<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)
HECLA MINING COMPANY
(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 31, 2000
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 5, 2000, at 10 a.m., Pacific
Daylight Time.
The annual meeting will involve the election of three
directors and the selection of auditors for 2000. 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 selection of 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 5, 2000
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 5,
2000, 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
PricewaterhouseCoopers LLP as independent auditors of the
Corporation for the fiscal year ending December 31, 2000; 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 13, 2000, 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.
By Order of the Board of Directors
MICHAEL B. WHITE
Secretary
March 31, 2000
- ------------------------------------------------------------------
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 5, 2000
------------------
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 5, 2000, 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 31, 2000.
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
PricewaterhouseCoopers LLP as independent auditors of the
Corporation for the fiscal year ending December 31, 2000 (see
"Approval of Auditors").
VOTING AT ANNUAL MEETING
General
The Board of Directors of the Corporation has fixed the close
of business on March 13, 2000, 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 66,782,464 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
<PAGE> 5
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 abstentions, 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. Abstentions would have the effect of negative
votes; broker nonvotes are not counted for purposes of
determining the number of shares present, and thus would have no
effect on the approval of the auditors.
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 PricewaterhouseCoopers LLP
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.
<PAGE> 6
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. Arthur
Brown, John E. Clute and Joe Coors, Jr. will expire at the Annual
Meeting of Shareholders in 2000. 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 term expiring in 2003. The terms of Messrs. Ted
Crumley, Charles L. McAlpine and Jorge E. Ordonez will expire in
2001. The terms of Messrs. Leland O. Erdahl, Thomas J. O'Neil and
Paul A. Redmond will expire in 2002.
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> 7
Nominees
The nominees for directors for terms which will expire in
2003 are as follows:
Year First
Age at Became
Principal Occupation and Other Directorships May 5, 2000 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, Idaho Independent Bank;
Director, Southern Africa Minerals
Corporation (a Canadian mining company) 59 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) from 1982 to 1991;
employed by Boise Cascade Corporation in
various other capacities since 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, American Eagle Funds,
Inc. (American Eagle Capital
Appreciation Fund and American Eagle
Twenty Fund); Director, RealResume, Inc.
(computerized employment and personnel
services) 65 1981
JOE COORS, JR. Chairman of the Board and
Chief Executive Officer, CoorsTek, Inc.
(formerly Coors Ceramics Company) since
1985; Chairman, Air Force Memorial
Foundation 58 1990
<PAGE> 8
Remaining Directors
The remaining directors whose present terms of office will
continue after the meeting and will expire in 2001 are as
follows:
Year First
Age at Became
Principal Occupation and Other Directorships May 5, 2000 Director
- --------------------------------------------------------------------
TED CRUMLEY. Senior Vice President and
Chief Financial Officer of Boise Cascade
Corporation (manufacturer of paper and
forest products) from 1994 to present;
Vice President andController of Boise
Cascade Corporation from 1990 to 1994;
other positions held at Boise Cascade
Corporation from 1972 to 1990; Director,
Boise Cascade Office Products
Corporation from 1995 to present 55 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, Goldstake
Explorations Inc.; Director, Postec
Systems Inc. 66 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.;
former Chief Executive Officer, Empresas
Frisco, S.A. de C.V.; former Chief
Executive Officer, Alfa Industrias-Div.
Minas 60 1994
<PAGE> 9
The remaining directors whose present terms of office will
continue after the meeting and will expire in 2002 are as
follows:
Year First
Age at Became
Principal Occupation and Other Directorships May 5, 2000 Director
- --------------------------------------------------------------------
LELAND O. ERDAHL. Vice President, Chief
Financial Officer and Director, Amax
Gold, Inc., from March 1997 to June
1998; 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,
Uranium Resources Inc. 71 1984
THOMAS J. O'NEIL. President and Chief
Operating Officer, Cleveland-Cliffs
Inc., since January 2000; Executive Vice
President - Operations, Cleveland-Cliffs
Inc., from October 1995 through December
1999; 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.);
Member, National Academy of Engineering 60 1996
PAUL A. REDMOND. Chairman of the Board
and Chief Executive Officer of
Washington Water Power Company ("Water
Power") (electric and natural gas
utility, now Avista Corp.) from May 1985
to July 1998; held various positions as
an officer of Water Power since 1978;
Director, ITRON, Inc.; Director, Source
Capital Corporation; Director, U.S.
Bancorp; Director, Hecla Mining Company
from 1988 to 1994 63 1998
<PAGE> 10
CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
The Board of Directors met seven times during 1999. The
standing committees of the Board of Directors are the Executive,
Audit, Compensation, Directors Nominating, Technical and Finance
committees.
The Executive Committee, the members of which are Messrs.
Brown (Chairman), Clute, Crumley, Erdahl and Redmond, met twice
in 1999. 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
1999. The Audit Committee's principal functions are to meet with
the Corporation's independent auditors to review the financial
statements contained in the Annual Report, to review the
Corporation's system of internal accounting controls and to
report to the Board of Directors thereon.
The Compensation Committee, the members of which are
Messrs. Clute (Chairman), Coors, Crumley, Erdahl and Redmond, met
twice in 1999. 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, did not
meet in 1999. 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 Technical Committee, the members of which are Messrs.
Erdahl (Chairman), McAlpine, O'Neil and Ordonez, met twice
in 1999. The principal functions of the Technical Committee are
to make recommendations to the Board of Directors concerning the
advisability of proceeding with the exploration, development,
acquisition or divestiture of mineral properties and/or
operations.
<PAGE> 11
The Finance Committee, the members of which are Messrs.
Coors (Chairman), Crumley, O'Neil and Ordonez, met one time in
1999. 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 as follows: (i) a retainer
fee of $2,000 per calendar quarter; (ii) $1,000 for each
director's meeting attended; (iii) $800 for attending any meeting
of any Committee of the Board; (iv) $500 for participation in
each telephonic Board meeting; and (v) $400 for participation in
each telephonic Committee meeting.
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 1999 for the accounts of directors, under the 1994 Plan,
amounted to an aggregate of $23,381.
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,
1999.
<PAGE> 12
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 five nonemployee directors who are
appointed annually by the Corporation's Board of Directors. The
Compensation Committee's consideration 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 1999 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 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.
<PAGE> 13
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
Corporation'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
cost containment and productivity for sectors of the
Corporation's business that sell gold, silver and other
commodities because the prices for these commodities are
established by international markets.
<PAGE> 14
Although the Committee believed that some of the above
factors might otherwise justify a base salary increase for
certain executives, other factors and the Corporation's lack of
profitability resulted in the Board of Directors' determination
that no executive officer be granted an increase in base salary
in 1999.
Although the Compensation Committee was satisfied with Mr.
Brown's individual performance, based upon a comparison of base
salaries of chief executive officers of the new peer group
companies, the Corporation's lack of profitability in 1998, and
the performance of the Common Stock, the Board of Directors did
not increase Mr. Brown's base salary in 1999.
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 1999) were eligible for annual cash payments based upon
a formula established in the plan covering the calendar year 1999
and generally described below. The plan formula for 1999
includes an overall corporate performance element, a departmental
performance element, an individual performance element and an
asset addition element. Each of these elements was assigned a
percentage weight described below, such that all elements
combined total 100%. For 1999, corporate performance for all
executives other than Messrs. Brown and Kauffman, were assigned a
40% weight, departmental performance was assigned a 20% weight,
asset addition was assigned a 30% weight and individual
performance was assigned a 10% weight. Mr. Kauffman's
performance payment was conditioned on corporate profitability
and tied 40% to corporate performance, 30% to achieving goals in
each of the Corporations operational segments, 20% to individual
performance and 10% to reserve replacement. 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 1999, the key success factors and
measures for the corporate performance included gold and silver
production and industrial minerals revenue (45%), operating cash
flow after capital expenditures but before financing (25%), cost
management (5%) 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 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
<PAGE> 15
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 Compensation Committee has the
sole discretion to increase or decrease the amount of any
performance pay under the plan.
For 1999 performance, the Compensation Committee determined
to defer consideration of any performance pay under the
performance payment plan from the first quarterly board meeting
until a later meeting in 2000.
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 (the "1987 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. 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 is
determined by the Compensation Committee, but may not be longer
than ten years from the date of grant. A total of 630,000
nonstatutory stock options were granted to executive officers in
1999, representing 85% of the total granted. All options granted
to executive officers were granted under the following vesting
schedule: 25% of the granted options vested on the date of grant
in 1999 and 25% will vest on each of the succeeding three
anniversary dates following the original grant. Stock options
granted in 1999 to the five named executive officers are
summarized in the Summary Compensation Table under Long-Term
Compensation Awards-Options.
<PAGE> 16
In 1999, Mr. Brown was granted nonstatutory stock options to
purchase 160,000 shares of Common Stock under the 1995 Stock
Incentive Plan at an exercise price of $2.875, 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 25%, or 40,000 stock options, were vested on the
date of grant in 1999 and 25% will vest on each of the succeeding
three anniversary dates following the original grant. Mr. Brown
owns 24,962 shares of Common Stock and holds options to purchase
an additional 560,000 shares under the 1987 and 1995 plans. In
addition, 132,290 shares of Common Stock are held in trust for
Mr. Brown under the Corporation's Executive Deferral Plan. The
Compensation Committee believes that significant equity interests
in the Corporation held by the Corporation's management align the
interests of shareholders and management, and 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 1999, 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 18, 2000
John E. Clute, Chairman
Joe Coors, Jr.
Ted Crumley
Leland O. Erdahl
Paul A. Redmond
<PAGE> 17
Comparison of Five-Year Cumulative Total Return(1)
Hecla Mining, S&P 500, S&P 500 Gold & Precious Metal Mining Index
and Peer Group(1)
[ GRAPH ]
1. Total return assumes reinvestment of dividends on a
quarterly basis.
2. Peer Group: Agnico Eagle Mines Ltd., Battle Mountain Gold
Company, Cambior, Inc., Coeur d'Alene Mines Corp., Echo Bay
Mines Ltd., Homestake Mining Company, TVX Gold, Inc.
S&P 500 Gold &
Date Hecla Mining S&P 500 Precious Metal Peer Group
- -----------------------------------------------------------------------------
December 1994 $ 100.00 $ 100.00 $ 100.00 $ 100.00
December 1995 $ 67.90 $ 137.45 $ 112.53 $ 95.47
December 1996 $ 55.56 $ 168.93 $ 111.76 $ 88.93
December 1997 $ 48.76 $ 225.21 $ 73.41 $ 50.27
December 1998 $ 35.80 $ 289.43 $ 64.34 $ 40.67
December 1999 $ 15.43 $ 350.26 $ 61.96 $ 30.37
- -----------------------------------------------------------------------------
<PAGE> 18
EXECUTIVE COMPENSATION
Compensation for 1999
The following table sets forth information regarding the
aggregate compensation for the fiscal years ended December 31,
1997, 1998 and 1999, paid or accrued for (i) the Chief Executive
Officer of the Corporation, and (ii) the four other 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 Options(5)
Arthur Brown: Chairman, 1999 $ 402,500 $ - -(4) $ 139,205 160,000
President & Chief 1998 $ 402,500 $ -0- $ 33,775 150,000
Executive Officer 1997 $ 402,500 $ -0- $ 42,339 107,000
Roger A. Kauffman: 1999 $ 265,000 $ - -(4) $ 16,848 100,000
Executive Vice President 1998 $ 265,000 $ -0- $ 13,828 75,000
& Chief Operating Officer 1997 $ 258,750 $ -0- $ 10,079 50,000
J. Gary Childress: 1999 $ 220,000 $ - -(4) $ 18,773 60,000
Vice President - 1998 $ 220,000 $ 10,333 $ 18,115 60,000
Industrial Minerals 1997 $ 215,833 $ 11,000 $ 17,942 42,000
Michael B. White: 1999 $ 187,000 $ - -(4) $ 13,232 75,000
Vice President - 1998 $ 187,000 $ 21,038 $ 10,907 60,000
General Counsel & 1997 $ 179,917 $ 20,000 $ 10,885 34,000
Secretary
John P. Stilwell: 1999 $ 187,000 $ - -(4) $ 8,991 75,000
Vice President - 1998 $ 187,000 $ 20,126 $ 9,732 60,000
Chief Financial Officer 1997 $ 179,917 $ 36,000 $ 8,773 34,000
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.
<PAGE> 19
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 Executive
Deferral Plan of $103,750, $4,920, $2,619, $4,103
and $2,408 for each named executive, respectively; (ii)
the above market portion of interest accrued under the
Corporation's Executive Deferral Plan of $29,463,
$6,458, $3,440, $5,367 and $3,821 on behalf of each
named executive, respectively; (iii) matching
contributions under the Corporation's Capital
Accumulation Plan of $2,400 for each named executive,
respectively; (iv) the dollar value benefit of premium
payments for term life insurance coverage of $2,292,
$1,520, $724, $362 and $362 for each named executive,
respectively; (v) personal tax service provided by
consultants at the expense of the Corporation for Mr.
Brown, $1,300; Mr. Kauffman, $1,550; Mr. Childress,
$800; and Mr. White, $1,000; and (vi) imputed interest
of $8,790 on a loan to Mr. Childress.
4. Consideration of Performance Payments for
performance for 1999 under the Corporation's
Performance Payment Plan was deferred to a Compensation
Committee meeting to be held later in 2000. Any
Performance Payments awarded for 1999 performance at
this later meeting will be disclosed in the proxy
materials for the annual shareholders meeting to be
held in 2001.
5. All options granted to the named executives in
1999 were granted under a vesting schedule described in
Option Grants in Last Fiscal Year - footnote 1.
<PAGE> 20
OPTION GRANTS IN LAST FISCAL YEAR1
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 160,000 21.64% $2.875 5/7/09 $289,296 $733,136
Roger A. Kauffman 100,000 13.52% $2.875 5/7/09 $180,810 $458,210
J. Gary Childress 60,000 8.11% $2.875 5/7/09 $108,486 $274,926
Michael B. White 75,000 10.14% $2.875 5/7/09 $135,608 $343,658
John P. Stilwell 75,000 10.14% $2.875 5/7/09 $135,608 $343,658
1. All options granted were coupled with a Tax Offset
bonus which, upon exercise, would approximately equal
the federal and state income taxes incurred in
exercising the options. 25% of the options were first
exercisable on May 7, 1999, and 25% shall vest on May 7
on each of the succeeding three years. All options
were granted with an exercise price equal to the fair
market value of the Common Stock on the date of grant.
2. The Potential Realizable Value shown in the table
represents the maximum gain if held for the full ten-
year term at each of the assumed annual appreciation
rates. Gains, if any, are dependent upon the actual
performance of the Common Stock and the timing of any
sale of the Common Stock received upon exercising the
options.
<PAGE> 21
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table shows information concerning the
exercise of stock options during fiscal year 1999 by each of the
named executive officers and the fiscal year-end value of
unexercised options.
Number of
Shares Unexercised
Acquired Options at Value of
on Value FY-End (#) Unexercised In-
Exercise Realized Exercisable/ the-Money-Options
Name (#) ($) Unexercisable at FY-End
- ------------------------------------------------------------------------------
Arthur Brown -0- -0- 293,000/267,000 -0-
Roger Kauffman -0- -0- 103,000/152,000 -0-
J. Gary Childress -0- -0- 94,100/102,900 -0-
Michael B. White -0- -0- 86,450/110,050 -0-
John P. Stilwell -0- -0- 85,650/109,850 -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 1999. 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 Executive Deferral Plan 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 $135,000 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> 22
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 1999 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, 2000.
Final Average
Annual Years of Credited Service
Earnings 5 10 15 20 25 30 35
- ------------------------------------------------------------------------------
$100,000 $ 6,623 $ 13,245 $ 19,868 $ 26,490 $ 33,113 $ 39,735 $ 46,358
125,000 8,498 16,995 25,493 33,990 42,488 50,985 59,483
150,000 10,373 20,745 31,118 41,490 51,863 62,235 72,608
175,000 12,248 24,495 36,743 48,990 61,238 73,485 85,733
200,000 14,123 28,245 42,368 56,490 70,613 84,735 98,858
225,000 15,998 31,995 47,993 63,990 79,988 95,985 111,983
250,000 17,873 35,745 53,618 71,490 89,363 107,235 125,108
275,000 19,748 39,495 59,243 78,990 98,738 118,485 138,233
300,000 21,623 43,245 64,868 86,490 108,113 129,735 151,358
325,000 23,498 46,995 70,493 93,990 117,488 140,985 164,483
350,000 25,373 50,745 76,118 101,490 126,863 152,235 177,608
375,000 27,248 54,495 81,743 108,990 136,238 163,485 190,733
400,000 29,123 58,245 87,368 116,490 145,613 174,735 203,858
425,000 30,998 61,995 92,993 123,990 154,988 185,985 216,983
450,000 32,873 65,745 98,618 131,490 164,363 197,235 230,108
Benefits listed in the pension table are not subject to any
deduction for Social Security or other offset amounts. As of
December 31, 1999, the following executive officers have
completed the indicated number of full years of credited service:
A. Brown, 32 years; R. A. Kauffman, 21 years; J. G. Childress, 13
years; J. P. Stilwell, 14 years; M. B. White, 19 years; J. T.
Langstaff, 36 years and W. B. Booth, 14 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, Kauffman, Langstaff, Stilwell and White (collectively,
the "Executives" and individually, an "Executive").
<PAGE> 23
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 13d-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 a lump-sum defined amount generally equivalent to
two times the aggregate of his then annual base salary rate and
his average annual bonus for the three years prior to the
Effective Date. 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. 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, 1999,
the named executive officers would be entitled to the following
estimated cash payments pursuant to the Agreements: Mr. Brown,
$942,390; Mr. Kauffman, $927,984; Mr. Childress, $542,133; Mr.
White, $462,204; and Mr. Stilwell, $474,745. These dollar
amounts do not include amounts which would have otherwise been
payable to each Executive if the Executive had terminated
employment on the day prior to a Change of Control.
<PAGE> 24
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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
To the knowledge of the Corporation, the following persons
beneficially own five percent (5%) or more of the securities
of the Corporation as of March 13, 2000:
- --------------------------------------------------------------------------------
Name & Address of Amount & Nature of Percent of Class
Title of Class Beneficial Owner Beneficial Ownership
- --------------------------------------------------------------------------------
Monarch Resources Limited
41 Cedar Avenue
Common Hamilton, Bermuda HM 12 6,700,250 shares - direct 10.1%
- --------------------------------------------------------------------------------
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) or otherwise held by each director and
executive officer of the Corporation and by all directors and
executive officers as a group, as of March 13, 2000. As of March
13, 2000, no director or executive officer of the Corporation
beneficially owned or otherwise held any shares of the
Corporation's Preferred Stock. 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.
<PAGE> 25
Amount and Nature Percent
Name of Individual Title of Class of Beneficial Ownership of Class
- ------------------ -------------- ----------------------- --------
Arthur Brown Common 464,452(1,4) Less than 1%
William B. Booth Common 75,108(1) Less than 1%
J. Gary Childress Common 99,200(1) Less than 1%
John E. Clute Common 5,300(3) Less than 1%
Joe Coors, Jr. Common 5,000(3) Less than 1%
Ted Crumley Common 8,539(3) Less than 1%
Leland O. Erdahl Common 36,575(3) Less than 1%
Roger A. Kauffman Common 112,382(1) Less than 1%
Jon T. Langstaff Common 73,420(1) Less than 1%
Charles L. McAlpine Common 7,000(3) Less than 1%
Thomas J. O'Neil Common 4,000(3) Less than 1%
Jorge E. Ordonez C. Common 5,000(3) Less than 1%
Paul A. Redmond Common 2,704(3) Less than 1%
John P. Stilwell Common 92,005(1) Less than 1%
David F. Wolfe Common 13,550(1) Less than 1%
Michael B. White Common 91,268(1) Less than 1%
All officers and
directors as a group Common 1,095,503(2) 1.64%
1. Includes the following number of shares of Common Stock
issuable upon the exercise by the following individuals of
currently exercisable options: Mr. Brown, 307,200; Mr. Booth,
74,100; Mr. Childress, 99,200; Mr. Kauffman, 109,000; Mr.
Langstaff, 71,500; Mr. Stilwell, 89,650; Mr. Wolfe, 13,500; and
Mr. White, 90,650.
2. Includes 935,800 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, 5,000; Mr. Coors, 5,000; Mr. Crumley, 4,359; Mr. Erdahl,
5,000; Mr. McAlpine, 5,000; Mr. O'Neil, 4,000; Mr. Ordonez,
5,000; and Mr. Redmond, 2,404. Each director disclaims
beneficial ownership of all shares held in trust under the stock
plan (see "Compensation of Directors").
4. Includes 132,290 shares credited to Arthur Brown under the
Corporation's Executive Deferral Plan, all of which are
held in trust pursuant to the plan. Mr. Brown disclaims
beneficial ownership of all shares held in trust under the
Executive Deferral Plan.
<PAGE> 26
CERTAIN TRANSACTIONS
On June 25, 1999, the Corporation purchased the La Camorra
underground gold mine in Venezuela and silver exploration
properties in Mexico from Monarch Resources Limited for
$9,000,000 in cash and 6,700,250 shares of Common Stock of the
Corporation (representing 10.1% of the Corporation's outstanding
shares). The reported closing price for the Corporation's Common
Stock on the New York Stock Exchange on the closing date of the
transaction was $2.25. The purchase price was determined by
arm's length negotiation between the Corporation and Monarch.
Additionally, Monarch will retain a sliding scale net smelter
royalty on future production if it ultimately exceeds 600,000
ounces at the La Camorra gold mine. The royalty starts at 1%
when the price of gold exceeds $300 per ounce and tops out at 3%
when the price of gold reaches $500 per ounce.
APPROVAL OF AUDITORS
PricewaterhouseCoopers LLP, independent public accountants,
has been selected by the Board of Directors as independent
auditors for the Corporation for the fiscal year ending December
31, 2000, subject to approval by the shareholders.
PricewaterhouseCoopers LLP, 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 PricewaterhouseCoopers LLP is
expected to be present at the Annual Meeting and to make a
statement if the representative 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 PricewaterhouseCoopers LLP as the Corporation's
independent auditors for 2000.
<PAGE> 27
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 of the Corporation at the principal executive offices
of the Corporation not less than 90 days nor more than 120 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 120th day prior to such Annual Meeting and not later than the
close of business on the later of the 90th 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.
Adjournment of a meeting shall not commence a new time period for
the giving of a shareholder's notice as described above. Such
shareholder's notice shall set forth (a) as to each person whom
the shareholder proposes to nominate for election or re-election
as a director, all information relating to such person that is
required to be disclosed in solicitations of proxies for election
of directors in an election contest, or is otherwise required, in
each case pursuant to Regulation 14A under the Exchange Act, as
amended, and Rule 14a-11 thereunder, including such person's
written consent to being named in the proxy statement as a
nominee and to serve 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 foregoing time limits also apply in determining
whether notice is timely for purposes of rules adopted by the
Securities and Exchange Commission relating to the exercise of
discretionary voting authority.
<PAGE> 28
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
The Corporation will review shareholder proposals intended to
be included in the Corporation's proxy materials for the 2001
Annual Meeting of Shareholders which are received by the
Corporation at its principal executive offices no later than
November 30, 2000, 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. The
Corporation will comply with Rule 14a-8 of the Exchange Act with
respect to any proposal that meets its requirements.
ANNUAL REPORT
The Corporation's Annual Report to Shareholders, including
financial statements, for the year ended December 31, 1999 (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 or Form 10-K for the
fiscal year ended December 31, 1999 (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 31, 2000
<PAGE> 29
<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 5, 2000
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 5,
2000, 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
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
PricewaterhouseCoopers LLP as independent auditors of the
Corporation for the fiscal year ending December 31, 2000.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE> 30
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 Proposal 2.
DATE , 2000 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>
