Note

10:

Stockholders’ Equity

Common Stock

We are authorized to issue

750,000,000

shares of common stock,

$0.25

par value per share, of which

487,830,728

shares of common stock were issued and

5,226,791

shares issued and held in treasury, for a net of

482,603,937

shares outstanding as of

December

31,

2018.

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

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: (

) a dividend that links the amount of dividends on our common stock to our average quarterly realized silver price in the preceding quarter, and (

) a minimum annual dividend of

$0.01

per share of common stock, in each case, payable quarterly, if and 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, 2016,

2017

and

2018:

	(A)	(B)	(A+B)
Declaration date	Silver-price- linked component per share	Minimum annual component per share	Total dividend per share	Total dividend amount (in millions)	Month of payment
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
May 4, 2017	$—	$0.0025	$0.0025	$1.0	June 2017
August 3, 2017	$—	$0.0025	$0.0025	$1.0	September 2017
November 7, 2017	$—	$0.0025	$0.0025	$1.0	December 2017
February 14, 2018	$—	$0.0025	$0.0025	$1.0	March 2018
May 9, 2018	$—	$0.0025	$0.0025	$1.0	June 2018
August 8, 2018	$—	$0.0025	$0.0025	$1.2	September 2018
November 6, 2018	$—	$0.0025	$0.0025	$1.2	December 2018
February 20, 2019	$—	$0.0025	$0.0025	$1.2	March 2019

Because the average realized silver prices for all periods in

2016,

2017

and

2018

were below the minimum threshold of

$30,

according to the policy

silver-price-linked component was declared or paid. Prior to

2011,

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,

as amended, we

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 (

which we expect to replace with a new shelf registration statement on Form S-

in late

February 2019).

As of

December

31,

2018,

we had sold

7,173,614

shares under the agreement for proceeds of approximately

$24.5

million, net of commissions of approximately

$0.6

million. We sold

2,564,767

shares under the agreement in

2018

for total proceeds of

$6.7

million, net of commissions of approximately

$0.1

million.

Common Stock Repurchase Program

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

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,

2018,

934,100

shares have been repurchased under the program, at an average price of

$3.99

per share, leaving approximately

19.1

million shares that

may

yet be purchased under the program. The closing price of our common stock at

February 19, 2019,

was

$2.92

per share.

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,

2018,

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 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

2016,

2017

and

2018

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

more. Until the Series B preferred stockholders have been paid the Liquidation Preference in full,

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,

2018

and

2017,

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

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 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,

2018,

2017

and

2016

were approximately

$6.3

million,

$6.3

million, and

$6.2

million, respectively. Over the next

twelve

months, we expect to recognize approximately

$4.5

million in additional compensation expense as outstanding restricted stock units and performance-based shares 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,

2018,

there were

3,267,759

shares available for future grant under the

2010

plan.

Directors’ Stock Plan

2017,

we adopted the amended and restated 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 each year with that number of shares determined by dividing

$120,000

by the average closing price for our common stock on the New York Stock Exchange for the prior calendar year. A minimum of

25%

of the shares credited each year is held in trust for the benefit of each director until delivered to the director. Each director

may

elect, prior to the

first

day of the applicable year, to have a greater percentage contributed to the trust for that year. Delivery of the shares from the trust occurs upon the earliest of: (

) death or disability; (

) retirement; (

) a cessation of the director’s service for any other reason; (

) a change in control; or (

) at the election of the director at any time, provided, however, that shares must be held in the trust for at least

two

years prior to delivery. During

2018,

2017,

and

2016,

161,630,

156,122,

and

68,462

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

2018,

2017

and

2016,

$593,000,

$774,000,

and

$271,000,

respectively, was charged to general and administrative expense associated with the shares issued to the non-employee directors. At

December

31,

2018,

there were

3,120,707

shares available for grant in the future under the plan.

In addition to the foregoing, for

2016,

120,911

shares were credited to the non-employee directors, and

$532,000

was charged to general and administrative expense, 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, 2018		2,095,318		$	4.52
Granted (unvested)		1,975,662		$	3.53
Canceled		(196,594	)	$	3.48
Distributed (vested)		(1,184,918	)	$	3.91
Unvested, December 31, 2018		2,689,468		$	4.14

The

2,689,468

unvested units at

December

31,

2018

are scheduled to vest as follows:

1,246,291		in June 2019
866,680		in June 2020
576,497		in June 2021

Unvested units will be forfeited by participants through termination of employment in advance of vesting, with the exception of termination due to retirement if certain criteria are met. Since the earliest grant date of unvested units (which was

2016

), we have recognized approximately

$5.2

million in compensation expense, including approximately

$3.8

million recognized in

2018,

and expect to record an additional

$5.9

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

December

31,

2018

June 2021.

Performance-Based Shares

We periodically grant performance-based share awards to certain executive employees. The value of the awards is based on the ranking of the market performance of our common stock relative to the performance of the common stock of a group of peer companies over a

three

-year measurement period. The number of shares to be issued is based on the value of the awards divided by the share price at grant date. The compensation cost is measured using a Monte Carlo simulation to estimate their value at grant date. Since the earliest grant date of unvested units (which was

2017

), we have recognized approximately

$0.5

million in compensation expense, including approximately

$0.4

million recognized in

2018,

and expect to record an additional

$0.9

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

December

31,

2018

December 31, 2020.

In connection with the vesting of restricted stock units, performance-based shares 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 and pay the obligations in cash. Pursuant to such net settlements, in

2018

we withheld

697,341

shares valued at approximately

$2.7

million, or approximately

$3.86

per share. In

2017,

we withheld

588,240

shares valued at approximately

$2.9

million, or approximately

$4.88

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

Warrants

As discussed in

Note

, we issued

4,136,000

warrants to purchase

one

share of our common stock to holders of warrants to purchase Klondex common stock under the terms of the Klondex acquisition, and all of the warrants were outstanding as of

December

31,

2018.

2,068,000

of the warrants have an exercise price of

$8.02

and expire in

April 2032.

2,068,000

of the warrants have an exercise price of

$1.57

and expire in

February 2029.