Document:

Exhibit 10.1

EMPLOYMENT AGREEMENT

          AGREEMENT
by and between Hecla Mining Company, a Delaware corporation (the “Company”) and
PHILLIPS S. BAKER, JR. (the “Executive”), dated as of the 1st day of June 2007.

          The Board of
Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its shareholders to assure that the Company will
have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive’s full attention and dedication to the Company, and to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of
other corporations. Therefore, in order to accomplish these objectives, the
Board has caused the company to enter into this Agreement.

          NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

          1.
Certain Definitions.

                    (a)
The “Effective Date” shall be the first date during the “Change of Control
Period” (as defined in Section 1(b)) on which a Change of Control occurs.
Anything in this Agreement to the contrary notwithstanding, if the Executive’s
employment with the Company is terminated or the Executive ceases to be an
officer of the Company prior to the date on which a Change of Control occurs,
and it is reasonably demonstrated that such termination of employment
(1) was at the request of a third party who has taken steps reasonably
calculated to effect the Change of Control or (2) otherwise arose in
connection with or anticipation of the Change of Control, then for all purposes
of this Agreement the “Effective Date” shall mean the date immediately prior to
the date of such termination of employment.

                    (b)
The “Change of Control Period” is the period commencing on the date hereof and
ending on June 1, 2010; provided, however, that commencing on June 1, 2010, and
on each subsequent anniversary of such date (each such anniversary is
hereinafter referred to as the “Renewal Date”), the Change of Control Period
shall be automatically extended so as to terminate three years from such
Renewal Date, unless at least 60 days prior to the Renewal Date the Company
shall give notice to the Executive that the Change of Control Period shall not
be so extended.

                    (c)
The “Deemed Retirement Benefit” means the aggregate benefits that would be
payable to the Executive under the Hecla Mining Company Qualified Retirement
Plan and/or any successor defined benefit plan (the “Retirement Plan”) and any
supplemental and/or excess retirement plans in which the Executive participates
(the “SERP”), assuming that (i) the Executive’s age as of the Date of
Termination were increased by three years for purposes of calculating
the pension reduction but not for purposes of determining covered compensation
(as those terms are defined in the Retirement Plan), (ii) the Executive’s
average annual earnings were calculated by assuming that the Executive had
continued to receive the compensation required by Section 4(b) of this
Agreement for three years, (iii) the Executive’s years of service were
increased by three years, and (iv) the Executive’s benefits under the
Retirement Plan and the SERP were fully vested.

                    (d)
The “Actual Retirement Benefit” means the aggregate benefits that actually are
payable to the Executive under the Retirement Plan and the SERP as of the Date
of Termination, determined in accordance with the applicable terms of the
Retirement Plan and the SERP.

          2.
 Change of Control. For the purpose of this Agreement, a “Change of Control”
shall mean:

                    (a)
Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the “beneficial owner” (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the
then outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this Section 2(a), the following acquisitions
shall not constitute a Change of Control: (I) any acquisition directly from the
Company or approved by the Incumbent Directors, following which such Person
owns not more than 40% of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities, (II) any acquisition by an underwriter
temporarily holding securities pursuant to an offering of such securities,
(III) any acquisition by the Company, (IV) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (V) any acquisition
pursuant to a transaction which complies with clauses (i), (ii) and (iii) of
Section 2(c) below; or

                    (b)
Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director, without written objection to such nomination) shall be considered as
though such individual were an Incumbent Director, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or

                    (c)
Consummation of a reorganization, merger or consolidation (or similar corporate
transaction) involving the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company, or the
acquisition of assets or 

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stock of
another entity (a “Business Combination”), in each case, unless, immediately
following such Business Combination, (i) more than 60% of, respectively, the
then outstanding shares of common stock and the total voting power of (A) the
corporation resulting from such Business Combination (the “Surviving
Corporation”), or (B) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of 80% of the voting securities
eligible to elect directors of the Surviving Corporation (the “Parent
Corporation”), is represented by Outstanding Company Common Stock and Company
Voting Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, is represented by shares into which such
Outstanding Company Common Stock or Outstanding Company Voting Securities, as
the case may be, were converted pursuant to such Business Combination), and
such beneficial ownership of common stock or voting power among the holders
thereof is in substantially the same proportion as the beneficial ownership of
Outstanding Company Common Stock and the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Business
Combination, (ii) no person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation),
is or becomes the beneficial owner, directly or indirectly, of 30% or more of
the outstanding shares of common stock and the total voting power of the
outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation),
unless such acquisition is pursuant to a Business Combination that is an
acquisition by the Company or a subsidiary of the Company of the assets or
Stock of another entity that is approved by the Incumbent Directors, following
which such person owns not more than 40% of such outstanding shares and voting
power, and (iii) at least a majority of the members of the board of
directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the Business Combination
were Incumbent Directors at the time of the Board’s approval of the execution
of the initial agreement providing for such Business Combination; or

                    (d)
Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

Notwithstanding
the foregoing, a Change of Control of the Company shall not be deemed to occur
solely because any person acquires beneficial ownership of 20% or more of the
Outstanding Company Common Stock or Outstanding Company Voting Securities as a
result of the acquisition of Outstanding Company Common Stock or Outstanding
Company Voting Securities by the Company which reduces the number of shares of
Outstanding Company Common Stock or Outstanding Company Voting Securities; provided, that if after such acquisition
by the Company such person becomes the beneficial owner of additional shares of
Outstanding Company Common Stock or Outstanding Company Voting Securities that
increases the percentage of Outstanding Company Common Stock or Outstanding
Company Voting Securities beneficially owned by such person, a Change of
Control of the Company shall then occur.

          3.
Employment Period. The Company hereby agrees to continue the Executive
in its employ for the period commencing on the Effective Date and ending on the
third anniversary of such date (the “Employment Period”). The Employment Period
shall terminate upon the Executive’s termination of employment for any reason.

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          4.
Terms of Employment.

	
 

	
 

	
 

	
          (a)
 Position and Duties.

	
 

	
 

	
 

	
                    (i)
 During the Employment Period, (A) the Executive’s position (including
 status, offices, titles and reporting requirements), authority, duties and
 responsibilities shall be at least commensurate in all material respects with
 the most significant of those held, exercised and assigned at any time during
 the 90-day period immediately preceding the Effective Date and (B) the
 Executive’s services shall be performed at the location where the Executive
 was employed immediately preceding the Effective Date or any office or
 location less than 35 miles from such location.

	
 

	
 

	
 

	
                    (ii)
 During the Employment Period, and excluding any periods of vacation and sick
 leave to which the Executive is entitled, the Executive agrees to devote
 reasonable attention and time during normal business hours to the business
 and affairs of the Company and, to the extent necessary to discharge the
 responsibilities assigned to the Executive hereunder, to use the Executive’s
 reasonable best efforts to perform faithfully and efficiently such
 responsibilities. During the Employment Period it shall not be a violation of
 this Agreement for the Executive to (A) serve on corporate, civic or
 charitable boards or committees, (B) deliver lectures, fulfill speaking
 engagements or teach at educational institutions and (C) manage-personal
 investments, so long as such activities do not significantly interfere with
 the performance of the Executive’s responsibilities as an employee of the
 Company in accordance with this Agreement. It is expressly understood and
 agreed that to the extent that any such activities have been conducted by the
 Executive prior to the Effective Date, the continued conduct of such
 activities (or the conduct of activities similar in nature and scope thereto)
 subsequent to the Effective Date shall not thereafter be deemed to interfere
 with the performance of the Executive’s responsibilities to the Company.

	
 

	
 

	
 

	
          (b)
 Compensation.

	
 

	
 

	
 

	
                    (i)
 Base Salary. During the Employment Period, the Executive shall receive
 an annual base salary (“Annual Base Salary”), which shall be paid at a
 monthly rate, at least equal to twelve times the highest monthly base salary
 paid or payable to the Executive by the Company and its affiliated companies
 in respect of the twelve-month period immediately preceding the month in
 which the Effective Date occurs. During the Employment Period, the Annual
 Base Salary shall be reviewed at least annually and shall be increased at any
 time and from time to time as shall be substantially consistent with
 increases in base salary awarded in the ordinary course of business to other
 peer executives of the Company and its affiliated companies. Any increase in
 Annual Base Salary shall not serve to limit or reduce any other obligation to
 the Executive under this Agreement. Annual Base Salary shall not be reduced
 after any such increase and the term Annual Base Salary as utilized in this
 Agreement shall refer to Annual Base Salary as so increased. As used in this
 Agreement, the term “affiliated companies;” includes any company controlled
 by, controlling or under common control with the Company.

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                    (ii)
 Annual Bonus. In addition to Annual Base Salary, the Executive shall
 be awarded, for each fiscal year beginning or ending during the Employment
 Period, an annual bonus (the “Annual Bonus”) in cash at least equal to the
 highest bonus paid or payable, including by reason of deferral, to the
 Executive by the Company and its affiliated companies, including pursuant to
 both the Company’s Short-Term Performance Pay Compensation Plan and the
 Company’s Executive and Senior Management Long-Term Performance Payment Plan
 for any fiscal year, in respect of the three fiscal years immediately
 preceding the fiscal year in which the Effective Date occurs (annualized for
 any fiscal year during the Employment Period consisting of less than twelve
 full, months or with respect to which the Executive has been employed by the
 Company for less than twelve full months) (the “Recent Annual Bonus”). Each
 such Annual Bonus shall be paid no later than two and a half months after the
 first fiscal year next following the fiscal year for which the Annual Bonus
 is awarded, unless the Executive shall elect, if applicable, to defer the
 receipt of such Annual Bonus pursuant to the Company’s Key Employee Deferred
 Compensation Plan.

	
 

	
 

	
 

	
                    (iii)
 Incentive, Savings and Retirement Plans. In addition to Annual Base
 salary and Annual Bonus payable as hereinabove provided, the Executive shall
 be entitled to participate during the Employment Period in all incentive,
 savings and retirement plans, practices, policies and programs applicable
 generally to other peer executives of the Company and its affiliated
 companies, but in no event, shall such plans, practices, policies and
 programs provide the Executive with incentive, savings and retirement benefit
 opportunities, in each case, less favorable, in the aggregate, than
 (x) the most favorable of those provided by the Company and its
 affiliated companies for the Executive under such plans, practices, policies
 and programs as in effect at any time during the 90-day period immediately preceding
 the Effective Date of (y) if more favorable to the Executive, those
 provided at any time after the Effective Date to other peer executives of the
 Company and its affiliated companies.

	
 

	
 

	
 

	
                    (iv)
 Welfare Benefit Plans. During the Employment Period, the Executive
 and/or the Executive’s family, as the case may be, shall be eligible for
 participation in and shall receive all benefits under welfare benefit plans,
 practices, policies and programs provided by the Company and its affiliated companies
 (including, without limitation, medical, prescription, dental, disability,
 salary continuance, employee life, group life, accidental death and travel
 accident insurance plans and programs) to the extent generally applicable to
 other peer executives of the Company and its affiliated companies, but in no
 event shall such plans, practices, policies and programs provide the
 Executive with benefits which are less favorable, in the aggregate, than (x)
 the most favorable of such plans, practices, policies and programs in effect
 for the Executive at any time during the 90-day period immediately preceding
 the Effective Date or (y) if more favorable to the Executive, those provided
 at any time after the Effective Date generally to other peer executives of
 the Company and its affiliated companies.

	
 

	
 

	
 

	
                    (v)
 Expenses. During the Employment Period, the Executive shall be
 entitled to receive prompt reimbursement for all reasonable expenses incurred
 by the Executive in accordance with the most favorable policies, practices
 and procedures of the Company and its affiliated companies in effect for the
 Executive at any time during the 90-day
 period immediately preceding the Effective Date or, if more favorable to the
 Executive, as in effect generally at any time thereafter with respect to
 other peer executives of the Company and its affiliated companies.

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                    (vi)
 Fringe Benefits. During the Employment Period, the Executive shall be
 entitled to fringe benefits in accordance with the most favorable plans,
 practices, programs and policies of the company and its affiliated companies
 in effect for the Executive at any time during the 90-day period immediately
 preceding the Effective Date or, if more favorable to the Executive, as in
 effect generally at any time thereafter with respect to other peer executives
 of the Company and its affiliated companies.

	
 

	
 

	
 

	
                    (vii)
 Office and Support Staff. During the Employment Period, the Executive
 shall be entitled to an office or offices of a size and with furnishings and
 other appointments, and to exclusive personal secretarial and other
 assistance, at least equal to the most favorable of the foregoing provided to
 the Executive by the Company and its affiliated companies at any time during
 the 90-day period immediately preceding the Effective Date or, if more
 favorable to the Executive, as provided generally at any time thereafter with
 respect to other peer executives of the Company and its affiliated companies.

	
 

	
 

	
 

	
                    (viii)
 Vacation. During the Employment Period, the Executive shall be
 entitled to paid vacation in accordance with the most favorable plans,
 policies, programs and practices of the Company and its affiliated companies
 as in effect at any time during the 90-day period immediately preceding the
 Effective Date or, if more favorable to the Executive, as in effect generally
 at any time thereafter with respect to other peer incentives of the Company
 and its affiliated companies.

          5.
Termination of Employment.

                    (a)
Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance
with Section 12(b) of this Agreement of its, intention to terminate the
Executive’s employment. In such event, the Executive’s employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Executive (the “Disability Effective Date”), provided that, within the
30 days after such receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties. For purposes of this Agreement,
“Disability” means the absence of the Executive from the Executive’s duties
with the Company on a fulltime basis for 180 consecutive business days as a result
of incapacity due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative (such
agreement. as to acceptability not to be withheld unreasonably).

                    (b)
Cause. The Company may terminate the Executive’s employment during the
Employment Period for Cause. For purposes of this Agreement, “Cause” means:

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                    (i)
 the willful and continued failure of the Executive to perform substantially
 the Executive’s duties (as contemplated by Section 4(a)) with the Company or
 any affiliated company (other than any such failure resulting from incapacity
 due to physical or mental illness or following the Executive’s delivery of a
 Notice of Termination for Good Reason), after a written demand for
 substantial performance is delivered to the Executive by the Board or the
 Chief Executive Officer of the Company that specifically identifies the manner
 in which the Board or the Chief Executive Officer of the Company believes
 that the Executive has not substantially performed the Executive’s duties, or

	
 

	
 

	
 

	
                    (ii)
 the willful engaging by the Executive in illegal conduct or gross misconduct
 that is materially and demonstrably injurious to the Company.

For purposes
of this Section 5(b), no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith and without reasonable belief that the
Executive’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer of the Company or a senior officer of the Company or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board (excluding the
Executive if the Executive is a member of the Board) at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel for
the Executive, to be heard before the Board), finding that, in the good faith
opinion of the Board, the Executive is guilty of the conduct described in
Section 5(b)(i) or 5(b)(ii), and specifying the particulars thereof in
detail.

                    (c)
Good Reason. The Executive’s employment may be terminated during the
Employment Period by the Executive for Good Reason or by the Executive
voluntarily without Good Reason. For purposes of this Agreement, “Good Reason”
means:

	
 

	
 

	
 

	
                    (i)
 the assignment to the Executive of any duties inconsistent in any respect
 with the Executive’s position (including status, offices, titles and
 reporting requirements), authority, duties or responsibilities as
 contemplated by Section 4(a) of this Agreement, or any other diminution
 in such position, authority, duties or responsibilities (whether or not
 occurring solely as a result of the Company’s ceasing to be a publicly traded
 entity), excluding for this purpose an isolated, insubstantial and
 inadvertent action not taken in bad faith and which is remedied by the
 Company promptly after receipt of notice thereof given by the Executive;

	
 

	
 

	
 

	
                    (ii)
 any failure by the Company to comply with any of the provisions of
 Section 4(b) of this Agreement, other than an isolated, insubstantial
 and inadvertent failures not occurring in bad faith and which is remedied by
 the Company promptly after receipt of notice thereof given by the Executive;

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                    (iii)
 the Company’s requiring the Executive to be based at any office or location
 other than that described in Section 4(a)(i)(B) hereof, or the Company’s
 requiring the Executive to travel on Company business to a substantially
 greater extent than required immediately prior to the Effective Date;

	
 

	
 

	
 

	
                    (iv)
 any purported termination by the Company of the Executive’s employment
 otherwise than as expressly permitted by this Agreement; or

	
 

	
 

	
 

	
                    (v)
 any failure by the Company to comply with and satisfy Section 11(c) of
 this Agreement.

          For
purposes of this Agreement, any good faith determination of Good Reason made by
the Executive shall be conclusive. Anything in this Agreement to the contrary
notwithstanding, a termination by the Executive for any reason pursuant to a
Notice of Termination given during the 30-day period immediately following the
first anniversary of the Effective Date shall be deemed, to be a termination
for Good Reason for all purposes of this Agreement. The Executive’s mental or
physical incapacity following the occurrence of an event described above in
clauses (i) through (v) shall not affect the Executive’s ability to
terminate employment for Good Reason.

                    (d)
Notice of Termination. Any termination by the Company for Cause or by
the Executive for Good Reason shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 12(b) of this
Agreement. For purposes of this Agreement, a “Notice of Termination” means a
written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date
of receipt of such notice, specifies the termination date (which date shall be
not more than fifteen days after the giving of such notice). In the case of a
termination of the Executive’s employment for Cause, a Notice of Termination
shall include a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for the purpose (after reasonable notice to the
Executive and reasonable opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board prior to such vote), finding
that in the good faith opinion of the Board the Executive was guilty of conduct
constituting Cause. No purported termination of the Executive’s employment for
Cause shall be effective without a Notice of Termination. The failure by the
Executive to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason shall not waive any right of the
Executive hereunder or preclude the Executive from asserting such fact or
circumstance in enforcing the Executive’s rights hereunder.

                    (e)
Date of Termination. “Date of Termination” means the date of receipt of
the Notice of Termination or any later date specified therein (which date shall
be not more than 30 days after the giving of such notice), as the case may be; provided,
however, that (i) if the Executive’s employment is terminated by the
Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (ii) if the Executive’s employment is terminated by
reason of death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the case may be.

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          6.
Obligations of the Company upon Termination.

                    (a)
Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive’s legal representatives under this
Agreement, other than the following obligations: (i) payment of the
Executive’s Annual Base Salary through the Date of Termination to the extent
not theretofore paid, (ii) payment of the product of (x) the greater
of (A) the Annual Bonus paid or payable, including by reason of deferral,
(and annualized for any fiscal year consisting of less than twelve full months
or for which the Executive has been employed for less than twelve full months)
for the most recently completed fiscal year during the Employment Period, if
any, and (B) the Recent Annual Bonus (such greater amount hereafter
referred to as the “Highest Annual Bonus”) times (y) a fraction, the numerator
of which is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 and (iii) payment of any
compensation previously deferred by the Executive (together with any accrued
interest thereon) and not yet paid by the Company and any accrued vacation pay
not yet paid by the Company (the amounts described in paragraphs (i), (ii)
and (iii) are hereafter referred to as “Accrued Obligations”). All Accrued
Obligations shall be paid to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination. In
addition, the Executive’s estate or designated beneficiaries shall be entitled
to receive the Executive’s Annual Base Salary for the balance of the Employment
Period. Anything in this Agreement to the contrary notwithstanding, the
Executive’s estate and family shall be entitled to receive benefits at least
equal to the most favorable benefits provided generally by the Company and any
of its affiliated companies to the estates and surviving families of peer
executives of the Company and such affiliated under such plans, programs,
practices and policies relating to death benefits, if any, as in effect
generally with respect to other peer executives and their estate and families
at any time during the 90-day period immediately preceding the Effective Date
or, if more favorable to the Executive and/or the Executive’s family, as in
effect on the date of the Executive’s death generally with respect to other
peer executives of the Company and its affiliated companies and their families.

                    (b)
Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability during the Employment period, this Agreement shall
terminate without further obligations to the Executive, other than for Accrued
Obligations. All Accrued Obligations shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of Termination. In addition, the
Executive shall be entitled to receive the Executive’s Annual Base Salary for
the balance of the Employment Period; provided, however, that such payments of Annual
Base Salary shall be reduced by any benefits paid to the Executive under the
Retirement Plan by reason of Disability and, provided further, any payments
made hereunder to a key employee (as defined by Section 409A of the Code)
shall be delayed six months if required by Section 409A of the Code.
Anything in this Agreement to the contrary notwithstanding, the Executive shall
be entitled after the Disability Effective Date to receive disability and other
benefits at least equal to the most favorable of those generally provided by
the Company and its affiliated companies to disable executives and/or their
families in accordance with such plans, programs, practices and policies
relating to disability, if any, as in effect generally with respect to other peer
executives and their families at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive and/or the
Executive’s family, as in effect at any time thereafter generally with respect
to other peer executives of the Company and its affiliated companies and their
families.

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                    (c)
Cause; other than for Good Reason. If the Executive’s employment shall
be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the
obligation to pay the Executive Annual Base Salary through the Date of
Termination plus the amount of any compensation previously deferred by the
Executive in accordance with Section 4(b)(ii), in each case to the extent
theretofore unpaid. If the Executive terminates employment during the
Employment Period other than for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued
Obligations. In such case, all Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination.

                    (d)
Good Reason; Other Than for Cause or Disability. If, during the
Employment Period, the Company shall terminate the Executive’s employment other
than for Cause or Disability, or if the Executive shall terminate employment
under this Agreement for Good Reason:

	
 

	
 

	
 

	
 

	
                    (i)
 the Company shall pay, to the Executive in a lump sum in cash within 30 days
 after the Date of Termination the aggregate of the following amounts:

	
 

	
 

	
 

	
 

	
                    A.
 all Accrued Obligations; and

	
 

	
 

	
 

	
 

	
 

	
                    B.
 the product of (x) three times (y) the sum of (i) Annual Base
 Salary plus (ii) the Highest Formula Annual Bonus (where the “Highest
 Formula Annual Bonus” means the remainder of (a) the sum of (1) the
 Highest Formula Short-Term Bonus, plus (2) the Highest Formula Long-Term
 Bonus, plus (3) the highest other bonus, if any, which was included
 within the calculation of Annual Bonus, but not considered in calculating the
 Highest Formula Short-Term Bonus or the Highest Formula Long-Term Bonus, and
 was paid or payable in any fiscal year in respect of the three fiscal years
 immediately preceding the Date of Termination, minus (b) any payments
 actually paid or payable under the provisions of the Company’s Executive and
 Senior Management Long-Term Performance Payment Plan due to an actual
 triggering of its change-in-control provisions by the same or related events
 constituting a Change of Control hereunder) (where the “Highest Formula
 Short-Term Bonus” means the highest bonus paid or payable in any fiscal year
 in respect of the three fiscal years immediately preceding the Date of
 Termination, including by reason of deferral, to the Executive by the Company
 and its affiliated companies pursuant to the Company’s Short-Term Performance
 Pay Compensation Plan or which would have been so paid or payable if the
 performance criteria applicable thereunder had been met at 100% of target for
 any applicable performance period ending in any fiscal year in respect of the
 three fiscal years immediately preceding the Date of Termination) (where the
 “Highest Formula Long-Term Bonus” means the highest bonus paid or payable in any
 fiscal year in respect of the three fiscal years immediately preceding the
 Date of Termination, including by reason of deferral, to the Executive by the
 Company and its affiliated companies pursuant to the Company’s Executive and
 Senior Management Long-Term Performance Payment Plan or which would have been
 so paid or payable if the performance criteria applicable thereunder had been
 met at 100% of target for any applicable performance period ending in any
 fiscal year in respect of the three fiscal years immediately preceding the
 Date of Termination); and

10

	
 

	
 

	
 

	
 

	
 

	
                    C.
 a lump-sum retirement benefit equal to the excess of (a) the actuarial
 equivalent of the Deemed Retirement Benefit over (b) the actuarial
 equivalent of the Executive’s Actual Retirement Benefit; and for purposes of
 determining the amount payable pursuant to this Section 5(d)(i)C, the
 actuarial assumptions utilized shall be no less favorable to the Executive
 than those in effect with respect to the Retirement Plan and the SERP during
 the 90-day period immediately prior to the Effective Date; and

	
 

	
 

	
 

	
 

	
                    (ii)
 for three additional years, or such longer period as any plan, program,
 practice or policy may provide, the Company shall continue benefits to the
 Executive and/or the Executive’s family at least equal to those which would
 have been provided to them in accordance with the plans, programs, practices
 and policies described in Section 4 (b) (iv) of this Agreement if the
 Executive’s employment had not been terminated in accordance with the most
 favorable plans, practices, programs or policies of the Company and its
 affiliated companies applicable generally to other peer executives and their
 families during the 90-day period immediately preceding the Effective Date
 or, if more favorable to the Executive, as in effect generally at any time
 thereafter with respect to other peer executives of the Company and its
 affiliated companies and their families; and for purposes of determining
 eligibility of the Executive for retiree benefits pursuant to such plans,
 practices, programs and policies, the Executive shall be considered to have
 remained employed for three additional years, and to have then retired; and

	
 

	
 

	
 

	
                    (iii)
 the Company shall, at its sole expense as incurred, provide the Executive
 with outplacement services the scope and provider of which shall be selected
 by the Executive in the Executive’s sole discretion; provided, that
 the cost of such outplacement shall not exceed $20,000; and

	
 

	
 

	
 

	
                    (iv)
 to the extent not theretofore paid or provided, the Company shall timely pay
 or provide to the Executive any other amounts or benefits required to be paid
 or provided or that the Executive is eligible to receive under any plan, program,
 policy or practice or contract or agreement of the Company and the Affiliated
 Companies.

Notwithstanding
the provisions of clause (ii) of this Section 6(d), if after using its reasonable best efforts to obtain life insurance,
long-term disability or travel accident insurance coverage for the Executive as required by said clause (ii) at the lowest
available rates, the Company is unable to obtain such coverage for an aggregate annual cost to the Company of not more than two
percent of the Annual Base Salary, the Executive shall be required to elect to either (i) waive one or more of such
coverages, or (ii) have the amount or duration of one or more of such coverages reduced, in either case so as to reduce such
aggregate annual cost to not more than two percent of the Annual Base Salary. If any of such coverages cannot be obtained, or if
the Executive elects to waive any of such coverages as provided in the preceding sentence, then the Company shall pay the
Executive cash in lieu thereof, in the amount of two-thirds of one percent of the Annual Base Salary for each such coverage that
is not provided.

11

          7.
Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any benefit, bonus,
incentive or other plans, programs, policies or practices, provided by the
Company or any of its affiliated companies and for which the Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Executive may have under any other agreements with the Company or any of its
affiliated companies. Amounts which are vested benefits or which the Executive
is otherwise entitled to receive under any plan, policy, practice or program of
the Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program except as explicitly modified by this Agreement. Notwithstanding the
foregoing, if the Executive receives payments and benefits pursuant to
Section 6(d) of this Agreement, the Executive shall not be entitled to any
severance pay or benefits under any severance plan, program or policy of the
Company and the affiliated companies, unless otherwise specifically provided
therein in a specific reference to this Agreement.

          8.
Full Settlement. The Company’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any setoff, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement. The Company agrees to
pay, to the full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to Section 9 of this
Agreement), plus in each case interest at the applicable Federal rate provided
for in section 7872(f)(2) of the Internal Revenue Code of 1986, as amended
(the “Code”).

          9.
Certain Additional Payments by the Company.

                    (a)
Anything in this Agreement to the contrary notwithstanding and except as set
forth below, in the event it shall be determined that any Payment would be
subject to the Excise Tax, then the Executive shall be entitled to receive an
additional payment (the “Gross-Up Payment”) in an amount such that, after
payment by the Executive of all taxes (and any interest or penalties imposed
with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 9(a), if it shall
be determined that the Executive is entitled to the Gross-Up Payment, but that
the Parachute Value of all Payments do not exceed 110% of the Safe Harbor
Amount, then

12

no Gross-Up
Payment shall be made to the Executive and the amounts payable under this Agreement
shall be reduced so that the Parachute Value of all Payments, in the aggregate,
equals the Safe Harbor Amount. The reduction of the amounts payable hereunder,
if applicable, shall be made by first reducing the payments under
Section 6(d)(i), unless an alternative method of reduction is elected by
the Executive, and in any event shall be made in such a manner as to maximize
the Value of all Payments actually made to the Executive. For purposes of
reducing the Payments to the Safe Harbor Amount, only amounts payable under
this Agreement (and no other Payments) shall be reduced. If the reduction of
the amount payable under this Agreement would not result in a reduction of the
Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable
under the Agreement shall be reduced pursuant to this Section 9(a). The
Company’s obligation to make Gross-Up Payments under this Section 9 shall
not be conditioned upon the Executive’s termination of employment.

                    (b)
Subject to the provisions of Section 9(c), all determinations required to
be made under this Section 9, including whether and when a Gross-Up
Payment is required, the amount of such Gross-Up Payment and the assumptions to
be utilized in arriving at such determination, shall be made by
PricewaterhouseCoopers or such other nationally recognized certified public
accounting firm as may be designated by the Executive (the “Accounting Firm”).
The Accounting Firm shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the receipt of notice from
the Executive that there has been a Payment or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Executive may appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 9, shall be paid by the Company to
the Executive within 5 days of the receipt of the Accounting Firm’s determination.
Any determination by the Accounting Firm shall be binding upon the Company and
the Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments that will not
have been made by the Company should have been made (the “Underpayment”),
consistent with the calculations required to be made hereunder. In the event
the Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive.

                    (c)
The Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of the Gross-Up Payment. Such notification shall be given as soon as
practicable, but no later than 10 business days after the Executive is informed
in writing of such claim. The Executive shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect
to such claim is due). If the Company notifies the Executive in writing prior
to the expiration of such period that the Company desires to contest such
claim, the Executive shall:

13

	
 

	
 

	
 

	
                    (i)
 give the Company any information reasonably requested by the Company relating
 to such claim,

	
 

	
 

	
 

	
                    (ii)
 take such action in connection with contesting such claim as the Company
 shall reasonably request in writing from time to time, including, without
 limitation, accepting legal representation with respect to such claim by an
 attorney reasonably selected by the Company,

	
 

	
 

	
 

	
                    (iii)
 cooperate with the Company in good faith in order effectively to contest such
 claim, and

	
 

	
 

	
 

	
                    (iv)
 permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and
pay directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest, and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 9(c), the Company shall control all
proceedings taken in connection with such contest, and, at its sole discretion,
may pursue or forgo any and all administrative appeals, proceedings, hearings
and conferences with the applicable taxing authority in respect of such claim and
may, at its sole discretion, either direct the Executive to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however,
that, if the Company directs the Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to the Executive,
on an interest-free basis, and shall indemnify and hold the Executive harmless,
on an after-tax basis, from any Excise Tax or income tax (including interest or
penalties) imposed with respect to such advance or with respect to any imputed
income in connection with such advance; and provided,
further, that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the Company’s control
of the contest shall be limited to issues with respect to which the Gross-Up
Payment would be payable hereunder, and the Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

                    (d)
If, after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 9(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the
Company’s complying with the requirements of Section 9(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.

14

               (e)
Notwithstanding any other provision of this Section 9, the Company may, in
its sole discretion, withhold and pay over to the Internal Revenue Service or
any other applicable taxing authority, for the benefit of the Executive, all or
any portion of the Gross-Up Payment, and the Executive hereby consents to such
withholding.

               (f)
Definitions. The following terms shall have the following meanings for
purposes of this Section 9.

	
 

	
 

	
 

	
 

	
          (i)
 “Excise Tax” shall mean the excise tax imposed by Section 4999 of the
 Code, together with any interest or penalties imposed with respect to such
 excise tax.

	
 

	
 

	
 

	
 

	
          (ii)
 The “Net After-Tax Amount” of a Payment shall mean the Value of a Payment net
 of all taxes imposed on the Executive with respect thereto under
 Sections 1 and 4999 of the Code and applicable state and local law,
 determined by applying the highest marginal rates that are expected to apply
 to the Executive’s taxable income for the taxable year in which the Payment
 is made.

	
 

	
 

	
 

	
 

	
          (iii)
 “Parachute Value” of a Payment shall mean the present value as of the date of
 the change of control for purposes of Section 280G of the Code of the
 portion of such Payment that constitutes a “parachute payment” under
 Section 280G(b)(2), as determined by the Accounting Firm for purposes of
 determining whether and to what extent the Excise Tax will apply to such
 Payment.

	
 

	
 

	
 

	
 

	
          (iv)
 A “Payment” shall mean any payment or distribution in the nature of
 compensation (within the meaning of Section 280G(b)(2) of the Code) to
 or for the benefit of the Executive, whether paid or payable pursuant to this
 Agreement or otherwise.

	
 

	
 

	
 

	
 

	
          (v)
 The “Safe Harbor Amount” means the maximum Parachute Value of all Payments
 that the Executive can receive without any Payments being subject to the
 Excise Tax.

	
 

	
 

	
 

	
 

	
          (vi)
 “Value” of a Payment shall mean the economic present value of a Payment as of
 the date of the change of control for purposes of Section 280G of the
 Code, as determined by the Accounting Firm using the discount rate required
 by Section 280G(d)(4) of the Code.

          10.
Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the
Executive during the Executive’s employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive’s employment with the
Company, the Executive shall not, without the prior
written consent of the Company, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.
In no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

15

          11. Successors.

	
 

	
 

	
 

	
                    (a) This
 Agreement is personal to the Executive and without the prior written consent
 of the Company shall not be assignable by the Executive otherwise than by
 will or the laws of descent and distribution. This Agreement shall inure to
 the benefit of and be enforceable by the Executive’s legal representatives.

	
 

	
 

	
 

	
                    
 (b) This Agreement shall inure to the benefit of and be binding upon the
 Company and its successors and assigns. Except as provided in
 Section 11(c), without the prior written consent of the Executive, this
 Agreement shall not be assignable by the Company.

	
 

	
 

	
 

	
                    
 (c) The Company will require any successor (whether direct or indirect, by
 purchase, merger, consolidation or otherwise) to all or substantially all of
 the business and/or assets of the Company to assume expressly and agree to
 perform this Agreement in the same manner and to the same extent that the
 Company would be required to perform it if no such succession had taken
 place. As used in this Agreement, “Company” shall mean the Company as
 hereinbefore defined and any successor to its business and/or assets as
 aforesaid which assumes and agrees to perform this Agreement by operation of
 law, or otherwise. 

          12. Miscellaneous.

	
 

	
 

	
 

	
                    (a)
 This Agreement shall be governed by and construed in accordance with the laws
 of the State of Delaware, without reference to principles of conflict of
 laws. The captions of this Agreement are not part of the provisions hereof
 and shall have no force or effect. This Agreement may not be amended or
 modified otherwise than by a written agreement executed by the parties hereto
 or their respective successors and legal representatives.

	
 

	
 

	
 

	
                    (b)
 All notices and other communications hereunder shall be in writing and shall
 be given by hand delivery to the other party or by registered or certified
 mail, return receipt. requested, postage prepaid, addressed as follows:

	
 

	
 

	
 

	
 

	
 

	
If to the
 Executive:

	
 

	
 

	
 

	
 

	
 

	
Phillips S.
 Baker, Jr. 

 Hecla Mining Company

 6500 N. Mineral Drive, Suite 200

 Coeur d’Alene, Idaho 83815-9408

16

	
 

	
 

 	
 

	
 

	 
 	
If to the
 Company:

	
 

	 
 	
 

	
 

	 
 	
Hecla Mining
 Company

 6500 N. Mineral Drive, Suite 200

 Coeur d’Alene, Idaho 83815-9408

 Attention: Chief Executive Officer

or to such
other address as either party shall have furnished to the other in writing in
accordance herewith. Notice and communications shall be effective when actually
received by the addressee.

	
 

	
 

	
 

	
                    (c)
 The invalidity or unenforceability of any provision of this Agreement shall
 not affect the validity or enforceability of any other provision of this
 Agreement.

	
 

	
 

	
 

	
                    (d)
 The Company may withhold from any amounts payable under this Agreement such
 Federal, state or local taxes as shall be required to be withheld pursuant to
 any applicable law or regulation.

	
 

	
 

	
 

	
                    (e)
 The Executive’s failure to insist upon strict compliance with any provision
 hereof or the failure to assert any right the Executive may have hereunder,
 including, without limitation, the right to terminate employment for Good
 Reason pursuant to Section 5(c)(i) - (v), shall not be deemed to be a
 waiver of such provision or right or any other provision or right thereof.

	
 

	
 

	
 

	
                    (f)
 The Executive and the Company acknowledge that, except as may otherwise be
 provided under any other written agreement between the Executive and the
 Company, the employment of the Executive by the Company is “at will” and, subject
 to Section 1(a), prior to the Effective Date, the Executive’s employment
 may be terminated by either the Executive or the Company at any time prior to
 the Effective Date, in which case the Executive shall have no further rights
 under this Agreement. From and after the Effective Date, this Agreement shall
 supersede any other agreement between the parties with respect to the subject
 matter hereof.

          IN
WITNESS WHEREOF, the Executive has hereunder set the Executive’s hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

	
 

	
 

	
 

	
EXECUTIVE

	
 

	
 HECLA MINING COMPANY

	
 

	
 

	
 

	
 

	
By:   

	
/s/   Phillips S. Baker, Jr.

	
By:   

	
/s/   Philip C. Wolf

	
 

	 

	
 

	 

	
 

	
PHILLIPS S.
 BAKER, JR.

	
 

	
PHILIP C. WOLF

	
 

	
 

	
 

	
Senior Vice President

17<page>

	 	
Exhibit 10.6

	 	 

EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT ("Employment Agreement") is entered into as of the ______ day of _______, ____ , among Sovran Self Storage, Inc., a Maryland corporation and Sovran Acquisition Limited Partnership, a Delaware limited partnership (the "Corporation" or the "Partnership", respectively and collectively the "Company"), and ___________ (the "Employee").

W I T N E S S E T H:

          WHEREAS, the Employee is a valuable employee of the Company and an integral part of its management team;

          WHEREAS, the Company wishes to attract and retain well-qualified personnel and to assure continuity of management, which will be essential to its ability to evaluate and respond to any actual or threatened Change in Control (as defined below) in the best interests of shareholders;

          WHEREAS, the Company understands that any actual or threatened Change in Control will present significant concerns for the Employee with respect to his financial and job security;

          WHEREAS, the Company wishes to encourage the Employee to continue his career and services with the Company for the period during and after an actual or threatened Change in Control and to assure to the Company the Employee's services during the period in which such a Change in Control is threatened; and

          WHEREAS, the Board of Directors of the Corporation  (the "Board") and the Partnership have determined that it would be in the best interests of the Company and its shareholders and partners to assure continuity in the management of the Company in the event of a Change in Control by entering into an employment continuation and noncompete agreement with Employee;

          NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree as follows:

 

 

 

 

- 1 -

<page>

          1.     Employment.

                  (a)     The Company hereby employs the Employee and the Employee hereby accepts such employment, on the terms and subject to the conditions hereinafter set forth.

                  (b)     During the term of this Employment Agreement, the Employee shall devote his entire business time and all reasonable efforts to his employment in that capacity with such other duties as may be reasonably requested from time to time by the Officers of the Company.

          2.     Compensation.

                  The Company will pay Employee the salary and provide the benefits as determined from time to time.

          3.     Term.

                  This Employment Agreement shall have a continuous term until terminated as provided in Paragraph 4.

          4.     Termination.

                  (a)     This Employment Agreement will terminate upon Employee's death or retirement.

                  (b)     The Company may terminate this Employment Agreement upon at least thirty (30) days' written notice in the event of Employee's "disability."  For purposes of this Employment Agreement, the Employee's "disability" shall be deemed to have occurred only after ninety (90) days in the aggregate during any consecutive twelve (12) month period, the Employee, by reason of his physical or mental disability or illness, shall have been unable to substantially discharge his duties under this Employment Agreement.

                  (c)     The Company may terminate this Employment Agreement for "cause."  For purposes of this Employment Agreement, "cause" shall mean

	 	
(i)
	
The Employee's fraud, commission of a felony, commission of an act or series of acts of dishonesty which are inimical to the best interests of the Company, or the Employee's willful and substantial failure to perform his duties under this Employment Agreement; or

	 	 	 
	 	
(ii)
	
The Employee's breach of any material provision of this Employment Agreement; or

- 2 -

 

<page>

	 	 	 
	 	
(iii)
	
The Employee's commission of an act of moral turpitude, dishonesty or fraud which would render his continued employment materially damaging or detrimental to the Company.

                  (d)     The Company may terminate this Employment Agreement without cause by notifying Employee in writing of its election to terminate at least thirty (30) days before the effective date of termination.

                  (e)     After a Change In Control (as defined below), Employee may terminate this Employment Agreement for "good reason."  "Good reason" shall exist if:

	 	
(i)
	
the Company materially changes the Employee's duties and responsibilities;

	 	 	 
	 	
(ii)
	
the Employee's place of employment or the principal executive offices of the Company are located more than thirty (30) miles from the geographical center of Williamsville, New York;

	 	 	 
	 	
(iii)
	
the Company diminishes the salary, fringe benefits or other compensation being paid to the Employee;

	 	 	 
	 	
(iv)
	
there occurs a material breach by the Company of any of its  obligations under this Employment Agreement, which breach has not been cured in all material respects within thirty (30) days after the Employee gives notice thereof of the Company;

	 	 	 
	 	
(v)
	
the failure of any successor of the Company to furnish the assurances provided for in Section 7(c).

                  (f)     This Employment Agreement may be terminated by mutual agreement of the Company and the Employee.

                  (g)     Employee may terminate this Employment Agreement at any time with thirty (30) days' written notice to the Company, and the Company may accelerate the effective date of termination to any other date up to the date of notice of acceleration.

                  (h)     The Company will pay Employee on the effective date of termination all unpaid compensation at the rate then in effect through the effective date of termination.

 

 

 

- 3 -

<page>

          5.     Severance Payments

                  (a)     The Company will make the severance payments specified in Section 5(b) or (c) below if this Employment Agreement is terminated pursuant to Sections 4(d) or (e) hereof.

                  (b)     If the Employment Agreement is terminated pursuant to Section 4(d) prior to a "Change In Control" (as defined below), as severance payments under this Section 5(b), the Company will pay Employee the severance benefits then in effect under the Company's severance policy for all employees.

                  (c)     If this Employment Agreement is terminated pursuant to Section 4(d) or (e) within twenty-four (24) months after a Change in Control of the Company has occurred, the Company shall pay the Employee a lump sum equal to three (3) times the salary and bonus paid to the Employee in the prior calendar year.  This lump sum shall be paid within 30 days after the effective date of termination.  In addition, health insurance benefits for the Employee will be continued for thirty-six (36) months after the effective date of termination upon substantially the same terms as provided to Employee immediately before the Change in Control.  For the purposes of this Employment Agreement, a "Change in Control" shall be deemed to have occurred if any of the following have occurred:

	 	
(i)
	
either (A) the Corporation shall receive a report on Schedule 13D, or an amendment to such a report, filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the "1934 Act") disclosing that any person (as such term is used in Section 13(d) of the 1934 Act) ("Person"), is the beneficial owner, directly or indirectly, of twenty (20) percent or more of the outstanding stock of the Corporation or (B) the Company has actual knowledge of facts which would require any Person to file such a report on Schedule 13D, or to make an amendment to such a report, with the SEC (or would be required to file such a report or amendment upon the lapse of the applicable period of time specified in Section 13(d) of the 1934 Act) disclosing that such Person is the beneficial owner, directly or indirectly, of twenty (20) percent or more of the outstanding stock of the Corporation;

	 	 	 
	 	
(ii)
	
purchase by any Person, other than the Company or a wholly-owned subsidiary of the Company or an employee benefit plan sponsored or maintained by the Company or a wholly-owned subsidiary of the Company, of shares pursuant to a tender or exchange offer to acquire any stock of the Corporation (or

 

 

 

- 4 -

<page>

	 	 	
securities, including units of limited partnership interests, convertible into stock) for cash, securities or any other consideration provided that, after consummation of the offer, such Person is the beneficial owner (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of twenty (20) percent or more of the outstanding stock of the Corporation (calculated as provided in paragraph (d) of Rule 13d-3 under the 1934 Act in the case of rights to acquire stock);

	 	 	 
	 	
(iii)
	
approval by the shareholders of the Corporation of (A) any consolidation or merger of, or other business combination involving, the Corporation in which the Corporation is not to be the continuing or surviving entity or pursuant to which shares of stock of the Corporation would be converted into cash, securities or other property, other than a consolidation or merger or business combination of the Corporation in which holders of its stock immediately prior to the consolidation or merger or business combination have substantially the same proportionate ownership of common stock of the surviving corporation immediately after the consolidation or merger or business combination as immediately before, or (B) any consolidation or merger or business combination in which the Corporation is the continuing or surviving corporation but in which the common shareholders of the Corporation immediately prior to the consolidation or merger or business combination do not hold at least a majority of the outstanding common stock of the continuing or surviving corporation (except where such holders of common stock hold at least a majority of the common stock of the corporation which owns all of the common stock of the Corporation), or (C) any sale, lease, exchange or other transfer by operation of law or otherwise (in one transaction or a series of related transactions) of all or substantially all the assets of the Corporation or the Partnership; or

	 	 	 
	 	
(iv)
	
a change in the majority of the members of the Board  within a 24-month period unless the election or nomination for election by the Corporation shareholders of each new director was approved by the vote of at least two-thirds of the directors then still in office who were in office at the beginning of the 24-month period.

	 	 	 
	 	
(v)
	
more than fifty percent (50%) of the assets of the Corporation or the Partnership are sold, transferred or otherwise disposed of, whether by operation of law or otherwise, other than in the usual and ordinary course of its business.

 

 

 

- 5 -

<page>

                  (d)     Employee shall be under no obligation to mitigate damages with respect to termination and in the event Employee is employed or receives income from any other source there shall be no offset therefor against the amounts due from the Company hereunder.

          6.     Covenants and Confidential Information.

                  (a)     The Employee acknowledges the Company's reliance and expectation of the Employee's continued commitment to performance of his duties and responsibilities during the term of this Employment Agreement.  In light of such reliance and expectation on the part of the Company:

	 	
(i)
	
During the term of this Employment Agreement and, during the one-year period following the termination of this Employment Agreement, the Employee shall not: (A) own, manage, control or participate in the ownership, management, or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association or other business entity engaged in the business of, or otherwise engage in the business of, acquiring, owning, developing or managing self-storage facilities; provided, however, that the ownership of not more than one percent (1%) of any class of publicly traded securities of any entity is permitted ; or (B) directly or indirectly or by acting in concert with others, employ or attempt to employ or solicit for any employment competitive with the Company, any Company employees.

	 	 	 
	 	
(ii)
	
During and after the term of this Employment Agreement, the Employee shall not, directly or indirectly, disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, any confidential information relating to the Company's operations, properties or otherwise to its particular business or other trade secrets of the Company, it being acknowledged by the Employee that all such information regarding the business of the Company compiled or obtained by, or furnished to, the Employee while the Employee shall have been employed by or associated with the Company is confidential information and the Company's exclusive property; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Employee

 

 

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of the terms hereof, (C) was not acquired by the Employee in connection with his employment or affiliation with the Company, (D) was not acquired by the Employee from the Company or its representatives, or (E) is required to be disclosed by rule or law or by order of a court or governmental body or agency.

	 	 	 

                  (b)     The Employee agrees and understands that the remedy at law for any breach by him of this Paragraph 6 will be inadequate and that the damages flowing from such breach are not readily susceptible to being measured in monetary terms.  Accordingly, it is acknowledged that, upon adequate proof of the Employee's violation of any legally enforceable provision of this Paragraph 6, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach.

                  (c)     The Employee has carefully considered the nature and extent of the restrictions upon him and the rights and remedies conferred upon the Company under this Paragraph 6, and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Employee, would not operate as a bar to the Employee's sole means of support, are fully required to protect the legitimate interests of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Employee.

          7.     Miscellaneous.

                  (a)     The Employee represents and warrants that he is not a party to any agreement, contract or understanding, whether of employment or otherwise, which would restrict or prohibit him from undertaking or performing employment in accordance with the terms and conditions of this Employment Agreement.

                  (b)     The provisions of this Employment Agreement are severable and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless shall be binding and enforceable.

                  (c)     Any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company must, within ten (10) days after Employee's request, furnish its written assurance that it is bound to perform this Employment Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place.

                  (d)     Any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association then pertaining in the City of Buffalo, New York, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court 

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having jurisdiction thereof.  The arbitrator or arbitrators shall be deemed to possess the powers to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Section 7(d) shall be construed so as to deny the Company the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Employee of any of his covenants contained in Section 6 hereof.

                  (e)     Any notice to be given under this Employment Agreement shall be personally delivered in writing or shall have been deemed duly given when received after it is posted in the United States mail, postage prepaid, registered or certified, return receipt requested, and if mailed to the Company, shall be addressed to the principal place of business of the Corporation and the Partnership, attention:  President, and if mailed to the Employee, shall be addressed to him at his home address last known on the records of the Company, or at such other address or addresses as either the Company or the Employee may hereafter designate in writing to the other.

                  (f)     The failure of either party to enforce any provision or provisions  of this Employment Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party thereafter from enforcing each and every other provision of this Employment Agreement.  The rights granted the parties herein are cumulative and the waiver of any single remedy shall not constitute a waiver of such party's right to assert all other legal remedies available to it under the circumstances.

                  (g)     This Employment Agreement supersedes all prior employment agreements and understandings between the parties and may not be modified or terminated orally.  No modification, termination or attempted waiver shall be valid unless in writing and signed by the party against whom the same is sought to be enforced.

                  (h)     This Employment Agreement shall be governed by and construed according to the laws of the State of New York.

                  (i)     Captions and paragraph headings used herein are for convenience and are not a part of this Employment Agreement and shall not be used in construing it.

                  IN WITNESS WHEREOF, the parties have executed this Employment Agreement on the day and year first set forth above.

	

                                                                      

          Employee
	
SOVRAN SELF STORAGE, INC.

By:                                                            

Title:                                                        

	 	 

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SOVRAN ACQUISITION LIMITED

PARTNERSHIP

By  SOVRAN HOLDINGS INC.

      General Partner

By:                                                            

Title:                                                        

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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