Note

Stockholders’ Equity

Common Stock

We are authorized to issue

500,000,000

shares of common stock,

$0.25

par value per share, of which

399,228,085

shares of common stock were issued as of

December

31,

2016.

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

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 quarterly common stock dividends declared by our board of directors for the years ended

December

31,

2014,

2015

and

2016:

	(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
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
May 6, 2015	$	—	$	0.0025	$	—	$	0.0025	$	0.9	June 2015
August 6, 2015	$	—	$	0.0025	$	—	$	0.0025	$	0.9	September 2015
November 3, 2015	$	—	$	0.0025	$	—	$	0.0025	$	0.9	December 2015
February 20, 2016	$	—	$	0.0025	$	—	$	0.0025	$	0.9	March 2016
May 4, 2016	$	—	$	0.0025	$	—	$	0.0025	$	1.0	June 2016
August 3, 2016	$	—	$	0.0025	$	—	$	0.0025	$	1.0	September 2016
November 4, 2016	$	—	$	0.0025	$	—	$	0.0025	$	1.0	December 2016
February 21, 2017	$	—	$	0.0025	$	—	$	0.0025	$	1.0	March 2017

Because the average realized silver prices for all periods in

2014,

2015

and

2016

were below the minimum threshold of

$30

according to the policy no silver-price-linked component was declared or paid. 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.

At-The-Market Equity Distribution Agreement

Pursuant to an equity distribution agreement dated

February

23,

2016,

may

issue and sell from time to time through ordinary broker transactions shares of our common stock having an aggregate offering price of up to

$75

million, with the net proceeds available for general corporate purposes. The terms of sales transactions under the agreement, including trading day(s), number of shares sold in the aggregate, number of shares sold per trading day, and the floor selling price per share, are proposed by us to the sales agent. Whether or not we engage in sales from time to time

may

depend on a variety of factors, including share price, our cash resources, customary black-out restrictions, and whether we have any material inside information. The agreement can be terminated by us at any time. The shares issued under the equity distribution agreement are registered under the Securities Act of

1933,

as amended, pursuant to our shelf registration statement on Form S-

which was filed with the SEC on

February

23,

2016.

As of

December

31,

2016,

we had sold

2,780,087

shares under the agreement for proceeds of approximately

$8.1

million, net of commissions and fees of approximately

$166

thousand.

Common Stock Repurchase Program

May

2012,

we announced that our board of directors approved a stock repurchase program. Under the program, we are authorized to repurchase up to

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,

2016,

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

20,

2017,

was

$6.58

per share.

Status of Warrants

As of

December

31,

2015,

we had

2,249,550

warrants outstanding, with each warrant exercisable for

0.1622

of a share of our common stock at an exercise price of

$6.17

per share. The warrants expired in

March

2016,

and there were no warrants outstanding as of

December

31,

2016.

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,

2016,

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 issuance 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

2/3%

of the outstanding shares of Series B preferred stock and any other series of preferred stock ranking on a parity with 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

January

April

and

July

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

2014,

2015

and

2016

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,

2016

and

2015,

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, the issuance of restricted stock units, and other equity-based awards.

Stock-based compensation expense amounts recognized for the years ended

December

31,

2016,

2015

and

2014

were approximately

$6.2

million,

$5.4

million, and

$5.0

million, respectively. Over the next

twelve

months, we expect to recognize approximately

$3.2

million in additional compensation expense as outstanding restricted stock units vest.

Stock Incentive Plan

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 has broad authority under the

2010

plan 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,

2016,

there were

8,302,326

shares available for future grant under the

2010

plan.

Directors’ Stock Plan

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 credited on

May

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

2016,

2015,

and

2014,

68,462,

48,244,

and

39,468

shares, respectively, were credited to the non-employee directors. During

2016,

2015

and

2014,

$271,000,

$150,000,

and

$109,000,

respectively, was charged to general and administrative expense associated with the Directors’ Stock Plan. At

December

31,

2016,

there were

438,459

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

2016,

2015,

and

2014,

120,911,

186,888,

and

110,910

shares, respectively, were credited to the non-employee directors, and

$532,000,

$456,000,

and

$366,000

respectively, was charged to operations associated with the

2010

Stock Incentive Plan.

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, 2016		3,375,798		$	2.73
Granted (unvested)		1,138,669		$	4.40
Canceled		(205,032	)	$	2.70
Distributed (vested)		(1,573,871	)	$	2.82
Unvested, December 31, 2016		2,735,564		$	3.41

The

2,735,564

unvested units at

December

31,

2016

are scheduled to vest as follows:

	790,253		in June 2017
	650,137		in July 2017
	379,743		in June 2018
	579,437		in July 2018
	335,994		in June 2019

Unvested units

may

be forfeited by participants through termination of employment in advance of vesting. Since the earliest grant date of unvested units (which was

2014),

we have recognized approximately

$4.8

million in compensation expense, including approximately

$3.6

million recognized in

2016,

and expect to record an additional

$4.5

million in compensation expense over the remaining vesting period related to these units. The latest vesting date for unvested units as of

December

31,

2016

June

2019.

In connection with the vesting of restricted stock units and other stock grants, 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 we withhold the number of shares necessary to satisfy such withholding obligations. Pursuant to such net settlements, in

2016

we repurchased

1,010,509

shares valued at approximately

$3.5

million, or approximately

$3.44

per share. In

2015,

we withheld

613,698

shares valued at approximately

$1.9

million, or approximately

$3.05

per share. These shares become treasury shares unless we cancel them.