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Exhibit 10.4(c)
HECLA MINING COMPANY 1995 STOCK INCENTIVE PLAN
Amended February 19, 1999, Amended June 7, 2001
Section 1. Purpose; Definitions
The purpose of the Plan is to give the Corporation a competitive advantage
in attracting, retaining and motivating officers and employees and to provide
the Corporation and its subsidiaries with the ability to provide incentives more
directly linked to the profitability of the Corporation's businesses and
increases in stockholder value.
For purposes of the Plan, the following terms are defined as set forth
below:
a. "Affiliate" means a corporation or other entity controlled by the
Corporation and designated by the Committee from time to time as such.
b. "Award" means a Stock Appreciation Right, Stock Option, Restricted
Stock or Performance Units.
c. "Award Cycle" shall mean a period of consecutive fiscal years or
portions thereof designated by the Committee over which Performance Units are
to be earned.
d. "Board" means the Board of Directors of the Corporation.
e. "Cause" means (1) conviction of the optionee for committing a felony
under federal law or the law of the state in which such action occurred,
(2) dishonesty in the course of fulfilling the optionee's employment duties or
(3) willful and deliberate failure on the part of the optionee to perform
his employment duties in any material respect, or such other events as shall
be determined by the Committee. The Committee shall have the sole discretion
to determine whether "Cause" exists, and its determination shall be final.
f. "Change in Control" and "Change in Control Price" have the meanings
set forth in Sections 9(b) and (c), respectively.
g. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
h. "Commission" means the Securities and Exchange Commission or any
successor agency.
i. "Committee" means the Committee referred to in Section 2.
j. "Common Stock" means common stock, par value $.25 per share, of the
Corporation.
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k. "Corporation" means Hecla Mining Company, a Delaware corporation.
l. "Covered Employee" shall mean a participant designated prior to the
grant of shares of Restricted Stock or Performance Units by the Committee who
is or may be a "covered employee" within the meaning of Section 162(m)(3) of
the Code in the year in which Restricted Stock or Performance Units are
expected to be taxable to such participant.
m. "Disability" means permanent and total disability as determined under
procedures established by the Committee for purposes of the Plan.
n. "Disinterested Person" shall mean a member of the Board who qualifies
as a disinterested person as defined in Rule 16b-3(c)(2), as promulgated by
the Commission under the Exchange Act, or any successor definition adopted by
the Commission.
o. "Early Retirement" means retirement from active employment with the
Corporation, a subsidiary or Affiliate pursuant to the early retirement
provisions of the applicable pension plan of such employer.
p. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
q. "Fair Market Value" means, except as provided in Sections 5(j) and
6(b)(ii)(2), as of any given date, the mean between the highest and lowest
reported sales prices of the Common Stock on the New York Stock Exchange
Composite Tape or, if not listed on such exchange, on any other national
securities exchange on which the Common Stock is listed or on NASDAQ. If there
is no regular public trading market for such Common Stock, the Fair Market Value
of the Common Stock shall be determined by the Committee in good faith.
r. "Incentive Stock Option" means any Stock Option designated as, and
qualified as, an "Incentive Stock Option" within the meaning of Section 422 of
the Code.
s. "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
t. "Normal Retirement" means retirement from active employment with the
Corporation, a subsidiary or Affiliate at or after age 65.
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u. "Performance Goals" means the performance goals established by the
Committee prior to the grant of Restricted Stock or Performance Units that are
based on the attainment of specified levels of earnings per share from
continuing operations, operating income, revenues, return on operating assets,
return on equity, stockholder return (measured in terms of stock price
appreciation) and/or total stockholder return (measured in terms of stock price
appreciation and/or dividend growth), ore reserve growth, achievement of cost
control, production targets at specific mines or company wide, or stock price of
the Corporation or such subsidiary, division or department of the Corporation
for or within which the participant is primarily employed and that are intended
to qualify under Section 162(m)(4)(c) of the Code. Such Performance Goals also
may be based upon attaining specified levels of Corporation performance under
one or more of the measures described above relative to the performance of other
corporations. Such Performance Goals shall be set by the Committee within the
time period prescribed by Section 162(m) of the Code and related regulations.
v. "Performance Units" means an award made pursuant to Section 8.
w. "Plan" means the Hecla Mining Company 1995 Stock Incentive Plan, as
set forth herein and as hereinafter amended from time to time.
x. "Restricted Stock" means an award granted under Section 7.
y. "Retirement" means Normal or Early Retirement.
z. "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
aa. "Stock Appreciation Right" means a right granted under Section 6.
bb. "Stock Option" means an option granted under Section 5.
cc. "Termination of Employment" means the termination of the participant's
employment with the Corporation and any subsidiary or Affiliate. A participant
employed by a subsidiary or an Affiliate shall also be deemed to incur a
Termination of Employment if the subsidiary or Affiliate ceases to be such a
subsidiary or an Affiliate, as the case may be, and the participant does not
immediately thereafter become an employee of the Corporation or another
subsidiary or Affiliate. Temporary absences from employment because of illness,
vacation or leave of absence and transfers among the Corporation and its
subsidiaries and Affiliates shall not be considered Terminations of Employment.
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In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
Section 2. Administration
The Plan shall be administered by a committee of the Board designated by
the Board (the "Committee"), which shall be composed of not less than two
Disinterested Persons, each of whom shall be an "outside director" for purposes
of Section 162(m)(4) of the Code, and shall be appointed by and serve at the
pleasure of the Board.
The Committee shall have plenary authority to grant Awards pursuant to the
terms of the Plan to officers and employees of the Corporation and its
subsidiaries and Affiliates.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
(a) To select the officers and employees to whom Awards may from time to
time be granted;
(b) Determine whether and to what extent Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock and
Performance Units or any combination thereof are to be granted hereunder;
(c) Determine the number of shares of Common Stock to be covered by each
Award granted hereunder;
(d) Determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the option price (subject to Section 5(a)), any
vesting condition, restriction or limitation (which may be related to the
performance of the participant, the Corporation or any subsidiary or Affiliate)
and any vesting acceleration or forfeiture waiver regarding any Award and the
shares of Common Stock relating thereto, based on such factors as the Committee
shall determine;
(e) Modify, amend or adjust the terms and conditions of any Award, at any
time or from time to time, including but not limited to Performance Goals;
provided however, that the Committee may not adjust upwards the amount payable
to a designated Covered Employee with respect to a particular award upon the
satisfaction of applicable Performance Goals;
(f) Determine to what extent and under what circumstances Common Stock and
other amounts payable with respect to an Award shall be deferred; and
(g) Determine under what circumstances an Award may be settled in cash or
Common Stock under Sections 5(j) and 8(b)(i).
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The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in office,
except that the members thereof may (i) delegate to an officer of the
Corporation the authority to make decisions pursuant to paragraphs (c), (f),
(g), (h) and (i) of Section 5 (provided that no such delegation may be made that
would cause Awards or other transactions under the Plan to cease to be exempt
from Section 16(b) of the Exchange Act) and (ii) authorize any one or more of
their number or any officer of the Corporation to execute and deliver documents
on behalf of the Committee.
Any determination made by the Committee or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Award shall be made
in the sole discretion of the Committee or such delegate at the time of the
grant of the Award or, unless in contravention of any express term of the Plan,
at any time thereafter. All decisions made by the Committee or any
appropriately delegated officer pursuant to the provisions of the Plan shall be
final and binding on all persons, including the Corporation and Plan
participants.
Section 3. Common Stock Subject to Plan
The total number of shares of Common Stock reserved and available for grant
under the Plan shall be 3,000,000. Shares subject to an Award under the Plan may
be authorized and unissued shares or may be treasury shares.
Subject to Section 7(c)(iv), if any shares of Restricted Stock are
forfeited for which the participant did not receive any benefits of ownership
(as such phrase is construed by the Commission or its Staff), or if any Stock
Option (and related Stock Appreciation Right, if any) terminates without being
exercised, or if any Stock Appreciation Right is exercised for cash, shares
subject to such Awards shall again be available for distribution in connection
with Awards under the Plan.
In the event of any change in corporate capitalization, such as a stock
split, or a corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock or property of
the Corporation, any reorganization (whether or not such reorganization comes
within the definition of such term in Section 368 of the Code) or any partial or
complete liquidation of the Corporation, the Committee or Board may make such
substitution or adjustments in the aggregate number and kind of shares reserved
for issuance under the Plan, in the number, kind and option price of shares
subject to outstanding Stock Options and Stock Appreciation Rights, in
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the number and kind of shares subject to other outstanding Awards granted under
the Plan and/or such other equitable substitution or adjustments as it may
determine to be appropriate in its sole discretion; provided however, that the
number of shares subject to any Award shall always be a whole number. Such
adjusted option price shall also be used to determine the amount payable by the
Corporation upon the exercise of any Stock Appreciation Right associated with
any Stock Option.
Section 4. Eligibility
Officers and employees of the Corporation, its subsidiaries and Affiliates
who are responsible for or contribute to the management, growth and
profitability of the business of the Corporation, its subsidiaries and
Affiliates are eligible to be granted Awards under the Plan. No grant shall be
made under this Plan to a director who is not an officer or a salaried employee
of the Corporation, its subsidiaries or Affiliates.
Section 5. Stock Options
Stock Options may be granted alone or in addition to other Awards granted
under the Plan and may be of two types: Incentive Stock Options and Nonqualified
Stock Options. Any Stock Option granted under the Plan shall be in such form as
the Committee may from time to time approve.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Nonqualified Stock Options or both types of Stock Options (in
each case with or without Stock Appreciation Rights); provided however, that
grants hereunder are subject to the aggregate limit on grants to individual
participants set forth in Section 3. Incentive Stock Options may be granted
only to employees of the Corporation and its subsidiaries (within the meaning of
Section 424(f) of the Code). To the extent that any Stock Option is not
designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Nonqualified Stock
Option.
Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ. An option agreement shall indicate on its face
whether it is intended to be an agreement for an Incentive Stock Option or a
Nonqualified Stock Option. The grant of a Stock Option shall occur on the date
the Committee by resolution selects an individual to be a participant in any
grant of a Stock Option, determines the number of shares of Common Stock to be
subject to such Stock Option to be granted to such individual and specifies the
terms and provisions of the Stock Option. The Corporation shall notify a
participant of any grant of a Stock Option, and a written option agreement or
agreements shall be duly executed and delivered by the Corporation to the
participant. Such agreement or agreements shall become effective upon execution
by the Corporation and the participant.
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Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or altered nor
shall any discretion or authority granted under the Plan be exercised so as to
disqualify the Plan under Section 422 of the Code or, without the consent of the
optionee affected, to disqualify any Incentive Stock Option under such Section
422.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Committee shall deem desirable:
(a) Option Price. The option price per share of Common Stock purchasable
under a Stock Option shall be determined by the Committee and set forth in the
option agreement, and shall not be less than the Fair Market Value of the Common
Stock subject to the Stock Option on the date of grant.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than 10 years
after the date the Stock Option is granted.
(c) Exercisability. Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the Committee
may at any time accelerate the exercisability of any Stock Option.
(d) Method of Exercise. Subject to the provisions of this Section 5, Stock
Options may be exercised, in whole or in part, at any time during the option
term by giving written notice of exercise to the Company specifying the number
of shares of Common Stock subject to the Stock Option to be purchased.
Such notice shall be accompanied by payment in full of the purchase price
by certified or bank check or such other instrument as the Corporation may
accept. If approved by the Committee, payment, in full or in part, may also be
made in the form of unrestricted Common Stock already owned by the optionee of
the same class as the Common Stock subject to the Stock Option (based on the
Fair Market Value of the Common Stock on the date the Stock Option is
exercised); provided however, that, in the case of an Incentive Stock Option,
the right to make a payment in the form of already owned shares of Common Stock
of the same class as the Common Stock subject to the Stock Option may be
authorized only at the time the Stock Option is granted.
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If payment of the option exercise price of a Nonqualified Stock Option is
made, in whole or in part, in the form of Restricted Stock or Deferred Stock,
the number of shares of Common Stock to be received upon such exercise equal to
the number of shares of Restricted Stock or Deferred Stock used for payment of
the option exercise price shall be subject to the same forfeiture restrictions
or deferral limitations to which such Restricted Stock was subject, unless
otherwise determined by the Committee.
In the discretion of the Committee, payment for any shares subject to a
Stock Option may also be made by delivering a properly executed exercise notice
to the Corporation, together with a copy of irrevocable instructions to a broker
to deliver promptly to the Corporation the amount of sale or loan proceeds to
pay the purchase price, and, if requested, by the amount of any federal, state,
local or foreign withholding taxes. To facilitate the foregoing, the
Corporation may enter into agreements for coordinated procedures with one or
more brokerage firms.
In addition, in the discretion of the Committee, payment for any shares
subject to a Stock Option may also be made by instructing the Committee to
withhold a number of such shares having a Fair Market Value on the date of
exercise equal to the aggregate exercise price of such Stock Option.
No shares of Common Stock shall be issued until full payment therefor has
been made. Subject to any forfeiture restrictions or deferral limitations that
may apply if a Stock Option is exercised using Restricted Stock, an optionee
shall have all of the rights of a stockholder of the Corporation holding the
class or series of Common Stock that is subject to such Stock Option (including,
if applicable, the right to vote the shares and the right to receive dividends),
when the optionee has given written notice of exercise, has paid in full for
such shares and, if requested, has given the representation described in
Section 12(a).
(e) Nontransferability of Stock Options. No Stock Option shall be
transferable by the optionee other than (i) by will or by the laws of
descent and distribution; or (ii) in the case of a Nonqualified Stock Option,
pursuant to (a) a qualified domestic relations order (as defined in the Code
or Title I of the Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder) or (b) a gift to such optionee's children, whether
directly or indirectly or by means of a trust or partnership or otherwise,
if expressly permitted under the applicable option agreement. All Stock
Options shall be exercisable, during the optionee's lifetime, only by the
optionee or by the guardian or legal representative of the optionee or,
in the case of a Nonqualified Stock Option, its alternative payee pursuant to
such qualified domestic relations order, it being understood that the terms
"holder" and "optionee" include the
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guardian and legal representative of the optionee named in the option agreement
and any person to whom an option is transferred by will or the laws of descent
and distribution or, in the case of a Nonqualified Stock Option, pursuant to a
qualified domestic relations order or a gift permitted under the applicable
option agreement.
(f) Termination by Death. Unless otherwise determined by the Committee,
if an optionee's employment terminates by reason of death, any Stock Option
held by such optionee may thereafter be exercised, to the extent then
exercisable, or on such accelerated basis as the Committee may determine, for a
period of one year (or such other period as the Committee may specify in the
option agreement) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(g) Termination by Reason of Disability. Unless otherwise determined by
the Committee, if an optionee's employment terminates by reason of Disability,
any Stock Option held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of termination, or
on such accelerated basis as the Committee may determine, for a period of
three years (or such shorter period as the Committee may specify in the option
agreement) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter; provided however, that if the optionee dies within such period, any
unexercised Stock Option held by such optionee shall, notwithstanding the
expiration of such period, continue to be exercisable to the extent to which it
was exercisable at the time of death for a period of 12 months from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination of employment by
reason of Disability, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of
the Code, such Stock Option will thereafter be treated as a Nonqualified Stock
Option.
(h) Other Termination. Unless otherwise determined by the Committee: (A)
If an optionee incurs a Termination of Employment for Cause, all Stock Options
held by such optionee shall thereupon terminate; and (B) If an optionee
incurs a Termination of Employment for any reason other than death,
Disability or Retirement or for Cause, any Stock Option held by such optionee,
to the extent then exercisable, or on such accelerated basis as the Committee
may determine, may be exercised for the lesser of three months from the
date of such Termination of Employment or the balance of such Stock Option's
term; provided however, that if the optionee dies within such three-month
period, any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such three-month period, continue to be
exercisable to the extent to which it was exercisable at the time of death for
a period of 12 months from
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the date of such death or until the expiration of the stated term of Termination
by Reason of Retirement. Unless otherwise determined by the Committee, if an
optionee's employment terminates by reason of Retirement, any Stock Option held
by such optionee may thereafter be exercised by the optionee, to the extent it
was exercisable at the time of such Retirement, or on such accelerated basis as
the Committee may determine, for a period of five years (or such shorter period
as the Committee may specify in the option agreement) from the date of such
termination of employment or until the expiration of the stated term of such
Stock Option, whichever period is the shorter; provided however, that if the
optionee dies within such period any unexercised Stock Option held by such
optionee shall, notwithstanding the expiration of such period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event
of termination of employment by reason of Retirement, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(i) such Stock Option, whichever period is the shorter. Notwithstanding the
foregoing, if an optionee incurs a Termination of Employment at or after a
Change in Control (as defined Section 9(b)), other than by reason of death,
Disability or Retirement, any Stock Option held by such optionee shall be
exercisable for the lesser of (1) six months and one day from the date of such
Termination of Employment, and (2) the balance of such Stock Option's term. In
the event of Termination of Employment, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply for purposes
of Section 422 of the Code, such Stock Option will thereafter be treated as a
Nonqualified Stock Option.
(j) Cashing Out of Stock Option. On receipt of written notice of exercise,
the Committee may elect to cash out all or part of the portion of the shares of
Common Stock for which a Stock Option is being exercised by paying the optionee
an amount, in cash or Common Stock, equal to the excess of the Fair Market Value
of the Common Stock over the option price times the number of shares of Common
Stock for which the Option is being exercised on the effective date of such
cash-out.
Cash-outs pursuant to this Section 5(j) relating to Options held by
optionees who are actually or potentially subject to Section 16(b) of the
Exchange Act shall comply with the "window period" provisions of Rule 16b-3, to
the extent applicable, and, in the case of cash-outs of Nonqualified Stock
Options held by such optionees, the Committee may determine Fair Market Value
under the pricing rule set forth in Section 6(b)(ii)(2).
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(k) Change in Control Cash-Out. Notwithstanding any other provision of the
Plan, during the 60-day period from and after a Change in Control (the "Exercise
Period"), unless the Committee shall determine otherwise at the time of grant,
an optionee shall have the right, whether or not the Stock Option is fully
exercisable and in lieu of the payment of the exercise price for the shares of
Common Stock being purchased under the Stock Option and by giving notice to the
Corporation, to elect (within the Exercise Period) to surrender all or part of
the Stock Option to the Corporation and to receive cash, within 30 days of such
notice, in an amount equal to the amount by which the Change in Control Price
per share of Common Stock on the date of such election shall exceed the exercise
price per share of Common Stock under the Stock Option (the "Spread") multiplied
by the number of shares of Common Stock granted under the Stock Option as to
which the right granted under this Section 5(k) shall have been exercised;
provided however, that if the Change in Control is within six months of the date
of grant of a particular Stock Option held by an optionee who is an officer or
director of the Corporation and is subject to Section 16(b) of the Exchange Act,
no such election shall be made by such optionee with respect to such Stock
Option prior to six months from the date of grant. However, if the end of such
60-day period from and after a Change in Control is within six months of the
date of grant of a Stock Option held by an optionee who is an officer or
director of the Corporation and is subject to Section 16(b) of the Exchange Act,
such Stock Option shall be canceled in exchange for a cash payment to the
optionee, effected on the day which is six months and one day after the date of
grant of such Option, equal to the Spread multiplied by the number of shares of
Common Stock granted under the Stock Option.
Section 6. Stock Appreciation Rights
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Nonqualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an optionee in accordance
with Section 6(b) by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the optionee shall be entitled to receive an amount
determined in the manner prescribed in Section 6(b). Stock Options which have
been so surrendered shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
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(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including the
following:
(i) Stock Appreciation Rights shall be exercisable only at such time
or times and to the extent that the Stock Options to which they relate are
exercisable in accordance with the provisions of Section 5 and this Section
6; provided however, that a Stock Appreciation Right shall not be
exercisable during the first six months of its term by an optionee who is
actually or potentially subject to Section 16(b) of the Exchange Act,
except that this limitation shall not apply in the event of death or
Disability of the optionee prior to the expiration of the six-month period.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee
shall be entitled to receive an amount in cash, shares of Common Stock or
both equal in value to the excess of the Fair Market Value of one share of
Common Stock over the option price per share specified in the related Stock
Option multiplied by the number of shares in respect of which the Stock
Appreciation Right shall have been exercised, with the Committee having the
right to determine the form of payment.
In the case of Stock Appreciation Rights relating to Stock Options
held by optionees who are actually or potentially subject to Section 16(b)
of the Exchange Act, the Committee:
(1) May require that such Stock Appreciation Rights be
exercised for cash only in accordance with the applicable "window
period" provisions of Rule 16b-3; and
(2) In the case of Stock Appreciation Rights relating to
Nonqualified Stock Options, may provide that the amount to be paid in
cash upon exercise of such Stock Appreciation Rights during a Rule
16b-3 "window period" shall be based on the highest of the daily means
between the highest and lowest reported sales prices of the Common
Stock on the New York Stock Exchange or other national securities
exchange on which the shares are listed or on NASDAQ, as applicable,
on any day during such "window period."
(iii) Stock Appreciation Rights shall be transferable only to
permitted transferees of the underlying Stock Option in accordance with
Section 5(e).
(iv) Upon the exercise of a Stock Appreciation Right, the Stock Option
or part thereof to which such Stock Appreciation Right is related shall be
deemed to have been exercised for the purpose of the limitation set forth
in Section 3 on the number of shares of Common Stock to be
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issued under the Plan, but only to the extent of the number of shares
covered by the Stock Appreciation Right at the time of exercise based on
the value of the Stock Appreciation Right at such time.
Section 7. Restricted Stock
(a) Administration. Shares of Restricted Stock may be awarded either
alone or in addition to other Awards granted under the Plan. The Committee shall
determine the officers and employees to whom and the time or times at which
grants of Restricted Stock will be awarded, the number of shares to be awarded
to any participant (subject to the aggregate limit on grants to individual
participants set forth in Section 3), the conditions for vesting, the time or
times within which such Awards may be subject to forfeiture and any other terms
and conditions of the Awards, in addition to those contained in Section 7(c).
The Committee may, prior to grant, condition vesting of Restricted Stock
upon the attainment of Performance Goals. The Committee may, in addition to
requiring satisfaction of Performance Goals, condition vesting upon the
continued service of the participant. The provisions of Restricted Stock Awards
(including the applicable Performance Goals) need not be the same with respect
to each recipient.
(b) Awards and Certificates. Shares of Restricted Stock shall be evidenced
in such manner as the Committee may deem appropriate, including book-entry
registration or issuance of one or more stock certificates. Any certificate
issued in respect of shares of Restricted Stock shall be registered in the name
of such participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, substantially in the
following form:
"The transferability of this certificate and the shares
of stock represented hereby are subject to the terms and
conditions (including forfeiture) of the Hecla Mining
Company 1995 Stock Incentive Plan and a Restricted Stock
Agreement. Copies of such Plan and Agreement are on file at
the offices of Hecla Mining Company, 6500 Mineral Drive,
Coeur d'Alene, Idaho 83814-8788."
The Committee may require that the certificates evidencing such shares be held
in custody by the Corporation until the restrictions thereon shall have lapsed
and that, as a condition of any Award of Restricted Stock, the participant shall
have delivered a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.
(c) Terms and Conditions. Shares of Restricted Stock shall be subject to
the following terms and conditions:
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(i) Subject to the provisions of the Plan (including Section 5(d))
and the Restricted Stock Agreement referred to in Section 7(c)(vi), during
the period, if any, set by the Committee, commencing with the date of such
Award for which such participant's continued service is required (the
"Restriction Period"), and until the later of (i) the expiration of the
Restriction Period and (ii) the date the applicable Performance Goals (if
any) are satisfied, the participant shall not be permitted to sell, assign,
transfer, pledge or otherwise encumber shares of Restricted Stock;
provided, that the foregoing shall not prevent a participant from pledging
Restricted Stock as security for a loan, the sole purpose of which is to
provide funds to pay the option price for Stock Options. Within these
limits, the Committee may provide for the lapse of restrictions based upon
period of service in installments or otherwise and may accelerate or
waive, in whole or in part, restrictions based upon period of service or
upon performance; provided however, that in the case of Restricted Stock
subject to Performance Goals granted to a participant who is a Covered
Employee, the applicable Performance Goals have been satisfied.
(ii) Except as provided in this paragraph (ii) and Section 7(c)(i) and
the Restricted Stock Agreement, the participant shall have, with respect to
the shares of Restricted Stock, all of the rights of a stockholder of the
Corporation holding the class or series of Common Stock that is the subject
of the Restricted Stock, including, if applicable, the right to vote the
shares and the right to receive any cash dividends. If so determined by
the Committee in the applicable Restricted Stock Agreement and subject to
Section 13(f) of the Plan, (1) cash dividends on the class or series of
Common Stock that is the subject of the Restricted Stock Award shall be
automatically deferred and reinvested in additional Restricted Stock, held
subject to the vesting of the underlying Restricted Stock, or held subject
to meeting Performance Goals applicable only to dividends, and (2)
dividends payable in Common Stock shall be paid in the form of Restricted
Stock of the same class as the Common Stock with which such dividend was
paid, held subject to vesting of the underlying Restricted Stock, or held
subject to meeting Performance Goals applicable only to dividends.
(iii) Except to the extent otherwise provided in the applicable
Restricted Stock Agreement and Sections 7(c)(i), 7(c)(iv) and 10(a)(ii),
upon a participant's Termination of Employment for any reason during the
Restriction Period or before the applicable Performance Goals are
satisfied, all shares still subject to restriction shall be forfeited by
the participant.
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(iv) Except to the extent otherwise provided in Section 9(a)(ii), in
the event that a participant retires or such participant's employment is
involuntarily terminated (other than for Cause), the Committee shall have
the discretion to waive, in whole or in part, any or all remaining
restrictions (other than, in the case of Restricted Stock with respect to
which a participant is a Covered Employee, satisfaction of the applicable
Performance Goals unless the participant's employment is terminated by
reason of death or Disability) with respect to any or all of such
participant's shares of Restricted Stock.
(v) If and when any applicable Performance Goals are satisfied and
the Restriction Period expires without a prior forfeiture of the Restricted
Stock, unlegended certificates for such shares shall be delivered to the
participant upon surrender of the legended certificates.
(vi) Each Award shall be confirmed by, and be subject to the terms of,
a Restricted Stock Agreement.
Section 8. Performance Units
(a) Administration. Performance Units may be awarded either alone or in
addition to other Awards granted under the Plan. The Committee shall determine
the officers and employees to whom and the time or times at which Performance
Units shall be awarded, the number of Performance Units to be awarded to any
participant (subject to the aggregate limit on grants to individual participants
set forth in Section 3), the duration of the Award Cycle and any other terms and
conditions of the Award, in addition to those contained in Section 8(b).
The Committee may condition the settlement of Performance Units upon the
continued service of the participant, the attainment of Performance Goals, or
both. The provisions of such Awards (including the applicable Performance
Goals) need not be the same with respect to each recipient.
(b) Terms and Conditions. Performance Units Awards shall be subject to
the following terms and conditions:
(i) Subject to the provisions of the Plan and the Performance Units
Agreement referred to in Section 8(b)(vi), Performance Units may not be
sold, assigned, transferred, pledged or otherwise encumbered during the
Award Cycle. At the expiration of the Award Cycle, the Committee shall
evaluate the Corporation's performance in light of the Performance Goals
for such Award to the extent applicable, and shall determine the number of
Performance Units granted to the participant which have been earned and the
Committee may then elect to deliver (1) a number of shares of Common Stock
equal to the number of Performance Units determined by the Committee to
have been earned, or (2) cash equal to the Fair Market Value of such number
of shares of Common Stock to the participant.
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(ii) Except to the extent otherwise provided in the applicable
Performance Unit Agreement and Sections 8(b)(iii) and 10(a)(iii), upon a
participant's Termination of Employment for any reason during the Award
Cycle or before any applicable Performance Goals are satisfied, the rights
to the shares still covered by the Performance Units Award shall be
forfeited by the participant.
(iii) Except to the extent otherwise provided in Section 10(a)(iii),
in the event that a participant's employment is terminated (other than for
Cause), or in the event a participant retires, the Committee shall have the
discretion to waive, in whole or in part, any or all remaining payment
limitations (other than, in the case of Performance Units with respect to
which a participant is a Covered Employee, satisfaction of any applicable
Performance Goals unless the participant's employment is terminated by
reason of death or Disability) with respect to any or all of such
participant's Performance Units.
(iv) A participant may elect to further defer receipt of the
Performance Units payable under an Award (or an installment of an Award)
for a specified period or until a specified event, subject in each case to
the Committee's approval and to such terms as are determined by the
Committee (the "Elective Deferral Period"). Subject to any exceptions
adopted by the Committee, such election must generally be made prior to
commencement of the Award Cycle for the Award (or for such installment of
an Award).
(v) If and when any applicable Performance Goals are satisfied and
the Elective Deferral Period expires without a prior forfeiture of the
Performance Units, payment in accordance with Section 8(b)(i) hereof shall
be made to the participant.
(vi) Each Award shall be confirmed by, and be subject to the terms
of, a Performance Unit Agreement.
Section 9. Tax Offset Bonuses
At the time an Award is made hereunder or at any time thereafter, the
Committee may grant to the participant receiving such Award the right to receive
a cash bonus in an amount specified by the Committee, to be paid at such time or
times (if ever) as the Award results in compensation income to the participant,
for the purpose of assisting the participant to pay the resulting taxes, all as
determined by the Committee and on such other terms and conditions as the
Committee shall determine.
Section 10. Change in Control Provisions
(a) Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control:
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(i) Any Stock Options and Stock Appreciation Rights outstanding as of
the date such Change in Control is determined to have occurred, and which
are not then exercisable and vested, shall become fully exercisable and
vested to the full extent of the original grant; provided however, that, in
the case of the holder of Stock Appreciation Rights who is actually subject
to Section 16(b) of the Exchange Act, such Stock Appreciation Rights shall
have been outstanding for at least six months at the date such Change in
Control is determined to have occurred.
(ii) The restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free
of all restrictions and become fully vested and transferable to the full
extent of the original grant.
(iii) All Performance Units shall be considered to be earned and
payable in full, and any deferral or other restriction shall lapse and such
Performance Units shall be settled in cash as promptly as is practicable.
(b) Definition of Change in Control. For purposes of the Plan, a "Change
in Control" shall mean the happening of any of the following events:
(i) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either (1) the then outstanding shares
of common stock of the Corporation (the "Outstanding Corporation Common
Stock") or (2) the combined voting power of the then outstanding voting
securities of the Corporation entitled to vote generally in the election of
directors (the "Outstanding Corporation Voting Securities"); excluding
however, the following: (1) Any acquisition directly from the Corporation,
other than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself acquired
directly from the Corporation, (2) Any acquisition by the Corporation, (3)
Any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Corporation or any corporation controlled by the
Corporation or (4) Any acquisition by any corporation pursuant to a
transaction which complies with clauses (1), (2) and (3) of subsection
(iii) of this Section 9(b); or
(ii) A change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, constitute the Board
(such Board shall be hereinafter referred to as the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board;
provided however, for purposes of this Section 9(b), that any
18
individual who becomes a member of the Board subsequent to the effective
date of the Plan, whose election, or nomination for election by the
Corporation's stockholders, was approved by a vote of at least a majority
of those individuals who are members of the Board and who were also members
of the Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such individual were a member of the
Incumbent Board; but, provided further, that any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board shall not be so considered as a member of the
Incumbent Board; or
(iii) The consummation by the stockholders of the Corporation of a
reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Corporation ("Corporate
Transaction") or, if consummation of such Corporate Transaction is subject,
at the time of such approval by stockholders, to the consent of any
government or governmental agency, obtaining such consent (either
explicitly or implicitly by consummation); excluding however, such a
Corporate Transaction pursuant to which (1) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of
the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock, and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Corporation or
all or substantially all of the Corporation's assets either directly or
through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Corporate Transaction, of the
Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be, (2) no Person (other than the Corporation,
any employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such Corporate Transaction) will beneficially
own, directly or indirectly, 20% or more of, respectively, the outstanding
shares of common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election
of directors except to the extent that such ownership existed prior to the
Corporate Transaction and (3) individuals who were members of the Incumbent
Board will
19
constitute at least a majority of the members of the board of directors of
the corporation resulting from such Corporate Transaction; or
(iv) The approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
(c) Change in Control Price. For purposes of the Plan, "Change in Control
Price" means the higher of (i) the highest reported sales price, regular way, of
a share of Common Stock in any transaction reported on the New York Stock
Exchange Composite Tape or other national exchange on which such shares are
listed or on NASDAQ during the 60-day period prior to and including the date of
a Change in Control or (ii) if the Change in Control is the result of a tender
or exchange offer or a Corporate Transaction, the highest price per share of
Common Stock paid in such tender or exchange offer or Corporate Transaction;
provided however, that (x) in the case of a Stock Option which (A) is held by an
optionee who is an officer or director of the Corporation and is subject to
Section 16(b) of the Exchange Act and (B) was granted within 240 days of the
Change in Control, then the Change in Control Price for such Stock Option shall
be the Fair Market Value of the Common Stock on the date such Stock Option is
exercised or deemed exercised and (y) in the case of Incentive Stock Options and
Stock Appreciation Rights relating to Incentive Stock Options, the Change in
Control Price shall be in all cases the Fair Market Value of the Common Stock on
the date such Incentive Stock Option or Stock Appreciation Right is exercised.
To the extent that the consideration paid in any such transaction described
above consists all or in part of securities or other non-cash consideration, the
value of such securities or other noncash consideration shall be determined in
the sole discretion of the Board.
Section 11. Term, Amendment and Termination
The Plan will terminate 10 years after the effective date of the Plan.
Under the Plan, Awards outstanding as of such date shall not be affected or
impaired by the termination of the Plan.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (i) impair the rights of
an optionee under a Stock Option or a recipient of a Stock Appreciation Right,
Restricted Stock Award or Performance Unit Award theretofore granted without the
optionee's or recipient's consent, except such an amendment made to cause the
Plan to qualify for the exemption provided by Rule 16b-3, or (ii) disqualify the
Plan from the exemption provided by Rule 16b-3. In addition, no such amendment
shall be made without the approval of the Corporation's stockholders to the
extent such approval is required by law or agreement.
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The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment shall
impair the rights of any holder without the holder's consent except such an
amendment made to cause the Plan or Award to qualify for the exemption provided
by Rule 16b-3.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
Section 12. Unfunded Status of Plan
It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation
of trusts or other arrangements to meet the obligations created under the Plan
to deliver Common Stock or make payments; provided however, that, unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
Section 13. General Provisions
(a) The Committee may require each person purchasing or receiving shares
pursuant to an Award to represent to and agree with the Corporation in writing
that such person is acquiring the shares without a view to the distribution
thereof. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
Notwithstanding any other provision of the Plan or agreements made pursuant
thereto, the Corporation shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock under the Plan prior to
fulfillment of all of the following conditions:
(1) Listing or approval for listing upon notice of issuance, of such
shares on the New York Stock Exchange, Inc., or such other securities
exchange as may at the time be the principal market for the Common Stock;
(2) Any registration or other qualification of such shares of the
Corporation under any state or federal law or regulation, or maintaining in
effect any such registration or other qualification which the Committee
shall, in its absolute discretion upon the advice of counsel, deem
necessary or advisable; and
21
(3) Obtaining any other consent, approval, or permit from any state
or federal governmental agency which the Committee shall, in its absolute
discretion after receiving the advice of counsel, determine to be necessary
or advisable.
(b) Nothing contained in the Plan shall prevent the Corporation or any
subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.
(c) Adoption of the Plan shall not confer upon any employee any right to
continued employment, nor shall it interfere in any way with the right of the
Corporation or any subsidiary or Affiliate to terminate the employment of any
employee at any time.
(d) No later than the date as of which an amount first becomes includible
in the gross income of the participant for federal income tax purposes with
respect to any Award under the Plan, the participant shall pay to the
Corporation, or make arrangements satisfactory to the Corporation regarding the
payment of, any federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount. Unless otherwise determined by
the Corporation, withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Award that gives rise to the
withholding requirement. The obligations of the Corporation under the Plan
shall be conditional on such payment or arrangements, and the Corporation and
its Affiliates shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment otherwise due to the participant. The Committee
may establish such procedures as it deems appropriate, including making
irrevocable elections, for the settlement of withholding obligations with Common
Stock.
(e) Reinvestment of dividends in additional Restricted Stock at the time
of any dividend payment shall only be permissible if sufficient shares of Common
Stock are available under Section 3 for such reinvestment (taking into account
then outstanding Stock Options and other Awards).
(f) The Committee shall establish such procedures as it deems appropriate
for a participant to designate a beneficiary to whom any amounts payable in the
event of the participant's death are to be paid or by whom any rights of the
participant, after the participant's death, may be exercised.
(g) In the case of a grant of an Award to any employee of a Corporation
subsidiary, the Corporation may, if the Committee so directs, issue or transfer
the shares of Common Stock, if any, covered by the Award to the subsidiary, for
such lawful consideration as the Committee may specify, upon the condition or
understanding that the subsidiary will transfer the shares of Common Stock to
the employee in accordance with the terms of the Award specified by the
Committee pursuant to the provisions of the Plan.
22
(h) Notwithstanding the foregoing, if any right granted pursuant to this
Plan would make a Change in Control transaction ineligible for pooling-of-
interests accounting under APB No. 16 that but for the nature of such grant
would otherwise be eligible for such accounting treatment, the Committee shall
have the ability to substitute for the cash payable pursuant to such grant
Common Stock with a Fair Market Value equal to the cash that would otherwise be
payable hereunder.
(i) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to principles of conflict of laws.
Section 14. Effective Date of Plan
The Plan shall be effective as of the date it is approved by at least a
majority of the outstanding shares of Common Stock of the Corporation.