<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
[Hecla Logo]
March 30, 1998
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 8, 1998, at 10 a.m., Pacific
Daylight Time.
The annual meeting will involve the election of three
directors and the selection of auditors for 1998. 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 83815-8788
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on
May 8, 1998
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 8,
1998, 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, 1998; 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 16, 1998, 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 30, 1998
- -----------------------------------------------------------------
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 83815-8788
(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 8, 1998
------------
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 8, 1998, 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 30, 1998.
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, 1998. See "Approval of Auditors."
VOTING AT ANNUAL MEETING
General
The Board of Directors of the Corporation has fixed the close
of business on March 16, 1998, 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 55,094,639 shares of Common
Stock entitled to vote. A majority of such shares will
constitute a quorum for the transaction of business at the Annual
Meeting. The holders of record on the Record Date of the shares
entitled to be voted at the Annual Meeting are entitled to cast
one vote per share on each matter submitted to a vote at the
Annual Meeting. Directors are elected by a plurality of the
votes cast by the holders of the Common Stock at a meeting at
which a quorum is present. "Plurality" means that the
individuals who receive the largest number of votes cast are
elected as directors up to the maximum number of directors to be
chosen at the meeting. Consequently, any shares not voted
(whether by abstention, broker nonvotes or otherwise) have no
impact in the election of directors except to the extent the
failure to vote for an individual results in another individual
receiving a larger number of votes. The approval of the
independent auditors requires the
<PAGE> 5
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 Coopers & Lybrand L.L.P. as
the Corporation's independent auditors; and (3) in the discretion
of the proxy holder as to any other matters which may properly
come before the Annual Meeting. A shareholder who has executed
and returned a proxy may revoke it at any time before it is voted
at the Annual Meeting by executing and returning a proxy bearing
a later date, by giving written notice of revocation to the
Secretary of the Corporation or by attending the Annual Meeting
and voting in person. Attendance in person at the Annual Meeting
will not, in itself, be sufficient to revoke a proxy.
The Corporation will bear all the costs and expenses relating
to the solicitation of proxies, including the costs of preparing,
printing and mailing this Proxy Statement and accompanying
material to shareholders. In addition to the solicitation of
proxies by use of the mails, the directors, officers and
employees of the Corporation, without additional compensation,
may solicit proxies personally or by telephone or otherwise.
Arrangements will be made with brokerage firms and other
custodians, nominees and fiduciaries for forwarding solicitation
materials to the beneficial owners of the shares of Common Stock
held by such persons, and the Corporation will reimburse such
brokerage firms, custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses incurred by them in connection
with such activities.
ELECTION OF DIRECTORS
In accordance with the Corporation's Certificate of
Incorporation, its Board of Directors is divided into three
classes. The terms of office of the directors in each of such
classes expire at different times. The terms of Messrs. Ted
Crumley, Charles L. McAlpine and Jorge E. Ordonez C. will expire
at the Annual Meeting of Shareholders in 1998. Messrs. Crumley,
McAlpine and Ordonez have been designated by the Board of
Directors of the Corporation as nominees for election as
directors of the Corporation each for a three-year term expiring
in 2001. The terms of Messrs. Leland O. Erdahl, Thomas J. O'Neil
and Paul A. Redmond will expire in 1999. Mr. Redmond was added
to the Board of Directors on January 1, 1998. Mr. Redmond
previously served as a Director of the Corporation from 1988 to
1994. The terms of Messrs. Arthur Brown, John E. Clute and Joe
Coors Jr., will expire in 2000.
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.
<PAGE> 6
Nominees
The nominees for directors for terms which will expire in 2001 are as
follows:
Year First
Age at Became
Principal Occupation and Other Directorships May 8, 1998 Director
- -------------------------------------------- ----------- ----------
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 53 1995
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. 64 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.;
Vice President, Minera Montoro S.A. de
C.V.; President and Chief Executive
Officer, Ordonez Profesional S.C. 58 1994
Remaining Directors
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 8, 1998 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.; Vice
President, Chief Financial Officer and
Director, Amax Gold, Inc.; Director,
Uranium Resources Inc. 69 1984
<PAGE> 7
Year First
Age at Became
Principal Occupation and Other Directorships May 8, 1998 Director
- -------------------------------------------- ----------- ----------
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, Lake Superior
and Ishpeming Railroad (subsidiary of
Cleveland-Cliffs Inc.) 58 1996
PAUL A. REDMOND. Chairman of the Board
and Chief Executive Officer of
Washington Water Power Company ("Water
Power")(electric and natural gas
utility) since May 1985; held various
positions as an officer of Water Power
since 1978; Chairman of the Board of
ITRON, Inc.; Chairman of the Board of
Pentzer Corporation; Director, U.S.
Bancorp; Director, Hecla Mining Company,
1988-1994 61 1998
The remaining directors whose present terms of office will continue after
the meeting and will expire in 2000 are as follows:
Year First
Age at Became
Principal Occupation and Other Directorships May 8, 1998 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 industrial minerals company);
Director, CalMat Co. (a construction
materials supply company); Director,
Idaho Independent Bank; Director,
Southern Africa Minerals Corporation (a
Canadian mining company) 57 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, Jundt Opportunity
Fund and Jundt Twenty-Five Fund);
Director, Skillnet Corporation (computer-
ized employment and personnel services) 63 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 56 1990
<PAGE> 8
CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
The Board of Directors met five times during 1997. One
director was unable to attend two board meetings and three other
directors were each 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 were Messrs.
Brown (Chairman), Clute, Crumley and Erdahl, did not meet in
1997. Mr. Redmond was appointed to this Committee at the
February 1998 Board meeting. 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
1997. The Audit Committee's principal functions are to meet with
the Corporation's independent auditors to review the financial
statements contained in the Annual Report, to review the
Corporation's system of internal accounting controls and to
report to the Board of Directors thereon.
The Compensation Committee, the members of which were
Messrs. Clute (Chairman), Coors, Crumley and Erdahl, met twice in
1997. Mr. Redmond was appointed to this Committee at the
February 1998 Board meeting. 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 once
in 1997. 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 three times in
1997. 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 managers 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
<PAGE> 9
distributions from the Corporation to provide for the obligations
of the Corporation pursuant to the 1994 Plan. Interest accrued
in 1997 for the accounts of directors, under the 1994 Plan,
amounted to an aggregate of $12,449.
In March 1995, the Corporation adopted the Hecla Mining
Company Stock Plan for Nonemployee Directors (the "Directors
Stock Plan"), which became effective following shareholder
approval on May 5, 1995, and is subject to termination by the
Board of Directors at any time. Pursuant to the Directors Stock
Plan, each nonemployee director is credited with 1,000 shares of
the Common Stock on May 30 of each year. Nonemployee directors
joining the Board of Directors after May 30 of any year are
credited with a pro rata number of shares based upon the date
they join the Board. All credited shares are held in a grantor
trust, the assets of which are subject to the claims of the
Corporation's creditors, until delivered under the Directors
Stock Plan. Delivery of the shares from the trust occurs upon the
earliest of (i) death or disability; (ii) retirement from the
Board; (iii) a cessation of the director's service for any other
reason; or (iv) a Change in Control of the Corporation (as
defined). Subject to certain restrictions, directors may elect
delivery of the shares on such date or in annual installments
thereafter over 5, 10 or 15 years. The shares of Common Stock
credited to nonemployee directors pursuant to the Directors Stock
Plan may not be sold until at least six months following the date
they are credited. The maximum number of shares of Common Stock
which may be credited pursuant to the Directors Stock Plan is
120,000. Each nonemployee director of the Corporation then
serving was credited with 1,000 shares of Common Stock on May 30,
1997.
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 twice in 1997 to consider various components of the
executive compensation program. In making recommendations
concerning executive compensation, the Committee reviews reports
published by independent compensation consultants assessing
compensation programs and reviews the Corporation's executive
compensation, corporate performance, stock price appreciation and
total return to shareholders against a peer group of public
corporations made up of the Corporation's most direct competitors
for executive talent. Because most executive skills and
expertise are transferable between industries and business
segments, the Compensation Committee believes the Corporation's
most direct competitors for executive talent are not 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 10. The Compensation Committee's periodic review
ensures an ongoing
<PAGE> 10
evaluation of the correlation between the Corporation's
performance and its executive compensation in the context of and
in comparisons 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 ("executive officers"
as used in this report), 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 $1.0 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.
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, 1997, based upon the
considerations described above.
With respect to the base salary set for Mr. Brown in 1997,
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 1997, 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 1997.
<PAGE> 11
Annual Performance Payment
- --------------------------
In August 1994, the Corporation adopted a formal short-term
performance payment plan based on the recommendation of the
Compensation Committee. Under the plan, executive officers
(eight in 1997) were eligible for annual cash payments based upon
a formula established in the plan covering the calendar year 1997
and generally described below. The plan formula for 1997
includes an overall corporate performance element, a departmental
performance element, an individual performance element and a
reserve replacement element. Each of these elements was assigned
a percentage weight described below, such that all elements
combined total 100%. For 1997, corporate performance, for all
executives other than Mr. Brown, was assigned a 40% weight,
departmental performance was assigned a 30% weight, reserve
replacement was assigned a 10% 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 1997, the key success factors and measures for the
corporate performance included gold and silver production and
industrial minerals revenue (45%), cash flow after capital
expenditures but before financing (20%), cost management (10%)
and relative share price (25%). Departmental factors vary for
each department, but include such factors as cost management,
internal customer service and production goals for metal and
industrial mineral operating divisions. Payments under the plan
are determined by the application of a performance formula to
these key success factors. At the first quarterly Board meeting
after the end of each year, actual performance results are
compared against the targeted performance goals as a percentage
of targeted goals for the various key success factors. Actual
performance must reach at least 90% of the targeted goals to be
included in the performance formula. The key success factors and
the percentage weights assigned to each of the elements may be
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.
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 preferred
dividends. However, payments derived from the reserve
replacement, 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 1997, since the Corporation did not
achieve a net profit after preferred dividends in 1997, no
performance payments were granted for 1997 to any executive with
respect to corporate performance. Since Mr. Brown was only
eligible for a corporate performance payment for 1997, he
received no performance payment. Payments for all executives
other than Mr. Brown were awarded for 1997 on the basis of
departmental and individual performance. For the named
executives the amounts are set forth in the summary compensation
table under Annual Compensation - Bonus.
Stock-Based Grants
- ------------------
The Corporation currently 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.
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
<PAGE> 12
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. Certain
previously granted options remain available to exercise under the
1987 plan. 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 are
determined by the Compensation Committee, but may not be longer
than ten years from the date of grant. A total of 348,000
nonstatutory stock options were granted to executive officers in
1997, representing 72% 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 1997 and 20% will vest on each of the succeeding four
anniversary dates following the original grant. Stock options
granted in 1997 to the five named executive officers are
summarized in the Summary Compensation Table under Long-Term
Compensation Awards-Options.
In 1997, Mr. Brown was granted nonstatutory stock options to
purchase 107,000 shares of Common Stock under the 1995 Stock
Incentive Plan at an exercise price of $5.625, 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 21,400 stock options vested on the date of
grant in 1997 and 20% will 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 268,000 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.
Conclusion
- ----------
The Corporation's executive compensation is primarily based
upon individual, departmental and corporate performance and stock
price appreciation. In 1997, as in previous years, a significant
portion of the Corporation's executive compensation consisted of
these performance-based variable elements. The Compensation
Committee intends to continue the policy of 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 19, 1998 John E. Clute, Chairman
Joe Coors Jr.
Ted Crumley
Leland O. Erdahl
<PAGE> 13
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN (1)
Hecla Mining Company, S&P 500, S&P 500 Gold & Precious Metal
Mining Index, and Peer Group(2)
[ GRAPH ]
(1) Total return assumes 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.,
Homestake Mining, Pegasus Gold Inc.
- -----------------------------------------------------------------------
Hecla Mining S&P 500 Gold &
Date Company S&P 500 Precious Metal Peer Group
- -----------------------------------------------------------------------
December 1992 $100.00 $100.00 $100.00 $100.00
December 1993 $150.00 $110.03 $183.07 $181.06
December 1994 $130.65 $111.53 $147.98 $149.44
December 1995 $ 88.71 $153.30 $166.53 $143.37
December 1996 $ 72.58 $188.40 $165.39 $117.76
December 1997 $ 63.70 $251.17 $108.63 $ 68.40
<PAGE> 14
EXECUTIVE COMPENSATION
Compensation for 1997
The following table sets forth information regarding the
aggregate compensation for the fiscal years ended December 31,
1995, 1996 and 1997, paid or accrued for (i) the Chief Executive
Officer of the Corporation, and (ii) the four most highly paid
executive officers of the Corporation.
SUMMARY COMPENSATION TABLE(1)
Long-
Other Term
Annual Compen-
Name and Principal Annual Compen- sation
Position Year Compensation(2) sation(3) Awards
- ------------------ ---- --------------- --------- ------
Salary Bonus(4) Options(5)
Arthur Brown: Chairman, 1997 $402,500 $ -0- $ 42,339 107,000
President & Chief 1996 $402,500 $ -0- $ 52,646 71,000
Executive Officer 1995 $380,625 $ -0- $ 44,146 15,000
Roger A. Kauffman: 1997 $258,750 $ -0- $ 10,079 50,000
Executive Vice President 1996 $117,787 $ -0- $ 4,548 30,000
& Chief Operating Officer 1995 -- -- -- --
J. Gary Childress: 1997 $215,833 $11,000 $ 17,942 42,000
Vice President - 1996 $202,500 $33,000 $ 17,341 25,500
Industrial Minerals 1995 $178,667 $18,700 $ 14,721 -0-
Michael B. White: 1997 $179,917 $20,000 $ 10,885 34,000
Vice President - 1996 $164,583 $28,000 $ 11,526 21,000
General Counsel & 1995 $149,917 $18,600 $ 8,999 -0-
Secretary
John P. Stilwell: 1997 $179,917 $36,000 $ 9,773 34,000
Vice President - 1996 $161,667 $35,000 $ 8,630 20,000
Chief Financial Officer 1995 $139,583 $31,300 $ 6,262 -0-
(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,
Kauffman, Childress, White and Stilwell: (i) matching
contributions under the Corporation's Deferred
Compensation Plan of $5,165, $5,125, $3,340, $3,982 and
$4,153 for each named executive, respectively; (ii) the
above market portion of interest accrued under the
Corporation's Deferred Compensation Plan of $29,211,
$1,559, $1,896, $2,976 and $1,989 on behalf of each
named executive, respectively; (iii) matching
contributions under the Corporation's Capital
Accumulation Plan of $2,375, $2,014, $2,375, $2,302 and
$2,375 for each named executive, respectively; (iv) the
dollar value benefit of premium payments for term life
insurance coverage of $3,540, $1,125, $574, $447 and
$262 for each named executive, respectively; (v) the
dollar value of use of automobiles owned by the
Corporation of $398, $-0-, $342, $553 and $994 for each
named executive, respectively; (vi) personal tax
service provided by consultants at the expense of the
Corporation for Mr. Brown, $1,650; Mr. Kauffman, $250;
Mr. Childress, $625; and Mr. White, $625; and (vii)
imputed interest of $8,790 on a loan to Mr. Childress.
<PAGE> 15
(4) For 1997, amounts shown represent performance
payments pursuant to the Corporation's Performance
Payment Plan, described in the Report of the
Compensation Committee above. 1997 Performance
Payments were delivered on March 2, 1998.
(5) All options granted to the named executives in
1997 were granted under a vesting schedule described in
Option Grants in Last Fiscal Year - footnote 1.
OPTION GRANTS IN LAST FISCAL YEAR(1)
Individual Grants Potential Realizable
% of Value at Assumed
Total Annual Rate of Stock
Options Price Appreciation
Granted for Option Term(2)
to Exercise
Employees or Base
Options in Fiscal Price: Expiration
Name Granted Year $/Share Date 5% 10%
- ----------------------------------------------------------------------------
Arthur Brown 107,000 22.27% $5.625 5/8/07 $378,534 $959,255
Roger A. Kauffman 50,000 10.41% $5.625 5/8/07 $176,885 $448,250
J. Gary Childress 42,000 8.74% $5.625 5/8/07 $148,583 $376,530
Michael B. White 34,000 7.08% $5.625 5/8/07 $120,282 $304,810
John P. Stilwell 34,000 7.08% $5.625 5/8/07 $120,282 $304,810
(1) All options granted were coupled with a Tax Offset
bonus which, upon exercise, would approximately equal
the federal and state income taxes incurred in
exercising the options. 20% of the options were first
exercisable on May 8, 1997; and 20% shall vest on May 8
on each of the succeeding four years. All options were
granted with an exercise price equal to the fair market
value of the Common Stock on the date of grant.
(2) The Potential Realizable Value shown in the table
represents the maximum gain if held for the full ten-
year term at each of the assumed annual appreciation
rates. Gains, if any, are dependent upon the actual
performance of the Common Stock and the timing of any
sale of the Common Stock received upon exercising the
options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table shows information concerning the
exercise of stock options during fiscal year 1997 by each of the
named executive officers and the fiscal year-end value of
unexercised options.
Shares
Acquired Number of Value of
on Value Unexercised Unexercised In-
Exercise Realized Options at the-Money-Options
Name (#) ($) FY-End (#) at FY-End
- --------------------------------------------------------------------
Arthur Brown -0- -0- 268,000 -0-
Roger Kauffman -0- -0- 80,000 -0-
J. Gary Childress -0- -0- 77,000 -0-
Michael B. White -0- -0- 66,500 -0-
John P. Stilwell -0- -0- 64,000 -0-
<PAGE> 16
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 1997. 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 Plan to any employee is $130,000 subject to
specified adjustments. Upon reaching the normal retirement age
of 65, each participant is eligible to receive annual retirement
benefits in monthly installments for life equal to, for each year
of credited service, 1% of final average annual earnings (defined
as the highest average earnings of such employee for any 36
consecutive calendar months during the final 120 calendar months
of service) up to the applicable covered compensation level
(which level is based on the Social Security maximum taxable wage
base) and 1 1/2% of the difference, if any, between final average
annual earnings and the applicable covered compensation level.
The Retirement Plan and Supplemental Plan define earnings for
purposes of the plans to be "a wage or salary for services of
employees inclusive of any bonus or special pay including
gainsharing programs, contract miner's bonus pay and the
equivalent."
The following table shows estimated aggregate annual
benefits under the Retirement Plan and the Supplemental Plan
payable upon retirement to a participant who retires in 1997 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, 1998:
Final Average Years of Credited Service
Annual Earnings 5 10 15 20 25 30
- ----------------------------------------------------------------
100,000 6,722 13,444 20,165 26,887 33,609 40,331
125,000 8,597 17,194 25,790 34,387 42,984 51,581
150,000 10,472 20,944 31,415 41,887 52,359 62,831
175,000 12,347 24,694 37,040 49,387 61,734 74,081
200,000 14,222 28,444 42,665 56,887 71,109 85,331
225,000 16,097 32,194 48,290 64,387 80,484 96,581
250,000 17,972 35,944 53,915 71,887 89,859 107,831
275,000 19,847 39,694 59,540 79,387 99,234 119,081
300,000 21,722 43,444 65,165 86,887 108,609 130,331
325,000 23,597 47,194 70,790 94,387 117,984 141,581
350,000 25,472 50,944 76,415 101,887 127,359 152,831
375,000 27,347 54,694 82,040 109,387 136,734 164,081
400,000 29,222 58,444 87,665 116,887 146,109 175,331
425,000 31,097 62,194 93,290 124,387 155,484 186,581
450,000 32,972 65,944 98,915 131,887 164,859 197,831
Benefits listed in the pension table are not subject to any
deduction for Social Security or other offset amounts. As of
December 31, 1997, the following executive officers have
completed the indicated number of full years of credited service:
A. Brown, 30 years; R. A. Kauffman, 12 years; J. G. Childress, 11
years; J. P. Stilwell, 12 years; and M. B. White, 17 years.
<PAGE> 17
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, Kauffman, Langstaff, Stilwell, White and Johnson
(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 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, 1997, the named executive
officers would be entitled to the following estimated cash
payments pursuant to the Agreements: Mr. Brown, $2,338,000; Mr.
Kauffman, $680,000; Mr. Childress, $615,000; Mr. White, $600,000;
and Mr. Stilwell, $565,000. 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no directors on the Compensation Committee which
are employees of the Company.
<PAGE> 18
SECURITY OWNERSHIP
The following table presents certain information regarding
the number and percentage of the shares of Common Stock
beneficially owned (as such term is defined in Rule 13d-3 under
the Exchange Act) by each director of the Corporation and by all
directors and officers as a group, as of March 3, 1998. 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 March 3, 1998.
Number of Shares
of Common Stock
Executive Officer, and Nature of
Director or Nominee Beneficial Ownership
- ------------------------------------------------------------------
Arthur Brown 173,962(1)
William B. Booth 25,570(1)
J. Gary Childress 33,200(1)
John E. Clute 3,300(3)
Joe Coors Jr. 3,000(3)
Ted Crumley 6,539(3)
Leland O. Erdahl 34,575(3)
Stan E. Hilbert 10,500(1)
George R. Johnson 23,200(1)
Roger A. Kauffman 23,382(1)
Jon T. Langstaff 25,920(1)
Charles L. McAlpine 5,000(3)
Thomas J. O'Neil 2,000(3)
Jorge E. Ordonez C. 3,000(3)
Paul A. Redmond 704(3)
John P. Stilwell 31,155(1)
David F. Wolfe 8,550(1)
Michael B. White 31,518(1)
All directors and executive officers
as a group (17 persons) 445,075(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, 154,000; Mr. Booth, 24,500; Mr. Childress,
33,200; Mr. Hilbert, 10,000; Mr. Kauffman, 22,000; Mr.
Langstaff, 24,000; Mr. Johnson, 23,200; Mr. Stilwell,
28,800; Mr. Wolfe, 8,500; and Mr. White, 30,900.
(2) Includes 359,100 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, 3,000; Mr. Coors,
3,000; Mr. Crumley, 2,539; Mr. Erdahl, 3,000; Mr.
McAlpine, 3,000; Mr. O'Neil, 2,000; Mr. Ordonez, 3,000;
and Mr. Redmond, 404. Each director disclaims
beneficial ownership of all shares held in trust under
the stock plan. See Compensation of Directors.
APPROVAL OF AUDITORS
Coopers & Lybrand L.L.P., independent public accountants, has
been selected by the Board of Directors as independent auditors
for the Corporation for the fiscal year ending December 31, 1998,
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
<PAGE> 19
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 any 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 1998.
PROVISIONS OF THE CORPORATION'S BY-LAWS
WITH RESPECT TO SHAREHOLDER PROPOSALS AND NOMINATIONS
FOR ELECTION AS DIRECTORS
The Corporation's By-Laws establish procedures governing the
eligibility of nominees for election to the Board of Directors of
the Corporation and the proposal of business to be considered by
the shareholders at an Annual Meeting. For nominations or other
business to be properly brought before an Annual Meeting by a
shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be
timely, a shareholder's notice shall be delivered to the
Secretary at the principal executive offices of the Corporation
not less than 60 days nor more than 90 days prior to the first
anniversary of the preceding year's Annual Meeting; provided
however, that in the event that the date of the Annual Meeting is
advanced by more than 30 days or delayed by more than 60 days
from such anniversary date, notice by the shareholder to be
timely must be so delivered not earlier than the 90th day prior
to such Annual Meeting and not later than the close of business
on the later of the 60th day prior to such Annual Meeting or the
10th day following the day on which public announcement of the
date of such meeting is first made. Such shareholder's notice
shall set forth (a) as to each person whom the shareholder
proposes to nominate for election or reelection as a director,
all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A
under the Exchange Act, including such person's written consent
to being named in the proxy statement as a nominee and to serving
as a director if elected; (b) as to any other business that the
shareholder proposes to bring before the meeting, who has not
otherwise complied with the rules and regulations under the
Exchange Act for the inclusion of a shareholder proposal in the
Corporation's proxy materials, a brief description of the
business desired to be brought before the meeting, the reasons
for conducting such business at the meeting and any material
interest in such business of such shareholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as
to the shareholder giving the notice and the beneficial owner, if
any, on whose behalf the nomination or proposal is made (i) the
name and address of such shareholder, as they appear on the
Corporation's books, and of such beneficial owner, and (ii) the
class and number of shares of the Corporation which are owned
beneficially and of record by such shareholder and such
beneficial owner. The Chairman of the meeting shall have the
power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made in accordance
with the procedures set forth in the By-Laws and, if any proposed
nomination or business is not in compliance with the By-Laws, to
declare that such defective proposal shall be disregarded. The
Corporation will comply with Rule 14a-8 of the Exchange Act with
respect to any proposal that meets its requirements.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
The Corporation will review shareholder proposals intended to
be included in the Corporation's proxy materials for the 1999
Annual Meeting of Shareholders which are received by the
Corporation at its principal executive offices no later than
November 30, 1998, 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.
<PAGE> 20
ANNUAL REPORT
The Corporation's Annual Report to Shareholders, including
financial statements, for the year ended December 31, 1997 (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, 1997 (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 30, 1998
<PAGE> 21
<TABLE>
<CAPTION
<S> <C> <C>
PROXY SOLICITED ON BEHALF OF HECLA MINING COMPANY ANNUAL MEETING OF SHAREHOLDERS
THE BOARD OF DIRECTORS 6500 Mineral Drive May 8, 1998
Coeur d'Alene, Idaho 83815-8788
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
FOR DIRECTOR LISTED IN ITEM 1 AND "FOR" PROPOSAL 2.
The undersigned, revoking any previous proxies, hereby
appoints ARTHUR BROWN and MICHAEL B. WHITE, and each of them,
proxies of the undersigned, with full power of substitution, to
attend the Corporation's Annual Meeting of Shareholders on May 8,
1998, and any adjournments or postponements thereof, and there to
vote the undersigned's shares on the following matters as
described in the Board of Directors Proxy Statement for such
Meeting, a copy of which has been received by the undersigned.
1. ELECTION OF DIRECTORS / / FOR all nominees listed below / / WITHHOLD AUTHORITY
/ / (except as marked to the contrary below) / / to vote for all nominees listed below
Ted Crumley Charles L. McAlpine Jorge E. Ordonez C.
(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, 1998.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion on all other business that may properly come before the meeting or
any adjournment or adjournments thereof.
<PAGE> 22
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 Proposal 2.
DATE , 1998 Signature
------------------------ ------------------------------------
Please mark, sign, date and promptly return the
proxy card using the enclosed envelope. Signature
------------------------------------
The proxy must be signed exactly as your
name or names appear on this card.
Executors, administrators, trustees,
partners, etc. should give full title as
such. If the signer is a corporation,
please sign full corporate name by duly
authorized officer(s), who should specify
the title(s) of such officer(s).
</TABLE>
