Note 8 - Shareholders' Equity

6 Months Ended

Jun. 30, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 8.    Shareholders’ Equity

Stock-based Compensation Plans

We periodically grant restricted stock unit awards and/or shares of common stock to our employees and directors. We measure compensation cost for restricted stock units and stock grants at the closing price of our stock at the time of grant. Restricted stock unit grants vest after a specified period with compensation cost amortized over that period. Although we have no current plans to issue stock options, we may do so in the future.

On March 3, 2014, the Board of Directors granted 1,345,072 restricted stock units to employees in payment of annual and long-term incentive compensation for the period ended December 31, 2013. The restricted stock units will be distributed in August 2014, and the $4.6 million in expense related to the unit awards was recognized as of December 31, 2013.

On June 25, 2014, the Board of Directors granted the following restricted stock unit awards to employees:

• 1,251,213 restricted stock units, with one third of those vesting in June 2015, one third vesting in June 2016, and one third vesting in June 2017;

• 107,576 restricted stock units, with one half of those vesting in June 2015 and one half vesting in June 2016; and

• 87,872 restricted stock units that vest in June 2015.

The $3.1 million in expense related to the unit awards discussed above vesting in 2015 will be recognized on a straight-line basis over the next twelve months, while the $1.7 million in expense related to awards vesting in 2016 and 2017 will be recognized over the next twenty-four and thirty-six month periods, respectively.

In the second quarter of 2014, a total of 150,378 shares of common stock were granted to nonemployee directors. We granted a total of 122,250 shares of common stock to nonemployee directors in the second quarter of 2013.

Stock-based compensation expense for restricted stock unit grants to employees and shares issued to nonemployee directors recorded in the first six months of 2014 totaled $2.6 million, compared to $1.9 million in the same period last year.

In connection with the vesting of restricted stock units, employees have in the past, at their election and when permitted by us, chosen to satisfy their minimum tax withholding obligations through net share settlement, pursuant to which the Company withholds the number of shares necessary to satisfy such withholding obligations.  As a result, in the first quarter of 2014 we withheld 11,090 shares for approximately $40,000, or approximately $3.57 per share.

Common Stock Dividends

In September 2011 and February 2012, our Board of Directors adopted a common stock dividend policy that has two components: (1) a dividend that links the amount of dividends on our common stock to our average quarterly realized silver price in the preceding quarter, and (2) a minimum annual dividend of $0.01 per share of common stock, in each case, payable quarterly, when and if declared. For illustrative purposes only, the table below summarizes potential per share dividend amounts at different quarterly average realized price levels according to the first component of the policy:

Quarterly average realized silver price per ounce	Quarterly dividend per share	Annualized dividend per share
$30	$0.01	$0.04
$35	$0.02	$0.08
$40	$0.03	$0.12
$45	$0.04	$0.16
$50	$0.05	$0.20
$55	$0.06	$0.24
$60	$0.07	$0.28

On July 29, 2014, our Board of Directors declared a common stock dividend, pursuant to the minimum annual dividend component of the policy described above, of $0.0025 per share, for a total dividend of $0.9 million payable in September 2014. Because the average realized silver price for the second quarter of 2014 was $19.62 per ounce, below the minimum threshold of $30 according to the policy, no silver-price-linked component was declared or paid. The declaration and payment of common stock dividends is at the sole discretion of our Board of Directors.

Status of Warrants

At December 31, 2013, there were 22,307,623 common stock purchase warrants outstanding. During the first six months of 2014, 5,856,092 warrants were exercised for total proceeds of approximately $14.1 million. At June 30, 2014, there were 16,451,531 Series 3 stock purchase warrants outstanding having an exercise price of $2.45. Under the financial terms of the 2011 Consent Decree settling the Coeur d'Alene Basin environmental (CERCLA) litigation, the proceeds from the exercise of our outstanding warrants are paid to the United States and the Coeur d'Alene Indian Tribe within 30 days after the end of the quarter when exercised. Thus, in July 2014, we paid $14.1 million in warrant proceeds over to the United States and the Tribe. The remaining Series 3 warrants expire on August 10, 2014, and any proceeds received from their exercise will also be paid over as part of the settlement. To the extent the warrants are not exercised, we are responsible for the final payment under the Consent Decree. 

Common Stock Repurchase Program

On May 8, 2012, we announced that our Board of Directors approved a stock repurchase program.  Under the program, we are authorized to repurchase up to 20 million shares of our outstanding common stock from time to time in open market or privately negotiated transactions, depending on prevailing market conditions and other factors.  The repurchase program may be modified, suspended or discontinued by us at any time. Whether or not we engage in repurchases from time to time may depend on a variety of factors, including not only price and cash resources, but customary black-out restrictions, whether we have any material inside information, limitations on share repurchases or cash usage that may be imposed by our credit agreement or in connection with issuances of securities, alternative uses for cash, applicable law, and other investment opportunities from time to time. As of June 30, 2014, a total of 934,100 shares have been purchased at an average price of $3.99 per share, including 533,800 shares purchased during the first six months of 2014 at an average price of $2.81 per share. As of June 30, 2014, there were approximately 19.1 million shares that may yet be purchased under the program. The closing price of our common stock at July 28, 2014, was $3.26 per share.