation Committee
places a premium on business efficiency because certain sectors of
the Corporation's businesses do not control the prices at which
their products are sold. Base salaries for all executive officers,
except Mr. Brown, were increased commencing June 1, 1996, based
upon the considerations described above.
With respect to the base salary set for Mr. Brown in 1996, the
Compensation Committee took into account a comparison of base
salaries of chief executive officers of the 1996 peer group
companies, the Corporation's success in meeting its return on
equity goals in 1996, the performance of the Common Stock and the
assessment by the Compensation Committee of Mr. Brown's individual
performance. Based upon these factors, the Board of Directors did
not increase Mr. Brown's salary in 1996.
Annual Performance Payment
- --------------------------
In August 1994, the Corporation adopted a formal short-term
performance payment plan based on the recommendation of the
Compensation Committee. Under the plan, executive officers (seven
in 1996) were eligible for annual cash payments based upon a
formula established in the plan covering the calendar year 1996 and
generally described below. The plan formula for 1996 includes an
overall corporate performance element, a departmental performance
element, and an individual performance element. Each of these
elements was assigned a percentage weight described below, such
that all elements combined total 100%. For 1996, corporate
performance, for all executives other than Mr. Brown, was assigned
a 50% weight, departmental performance was assigned a 30% weight,
and individual performance was assigned a 20% weight. Mr. Brown's
performance payment was tied 100% to corporate performance. The
Compensation Committee, based upon recommendations from the
Corporation's senior management, established targeted performance
goals in key areas called "key success factors" for the corporate
performance element. For 1996, the key success factors and
<PAGE> 13
measures for the corporate performance included gold, silver and
industrial minerals production (40%), cash flow after capital
expenditures but before financing (20%), profitability after
dividends (20%) and relative share price (20%). Departmental
factors vary for each department, but include such factors as cost
management, internal customer service and production goals for
metal and industrial minerals operating divisions. Payments under
the plan are determined by the application of a performance formula
to these key success factors. At the first quarterly Board meeting
after the end of each year, actual performance results are compared
against the targeted performance goals as a percentage of targeted
goals for the various key success factors. Actual performance must
reach at least 90% of the targeted goals to be included in the
performance formula. The key success factors and the percentage
weights assigned to each of the elements may be altered from year
to year at the discretion of the Compensation Committee. The
corporate and departmental performance elements are tied to a
formula, while the individual performance element is discretionary
and not based upon any specific formula. Individual performance
payments for all eligible executives other than the Chief Executive
Officer are based in significant part upon the recommendations of
the Chief Executive Officer. The Compensation Committee reviews
and approves individual performance payments for all eligible
executives.
For 1996, the plan provides that no performance payments may
be awarded based upon any of the corporate key success factors if
the Corporation does not achieve a net profit after dividends.
However, payments derived from the departmental and individual
performance elements may nevertheless be available pursuant to the
plan.
Although certain of the targeted corporate success factors
goals were attained for 1996, because the Corporation did not
achieve a net profit after dividends in 1996, no corporate
performance based payments were granted for 1996 to any executive.
Because Mr. Brown was only eligible for a corporate performance
payment for 1996, he received no performance payment. Payments for
all executives other than Mr. Brown were awarded for 1996 on the
basis of departmental and individual performance. Amounts awarded
to the named executive officers are set forth in the Summary
Compensation Table under Annual Compensation - Bonus.
Stock-Based Grants
- ------------------
The Corporation currently uses two stock-based compensation
plans, which are intended to give the Corporation a competitive
advantage in attracting, retaining and motivating its officers and
key employees and are intended to provide the Corporation with the
ability to provide incentives more directly linked to the
profitability of the Corporation's business and increases in
shareholder value.
<PAGE> 14
The 1987 Nonstatutory Stock Option Plan was approved by the
shareholders in 1987 and provides that stock options may be granted
to the Corporation's officers and key employees, including the
individuals whose compensation is detailed in this Proxy Statement.
The right to grant options under this plan expired in February
1997. Although certain of the previously granted options remain
available to exercise, no options were granted under the 1987 plan
during 1996. All options previously granted under the 1987 plan
were granted at the fair market value of the stock on the date of
the grant.
In May 1995, the shareholders of the Corporation approved the
Corporation's 1995 Stock Incentive Plan which provides for a
variety of stock-based grants to the Corporation's officers and key
employees, including the individuals whose compensation is detailed
in this Proxy Statement. The plan is administered by the
Compensation Committee of the Board of Directors. The plan
provides for the grant of stock options, stock appreciation rights,
restricted stock and performance units to eligible officers and key
employees of the Corporation. Stock options under the plan must be
granted at 100% of the market value of the stock on the date of the
grant. The term of such options is determined by the Compensation
Committee, but may not be longer than ten years from the date of
grant. A total of 215,000 nonstatutory stock options were granted
to executive officers in 1996, representing 77% of the total
granted. All options granted to executive officers were granted
under the following vesting schedule: 20% of the granted options
vested on the date of grant in 1996 and 20% vest on each of the
succeeding four anniversary dates following the original grant.
Stock options granted in 1996 to the five named executive officers
are summarized in the Summary Compensation Table under Long-Term
Compensation Awards - Options.
In 1996, Mr. Brown was granted nonstatutory stock options to
purchase 71,000 shares of Common Stock under the 1995 Stock
Incentive Plan at an exercise price of $8.625, which price was the
fair market value of the stock on the date of grant. All options
granted to Mr. Brown were granted under a vesting schedule where
20% or 14,200 stock options vested on the date of grant in 1996 and
20% vest on each of the succeeding four anniversary dates
following the original grant. Mr. Brown owns 19,962 shares of
Common Stock and holds options to purchase an additional 179,000
shares under the 1987 and 1995 plans. The Compensation Committee
believes that significant equity interests in the Corporation held
by the Corporation's management align the interests of shareholders
and management and the Committee considered this in granting
additional options to Mr. Brown.
<PAGE> 15
Conclusion
- ----------
In 1996, as in previous years, a significant portion of the
Corporation's executive compensation was based upon individual,
departmental and corporate performance and stock price
appreciation. The Compensation Committee intends to continue the
policy of relating executive compensation to corporate performance
and returns to shareholders, recognizing that the ups and downs of
the business cycle, particularly in the long-depressed price
periods for a large portion of the Corporation's products, from
time to time may result in an imbalance for a particular period.
The Compensation Committee adjusts for factors such as these, which
are beyond an executive's control, by exercising its qualitative
judgment rather than employing strict quantitative formulas.
February 21, 1997 John E. Clute, Chairman
Joe Coors Jr.
Ted Crumley
Leland O. Erdahl
<PAGE> 16
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(1)
HECLA MINING COMPANY, S&P 500,
S&P GOLD MINING AND PEER GROUP(2)
[ GRAPH ]
1. The total return for each of the Corporation, the Peer Group,
S&P 500 and the S&P Gold Index assumes that $100 was invested
on December 31, 1991, and the reinvestment of dividends on a
quarterly basis.
2. Peer Group: Amax Gold Inc., Battle Mountain Gold Company,
Coeur d'Alene Mines Corporation, Echo Bay Mines Ltd., Hemlo
Gold Mines Inc., Homestake Mining Company and Pegasus Gold
Inc.
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ ------
S&P 500 Index 100.00 107.61 118.41 120.01 164.95 202.73
S&P Gold Index 100.00 93.35 170.96 138.11 155.41 154.35
Peer Group 100.00 73.64 133.34 110.05 105.58 86.73
Hecla Mining Company 100.00 70.45 105.68 92.05 62.50 51.14
EXECUTIVE COMPENSATION
COMPENSATION FOR 1996
The following table sets forth information regarding the
aggregate compensation for the fiscal years ended December 31,
1994, 1995 and 1996, paid or accrued for (i) the Chief Executive
Officer of the Corporation, and (ii) the four most highly paid
executive officers of the Corporation.
<PAGE> 17
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
Annual Long-
Compensation(2) Other Term
Annual Compen-
Name and Principal Compen- sation
Position Year sation(3) Awards
---------- --------- ------
Salary Bonus(4) Options(5)
<S> <C> <C> <C> <C> <C>
Arthur Brown: Chairman, 1996 $402,500 $ -0- $52,646 71,000
President & Chief 1995 $380,625 $ -0- $44,146 15,000
Executive Officer 1994 $350,000 $ -0- $20,062 11,000
J. Gary Childress: 1996 $202,500 $33,000 $17,341 25,500
Vice President - 1995 $178,667 $18,700 $14,721 -0-
Industrial Minerals 1994 $157,917 $34,552 $51,544 9,500
Michael B. White: 1996 $164,583 $28,000 $11,526 21,000
Vice President - 1995 $149,917 $18,600 $ 8,999 -0-
General Counsel & 1994 $135,834 $ 8,000 $ 5,886 6,500
Secretary
John P. Stilwell: 1996 $161,667 $35,000 $ 8,630 20,000
Vice President - 1995 $139,583 $31,300 $ 6,262 -0-
Chief Financial Officer 1994 $116,667 $ -0- $ 2,923 6,500
& Treasurer
George R. Johnson: 1996 $141,725 $13,000 $ 5,883 17,000
Vice President - 1995 $128,130 $22,000 $ 4,958 -0-
Metal Mining 1994 $126,130 $ -0- $ 2,830 5,000
</TABLE>
1. Information for deleted columns is not required, because
no compensation was paid by the Corporation that would
require disclosure under any such deleted column.
2. The annual compensation set forth in the table is based
upon salaries of the Chief Executive Officer and other
named executives established in May of each year for 12-
month periods from June 1 to May 31. This table reflects
compensation paid to or earned by the executive officers
during the fiscal year ending December 31 of each year.
3. "Other Annual Compensation" for the last fiscal year
includes the following for Messrs. Brown, Childress,
White, Stilwell and Johnson: (i) matching contributions
under the Corporation's Deferred Compensation Plan of
$8,856, $3,416, $3,640, $3,347 and $2,038 for each named
executive, respectively; (ii) the above market portion of
interest accrued under the Corporation's Deferred
Compensation Plan of $37,195, $1,819, $3,076, $1,797 and
$590 on behalf of each named executive, respectively;
(iii) matching contributions under the Corporation's
Capital Accumulation Plan of $1,875, $1,875, $1,859,
$1,875 and $1,669 for each named executive, respectively;
(iv) the dollar value benefit of premium payments for
term life insurance coverage of $3,540, $525, $391, $224
and $-0- for each named executive, respectively; (v) the
<PAGE> 18
dollar value of use of automobiles owned by the
Corporation of $430, $316, $1,670, $1,387 and $1,586 for
each named executive, respectively; (vi) personal tax
service provided by consultants at the expense of the
Corporation for Mr. Brown, $750; Mr. Childress, $600; and
Mr. White, $890; and (vii) imputed interest of $8,790 on
a loan to Mr. Childress.
4. For 1996, amounts shown represent performance payments
pursuant to the Corporation's Performance Payment Plan,
described in the narrative Report of the Compensation
Committee above. 1996 Performance Payments were
delivered on March 3, 1997.
5. All options granted to the named executives in 1996 were
granted under a vesting schedule described in Option
Grants in Last Fiscal Year - footnote 1.
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rate of Stock
Price Appreciation
Individual Grants for Option Term(2)
- --------------------------------------------------------------------------------
% of
Total
Options
Granted
to Exercise
Employees or Base
Options in Fiscal Price: Expiration
Name Granted Year $/Share Date 5% 10%
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arthur Brown 71,000 25.54% $8.625 2/14/06 $ 385,125 $ 975,987
J. Gary Childress 25,500 9.17% $8.625 2/14/06 $ 138,320 $ 350,531
Michael B. White 21,000 7.55% $8.625 2/14/06 $ 113,910 $ 288,672
John P. Stilwell 20,000 7.19% $8.625 2/14/06 $ 108,486 $ 274,926
George R. Johnson 17,000 6.12% $8.625 2/14/06 $ 92,213 $ 233,687
</TABLE>
1. All options granted were coupled with a Tax Offset Bonus
which, upon exercise, would approximately equal the
federal and state income taxes incurred in exercising the
options. 20% of the options were first exercisable on
August 15, 1996; 20% vested and were exercisable on
February 15, 1997; and 20% shall vest on February 15 on
each of the succeeding three years. All options were
granted with an exercise price equal to the fair market
value of the Common Stock on the date of grant.
2. The Potential Realizable Value shown in the table
represents the maximum gain if held for the full ten-year
term at each of the assumed annual appreciation rates.
Gains, if any, are dependent upon the actual performance
of the Common Stock and the timing of any sale of the
Common Stock received upon exercising the options.
<PAGE> 19
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table shows information concerning the exercise
of stock options during fiscal year 1996 by each of the named
executive officers and the fiscal year-end value of unexercised
options.
Shares
Acquired Number of Value of
on Value Unexercised Unexercised In-
Exercise Realized Options at the-Money Options
Name (#) ($) FY-End (#) at FY-End
- -------------------------------------------------------------------
Arthur Brown -0- -0- 179,000 -0-
J. Gary Childress -0- -0- 35,000 -0-
Michael B. White -0- -0- 36,000 -0-
John P. Stilwell -0- -0- 33,000 -0-
George R. Johnson -0- -0- 24,000 -0-
RETIREMENT PLAN
The officers of the Corporation participate in the Hecla
Mining Company Qualified Retirement Plan (the "Retirement Plan"),
which covers substantially all employees of the Corporation, except
for certain hourly employees who are covered by separate plans.
Contributions to the Retirement Plan, and the related expense or
income, are based on general actuarial calculations and,
accordingly, no portion of the Corporation's contributions, and
related expenses or income, is specifically attributable to the
Corporation's officers. The Corporation was not required to make a
contribution for 1996. The Corporation also has an unfunded
Supplemental Retirement Benefit Plan adopted in November 1985 (the
"Supplemental Plan") under which the amount of any benefits not
payable under the Retirement Plan by reason of the limitations
imposed by the Internal Revenue Code and/or the Employee Retirement
Income Security Act, as amended (the "Acts") and the loss, if any,
due to a deferral of salary made under the Corporation's Deferred
Compensation Plan for Officers and/or the Capital Accumulation Plan
will be paid out of the general funds of the Corporation to any
employee who may be adversely affected. Under the Acts, the
current maximum annual pension benefit payable by the Retirement
Plan to any employee is $120,000 subject to specified adjustments.
Upon reaching the normal retirement age of 65, each participant is
eligible to receive annual retirement benefits in monthly
installments for life equal to, for each year of credited service,
1% of final average annual earnings (defined as the highest average
earnings of such employee for any 36 consecutive calendar months
during the final 120 calendar months of service) up to the
applicable covered compensation level (which level is based on the
Social Security maximum taxable wage base) and 1 1/2% of the
difference, if any, between final average annual earnings and the
applicable covered compensation level. The Retirement Plan and
Supplemental Plan define earnings for purposes of the plans to be
"a wage or salary for services of employees inclusive of any bonus
or special pay including gainsharing programs, contract miner's
bonus pay, and the equivalent."
<PAGE> 20
The following table shows estimated aggregate annual benefits
under the Retirement Plan and the Supplemental Plan payable upon
retirement to a participant who retires in 1996 at age 65 having
the years of service and final average annual earnings as
specified. The table assumes Social Security covered compensation
levels as in effect on January 1, 1997:
Final Average Years of Credited Service
Annual Earnings 5 10 15 20 25 30
- ------------------------------------------------------------------
100,000 6,767 13,535 20,302 27,070 33,837 40,604
125,000 8,642 17,285 25,927 34,570 43,212 51,825
150,000 10,517 21,035 31,552 42,070 52,587 63,104
175,000 12,392 24,785 37,177 49,570 61,962 74,354
200,000 14,267 28,535 42,802 57,070 71,337 85,604
225,000 16,142 32,285 48,427 64,570 80,712 96,854
250,000 18,017 36,035 54,052 72,070 90,087 108,104
275,000 19,892 39,785 59,677 79,570 99,462 119,354
300,000 21,767 43,535 65,303 87,070 108,837 130,604
325,000 23,642 47,285 70,927 94,570 118,212 141,854
350,000 25,517 51,035 76,552 102,070 127,587 153,104
375,000 27,392 54,785 82,177 109,570 136,962 164,354
400,000 29,267 58,535 87,802 117,070 146,337 175,604
425,000 31,142 62,285 93,427 124,570 155,712 186,854
450,000 33,017 66,035 99,052 132,070 165,087 198,104
Benefits listed in the pension table are not subject to any
deduction for Social Security or other offset amounts. As of
December 31, 1996, the following executive officers have completed
the indicated number of full years of credited service: A. Brown,
29 years; J. G. Childress, 10 years; G. R. Johnson, 13 years; J. P.
Stilwell, 11 years; and M. B. White, 16 years.
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT ARRANGEMENT AND
OTHER MANAGEMENT ARRANGEMENTS
The Corporation has entered into employment agreements
(collectively, the "Agreements") with Messrs. Booth, Brown,
Childress, Johnson, Kauffman, Langstaff, Stilwell and White
(collectively, the "Executives" and individually, an "Executive").
The Agreements were recommended to the Board of Directors by
the Compensation Committee and were approved by the Board of
Directors on the basis of such recommendation. The Agreements,
which are substantially identical except for compensation
provisions, provide that each of the Executives shall serve in such
executive position as the Board of Directors may direct. The
Agreements become effective only upon a "Change of Control" of the
Corporation (the "Effective Date"). The term of employment under
the Agreements is two years from the Effective Date. The
Agreements are automatically renewed for an additional year in
November of each year unless the Corporation gives notice of
nonrenewal 60 days prior to the renewal date. Under the
Agreements, a Change of Control of the Corporation is deemed to
occur if a person (including a "group" under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended the "Exchange Act")
becomes the beneficial owner of 20% or more of the voting power of
<PAGE> 21
the Corporation or if, as the result of a tender offer, merger,
proxy fight or similar transaction, the persons who were previously
directors of the Corporation cease to constitute a majority of the
Board. The Agreements are intended to ensure that, in the event of
a Change of Control, each Executive will continue to receive
payments and other benefits equivalent to those he was receiving at
the time of a Change of Control for the duration of the term of the
Agreement. The Agreements also provide, among other things, that
should an Executive's employment be terminated by the Corporation
or by the Executive for good reason (other than death, incapacity
or misconduct) after the Effective Date of the Agreement, he would
receive from the Corporation for the remaining term of his
employment, payable in a lump sum, a defined amount generally
equivalent to his then annual base salary rate. The Corporation
would also maintain such Executive's participation in all benefit
plans and programs (or provide equivalent benefits if such
continued participation was not possible under the terms of such
plans and programs) and pay him the full retirement benefits to
which he would have been entitled had his employment not been
terminated. An Executive whose employment has terminated would not
be required to seek other employment in order to receive the
defined benefits. The Agreements also provide that the Corporation
will make an additional gross-up payment if necessary to place the
Executive in the same after-tax position as if no excise tax were
imposed by the Internal Revenue Code. Pursuant to the Agreements
between the Corporation and each of its named executive officers,
if a Change of Control occurred and the named executive officers
were each terminated as of December 31, 1996, the named executive
officers would be entitled to the following estimated cash payments
pursuant to the Agreements: Mr. Brown, $2,154,408; Mr. Childress,
$559,067; Mr. White, $513,424; Mr. Stilwell, $478,315; and Mr.
Johnson, $402,451. The named executive officers would also be
entitled to lump-sum payments representing the difference in
pension and supplemental retirement benefits to which they would be
entitled on (i) the date of actual termination, and (ii) the end of
the two-year employment period under the Agreements.
Mr. J. Gary Childress, Vice President - Industrial Minerals,
relocated to the Coeur d'Alene, Idaho, headquarters from the
Mayfield, Kentucky, headquarters of Kentucky-Tennessee Clay Company
in February 1994. The Corporation offset the substantial
differential in housing costs between the two locations by loaning
Mr. Childress $150,000 at an interest rate of 5.86%, which is
currently outstanding and which is secured by a mortgage on his
Idaho residence.
<PAGE> 22
SECURITY OWNERSHIP
The following table presents certain information regarding the
number and percentage of the shares of Common Stock beneficially
owned (as such term is defined in Rule 13d-3 under the Exchange
Act) by each director and executive officer of the Corporation and
by all directors and executive officers as a group, as of February
21, 1997. On that date, all of such persons together beneficially
owned an aggregate of less than 1% of the outstanding shares of the
Corporation's Common Stock. Except as otherwise indicated, the
directors and officers have sole voting and investment power with
respect to the shares beneficially owned by them. To the
Corporation's knowledge, no person or entity owned more than 5% of
the Corporation's Common Stock as of February 21, 1997.
Number of Shares
of Common Stock
Executive Officer, and Nature of
Director or Nominee Beneficial Ownership
------------------------------------------------------------
Arthur Brown . . . . . . . . . 156,362(1)
William B. Booth . . . . . . . . 16,770(1)
J. Gary Childress . . . . . . . 19,700(1)
John E. Clute . . . . . . . . . 2,300(3)
Joe Coors Jr. . . . . . . . . . 2,000(3)
Ted Crumley . . . . . . . . . . 1,539(3)
Leland O. Erdahl . . . . . . . . 33,575(3)
George R. Johnson . . . . . . . 13,800(1)
Roger A. Kauffman . . . . . . . 7,386(1)
Jon T. Langstaff . . . . . . . . 20,583(1)
Charles L. McAlpine . . . . . . 4,000(3)
Thomas J. O'Neil . . . . . . . . 1,000(3)
Jorge E. Ordonez C. . . . . . . 2,000(3)
John P. Stilwell . . . . . . . . 21,105(1)
Michael B. White . . . . . . . . 24,018(1)
----------
All directors and executive officers
as a group (15 persons) . . . 326,138(2)
1. Includes the following number of shares of Common Stock
issuable upon the exercise by the following individuals
of currently exercisable options: Mr. Brown, 136,400;
Mr. Booth, 16,200; Mr. Childress, 19,700; Mr. Kauffman,
6,000; Mr. Langstaff, 19,500; Mr. Johnson, 13,800; Mr.
Stilwell, 21,000; and Mr. White, 23,400.
2. Includes 256,000 shares issuable upon the exercise of
currently exercisable options.
3. Includes the following number of shares credited to each
nonemployee director, all of which are held in trust
pursuant to the Corporation's Stock Plan for Nonemployee
Directors: Mr. Clute, 2,000; Mr. Coors, 2,000; Mr.
Crumley, 1,539; Mr. Erdahl, 2,000; Mr. McAlpine, 2,000;
Mr. O'Neil, 1,000; and Mr. Ordonez, 2,000. Each director
disclaims beneficial ownership of all shares held in
trust under the stock plan. See Compensation of
Directors.
<PAGE> 23
APPROVAL OF AUDITORS
Coopers & Lybrand L.L.P., independent public accountants, have
been selected by the Board of Directors as independent auditors for
the Corporation for the fiscal year ending December 31, 1997,
subject to approval by the shareholders. Coopers & Lybrand L.L.P.,
or its predecessor firm, has served as independent auditors for the
Corporation since 1964. This firm is experienced in the field of
mining accounting and is well qualified to act in the capacity of
auditors. The selection of this firm was recommended to the Board
of Directors by its Audit Committee, composed of Messrs. Erdahl,
McAlpine, O'Neil and Ordonez, none of whom is an officer or
employee of the Corporation. A representative of Coopers & Lybrand
L.L.P. is expected to be present at the Annual Meeting to make a
statement if he so desires and to be available to respond to
questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
SELECTION OF COOPERS & LYBRAND L.L.P. AS THE CORPORATION'S
INDEPENDENT AUDITORS FOR 1997.
PROVISIONS OF THE CORPORATION'S BY-LAWS
WITH RESPECT TO SHAREHOLDER PROPOSALS AND NOMINATIONS
FOR ELECTION AS DIRECTORS
The Corporation's By-Laws establish procedures governing the
eligibility of nominees for election to the Board of Directors of
the Corporation and the proposal of business to be considered by
the shareholders at an Annual Meeting. For nominations or other
business to be properly brought before an Annual Meeting by a
shareholder, the shareholder must have given timely notice thereof
in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice shall be delivered to the Secretary at the
principal executive offices of the Corporation not less than 60
days nor more than 90 days prior to the first anniversary of the
preceding year's Annual Meeting; PROVIDED HOWEVER, that in the
event that the date of the Annual Meeting is advanced by more than
30 days or delayed by more than 60 days from such anniversary date,
notice by the shareholder to be timely must be so delivered not
earlier than the 90th day prior to such Annual Meeting and not
later than the close of business on the later of the 60th day prior
to such Annual Meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made.
Such shareholder's notice shall set forth (a) as to each person
whom the shareholder proposes to nominate for election or
reelection as a director, all information relating to such person
that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Exchange Act, including such
person's written consent to being named in the Proxy Statement as a
nominee and to serving as a director if elected; (b) as to any
other business that the shareholder proposes to bring before the
meeting, who has not otherwise complied with the rules and
regulations under the Exchange Act for the inclusion of a
shareholder proposal in the Corporation's proxy materials, a brief
description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting
and any material interest in such business of such shareholder and
<PAGE> 24
the beneficial owner, if any, on whose behalf the proposal is made;
and (c) as to the shareholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such shareholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the
class and number of shares of the Corporation which are owned
beneficially and of record by such shareholder and such beneficial
owner. The Chairman of the meeting shall have the power and duty
to determine whether a nomination or any business proposed to be
brought before the meeting was made in accordance with the
procedures set forth in the By-Laws and, if any proposed nomination
or business is not in compliance with the By-Laws, to declare that
such defective proposal shall be disregarded. The Corporation will
comply with Rule 14a-8 of the Exchange Act with respect to any
proposal that meets its requirements.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
The Corporation will review shareholder proposals intended to
be included in the Corporation's proxy materials for the 1997
Annual Meeting of Shareholders which are received by the
Corporation at its principal executive offices no later than
November 26, 1997, subject to the By-Law provision discussed above.
Such proposals must be submitted in writing and should be sent to
the attention of the Secretary of the Corporation.
ANNUAL REPORT
The Corporation's Annual Report to Shareholders, including
financial statements, for the year ended December 31, 1996 (the
"Annual Report"), is being mailed to shareholders with this Proxy
Statement. In addition, a shareholder of record may obtain a copy
of the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 (the "Form 10-K"), without cost, upon
written request to the Secretary of the Corporation. The Annual
Report and the Form 10-K are not part of the proxy solicitation
materials for the Annual Meeting.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors
is not aware of any matters that will be presented for action at
the Annual Meeting other than those described above. However,
should other business properly be brought before the Annual
Meeting, the Proxies will be voted thereon in the discretion of the
persons acting thereunder.
By Order of the Board of Directors
Michael B. White
Secretary
March 26, 1997
<PAGE> 25
HECLA MINING COMPANY
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
May 9, 1997
The undersigned, revoking any previous proxies, hereby appoints ARTHUR BROWN
and MICHAEL B. WHITE, and each of them, proxies of the undersigned, with full
power of substitution, to attend the Corporation's Annual Meeting of
Shareholders on May 9, 1997, and any adjournments or postponements thereof,
and there to vote the undersigned's shares on the following matters as
described in the Board of Directors Proxy Statement for such Meeting, a copy of
which has been received by the undersigned.
(Continued and to be signed on reverse side)
<PAGE> 26
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
FOR DIRECTOR LISTED IN ITEM 1, AND "FOR" PROPOSAL 2.
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed at right WITHHOLD AUTHORITY
/ / (except as marked to the contrary below) / / to vote for all nominees listed at right
Arthur Brown John E. Clute Joe Coors Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee, put a line through that nominee's name.)
2. PROPOSAL to approve the selection of Coopers & Lybrand L.L.P. as independent auditors of the Corporation for the fiscal year
ending December 31, 1997.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion on all other business that may properly come before the meeting or any adjournment or adjournments
thereof.
This proxy will be voted as specified. If no specification is made, this Proxy will be voted FOR the election of the
three nominees for Directors and FOR the adoption of Proposals 2 and 3.
Signature
------------------------------------
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THE
PROXY CARD USING THE ENCLOSED ENVELOPE. Signature
------------------------------------
Date , 1997
-----------------------------------
Note: The proxy must be signed exactly as your name or names
appear on this card. Executors, administrators, trustees,
partners, etc. should give full title as such. If the signer is
a corporation, please sign full corporate name by duly authorized
officer(s), who should specify the title(s) of such officer(s).
</TABLE>
