Note 9 - Shareholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 9: Stockholders’ Equity

Common Stock

We are authorized to issue 500,000,000 shares of common stock, $0.25 par value per share, of which 369,528,345 shares of common stock were issued as of December 31, 2014. All of our currently outstanding shares of common stock are listed on the New York Stock Exchange under the symbol “HL”.

Subject to the rights of the holders of any outstanding shares of preferred stock, each share of common stock is entitled to: (i) one vote on all matters presented to the stockholders, with no cumulative voting rights; (ii) receive such dividends as may be declared by the Board of Directors out of funds legally available therefor; and (iii) in the event of our liquidation or dissolution, share ratably in any distribution of our assets.

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 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		Annual 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

The following table summarizes the common stock dividends declared by our Board of Directors:

	(A)		(B)		(C)		(A+B+C)
Declaration date	Silver-price- linked component per share		Minimum annual component per share		Special dividend per share		Total dividend per share		Total dividend amount (in millions)		Month of payment
November 8, 2011	$	0.02	$	—	$	—	$	0.02	$	5.6	December 2011
February 17, 2012	$	0.01	$	0.0025	$	—	$	0.0125	$	3.6	March 2012
May 8, 2012	$	0.02	$	0.0025	$	—	$	0.0225	$	6.4	June 2012
August 7, 2012	$	—	$	0.0025	$	—	$	0.0025	$	0.7	September 2012
November 2, 2012	$	0.02	$	0.0025	$	—	$	0.0225	$	6.4	December 2012
February 25, 2013	$	—	$	0.0025	$	0.01	$	0.0125	$	3.6	March 2013
May 10, 2013	$	—	$	0.0025	$	—	$	0.0025	$	0.7	June 2013
August 8, 2013	$	—	$	0.0025	$	—	$	0.0025	$	0.9	August 2013
November 5, 2013	$	—	$	0.0025	$	—	$	0.0025	$	0.9	December 2013
February 21, 2014	$	—	$	0.0025	$	—	$	0.0025	$	0.9	March 2014
May 5, 2014	$	—	$	0.0025	$	—	$	0.0025	$	0.9	June 2014
July 31, 2014	$	—	$	0.0025	$	—	$	0.0025	$	0.9	September 2014
November 5, 2014	$	—	$	0.0025	$	—	$	0.0025	$	0.9	December 2014
February 17, 2015	$	—	$	0.0025	$	—	$	0.0025	$	0.9	March 2015

Because the average realized silver prices for the second and fourth quarters of 2012, along with all periods in 2013 and 2014, were below the minimum threshold of $30, according to the policy no silver-price-linked component was declared or paid. However, on February 25, 2013, our Board of Directors declared a special common stock dividend of $0.01 per share, in addition to the minimum dividend of $0.0025 per share, for an aggregate dividend of $3.6 million paid in March 2013. Prior to 2011, no dividends had been declared on our common stock since 1990. The declaration and payment of common stock dividends is at the sole discretion of our Board of Directors.

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. As of December 31, 2014, 934,100 shares have been repurchased under the program, at an average price of $3.99 per share, leaving 19.1 million shares that may yet be purchased under the program. The closing price of our common stock at February 16, 2015, was $3.42 per share.

 Status of Warrants

At December 31, 2013, there were 22,307,623 common stock purchase warrants outstanding, all of which were exercised during 2014 for total proceeds of approximately $54.4 million. As of December 31, 2014, there were no stock purchase warrants outstanding. 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 were paid to the United States and the Coeur d'Alene Indian Tribe.

Preferred Stock

Our certificate of incorporation authorizes us to issue 5,000,000 shares of preferred stock, par value $0.25 per share. The preferred stock is issuable in series with such voting rights, if any, designations, powers, preferences and other rights and such qualifications, limitations and restrictions as may be determined by our Board of Directors. The Board may fix the number of shares constituting each series and increase or decrease the number of shares of any series. As of December 31, 2014, 157,816 shares of Series B preferred stock were outstanding. Our Series B preferred stock is listed on the New York Stock Exchange under the symbol “HL PB.”

Ranking

The Series B preferred stock ranks senior to our common stock and any shares of Series A junior participating preferred stock (none of which have ever been issued) with respect to payment of dividends, and amounts due upon liquidation, dissolution or winding up.

While any shares of Series B preferred stock are outstanding, we may not authorize the creation or issue of any class or series of stock that ranks senior to the Series B preferred stock as to dividends or amounts due upon liquidation, dissolution or winding up without the consent of the holders of 66 2/3% of the outstanding shares of Series B preferred stock and any other series of preferred stock ranking on a parity with respect to the Series B preferred stock as to dividends and amounts due upon liquidation, dissolution or winding up, voting as a single class without regard to series.

Dividends

Series B preferred stockholders are entitled to receive, when, as and if declared by the Board of Directors out of our assets legally available therefor, cumulative cash dividends at the rate per annum of $3.50 per share of Series B preferred stock. Dividends on the Series B preferred stock are payable quarterly in arrears on October 1, January 1, April 1 and July 1 of each year (and, in the case of any undeclared and unpaid dividends, at such additional times and for such interim periods, if any, as determined by the Board of Directors), at such annual rate. Dividends are cumulative from the date of the original issuance of the Series B preferred stock, whether or not in any dividend period or periods we have assets legally available for the payment of such dividends. Accumulations of dividends on shares of Series B preferred stock do not bear interest.

All quarterly dividends on our Series B preferred stock for 2012, 2013 and 2014 were declared and paid in cash.

Redemption

The Series B preferred stock is redeemable at our option, in whole or in part, at $50 per share, plus all dividends undeclared and unpaid on the Series B preferred stock up to the date fixed for redemption.

Liquidation Preference

The Series B preferred stockholders are entitled to receive, in the event that we are liquidated, dissolved or wound up, whether voluntary or involuntary, $50 per share of Series B preferred stock plus an amount per share equal to all dividends undeclared and unpaid thereon to the date of final distribution to such holders (the “Liquidation Preference”), and no more. Until the Series B preferred stockholders have been paid the Liquidation Preference in full, no payment will be made to any holder of Junior Stock upon our liquidation, dissolution or winding up. The term “junior stock” means our common stock and any other class of our capital stock issued and outstanding that ranks junior as to the payment of dividends or amounts payable upon liquidation, dissolution and winding up to the Series B preferred stock. As of December 31, 2014 and 2013, our Series B preferred stock had a Liquidation Preference of $7.9 million.

 Voting Rights

Except in certain circumstances and as otherwise from time to time required by applicable law, the Series B preferred stockholders have no voting rights and their consent is not required for taking any corporate action. When and if the Series B preferred stockholders are entitled to vote, each holder will be entitled to one vote per share.

Conversion

Each share of Series B preferred stock is convertible, in whole or in part at the option of the holders thereof, into shares of common stock at a conversion price of $15.55 per share of common stock (equivalent to a conversion rate of 3.2154 shares of common stock for each share of Series B preferred stock). The right to convert shares of Series B preferred stock called for redemption will terminate at the close of business on the day preceding a redemption date (unless we default in payment of the redemption price).

Stock Award Plans

We use stock-based compensation plans to aid us in attracting, retaining and motivating our employees, as well as to provide us with the ability to provide incentives more directly linked to increases in stockholder value. These plans provide for the grant of options to purchase shares of our common stock and the issuance of restricted stock units.

Stock-based compensation expense amounts recognized for the years ended December 31, 2014, 2013 and 2012 were approximately $5.0 million, $4.5 million, and $3.1 million, respectively.  Over the next twelve months, we expect to recognize approximately $2.8 million in additional compensation expense as the remaining options and restricted stock units vest.

Stock Incentive Plans

 During the second quarter of 2010, our stockholders voted to approve the adoption of our 2010 Stock Incentive Plan and to reserve up to 20,000,000 shares of common stock for issuance under the plan.  The Board of Directors committee that administers the 2010 plan has broad authority to fix the terms and conditions of individual agreements with participants, including the duration of the award and any vesting requirements. As of December 31, 2014, there were 15,414,727 shares available for future grant under the 2010 plan.

Directors’ Stock Plan

In 1995, we adopted the Hecla Mining Company Stock Plan for non-employee Directors (the “Directors’ Stock Plan”), which may be terminated by our Board of Directors at any time. Each non-employee director is to be credited on May 30 of each year with that number of shares determined by dividing $24,000 by the average closing price for our common stock on the New York Stock Exchange for the prior calendar year. All credited shares are held in trust for the benefit of each director until delivered to the director. Delivery of the shares from the trust occurs upon the earliest of: (1) death or disability; (2) retirement; (3) a cessation of the director’s service for any other reason; or (4) a change in control. The shares of our common stock credited to non-employee directors pursuant to the Directors’ Stock Plan may not be sold until at least six months following the date they are delivered. A maximum of one million shares of common stock may be granted pursuant to the Directors’ Stock Plan. During 2014, 2013, and 2012, respectively, 39,468, 28,050, and 18,492 shares were credited to the non-employee directors. During 2014, 2013 and 2012, $109,000, $111,000, and $80,000, respectively, was charged to general and administrative expense associated with the Directors’ Stock Plan. At December 31, 2014, there were 555,167 shares available for grant in the future under the plan.

In addition to the foregoing, in May of each year, each non-employee director is also granted additional common stock under our 2010 Stock Incentive Plan. For 2014, 2013, and 2012, respectively, 110,910, 94,200, and 59,484 shares were credited to the non-employee directors, and $366,000, $276,000, and $275,000 respectively, was charged to operations associated with the 2010 Stock Incentive Plan.

 Status of Stock Options

No stock options have been granted since 2010. The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2014 before applicable income taxes was zero, based on our closing stock price of $2.79 per common share at December 31, 2014. All options outstanding were fully vested at December 31, 2014.

Transactions concerning stock options pursuant to our stock option plans are summarized as follows:

	Shares Subject to Options			Weighted Average Exercise Price
Outstanding, December 31, 2013		612,745		$	4.29
Expired		(353,403	)	$	3.42
Outstanding, December 31, 2014		259,342		$	5.47

All of the outstanding options above were exercisable at December 31, 2014. The weighted average remaining contractual term of options outstanding and exercisable at December 31, 2014 was less than one year. There were no options exercised during 2014, 2013 or 2012.

Restricted Stock Units

Unvested restricted stock units granted by the board of directors to employees are summarized as follows:

	Shares			Weighted Average Grant Date Fair Value per Share
Unvested, January 1, 2014		2,085,301		$	3.56
Granted		1,457,267		$	3.30
Canceled		(72,031	)	$	3.10
Distributed		(1,234,962	)	$	3.74
Unvested, December 31, 2014		2,235,575		$	3.31

The 2,235,575 unvested units at December 31, 2014 will vest as follows:

1,012,100	in June 2015
777,878	in June 2016
26,000	in August 2016
419,597	in June 2017

Unvested units may be forfeited by participants through termination of employment in advance of vesting. We have recognized approximately $3.3 million in compensation expense since grant date, and will record an additional $4.1 million in compensation expense over the remaining vesting period related to these units.

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 tax withholding obligations through net share settlement, pursuant to which the Company withholds the number of shares necessary to satisfy such withholding obligations.  Pursuant to such net settlements, in 2014 we repurchased 695,961 shares for $2.3 million, or approximately $3.27 per share.