Exhibit 10.3

 

 

 

 

 

HECLA MINING COMPANY

KEY EMPLOYEE DEFERRED COMPENSATION PLAN

 

Amended, Restated, and Effective December 1, 2014

 

 

 

 

 

 
 

--------------------------------------------------------------------------------

 

 

SECTION 1

 

INTRODUCTION AND DEFINITIONS

 

1.1     Purpose of the Plan. The Company established this Key Employee Deferred
Compensation Plan effective July 18, 2002, to assist the Company in attracting
and retaining key executive officers and select management, encouraging their
long term commitment to the success of the Company and providing an opportunity
to participate in the increase in value of the Company. To this end, the Plan
provides for (i) Participant elections to defer Base Salary, (ii) Participant
elections to defer Performance-Based Compensation, (iii) Participant Elections
to defer Restricted Stock Units, (iv) Company Matching Contributions, and (iv)
Discretionary Awards.

 

The Plan was subsequently amended to comply with Section 409A effective January
1, 2005, and January 1, 2009, to comply with the final regulations promulgated
pursuant to Section 409A. This document is an amendment and restatement of the
Plan effective December 1, 2014. However, grandfathered accounts which were
frozen effective December 31, 2004, shall be governed by the terms of the prior
Plan document in effect at that time. Nothing herein shall be construed to
modify any Accounts or the time or form of payment of Accounts in existence as
of December 1, 2014.

 

The Plan is intended to be “unfunded” within the meaning of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”). Accordingly, it is
intended that the Plan be a “top hat plan” that is exempt from the requirements
of Parts II, III and IV of Title I of ERISA pursuant to §§ 201(2), 301(a)(3) and
401(a)(1) of ERISA.

 

1.2     Definitions. The following words and phrases shall have the following
meanings, unless a different meaning is plainly required by the context. Any
masculine terminology used in the Plan shall also include the feminine gender
and the definition of any terms in the singular shall also include the plural.

 

Account means the separate bookkeeping account or accounts established and
maintained for a Participant to record a Participant’s interest under the Plan
attributable to amounts credited to the Participant pursuant to the Plan. The
Account or Accounts of a Participant shall consist of Company Stock Accounts and
Investment Accounts. The Company shall maintain sub-Accounts for a Participant
as necessary to facilitate the administration of distributions under the Plan.

 

Active Participant means an Employee who is eligible to participate in the Plan
for a Plan Year, as described in Section 3.1.

 

Base Salary means a participant’s regular base salary, but shall not include
cash bonuses and awards made under the Stock Plan, Hecla Mining Company Annual
Incentive Plan or Hecla Mining Company Executive and Senior Management Long-Term
Performance Payment Plan or any other bonus or award that is treated as
Performance-Based Compensation.

 

 
2

--------------------------------------------------------------------------------

 

 

Beneficiary means the person or persons designated as such by the Participant to
receive all or a part of the Participant’s vested Account balance in the event
of the Participant’s death prior to the full payment thereof. Each such
designation shall be filed with the Company in a form acceptable to the Company
and shall become effective only when received by the Company. Designated persons
or entities shall not be considered Beneficiaries until the death of the
Participant. If a Participant becomes divorced after having named his or her
spouse as a Beneficiary, the prior designation of the spouse as Beneficiary
shall be void. After the divorce, the Participant may, in his or her discretion,
designate his or her ex-spouse as a Beneficiary by filing a new beneficiary
designation form with the Company.

 

Board means the Board of Directors of the Company.

 

Change of Control means a change in the ownership or effective control of the
Company or the Participant’s Employer, or in the ownership of a substantial
portion of the assets of the Company or the Participant’s Employer. The
definition of “Change of Control” shall be construed in a manner consistent with
Section 409A.      

 

Code means the Internal Revenue Code of 1986, as amended from time to time.
References to the Code shall include the valid and binding governmental
regulations, court decisions and other regulatory and judicial authority issued
or rendered thereunder.     

 

Committee means the Compensation Committee of the Board or any committee or
other person or persons designated by the Board to administer the Plan. The
Board will cause the Committee to satisfy the applicable requirements of any
stock exchange on which the Common Stock may then be listed. To the extent
necessary for compliance with Section 16 of the Exchange Act, the Committee
means all of the members of the Committee who are “non-employee directors”
within the meaning of Rule 16b-3 adopted under the Exchange Act. All references
in the Plan to the Board shall mean such Committee or the Board.

 

Common Stock means the Company’s common stock, par value $0.25 per share.

 

Company means Hecla Mining Company, a Delaware corporation, and any successor.

 

Company Stock Account means an Account established and maintained for a
Participant to record the amount of any compensation deferred under the Plan in
the form of Stock Units, which may include elective deferrals of Base Salary,
Performance-Based Compensation or Restricted Stock Units, or amounts credited as
Matching Contributions or Discretionary Employer Contributions.

 

Deferral Election means the agreement executed by an Eligible Employee whereby
an Eligible Employee elects to defer Base Salary, Performance-Based
Compensation, or Restricted Stock Units.

 

Disability: a Participant is disabled if the Committee determines that:

 

(i)     The Participant is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months;

 

 
3

--------------------------------------------------------------------------------

 

 

(ii)     The Participant is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under an accident
and health plan covering employees of the Company; or

 

(iii)     The Participant is determined to be disabled by the Social Security
Administration.

 

The foregoing definition of Disability shall be construed in a manner consistent
with the treatment of “disability” as a payment event under Section 409A.

 

Discretionary Employer Contributions means discretionary amounts credited to a
Participant’s Company Stock Account pursuant to Section 3.4.

 

Eligible Employee means an Employee designated by the Committee as eligible to
participate in the Plan pursuant to Section 3.1.           

 

Employee means an individual employed by a Participating Employer.

 

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

 

Fair Market Value means, as of any given date, the value of a share of Common
Stock determined as follows: (a) if the Common Stock is listed or quotedon any
(i) established securities exchange (such as the New York Stock Exchange, the
NASDAQ Global Market and the NASDAQ Global Select Market); (ii) national market
system; or (iii) automated quotation system, its Fair Market Value shall be the
closing sales price for a share of Common Stock as quoted on such exchange or
system for such date or, if there is no closing sales price for a share of
Common Stock on the date in question, the closing sales price for a share of
Common Stock on the last preceding date for which such quotation exists, as
reported in The Wall Street Journal or such other source as the Committee deems
reliable; (b) 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 reasonably and in good faith.

 

Investment Account means the bookkeeping Account established and maintained for
a Participant to record the amount of Base Salary and Performance-Based
Compensation the Participant elected to defer and have credited in an account at
the equivalent cash value, plus deemed investment returns credited pursuant to
Section 4.3.

 

Matching Contribution means a matching contribution credited to a Participant’s
Company Stock Account pursuant to Section 3.3.

 

 
4

--------------------------------------------------------------------------------

 

 

Participant means an Eligible Employee who becomes a Participant in this Plan in
accordance with the provisions of Section 3.

 

Participating Employer means the Company and any other entity affiliated with
the Company and designated as a participating employer under this Plan from time
to time by the Company, and their respective successors and assigns. As of the
effective date of this restatement, the Participating Employers are set forth on
Exhibit A attached to the Plan. Exhibit A may be updated from time to time by
the Company.

 

Performance-Based Compensation means compensation where the amount of, or
entitlement to, the compensation is contingent on the satisfaction of
preestablished organizational or individual performance criteria relating to a
performance period of at least twelve (12) consecutive months in which the
Participant performs services including, but not limited to, awards made under
the Hecla Mining Company Annual Incentive Plan and Hecla Mining Company
Executive and Senior Management Long-Term Performance Payment Plan.
Organizational or individual performance criteria are considered preestablished
if established in writing no later than ninety (90) days after the commencement
of the period of service to which the criteria relates, provided that the
outcome is substantially uncertain at the time the criteria are established This
definition shall be interpreted and construed in a manner consistent with the
definition of “performance-based compensation” under Section 409A.

 

Plan means the Hecla Mining Company Key Employee Deferred Compensation Plan, as
the same may be in effect from time to time.

 

Plan Year means the calendar year (i.e., the twelve month period beginning on
each January 1 and ending on the following December 31).

 

Restricted Stock Units means an award of Stock Units made under the Stock Plan
or this Plan which is subject to vesting conditions specified in the applicable
award agreement and which may be deferred in accordance with Section 3.2.3.
     

 

Section 409A means Section 409A of the Code.

 

Separation from Service means a Participant’s “separation from service” with the
Participating Employers within the meaning of Section 409A and any related
administrative policies of the Participating Employers.

 

Specified Employee means a “specified employee” within the meaning of Section
409A.

 

Stock Plan means the Hecla Mining Company 2010 Stock Incentive Plan as in effect
from time to time, and any successor plan thereto.

 

Stock Unit means a unit having a value as of a given date equal to the Fair
Market Value of one (1) share of Common Stock on such date, and includes
Restricted Stock Units.

 

 
5

--------------------------------------------------------------------------------

 

 

Unforeseeable Emergency means a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the Participant’s
spouse, or a dependent (as defined in section 152(a) of the Code) of the
Participant, loss of the Participant’s property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. The circumstances that constitute
an Unforeseeable Emergency shall depend on the facts of each case, but, in any
case, payment may not be made to the extent the hardship may be relieved through
distributions or loans from a qualified plan maintained by the Company,
reimbursement or compensation by insurance or through liquidation of other
assets, to the extent such distribution or liquidation does not itself cause a
severe financial hardship. The foregoing definition of Unforeseeable Emergency
shall be construed in a manner consistent with the treatment of “unforeseeable
emergency” as a payment event under Section 409A.

 

 

SECTION 2

 

ADMINISTRATION

 

2.1.     Administration. The Committee shall have the authority, duty and power
to interpret and construe the provisions of the Plan as it deems appropriate, to
adopt, establish and revise rules, procedures and regulations relating to the
Plan, to determine the conditions subject to which any benefits may be payable,
to resolve all factual and legal questions concerning the status and rights of
the Participants and others under the Plan, including, but not limited to,
eligibility for benefits, and to make any other determinations which it believes
necessary or advisable for the administration of the Plan. Benefits under this
Plan will be payable only if the Committee decides in its discretion that the
applicant is entitled to them under the Plan. The Company shall have the duty
and responsibility of maintaining records, making the requisite calculations and
disbursing payments hereunder. The determinations, interpretations, and
regulations of the Committee and the calculations of the Company shall be final
and binding on all persons and parties concerned. The Committee may delegate any
of its duties and powers hereunder to the extent permitted by applicable law.

 

2.2     Liability. No current or former member of the Committee and no director,
officer or member of the Board of the Company or its affiliates shall be liable
to any persons for any actions taken under the Plan, or for any failure to
effect any of the objectives or purposes of the Plan, by reason of insolvency or
otherwise. Neither the officers nor any current or former member of the
Committee or the Board of Directors of the Company or any of its affiliates in
any way secures or guarantees the payment of any benefit or amount which may
become due and payable hereunder to or with respect to any Participant. Each
Participant and other person entitled at any time to payments hereunder shall
look solely to the assets of the Company for such payments as an unsecured,
general creditor. Nothing herein shall be construed to give a Participant,
Beneficiary or any other person or persons any right, title, interest or claim
in or to any specific asset, fund, reserve, account or property of any kind
whatsoever owned by the Company or in which it may have any right, title or
interest now or in the future. After benefits shall have been paid to or with
respect to a Participant or Beneficiary (as applicable) and such payment
purports to cover in full the benefit hereunder, such former Participant or
Beneficiary or other person or persons, as the case may be, shall have no
further right or interest in the other assets of the Company and its affiliates
in connection with this Plan.

 

 
6

--------------------------------------------------------------------------------

 

 

SECTION 3

 

ELIGIBILITY; DEFERRAL ELECTIONS; EMPLOYER CONTRIBUTIONS

 

3.1.     Eligibility. The Committee shall designate which Employees are eligible
to participate in the Plan. Eligible Employees shall be selected consistent with
the intent that the Plan be a “top hat” plan for a select group of management or
highly compensated employees under ERISA.

 

3.2.     Deferral Elections. An Eligible Employee may elect to defer a
percentage of his or her Base Salary, Performance-Based Compensation, and
Restricted Stock Units for a Plan Year. All Deferral Elections shall be made in
writing on a form, or pursuant to other electronic or non-written procedures, as
may be prescribed from time to time by the Committee and shall be irrevocable
for the Plan Year for which the Deferral Election was made. Deferral Elections
shall not automatically apply to future compensation of the same type payable
for any subsequent Plan Year unless otherwise permitted by the Committee and
specified by the Participant. Deferral Elections shall be made in accordance
with the following timing rules.

 

3.2.1     Base Salary. To be effective for a Plan Year, elections to defer Base
Salary must be made no later than the December 31 immediately preceding the Plan
Year for which services are performed to earn the Base Salary. However, a newly
hired or promoted Eligible Employee who first becomes eligible to participate in
the Plan after the start of a Plan Year may make a Deferral Election within
thirty (30) days after first becoming eligible to participate in the Plan to the
extent permitted by Section 409A.

 

3.2.2     Performance-Based Compensation. Elections to defer Performance-Based
Compensation shall generally be made no later than the December 31 immediately
preceding the Plan Year for which services are performed to earn the
Performance-Based Compensation. Notwithstanding the foregoing, the Committee
may, in its discretion, permit Deferral Elections for Performance-Based
Compensation on or before the date that is six months before the end of the
applicable performance period, provided that the Participant provides service
continuously from the later of the beginning of the performance period or the
date the performance criteria was established through the date the election is
made and the compensation has not become readily ascertainable and substantially
certain to be paid, all to the extent permitted by Section 409A. A newly hired
or promoted Eligible Employee who first becomes eligible to participate in the
Plan after the start of a Plan Year may make a Deferral Election within thirty
(30) days after first becoming eligible to participate in the Plan to the extent
permitted by Section 409A

 

 
7

--------------------------------------------------------------------------------

 

 

3.2.3        Restricted Stock Units. An Eligible Employee may elect to make a
Deferral Election with respect to Restricted Stock Units in accordance with the
following rules.

 

 

(a)

General Rule. Elections to defer Restricted Stock Units shall generally be made
no later than the December 31 immediately preceding the Plan Year in which the
Restricted Stock Units are granted.

 

 

(b)

Forfeitable Restricted Stock Units. With respect to Restricted Stock Units that
are subject to a condition requiring the Eligible Employee to provide services
for a period of at least twelve (12) months from the grant date to avoid
forfeiture of payment for the Restricted Stock Units, the Committee may permit
the Deferral Election to be made no later than thirty (30) days after the grant
date and at least twelve (12) months in advance of the earliest date at which
the forfeiture condition could lapse, all to the extent permitted by Section
409A.

 

 

(c)

Short Term Deferrals. The Committee may permit a Deferral Election may to be
made with respect to Restricted Stock Units that, absent a Deferral Election,
would be treated as a “short term deferral” within the meaning of Section 409A,
provided that the Deferral Election (i) is made at least twelve (12) months
before the scheduled vesting date and (ii) provides that payment for the
Restricted Stock Units will be deferred for a period of not less than five (5)
years from the date such payment would otherwise have been paid, except that
payment may be made earlier in the event of the Participant’s death, Disability,
Change in Control, or Unforeseeable Emergency, all to the extent permitted by
Section 409A.

 

 

(d)

Newly Eligible. A newly hired or promoted Eligible Employee who first becomes
eligible to participate in the Plan after the start of a Plan Year may make a
Deferral Election within thirty (30) days after first becoming eligible to
participate in the Plan to the extent permitted by Section 409A

 

3.3        Matching Contributions. If a Participant makes a Deferral Election
for Base Salary or Performance-Based Compensation for a Plan Year and elects to
have all or a portion of such amount credited to the Company Stock Account, the
Committee shall credit to the Participant’s Company Stock Account, at the end of
each quarter, a 10% matching contribution, unless the Committee determines that
another percentage shall apply for a Plan Year. The Matching Contribution shall
be denominated in Stock Units in accordance with Section 4.4.

 

3.4        Discretionary Employer Contributions. The Committee may, in its sole
discretion, credit an amount determined by the Committee to a Participant’s
Company Stock Account. Any Discretionary Employer Contribution shall be
denominated in Stock Units. If the Discretionary Employer Contribution is
initially determined as a cash amount, the number of Stock Units shall be
determined in accordance with Section 4.4.

 

3.5        Cancellation Due to Unforeseeable Emergency. A Participant may elect
to cancel the Participant’s Deferral Election due to an Unforeseeable Emergency.
The Deferral Election must be cancelled, not merely postponed or otherwise
delayed. Any subsequent Deferral Election will be subject to the provisions
governing initial deferral elections.

 

 
8

--------------------------------------------------------------------------------

 

 

SECTION 4

 

ACCOUNTS

 

4.1.     Establishment of Accounts. The Company shall establish and maintain on
its books an Account for each Participant. Each Account shall be designated by
the name of the Participant for whom established.

 

4.2     Participant Election of Account. A Participant who elects to defer Base
Salary or Performance-Based Compensation may elect, at the same time as the
Deferral Election is made, to have such amounts credited to an Investment
Account or Company Stock Account. All Restricted Stock Units deferred under the
Plan, Matching Contributions, and Employer Discretionary Contributions for a
Participant shall be credited as Stock Units to the Participant’s Company Stock
Account.

 

4.3.     Investment Account. The Committee shall credit each Investment Account
with deemed investment earnings and gains as of the last day of each calendar
month. The amount credited shall equal the product of (i) the balance of the
Investment Account at the end of the month, multiplied by (ii) the prime rate
quoted at the beginning of the quarter by the Wall Street Journal. The Committee
may, in its sole discretion, establish a different interest rate or deemed
investment index for the Investment Accounts on a prospective basis. Amounts
distributed from Investment Accounts shall be distributed in cash.

 

4.4     Company Stock Account. Amounts credited to a Participant’s Company Stock
Account shall be denominated in whole and fractional Stock Units in accordance
with the following rules.

 

4.4.1     Initial Amounts Credited. Where an amount being deferred is
denominated in Stock Units, such as an award of Restricted Stock Units, the
number of Stock Units credited to the Company Stock Account shall be based on
the portion of such award that is deferred. For any amount to be credited to the
Company Stock Account that is initially denominated in cash, including any
deferral of Base Salary or Performance-Based Compensation, any Matching
Contributions or any Discretionary Employer Contributions awarded in a cash
amount, the dollar amount credited to the Company Stock Account shall be
converted to a number of whole and fractional Stock Units as of the last
business day of the calendar quarter in which such amount is credited to the
Company Stock Account based on the average Fair Market Value of the Common Stock
for such calendar quarter.

 

4.4.2     Reallocations from Investment Account. Notwithstanding any provision
herein to the contrary, a Participant may elect to have all or a portion of his
or her Investment Account reallocated to a Company Stock Account. Such an
election may be made once per calendar quarter within the ten (10) day period
following the public release of the Company’s financial results for the quarter
for which the election is made and is irrevocable once made. If such an election
is made, the cash value to be reallocated to the Participant’s Company Stock
Account shall be converted to a number of whole and fractional Stock Units based
on the Fair Market Value of the Common Stock as of the effective date of such
reallocation.

 

 
9

--------------------------------------------------------------------------------

 

 

4.4.3     Dividend Equivalents. Company Stock Accounts shall not be adjusted or
credited with additional amounts for cash dividends paid on Common Stock.

 

4.4.4     Adjustments. The number of Stock Units credited to a Participant’s
Company Stock Account is subject to adjustment as provided in Section 8.3.2.

 

4.5        Vesting. A Participant is 100% vested in Base Salary and
Performance-Based Compensation deferred to the Plan and Matching Contributions.
Employer Discretionary Contributions and Restricted Stock Units shall be subject
to any vesting or other restrictions imposed by the Committee as specified in
the notice of award.

 

SECTION 5

 

DISTRIBUTIONS

 

5.1.     Specified Date. A Participant may elect, at the time of a Deferral
Election, to have Base Salary, Performance-Based Compensation and Restricted
Stock Units subject to the Deferral Election distributed in a single lump sum
payment on a specific date, and for Restricted Stock Units or Discretionary
Contributions that include a vesting schedule, after the last applicable vesting
date. Such an election will apply to any Matching Contributions related to the
Base Salary or Performance Based Compensation deferred. The Committee may
establish a latest permitted specified date (such as the date the Participant
attains an age specified by the Committee). Such an election shall state whether
the specified date will be effective without regard to any earlier Distribution
Event under Section 5.2. A Participant may elect to change the time of payment
only if (i) the election is made at least twelve (12) months before the date the
distribution would otherwise occur, (ii) the election shall not take effect
until at least twelve months after the date the election is made, and (ii) the
effect of the election is to defer commencement of such payment by at least five
(5) years.

 

5.2.     Distribution Events. Amounts credited to an Account shall be
distributed on the earliest to occur of the following:

 

(a)     The date elected by the Participant pursuant to Section 5.1 (subject to
any election to disregard an earlier Distribution Event);

 

(b)     the Participant’s death;

 

(c)     the Participant’s Disability;

 

(d)     the Participant’s Separation from Service; or

 

(e)     a Change of Control.

 

 
10

--------------------------------------------------------------------------------

 

 

5.3     Additional Rules for Distribution Events. If distribution of an Account
is due as a result of a Distribution Event, such payment will be made as soon as
practicable, but no later than seventy-five (75) days after the applicable
Distribution Event. If payment is due as a result of a Separation from Service
and the Participant is a Specified Employee, distribution will occur on the
earlier of (i) first day of the seventh month following the Participant’s
Separation from Service, or (ii) the date of the Participant’s death.

 

5.4     Unforeseeable Emergency. A Participant may request a distribution of
vested amounts from his or her Account in the event the Participant has an
Unforeseeable Emergency. A Participant who receives a distribution due to an
Unforeseeable Emergency shall have any Deferral Election for the Plan Year in
which the distribution is received cancelled for the remainder of the Plan Year.
The amount distributed with respect to an Unforeseeable Emergency shall not
exceed the amounts necessary to satisfy such Unforeseeable Emergency plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution. The Committee may establish guidelines and procedures for
implementing withdrawals. An application shall be written, be signed by the
Participant and include a statement of facts causing the Unforeseeable Emergency
and any other facts required by the Committee. The withdrawal amount and date
shall be fixed by the Committee. The Committee may require a minimum advance
notice and may limit the amount, time and frequency of withdrawals. The
foregoing shall be construed in a manner consistent with Section 409A.

 

5.5      Form of Payment. Payment from a Participant’s Account shall be made in
the form of cash or shares of Common Stock in accordance with the following
rules.

 

5.5.1    Investment Account. Amounts payable from a Participant’s Investment
Account shall be payable in cash.

 

5.5.2    Company Stock Account. Unless otherwise determined by the Committee,
amounts payable from a Participant’s Company Stock Account shall be payable in
the form of one share of Common Stock for each whole Stock Unit then payable,
with cash payable for each fractional Stock Unit based on the Fair Market Value
of the Common Stock as of the applicable distribution date. For payment of
amounts attributable to a Restricted Stock Unit originally granted under the
Stock Plan, the shares payable shall come from the Stock Plan’s share pool. All
other shares of Common Stock payable from a Participant’s Company Stock Account
shall come from the share pool for this Plan as provided in Section 8.3.

 

5.6      Beneficiary Designation. If distribution of an Account is due as a
result of the Participant’s death, the Participant’s Account(s) will be
distributed to the Participant’s designated beneficiary, designated in
accordance with rules and procedures adopted by the Committee for beneficiary
designations. If a Participant dies without designating a beneficiary or the
designated beneficiary does not survive the Participant, then the Participant’s
Account(s) shall be distributed to the Participant’s surviving spouse, or, if
none, to the Participant’s surviving children, or, if none, to the Participant’s
surviving grandchildren, or, if none, to the Participant’s surviving parents,
or, if none, to the Participant’s surviving siblings, or, if none, to the
Participant’s estate.      

 

 
11

--------------------------------------------------------------------------------

 

 

SECTION 6

 

AMENDMENT; TERMINATION

 

The Plan may be amended or terminated at any time through action by the Board or
by the Committee; provided, however, that no amendment or termination of the
Plan will reduce the amount actually credited to a Participant’s Account as of
the date of the amendment or termination or further defer the due dates for the
payment of Accounts. An amendment shall be contingent on approval of the
Company’s stockholders to the extent stated by the Committee, required by
applicable law or required by applicable stock exchange listing requirements.
Notwithstanding any provision of the Plan to the contrary but only to the extent
permitted by Section 409A, in connection with any termination of the Plan the
Committee shall have the authority to cause the Accounts of all Participants
(and Beneficiaries of any deceased Participants) to be paid in a single cash
payment as of a date determined by the Committee or to otherwise accelerate the
payment of all Accounts in such manner as the Committee determines in its
discretion.

 

 

SECTION 7

 

CLAIMS PROCEDURE

 

7.1.     Initial Claim. Any person (“Claimant”) claiming a benefit or requesting
an interpretation, ruling or information under the Plan shall present the
request in writing to the Committee. The Committee may, in its discretion and at
any stage of the claims process, hold one or more hearings. The Claimant may, at
the Claimant’s own expense, have an attorney or other representative act on the
Claimant’s behalf; provided that a written authorization is presented to the
Committee.

 

7.2.     Timing of Initial Decision. Within 90 days after the Claimant delivers
the claim (45 days in the case of a claim based upon Disability), the Claimant
will receive either: (a) a decision; or (b) a notice for extension describing
special circumstances requiring additional time to process the claim (up to 180
days from the day the Claimant delivered the claim or, in the case of a claim
based upon Disability, up to two 30-day extensions for a total maximum
processing time of 105 days from the day the Claimant delivered the claim). Any
notice for extension will describe the special circumstances (such as the need
to hold a hearing) requiring more time and the date by which the Committee
expects to render a decision.

 

7.3.     Content of Initial Decision. If the Claimant’s claim is denied in whole
or in part, the Claimant will receive a written notice specifying: (a) the
reasons for the denial; (b) the Plan provisions on which the denial is based;
(c) any additional information needed from the Claimant in connection with the
claim and the reason such information is needed; and (d) an explanation of the
claims review procedure and the applicable time limits, including a statement of
the claimant’s right to bring a civil action under ERISA Section 502(a)
following an adverse benefit determination on appeal. The time limits for making
a decision on the Claimant’s claim will be frozen until any necessary additional
information is received by the Committee.

 

 
12

--------------------------------------------------------------------------------

 

 

7.4.     Appeal. To appeal a benefit claim decision, the Claimant must deliver
the Claimant’s written request for review to the Committee within 60 days (180
days for the denial of a claim based upon Disability) of the date the Claimant
received the initial claim denial. The Claimant’s written request for review may
(but is not required to) include issues, comments, documents, and other records
the Claimant wants considered in the review. All the information the Claimant
submits will be taken into account on appeal, even if it was not reviewed as
part of the initial decision. The Claimant may ask to examine or receive free
copies of all pertinent Plan documents, records, and other information relevant
to the Claimant’s claim by asking the Committee. If the Claimant fails to
deliver the written request for review to the Committee within 60 days (180 days
for a Disability claim) of the date the Claimant received the initial claim
denial, the Claimant shall forever forfeit his or her right to appeal the claim
either to the Committee or to a court.

 

7.5.     Timing of Decision Upon Appeal. Within 60 days (45 days for a claim
based upon Disability) after the Claimant delivers the request for review, the
Claimant will receive either: (a) a decision; or (b) a notice for extension
describing special circumstances requiring additional time to process the
Claimant’s claim (up to 120 days from the day the Claimant delivered the request
for review or, in the case of a claim based upon Disability, up to 90 days from
the day the Claimant delivered the request for review). Any notice for extension
will describe the special circumstances (such as the need to hold a hearing)
requiring more time and the date by which the Committee expects to render a
decision on appeal.

 

7.6.     Content of Decision Upon Appeal. The decision on the Claimant’s appeal
will be in writing and will specify: (a) the reasons for the decision; (b) the
Plan provisions on which the decision is based; and (c) any documents, records
or other information relevant to the Claimant’s claim.

 

7.7.     Final Decision. All decisions on appeal are final and binding on all
parties. No legal action may be brought more than one year following a final
decision on the claim under these claims procedures. The one-year statute of
limitations on suits applies in any forum where a Claimant initiates such suit
or legal action. If a civil action is not filed within this period, the
Claimant’s claim will be deemed permanently waived and abandoned, and the
Claimant will be precluded from reasserting it. A Claimant’s authorized
representative may act on the Claimant’s behalf in pursuing a claim or appeal of
an adverse benefit determination.

 

 
13

--------------------------------------------------------------------------------

 

 

SECTION 8

 

GENERAL PROVISIONS

 

8.1.       Compliance with Section 409A. The Plan is intended to comply with
Section 409A. Notwithstanding any provision of the Plan to the contrary, the
Plan shall be interpreted, operated and administered consistent with its intent.
Notwithstanding any provision of this Plan to the contrary, in the event that
the Committee determines in good faith that any amounts payable under this Plan
may not be either exempt from, or compliant with, Section 409A, the Committee
shall adopt such amendments to this Plan or adopt other policies or procedures
(including amendments, policies and procedures with retroactive effective), or
take any other commercially reasonable actions necessary or appropriate (i) to
preserve the intended tax treatment of the amounts payable hereunder, to
preserve the economic benefits of such amounts, and/or to avoid less favorable
accounting or tax consequences for the Participating Employers and/or (ii) to
exempt the amounts payable hereunder from Section 409A or to comply with the
requirements of Section 409A and thereby avoid the application of additional
taxes thereunder; provided, however, that this Section 8.1 does not, and shall
not be construed so as to, create any obligation on the part of any
Participating Employer to adopt any such amendments, policies or procedures or
to take any other such actions or to indemnify any Participant for any failure
to do so.

 

8.2       Withholding. Amounts due for FICA taxes and other similar taxes on
Base Salary, Performance-Based Compensation and Matching Contributions will be
withheld from the Participant’s remaining compensation. The Company or
Participating Employer, as the case may be, shall have the right to deduct from
payments of any kind otherwise due to the Participant any federal, state, or
local taxes of any kind required by law to be withheld as a result of (i)
vesting in Restricted Stock Units or Discretionary Employer Contributions, (ii)
issuance of shares of Common Stock, or (iii) any other event. Withholding of
amounts with respect to a Participant’s Company Stock Account may be effected by
withholding a number of the Stock Units credited to such Company Stock Account,
based on the Fair Market Value of the Common Stock as of the applicable tax
date, at statutory minimum rates.

 

8.3       Stock Subject to the Plan.

 

8.3.1     Share Pool. The shares of Common Stock that shall be made available
for purposes of satisfying the obligations of the Company under the Plan shall
be both (i) 6,000,000 shares that are reserved and available for grant or award
under the Plan, subject to adjustment as provided below, and (ii) the shares of
Common Stock authorized and approved under the Stock Plan. For purposes of
counting shares of Common Stock available under this Section 8.3.1 for
distribution from Company Stock Accounts, the number of shares covered by Stock
Units credited to such Company Stock Accounts shall be counted on the date the
Stock Units are credited to a Company Stock Account. The Company shall keep
separate sub-accounts to determine which applicable share pool the Stock Units
shall be settled from.

 

 
14

--------------------------------------------------------------------------------

 

 

8.3.2     Adjustments. 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 Company, 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 Company, the Committee shall
equitably adjust (i) the number of shares available under the Plan as provided
in Section 8.3.1 above and (ii) the Stock Units credited to the Company Stock
Account of each Participant. Adjustments under this Section 8.3.1 shall be made
by the Committee, whose determination in that respect shall be final, binding
and conclusive.

 

8.4       Attorneys’ Fees. If a suit or action is instituted to enforce any
rights under this Plan, the prevailing party may recover from the other party
reasonable attorneys’ fees at trial and on any court appeal.

 

8.5.      Notices. Any notice under this Plan shall be in writing and shall be
effective when actually delivered or, if mailed, when deposited as first class
mail postage prepaid. Mail shall be directed to the Company at the address
stated in this Plan, to the Participant’s last known home address shown in the
Company’s records, or to such other address as a party may specify by notice to
the other parties. Notices to an Employer or the Committee shall be sent to the
Company’s address.

 

8.6.      Nontransferability. The rights of a Participant under this Plan are
personal. No interest of a Participant or one claiming through a Participant may
be directly or indirectly assigned, alienated, pledged, transferred or
encumbered and no such interest shall be subject to seizure by legal process,
attachment, garnishment, execution following judgment or in any other way
subjected to the claims of any creditor. The foregoing limitation precludes,
among other things, a Participant who is getting (or has gotten) a divorce from
transferring any portion of his or her interest under this Plan to his or her
spouse or ex-spouse (except by naming the spouse or ex-spouse as a Beneficiary).

 

8.7.      Not an Employment Contract. This Plan is not and shall not be deemed
to constitute a contract of employment between the Company and any Employee or
other person, nor shall anything herein contained be deemed to give any Employee
or other person any right to be retained in the Company’s employ or in any way
limit or restrict the Company’s right or power to discharge any Employee or
other person at any time and to treat him without regard to the effect which
such treatment might have upon the Employee as a Participant in the Plan.

 

8.8.      Successors. Amounts payable under this Plan shall be an obligation of
the Employer and successors of the Employer and shall constitute mere unfunded,
unsecured promises by the Employer to pay cash compensation to the Participants.
The Company and its affiliates that constitute the Employer shall be jointly and
severally liable for benefit payments to Participants under this Plan. In the
event a Participant’s employer becomes insolvent, a Participant may bring a
claim for benefits under this Plan against the Company or any affiliate of the
Company that is an Employer under this Plan.

 

 
15

--------------------------------------------------------------------------------

 

 

8.9.      Incompetence. The Committee may decide that because of the mental or
physical condition of a person entitled to payments, or because of other
relevant factors, it is in the person’s best interest to make payments to others
for the benefit of the person entitled to payment. In that event, the Committee
may in its discretion direct those payments to be made as follows:

 

(a)     To a parent or spouse or a child of legal age;

 

(b)     To a legal guardian; or

 

(c)     To one furnishing maintenance, support, or hospitalization.

 

8.10.     Governing Law. Except to the extent that federal law is controlling
the Plan shall be construed and entered in accordance with and governed by the
laws of the State of Delaware. Invalidation of any one of the provisions of the
Plan for any reason shall in no way affect the other provisions hereof, and all
such other provisions shall remain in full force and effect.

 

8.11.     Unsecured General Creditor. Any amount allocated to a Participant’s
Account balance under this Plan shall be an unfunded, unsecured promise of the
Employer to make payments in the future. Participants and their beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interest
or claims in any property or assets of the Employer or any affiliate thereof.
Any and all of the Employer’s assets shall be, and remain, the general,
unpledged, unrestricted assets of the Employer. One or more of the entities
constituting the Employer may choose (but are not required) to contribute assets
to a rabbi trust, the assets of which will be subject to the claims of such
entity’s creditors in the event of insolvency. The Employer may, but shall not
be required to, establish a reserve of assets to provide funds for payments
under this Plan. Establishing a reserve or rabbi trust shall have no effect on
the operation of this Plan or upon the status of Participants as unsecured
general creditors of the Employer. Rights to payments will not be limited to
assets held in any reserve or rabbi trust.

 

8.12.   Effective Date. This amended and restated Plan shall be effective
December 1, 2014.

 

 

 

 

 

 

HECLA MINING COMPANY

 

 

 

 

 

 

 

 

 

Date Signed:                                                                 ,
2014

By:

 

 

 

 

 

Its:

 

 

 

 

 

 
16

--------------------------------------------------------------------------------

 

 

EXHIBIT A

PARTICIPATING EMPLOYERS

 

Hecla Mining Company

Hecla Greens Creek Mining Company

Hecla Limited

Rio Grande Silver, Inc.

Hecla Silver Valley, Inc.

Minera Hecla S.A. de C.V.