Document:

Exhibit
10.1

EMPLOYMENT
AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”),
is dated as of August 7, 2007 (the “Effective Date”), between Mines Management,
Inc, an Idaho corporation (the “Company”) and Glenn M. Dobbs (“Executive”).

W I T N E S S E T
H   T H A T:

WHEREAS, the Company and Executive are
parties to that certain Executive Compensation Agreement, dated
November 20, 2003 (the “Prior Agreement”); and

WHEREAS,
the Company and the Executive agree to terminate the Prior Agreement, and
hereby covenant that as  of the date
hereof, the Prior Agreement shall be null and void and have no further effect,
and

WHEREAS, the Company wishes to retain the
services of Executive as President of the Company and Executive is willing to
continue to make his services available to the Company on the terms and
conditions herein provided.

NOW, THEREFORE, in consideration thereof and
hereof, the parties hereto covenant and agree as follows:

Section 1.                                            Term of
Employment; Compensation.  The
Company agrees to employ Executive from the Effective Date, in the full time
capacity of President of the Company, with the responsibilities normally
associated with such position, which employment shall continue until terminated
as hereafter provided.  The Company will
pay Executive for his services at an annual rate of Three Hundred Thousand
Dollars ($300,000), payable in arrears, in equal installments, in accordance
with standard Company practice, but in any event not less often than monthly,
subject only to such payroll and withholding deductions as are required by law
or authorized by Executive. Executive shall also be entitled to participate in
all employee benefit plans of the Company on the same terms and conditions as
other employees similarly situated, subject to the Company’s right, in any
event, to modify or terminate such plans. 
The Company shall pay Executive’s individual medical and dental
insurance premiums and shall provide paid monthly parking.  In addition, Executive shall be eligible to
receive such stock options as may be approved by the Compensation Committee of
the Board of Directors of the Company (the “Board”) or by the Board.

Section 2.                                            Office
and Duties.  Executive shall serve as
President of the Company, and if elected a director of the Company, as Chairman
of the Board (so long as Executive serves as a director and is so appointed by
the Board) and perform duties customarily incident to such offices and all
other duties as may from time to time be assigned to Executive by the Board.  Executive shall devote substantially all of
his business time, labor, skill, undivided attention, and best ability to the
performance of his duties hereunder in a manner that will faithfully and
diligently further the business and interests of the Company on a full time
basis.  Executive shall not directly or
indirectly pursue any other business activity without the Company’s prior
written consent.  

Executive agrees that he will travel as is reasonably necessary in the
conduct of the Company’s business.

Section 3.                                            Expenses.  Executive shall be entitled to reimbursement
for expenses incurred by him in connection with the performance of his duties
hereunder upon receipt of vouchers therefor in accordance with such procedures
as the Company has heretofore or may hereafter establish.

Section 4.                                            Vacation
During Employment.  Executive shall
be entitled to such reasonable vacation time as may be allowed by the Company
in accordance with general practices established or to be established, but in
any event not less than four (4) weeks of vacation during each twelve (12)
month period plus usual statutory and other public holidays, the timing of such
vacation to be mutually agreed upon between Executive and the Company.  The Company recommends that all employees
take vacation, but if duties of Executive prevent him from taking said
vacation, Executive shall be paid for any unused vacation at the end of each
year. Unused vacation time will not be accrued and carried from year to year,
and Executive will forfeit any unused vacation at the end of each year.

Section 5.                                            Additional
Benefits.  Nothing herein contained
shall preclude Executive, to the extent he is otherwise eligible, from
participation in all group insurance programs or other fringe benefit plans
that the Company may hereafter in its sole and absolute discretion make
available generally to its employees.

Section 6.                                            Certain
Definitions.  For purposes of this
Agreement, the following words and phrases shall have the following meanings:

(a)                                           “Cause”
shall mean termination by the Company of Executive due to:  (i) engaging in illegal conduct, including
but not limited to fraud or embezzlement; (ii) being convicted of a felony;
(iii) engaging in substance abuse which impairs Executive’s ability to perform
the duties and obligations of his employment or causes harm to the reputation
of the Company; (iv) the willful breach of Executive’s duties to the Company;
(v) failure or refusal by Executive to follow reasonable directions by the
Company; or (vi) engaging in conduct which in the sole opinion of management
of the Company is deemed to be detrimental to the Company.  Whether Cause exists for termination will be
determined by the Company in its sole discretion.

(b)                                          A
“Change in Control” shall be deemed to have occurred if any of the following
occurs with respect to the Company:  (i)
the direct or indirect sale or exchange in a single transaction or series of
transactions by the shareholders of the Company of more than thirty five
percent (35%) of the voting stock of the Company to an individual, an entity or
a “group” as that term is defined in Section 13 of the Securities Exchange Act
of 1934; (ii) a merger or consolidation to which the Company is a party and
following which the shareholders of the Company do not have more than fifty
percent (50%) of the voting stock of the resulting company (or its ultimate
parent company); (iii) the sale, exchange, or transfer of all or substantially
all of the assets of the Company; (iv) a liquidation or dissolution of the
Company; or (v) a series of related 

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Transactions (each of the items (i) through (iv) constituting a “Transaction”) wherein the
shareholders of the Company immediately before the Transaction do not retain
immediately after the Transaction, in substantially the same proportions as
their ownership of shares of the Company’s voting stock immediately before the
Transaction, direct or indirect beneficial ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding voting securities
of the Company or, in the case of a Transaction involving the sale, exchange,
or transfer of all or substantially all of the assets of the Company, the
corporation or other business entity to which the assets of the Company were
transferred (the “Transferee”),
as the case may be.  For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting securities of
one or more corporations or other business entities which own the Company or
the Transferee, as the case may be, either directly or through one or more
subsidiary corporations or other business entities.  The Board shall have the right to determine
whether multiple sales or exchanges of the voting securities of the Company or
multiple Transactions are related, and its determination shall be final,
binding and conclusive.  Notwithstanding
the preceding sentence, a Change in Control shall not include a distribution or
transaction in which the voting stock of the Company or a parent or subsidiary
is distributed to the shareholders of a parent of such entity.  Any change in ownership resulting from an
underwritten public offering of the common stock or the stock of any parent or
subsidiary shall not be deemed a Change in Control for any purpose hereunder.

(c)                                           The
“Change in Control Date” shall be any date during the term of this Agreement on
which a Change in Control occurs. 
Anything in this Agreement to the contrary notwithstanding, if Executive’s
employment or status as an elected officer with the Company is terminated
within six (6) months before the date on which a Change in Control occurs, and
it is reasonably demonstrated that such termination (i) was at the request
of a third party who has taken steps reasonably calculated or intended to
effect a Change in Control or (ii) otherwise arose in connection with or
anticipation of a Change in Control, then for all purposes of this Agreement
the “Change in Control Date” shall mean the date immediately before the date of
such termination.

(d)                                          “Code”
shall mean the Internal Revenue Code of 1986, as amended.

(e)                                           “Disability,”
for purposes of this Agreement, shall mean total disability as defined in any
long-term disability plan sponsored by the Company in which Executive
participates, or, if there is no such plan or such plan does not define such
term, then it shall mean the physical or mental incapacity of Executive that
prevents him from substantially performing the duties of President, and which
incapacity has continued for a period of at least ninety (90) days in any three
hundred sixty five (365) day period.

(f)                                             “Good
Reason” means:

(i)                                     the
assignment to Executive within the Protection Period (as defined in
subparagraph (g) below) of any duties inconsistent in any material respect with
Executive’s position (including status, offices, titles and reporting 

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requirements, authority,
duties or responsibilities), or any other action that results in a material
diminution in such position, authority, duties, or responsibilities, excluding
for this purpose an isolated or inadvertent action not taken in bad faith, or
that is remedied by the Company within thirty (30) days after receipt of
written notice given by Executive;

(ii)                                  a
reduction by the Company in Executive’s base salary as in effect immediately
before the beginning of the Protection Period or as increased from time to time
after the beginning of the Protection Period;

(iii)                               a
failure by the Company to maintain plans providing benefits at least as
beneficial as those provided by any benefit or compensation plan (including,
without limitation, any incentive compensation plan, bonus plan or program,
retirement, pension or savings plan, life insurance plan, health and dental
plan or disability plan) in which Executive is participating immediately before
the beginning of the Protection Period, or any action taken by the Company that
would adversely affect Executive’s participation in or reduce Executive’s
opportunity to benefit under any of such plans or deprive Executive of any
material fringe benefit enjoyed by him immediately before the beginning of the
Protection Period; provided, however, that a reduction in benefits under the
Company’s tax-qualified retirement, pension, or savings plans or its life
insurance plan, health and dental plan, disability plans or other insurance
plans, which reduction applies generally to all participants in the plans or
has a de minimis effect on Executive shall not constitute “Good Reason”;

(iv)                              the
Company’s requiring Executive, without Executive’s written consent, to be based
at any office or location in excess of fifty (50) miles from his office
location immediately before the beginning of the Protection Period, except for
travel reasonably required in the performance of Executive’s responsibilities;

(v)                                 any
failure by the Company to obtain the assumption of the obligations contained in
this Agreement by any successor as contemplated in Section 13 of
this Agreement; or

(vi)                              any
material breach of this Agreement by the Company.

(g)                                          “Protection
Period” means the period beginning on the Change in Control Date and ending on
the one year anniversary of the Change in Control Date.

Section 7.                                            Termination
of Employment.

(a)                                           Notwithstanding
any other provision of this Agreement, Executive’s employment may be
terminated:

(i)                                     by
Executive upon ninety (90) days written notice;

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(ii)                                  by
the Company upon thirty (30) days written notice, without Cause;

(iii)                               by
the Company, with notice to Executive, for Disability;

(iv)                              in
the event of Executive’s death during the term of his employment, provided that
the Company’s obligation to pay further compensation hereunder shall cease
forthwith, except that the legal representative of Executive’s estate shall be
entitled to receive an amount equal to one-twelfth (1/12) of Executive’s then
current annual base salary for a period of three (3) months beginning with the
pay period immediately after Executive’s death shall have occurred; or

(v)                                 by
the Company, at any time for Cause.

Upon the termination of Executive’s employment pursuant to this Section
7(a), this Agreement shall automatically terminate, except as otherwise
provided herein.

(b)                                          In
the event that Executive’s employment is terminated pursuant to Section 7(a)(i),
(ii), (iii) or (iv) 
or Section 7(d), Executive shall receive an amount equal to
Executive’s full base salary and vacation pay (for vacation not taken) accrued
but unpaid through the date of termination at the rate in effect at the time of
the termination.

(c)                                           In
the event that Executive’s employment is terminated pursuant to Section 7(a)(ii)
or (iii) or Section 7(d):

(i)                                     shares,
options, or other forms of securities issued by the Company and beneficially
owned by Executive (whether granted before or after the date of this Agreement)
that are unvested, restricted, or subject to any similar restriction shall vest
automatically on the termination date and shall be exercisable by Executive or
Executive’s personal representative in accordance with the terms of the
applicable Company stock option plan and restrictions shall lapse; and

(ii)                                  the
Company shall pay the premium for Executive’s COBRA continuation coverage for
health benefits provided by the Company for a period of up to twenty-four (24)
months (or such lesser period of COBRA coverage as may apply to Executive)
following the date of termination.

(d)                                          Benefits
upon Termination During a Protection Period.   If, during a Protection Period, Executive’s
employment is terminated by the Company other than for Cause or Disability or
other than as a result of Executive’s death, or if Executive terminates his
employment for Good Reason, and such termination of employment constitutes a “separation
from service” within the meaning of Section 409A of the Code, the Company shall
pay to Executive in a lump sum in cash, within ten (10) days after the date of
termination, the aggregate of the following amounts:

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(i)                                     Severance.  The Company shall pay to Executive a
severance amount equal to three (3) times Executive’s Annual Compensation.  As used herein,  “Annual Compensation” shall be an amount
equal to the sum of (i) Executive’s annual base salary from the Company
and its subsidiaries; and (ii) the amount of annual bonus, if any, paid by
the Company to Executive for the year before the Change of Control occurs.

(ii)                                  Gross-Up Benefits.  Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the
benefit of Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 7(d) (a “Payment”)
would be subject to the excise tax imposed by Section 4999 of the Code, or any
interest or penalties are incurred by Executive with respect to such excise tax
that are not due to Executive’s actions or inactions (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the “Excise Tax”), then Executive shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in an amount such that after payment by
Executive of all taxes imposed upon the Gross-Up Payment (including any
federal, state, and local income taxes, employment taxes under
Section 3101(b) of the Code, and Excise Taxes, assuming the highest
marginal income tax rates apply to the Gross-Up Payment), Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.  In the event that Executive is
entitled to a Gross-Up Payment, the following shall apply:

(1)                                  All
determinations required to be made, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment, shall be made by a
nationally recognized certified public accounting firm selected by the Company
(the “Accounting Firm”).  The Accounting
Firm shall be requested to provide detailed supporting calculations both to the
Company and to Executive within fifteen (15) business days of the receipt
of notice that there has been a Payment. 
All fees and expenses of the Accounting Firm shall be borne solely by
the Company.  Any Gross-Up Payment shall
be paid by the Company to Executive within five (5) days of the receipt of
the Accounting Firm’s determination.  Any
determination by the Accounting Firm shall be binding upon the Company and
Executive.  As a result of uncertainty in
the application of Sections 280G and 4999 of the Code, it is possible that
Gross-Up Payments that will not have been made by the Company should have been
made (an “Underpayment”).  In the event
the Company exhausts its remedies pursuant to the following subparagraph and
Executive is thereafter required to make a payment of any Excise Tax, the
Accounting Firm shall be requested to determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to Executive.

(2)                                  Executive
shall notify the Company in writing of any assertion by the Internal Revenue
Service that, if successful, would require the payment by the Company of an
Underpayment.  Such notification shall be
given as soon 

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as practicable, but no later than ten
(10) business days after Executive is informed of such assertion.  Executive shall apprise the Company of the
nature of such assertion and provide copies of all letters, notices, etc.
regarding the assertion, and written summaries of any statements made to
Executive or by Executive in connection with the assertion.  Executive shall not pay any amount asserted
to be due prior to the expiration of the 30-day period following the date on
which Executive gives such notice to the Company (or such shorter period ending
on the date that any payment of taxes with respect to such assertion is
due).  If the Company notifies Executive
in writing prior to the expiration of such period that the Company desires to
contest such assertion, Executive shall:

a.                                       give
the Company any information reasonably requested by the Company relating to
such assertion,

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

c.                                       cooperate
with the Company in good faith in order effectively to contest such assertion,
and

d.                                      permit
the Company to participate in any proceedings relating to such assertion;

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 Executive harmless,
on an after-tax basis, for any Excise Tax and income and employment tax
(including interest and penalties) imposed as a result of such representation
and payment of costs and expenses.  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 assertion and may, at its sole discretion, either
direct Executive to pay the tax asserted and sue for a refund or contest the
claim in any permissible manner, and 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 Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to Executive, on an interest-free basis, and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax and income and
employment 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 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 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.

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(3)                                  If,
after the receipt by Executive of a Gross-Up Payment or an amount advanced by
the Company, Executive becomes entitled to receive any refund with respect to
the Excise Tax to which such Gross-Up Payment relates or with respect to such
claim, Executive shall (subject to the Company’s complying with the
requirements of this section, if applicable) 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 Executive of an amount advanced by the Company pursuant to
this section, a determination is made that Executive shall not be entitled to
any refund with respect to such claim and the Company does not notify Executive
in writing of its intent to contest such denial of refund prior to the
expiration of thirty (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.

(e)                                           Prior
to receiving any payment or other consideration set forth in Section 7(b),
Section 7(c)(i), (ii) or Section 7(d), Executive must first sign
a Confidential Severance and Release Agreement in a form reasonably
satisfactory to the Company.

Section 8.                                            Code
Section 409A Savings Provision. 
Anything in this Agreement to the contrary notwithstanding, if (1) on
the date of Executive’s “separation from service” to the Company (within the
meaning of Section 409A of the Code), any of the Company’s stock is publicly
traded on an established securities market or otherwise (within the meaning of
Section 409A(a)(2)(B)(i) of the Code) and (2) as a result of such separation
from service, Executive would receive any payment that, absent the application
of this Section 8, would be subject to constructive receipt,
interest and additional tax imposed pursuant to Code Section 409A(a) as a
result of the application of Code Section 409A(2)(B)(i), then no such payment
shall be payable until the date that is the earliest of (i) six (6) months
after Executive’s separation from service date, (ii) Executive’s death or (iii)
such other date as will not result in such payment being subject to such
interest and additional tax.  It is the intention of the parties that all
amounts payable under this Agreement not be subject to constructive receipt,
interest and additional tax imposed pursuant to Code Section 409A, and all
provisions of the Code shall be interpreted consistently therewith.  To the extent amounts payable under this
Agreement may be or become subject to such interest and additional tax, based
on subsequent governmental or court interpretation of Code Section 409A, the
parties shall cooperate to amend this Agreement with the goal of giving
Executive the same or equivalent value of the benefits described in this
Agreement in a manner that does not result in such constructive receipt, interest
and additional tax.

Section 9.                                            Proprietary
Information.  Executive hereby grants
to the Company all right, title, and interest in and to any information
concerning discoveries; methods; business plans and practices; enterprises;
explorations; mining information; plant design, location, or operation; or any
other information affecting the business operations of the Company and any
invention, discovery, or improvement conceived or reduced to practice in
connection with the services performed hereunder (“Proprietary Information”).  Executive will keep signed, witnessed, and
dated written records of all such inventions, discoveries, or improvements;
will furnish the Company promptly with complete 

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information in respect thereof and will do all things necessary to
protect the interests of the Company therein.

Section 10.                                      Confidentiality.  Executive shall not, either during the period
of Executive’s employment with the Company or for a period of two (2) years
thereafter, reveal or disclose to any person outside the Company or use for
Executive’s own benefit or for the benefit of any third party, without the
Company’s specific written authorization, whether by private communication or
by public address or publication or otherwise, any information not already
lawfully available to the public concerning the Company or the Company’s equity
securities, including any Proprietary Information, whether or not supplied by
the Company, and whether or not made, developed, and/or conceived by Executive
or by others in the employ of the Company. 
All originals and copies of any of the foregoing, relating to the
business of the Company, however and whenever produced, shall be the sole
property of the Company, not to be removed from the premises or custody of the
Company without in each instance first obtaining written consent or
authorization of the Company.  Upon the
termination of Executive’s employment in any manner or for any reason,
Executive shall promptly surrender to the Company all copies of any of the
foregoing, together with any other documents, materials, data, information, and
equipment belonging to or relating to the Company’s business and in his
possession, custody, or control, and Executive shall not thereafter retain or
deliver to any other person, any of the foregoing or any summary or memorandum
thereof.

Section 11.                                      Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed to have been given when
delivered or three (3) days after mailing if mailed by first-class, registered,
or certified mail, postage prepaid, addressed (a) if to Executive: Glenn
M. Dobbs, 22820 E. Clearwater Lane, Liberty Lake, Washington 99019; and (b) if
to the Company: Chief Financial Officer, Mines Management, Inc., 905 W.
Riverside Ave. Suite 311, Spokane, WA 99201, or to such other person(s) or
address(es) as the Company shall have furnished to Executive in writing.

Section 12.                                      Survival.   The rights and obligations of the parties
hereto arising under Sections 6, 7, 8, 9, 10,
11, 12, 13, 14, 15, 16, 17, 18,
19, and 22 shall survive the termination or cancellation of this
Agreement for any reason.

Section 13.                                      Assignability.  If the Company shall be merged with, or
consolidated into any other corporation, or in the event that it shall sell and
transfer substantially all of its assets to another corporation, the terms of
this Agreement shall inure to the benefit of, and be assumed by, the
corporation resulting from such merger or consolidation, or to which the
Company’s assets shall be sold and transferred. 
This Agreement shall not be assignable by Executive, but it shall be
binding upon and to the extent provided in Section 7 shall inure to
the benefit of, his heirs, executors, administrators, and legal
representatives.

Section 14.                                      Entire
Agreement.  This Agreement contains
the entire agreement between the Company and Executive with respect to the
subject matter hereof and there 

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have been no oral or other agreements of any kind
whatsoever as a condition precedent or inducement to the signing of this
Agreement or otherwise concerning this Agreement or the subject matter hereof.
This Agreement supersedes and replaces any prior agreements, promises, or
understandings between the Company and Executive.

Section 15.                                      Expenses.  Each party shall pay its or his own expenses
incident to the performance or enforcement of this Agreement, including all
fees and expenses of its counsel for all activities of such counsel undertaken
pursuant to this Agreement, except as otherwise herein specifically provided.

Section 16.                                      Equitable
Relief.  Executive recognizes and
agrees that the Company’s remedy at law for any breach of the provisions of Sections
9 and 10 hereof would be inadequate, and he agrees that for breach
of such provisions, the Company shall, in addition to such other remedies as
may be available to it at law or in equity or as provided in this Agreement, be
entitled to injunctive relief and to enforce its rights by an action for
specific performance to the extent permitted by law.  If Executive engages in any activities
prohibited by this Agreement, he agrees to pay over to the Company all
compensation, remunerations or property of any sort received in connection with
such activities; such payment shall not impair any rights or remedies of the
Company or obligations or liabilities of Executive that such parties may have
under this Agreement or applicable law.

Section 17.                                      Waivers and
Further Agreements.  Any waiver of
any terms or conditions of this Agreement shall not operate as a waiver of any
other breach of such terms or conditions or any other term or condition, nor
shall any failure to enforce any provision hereof operate as a waiver of such
provision or of any other provision hereof, unless it, by its own terms,
explicitly provides to the contrary, nor shall it be construed to effect a
continuing waiver of the provision being waived and no such waiver in any
instance shall constitute a waiver in any other instance or for any other
purpose or impair the right of the party against whom such waiver is claimed in
all other instances or for all other purposes to require full compliance with
such provision.  Each of the parties
hereto agrees to execute all such further instruments and documents and to take
all such further action as the other party may reasonably require in order to
effectuate the terms and purposes of this Agreement.

Section 18.                                      Amendments.  This Agreement may not be amended, nor shall
any waiver, change, modification, consent, or discharge be effected except by
an instrument in writing executed by or on behalf of the party against whom
enforcement of any such waiver, change, modification, consent, or discharge is
sought.

Section 19.                                      Severability.  If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the conflict
of any provision with any constitution or statute or rule of public policy or
for any other reason, such circumstance shall not have the effect of rendering
the provision or provisions in question invalid, inoperative, or unenforceable
in any other jurisdiction or in any other case or circumstance or of rendering
any other provision or 

 10
 

provisions herein contained invalid, inoperative, or unenforceable to
the extent that such other provisions are not themselves actually in conflict
with such constitution, statute, or rule of public policy, but this Agreement
shall be reformed and construed in any such jurisdiction or case as if such
invalid, inoperative, or unenforceable provision had never been contained
herein and such provision reformed so that it would be valid, operative, and
enforceable to the maximum extent permitted in such jurisdiction or in such case.

Section 20.                                      Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

Section 21.                                      Section
Headings.  The headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.

Section 22.                                      General
Provisions.

(a)                                           Executive
further agrees that his obligations under Sections 9 and 10 of
this Agreement shall be binding upon him irrespective of the duration of his
employment by the Company, the reasons for any cessation of his employment by
the Company, or the amount of his compensation and shall survive the
termination of this Agreement (whether such termination is by the Company, by
Executive, upon expiration of this Agreement or otherwise).

(b)                                          Executive
represents and warrants to the Company that he is not now under any obligations
to any person, firm, or corporation, and has no other interest that is
inconsistent or in conflict with this Agreement, or that would prevent, limit
or impair, in any way, the performance by him of any of the covenants or duties
in his employment.

Section 23.                                      Gender.  Whenever used herein, the singular number
shall include the plural, the plural shall include the singular, and the use of
any gender shall include all genders.

Section 24.                                      Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the law of Washington.  Venue for any action arising from or in
connection with this Agreement shall be in Spokane County, Washington.

Signature Page Follows.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

	
  

  	
  MINES MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/

  	
  James H. Moore

  
	
   

  	
  Name:

  	
  James H. Moore

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Glenn M. Dobbs

  
	
   

  	
  Glenn M. Dobbs

  

 

 12Exhibit
10.2

EMPLOYMENT
AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”),
is dated as of August 7, 2007 (the “Effective Date”), between Mines Management,
Inc, an Idaho corporation (the “Company”) and James H. Moore (“Executive”).

W I T N E S S E T
H   T H A T:

WHEREAS, the Company and Executive are
parties to that certain Employment Agreement, dated August 10, 2005 (the “Prior
Agreement”); and

WHEREAS,
the Company and the Executive agree to terminate the Prior Agreement, and
hereby covenant, as of the date hereof, that the Prior Agreement shall be null
and void and have no further effect, and

WHEREAS, the Company wishes to retain the
services of Executive as Chief Financial Officer and Treasurer of the Company
and Executive is willing to continue to make his services available to the
Company on the terms and conditions herein provided.

NOW, THEREFORE, in consideration thereof and
hereof, the parties hereto covenant and agree as follows:

Section 1.                                            Term of
Employment; Compensation.  The
Company agrees to employ Executive from the Effective Date, in the full time
capacity of Chief Financial Officer and Treasurer of the Company, with the
responsibilities normally associated with such position, which employment shall
continue until terminated as hereafter provided.  The Company will pay Executive for his
services at an annual rate of Two Hundred Thousand Dollars ($200,000), payable
in arrears, in equal installments, in accordance with standard Company
practice, but in any event not less often than monthly, subject only to such
payroll and withholding deductions as are required by law or authorized by
Executive. Executive shall also be entitled to participate in all employee
benefit plans of the Company on the same terms and conditions as other
employees similarly situated, subject to the Company’s right, in any event, to
modify or terminate such plans.  The
Company shall pay Executive’s individual medical and dental insurance premiums
and shall provide paid monthly parking. 
In addition, Executive shall be eligible to receive such stock options
as may be approved, in its sole discretion, by the Compensation Committee of
the Board of Directors of the Company (the “Board”) or by the Board. Executive’s
performance will be evaluated annually or at such other times as determined by
the Board.

Section 2.                                            Office
and Duties.  Executive shall have the
usual duties of a corporate officer and shall be responsible for providing
financial and accounting services, supervising the finance and accounting
functions of the Company and participating in the management and direction of
the Company’s financial and business operation, and shall perform such specific
other tasks consistent with Executive’s position as a member of senior
management as may from time to time be assigned to Executive by the Chief
Executive Officer of the Company. 
Executive’s primary duties will focus on Securities 

and Exchange Commission (“SEC”) reporting and compliance, establishment
and oversight of corporate governance programs as mandated by the Sarbanes-Oxley
Act of 2002, as amended and the SEC rules and regulations relating thereto,
treasury functions, asset management and preservation and capital
financing.  Executive shall devote
substantially all of his business time, labor, skill, undivided attention, and
best ability to the performance of his duties hereunder in a manner that will
faithfully and diligently further the business and interests of the Company on
a full time basis.  Executive shall not
directly or indirectly pursue any other business activity without the Company’s
prior written consent.  Executive agrees
that he will travel as is reasonably necessary in the conduct of the Company’s
business.

Section 3.                                            Expenses.  Executive shall be entitled to reimbursement
for expenses incurred by him in connection with the performance of his duties
hereunder upon receipt of vouchers therefor in accordance with such procedures
as the Company has heretofore or may hereafter establish.

Section 4.                                            Vacation
During Employment.  Executive shall
be entitled to such reasonable vacation time as may be allowed by the Company
in accordance with general practices established or to be established, but in
any event not less than four (4) weeks of vacation during each twelve (12)
month period plus usual statutory and other public holidays, the timing of such
vacation to be mutually agreed upon between Executive and the Company.  The Company recommends that all employees
take vacation, but if duties of Executive prevent him from taking said
vacation, Executive shall be paid for any unused vacation at the end of each
year. Unused vacation time will not be accrued and carried from year to year,
and Executive will forfeit any unused vacation at the end of each year.

Section 5.                                            Additional
Benefits.  Nothing herein contained
shall preclude Executive, to the extent he is otherwise eligible, from
participation in all group insurance programs or other fringe benefit plans
that the Company may hereafter in its sole and absolute discretion make
available generally to its employees.

Section 6.                                            Certain
Definitions.  For purposes of this
Agreement, the following words and phrases shall have the following meanings:

(a)                                           “Cause”
shall mean termination by the Company of Executive due to:  (i) engaging in illegal conduct, including
but not limited to fraud or embezzlement; (ii) being convicted of a felony;
(iii) engaging in substance abuse which impairs Executive’s ability to perform
the duties and obligations of his employment or causes harm to the reputation
of the Company; (iv) the willful breach of Executive’s duties to the Company;
(v) failure or refusal by Executive to follow reasonable directions by the
Company; or (vi) engaging in conduct which in the sole opinion of management of
the Company is deemed to be detrimental to the Company.  Whether Cause exists for termination will be
determined by the Company in its sole discretion.

(b)                                          A
“Change in Control” shall be deemed to have occurred if any of the following
occurs with respect to the Company:  (i)
the direct or indirect sale or 

 2
 

exchange in a single transaction or series of transactions by the
shareholders of the Company of more than thirty five percent (35%) of the
voting stock of the Company by an individual, an entity or a “group” as that
term is defined in Section 13 of the Securities Exchange Act of 1934; (ii) a
merger or consolidation to which the Company is a party and following which the
shareholders of the Company do not have more than fifty percent (50%) of the
voting stock of the resulting company (or its ultimate parent company); (iii)
the sale, exchange, or transfer of all or substantially all of the assets of
the Company; (iv) a liquidation or dissolution of the Company; or (v) a series
of related Transactions (each of the items (i) through (iv) constituting a “Transaction”) wherein the
shareholders of the Company immediately before the Transaction do not retain
immediately after the Transaction, in substantially the same proportions as
their ownership of shares of the Company’s voting stock immediately before the
Transaction, direct or indirect beneficial ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding voting securities
of the Company or, in the case of a Transaction involving the sale, exchange,
or transfer of all or substantially all of the assets of the Company, the
corporation or other business entity to which the assets of the Company were
transferred (the “Transferee”),
as the case may be.  For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting securities of
one or more corporations or other business entities which own the Company or
the Transferee, as the case may be, either directly or through one or more
subsidiary corporations or other business entities.  The Board shall have the right to determine
whether multiple sales or exchanges of the voting securities of the Company or
multiple Transactions are related, and its determination shall be final,
binding and conclusive.  Notwithstanding
the preceding sentence, a Change in Control shall not include a distribution or
transaction in which the voting stock of the Company or a parent or subsidiary
is distributed to the shareholders of a parent of such entity.  Any change in ownership resulting from an
underwritten public offering of the common stock or the stock of any parent or
subsidiary shall not be deemed a Change in Control for any purpose hereunder.

(c)                                           The
“Change in Control Date” shall be any date during the term of this Agreement on
which a Change in Control occurs. 
Anything in this Agreement to the contrary notwithstanding, if Executive’s
employment or status as an elected officer with the Company is terminated
within six (6) months before the date on which a Change in Control occurs, and
it is reasonably demonstrated that such termination (i) was at the request
of a third party who has taken steps reasonably calculated or intended to
effect a Change in Control or (ii) otherwise arose in connection with or
anticipation of a Change in Control, then for all purposes of this Agreement
the “Change in Control Date” shall mean the date immediately before the date of
such termination.

(d)                                          “Code”
shall mean the Internal Revenue Code of 1986, as amended.

(e)                                           “Disability,”
for purposes of this Agreement, shall mean total disability as defined in any
long-term disability plan sponsored by the Company in which Executive
participates, or, if there is no such plan or such does not define such term,
then it shall mean the physical or mental incapacity of Executive that prevents
him from 

 3
 

substantially performing the duties of Chief Financial Officer and
Treasurer, and which incapacity has continued for a period of at least ninety
(90) days in any three hundred sixty five (365) day period.

(f)                                             “Good
Reason” means:

(i)                                     the
assignment to Executive within the Protection Period (as defined in
subparagraph (g) below) of any duties inconsistent in any material respect with
Executive’s position (including status, offices, titles and reporting
requirements, authority, duties or responsibilities), or any other action that
results in a material diminution in such position, authority, duties, or
responsibilities, excluding for this purpose an isolated or inadvertent action
not taken in bad faith, or that is remedied by the Company within thirty (30)
days after receipt of written notice given by Executive;

(ii)                                  a
reduction by the Company in Executive’s base salary as in effect immediately
before the beginning of the Protection Period or as increased from time to time
after the beginning of the Protection Period;

(iii)                               a
failure by the Company to maintain plans providing benefits at least as
beneficial as those provided by any benefit or compensation plan (including,
without limitation, any incentive compensation plan, bonus plan or program,
retirement, pension or savings plan, life insurance plan, health and dental
plan or disability plan) in which Executive is participating immediately before
the beginning of the Protection Period, or any action taken by the Company that
would adversely affect Executive’s participation in or reduce Executive’s
opportunity to benefit under any of such plans or deprive Executive of any
material fringe benefit enjoyed by him immediately before the beginning of the
Protection Period; provided, however, that a reduction in benefits under the
Company’s tax-qualified retirement, pension, or savings plans or its life
insurance plan, health and dental plan, disability plans or other insurance
plans, which reduction applies generally to all participants in the plans or
has a de minimis effect on Executive shall not constitute “Good Reason”;

(iv)                              the
Company’s requiring Executive, without Executive’s written consent, to be based
at any office or location in excess of fifty (50) miles from his office
location immediately before the beginning of the Protection Period, except for
travel reasonably required in the performance of Executive’s responsibilities;

(v)                                 any
failure by the Company to obtain the assumption of the obligations contained in
this Agreement by any successor as contemplated in Section 13 of
this Agreement; or

(vi)                              any
material breach of this Agreement by the Company.

(g)                                          “Protection
Period” means the period beginning on the Change in Control Date and ending on
the one year anniversary of the Change in Control Date.

 4
 

Section 7.                                            Termination
of Employment.

(a)                                           Notwithstanding
any other provision of this Agreement, Executive’s employment may be
terminated:

(i)                                     by
Executive upon ninety (90) days written notice;

(ii)                                  by
the Company upon thirty (30) days written notice, without Cause;

(iii)                               by
the Company, with notice to Executive, for Disability;

(iv)                              in
the event of Executive’s death during the term of his employment, provided that
the Company’s obligation to pay further compensation hereunder shall cease
forthwith, except that the legal representative of Executive’s estate shall be
entitled to receive an amount equal to one-twelfth (1/12) of Executive’s then
current annual base salary for a period of three (3) months beginning with the
pay period immediately after Executive’s death shall have occurred; or

(v)                                 by
the Company, at any time for Cause.

Upon the termination of Executive’s employment pursuant to this Section
7(a), this Agreement shall automatically terminate, except as otherwise
provided herein.

(b)                                          In the event that Executive’s
employment is terminated pursuant to Section 7(a)(i), (ii), (iii) or (iv)  or Section 7(d), Executive
shall receive an amount
equal to Executive’s full base salary and vacation pay (for vacation not taken)
accrued but unpaid through the date of termination at the rate in effect at the
time of the termination.

(c)                                           In
the event that Executive’s employment is terminated pursuant to Section
7(a)(ii) or (iii) or Section 7(d):

(i)                                     shares, options, or other
forms of securities issued by the Company and beneficially owned by Executive
(whether granted before or after the date of this Agreement) that are unvested,
restricted, or subject to any similar restriction shall vest automatically on
the termination date and shall be exercisable by Executive or
Executive’s personal representative in accordance with the terms of the applicable Company stock option
plan and restrictions shall lapse; and

(ii)                                  the
Company shall pay the premium for Executive’s COBRA continuation coverage for
health benefits provided by the Company for a period of up to twenty-four (24)
months (or such lesser period of COBRA coverage as may apply to Executive)
following the date of termination.

(d)                                          Benefits
upon Termination During a Protection Period.   If, during a Protection Period, Executive’s
employment is terminated by the Company other than 

 5
 

for Cause or Disability or other than as a result of
Executive’s death, or if Executive terminates his employment for Good Reason,
and such termination of employment constitutes a “separation from service”
within the meaning of Section 409A of the Code, the Company shall pay to
Executive in a lump sum in cash, within ten (10) days after the date of
termination, the aggregate of the following amounts:

(i)                                     Severance.  The Company shall pay to Executive a
severance amount equal to three (3) times Executive’s Annual Compensation.  As used herein,  “Annual Compensation” shall be an amount
equal to the sum of (i) Executive’s annual base salary from the Company and its
subsidiaries; and (ii) the amount of annual bonus, if any, paid by the Company
to Executive for the year before the Change of Control occurs.

(ii)                                  Gross-Up
Benefits.  Anything in this Agreement
to the contrary notwithstanding, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 7(d) (a “Payment”) would be subject to the
excise tax imposed by Section 4999 of the Code, or any interest or penalties
are incurred by Executive with respect to such excise tax that are not due to
Executive’s actions or inactions (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”), then Executive shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by Executive of all taxes
imposed upon the Gross-Up Payment (including any federal, state, and local
income taxes, employment taxes under Section 3101(b) of the Code, and Excise
Taxes, assuming the highest marginal income tax rates apply to the Gross-Up
Payment), Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.  In
the event that Executive is entitled to a Gross-Up Payment, the following shall
apply:

(1)                                  All
determinations required to be made, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment, shall be made by a
nationally recognized certified public accounting firm selected by the Company
(the “Accounting Firm”).  The Accounting
Firm shall be requested to provide detailed supporting calculations both to the
Company and to Executive within fifteen (15) business days of the receipt
of notice that there has been a Payment. 
All fees and expenses of the Accounting Firm shall be borne solely by
the Company.  Any Gross-Up Payment shall
be paid by the Company to Executive within five (5) days of the receipt of
the Accounting Firm’s determination.  Any
determination by the Accounting Firm shall be binding upon the Company and
Executive.  As a result of uncertainty in
the application of Sections 280G and 4999 of the Code, it is possible that
Gross-Up Payments that will not have been made by the Company should have been
made (an “Underpayment”).  In the event
the Company exhausts its remedies pursuant to the following subparagraph and
Executive is thereafter required to make a payment of any Excise Tax, the
Accounting Firm shall be requested to determine the amount of the 

 6
 

Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to Executive.

(2)                                  Executive
shall notify the Company in writing of any assertion by the Internal Revenue
Service that, if successful, would require the payment by the Company of an
Underpayment.  Such notification shall be
given as soon as practicable, but no later than ten (10) business days
after Executive is informed of such assertion. 
Executive shall apprise the Company of the nature of such assertion and
provide copies of all letters, notices, etc. regarding the assertion, and written
summaries of any statements made to Executive or by Executive in connection
with the assertion.  Executive shall not
pay any amount asserted to be due prior to the expiration of the 30-day period
following the date on which Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such assertion is due).  If the Company
notifies Executive in writing prior to the expiration of such period that the
Company desires to contest such assertion, Executive shall:

a.                                       give
the Company any information reasonably requested by the Company relating to
such assertion,

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

c.                                       cooperate
with the Company in good faith in order effectively to contest such assertion,
and

d.                                      permit
the Company to participate in any proceedings relating to such assertion;

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 Executive harmless,
on an after-tax basis, for any Excise Tax and income and employment tax
(including interest and penalties) imposed as a result of such representation
and payment of costs and expenses.  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 assertion and may, at its sole discretion, either
direct Executive to pay the tax asserted and sue for a refund or contest the
claim in any permissible manner, and 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 Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to Executive, on
an interest-free basis, and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax and income and employment tax (including
interest or penalties) imposed with respect to such advance or with respect to
any imputed income in connection with such advance; 

 7
 

and provided, further,
that any extension of the statute of limitations relating to payment of taxes
for the taxable year 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 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.

(3)                                  If,
after the receipt by Executive of a Gross-Up Payment or an amount advanced by
the Company, Executive becomes entitled to receive any refund with respect to
the Excise Tax to which such Gross-Up Payment relates or with respect to such
claim, Executive shall (subject to the Company’s complying with the
requirements of this section, if applicable) 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 Executive of an amount advanced by the Company pursuant to
this section, a determination is made that Executive shall not be entitled to
any refund with respect to such claim and the Company does not notify 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.

(e)                                           Prior
to receiving any payment or other consideration set forth in Section 7(b),
Section 7(c)(i), (ii) or Section 7(d), Executive must first sign a
Severance and Release Agreement in a form reasonably satisfactory to the
Company.

Section 8.                                            Code
Section 409A Savings Provision. 
Anything in this Agreement to the contrary notwithstanding, if (1) on
the date of Executive’s “separation from service” to the Company (within the
meaning of Section 409A of the Code), any of the Company’s stock is publicly
traded on an established securities market or otherwise (within the meaning of
Section 409A(a)(2)(B)(i) of the Code) and (2) as a result of such separation
from service, Executive would receive any payment that, absent the application
of this Section 8, would be subject to constructive receipt,
interest and additional tax imposed pursuant to Code Section 409A(a) as a
result of the application of Code Section 409A(2)(B)(i), then no such payment
shall be payable until the date that is the earliest of (i) six (6) months
after Executive’s separation from service date, (ii) Executive’s death or (iii)
such other date as will not result in such payment being subject to such
interest and additional tax.  It is the intention of the parties that all
amounts payable under this Agreement not be subject to constructive receipt,
interest and additional tax imposed pursuant to Code Section 409A, and all
provisions of the Code shall be interpreted consistently therewith.  To the extent amounts payable under this
Agreement may be or become subject to such interest and additional tax, based
on subsequent governmental or court interpretation of Code Section 409A, the
parties shall cooperate to amend this Agreement with the goal of giving
Executive the same or equivalent value of the benefits described in this
Agreement in a manner that does not result in such constructive receipt,
interest and additional tax.

 8
 

Section 9.                                            Proprietary
Information.  Executive hereby grants
to the Company all right, title, and interest in and to any information
concerning discoveries; methods; business plans and practices; enterprises;
explorations; mining information; plant design, location, or operation; or any
other information affecting the business operations of the Company and any
invention, discovery, or improvement conceived or reduced to practice in
connection with the services performed hereunder (“Proprietary Information”).  Executive will keep signed, witnessed, and
dated written records of all such inventions, discoveries, or improvements;
will furnish the Company promptly with complete information in respect thereof
and will do all things necessary to protect the interests of the Company
therein.

Section 10.                                      Confidentiality.  Executive shall not, either during the period
of Executive’s employment with the Company or for a period of two (2) years
thereafter, reveal or disclose to any person outside the Company or use for
Executive’s own benefit or for the benefit of any third party, without the
Company’s specific written authorization, whether by private communication or
by public address or publication or otherwise, any information not already
lawfully available to the public concerning the Company or the Company’s equity
securities, including any Proprietary Information, whether or not supplied by
the Company, and whether or not made, developed, and/or conceived by Executive
or by others in the employ of the Company. 
All originals and copies of any of the foregoing, relating to the
business of the Company, however and whenever produced, shall be the sole
property of the Company, not to be removed from the premises or custody of the
Company without in each instance first obtaining written consent or
authorization of the Company.  Upon the
termination of Executive’s employment in any manner or for any reason,
Executive shall promptly surrender to the Company all copies of any of the
foregoing, together with any other documents, materials, data, information, and
equipment belonging to or relating to the Company’s business and in his
possession, custody, or control, and Executive shall not thereafter retain or
deliver to any other person, any of the foregoing or any summary or memorandum
thereof.

Section 11.                                      Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed to have been given when
delivered or three (3) days after mailing if mailed by first-class, registered,
or certified mail, postage prepaid, addressed (a) if to Executive: James
H. Moore, 13924 E. Arrowleaf Lane, Spokane, WA 99206, and (b) if to the Company:
President, Mines Management, Inc., 905 W. Riverside Ave. Suite 311, Spokane, WA
99201, or to such other person(s) or address(es) as the Company shall have
furnished to Executive in writing.

Section 12.                                      Survival.   The rights and obligations of the parties
hereto arising under Sections 6, 7, 8, 9, 10,
11, 12, 13, 14, 15, 16, 17, 18,
19, and 22 shall survive the termination or cancellation of this
Agreement for any reason.

Section 13.                                      Assignability.  If the Company shall be merged with, or
consolidated into any other corporation, or in the event that it shall sell and
transfer substantially all of its assets to another corporation, the terms of
this Agreement shall inure to the benefit of, and be assumed by, the
corporation resulting from such merger or 

 9
 

consolidation, or to which the Company’s assets shall be sold and
transferred.  This Agreement shall not be
assignable by Executive, but it shall be binding upon and to the extent
provided in Section 7 shall inure to the benefit of, his heirs,
executors, administrators, and legal representatives.

Section 14.                                      Entire
Agreement.  This Agreement contains
the entire agreement between the Company and Executive with respect to the
subject matter hereof and there have been no oral or other agreements of any
kind whatsoever as a condition precedent or inducement to the signing of this
Agreement or otherwise concerning this Agreement or the subject matter hereof.
This Agreement supersedes and replaces any prior agreements, promises, or
understandings between the Company and Executive.

Section 15.                                      Expenses.  Each party shall pay its or his own expenses
incident to the performance or enforcement of this Agreement, including all
fees and expenses of its counsel for all activities of such counsel undertaken
pursuant to this Agreement, except as otherwise herein specifically provided.

Section 16.                                      Equitable
Relief.  Executive recognizes and
agrees that the Company’s remedy at law for any breach of the provisions of Section 7
hereof would be inadequate, and he agrees that for breach of such provisions,
the Company shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in this Agreement, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by law.  If Executive
engages in any activities prohibited by this Agreement, he agrees to pay over
to the Company all compensation, remunerations or property of any sort received
in connection with such activities; such payment shall not impair any rights or
remedies of the Company or obligations or liabilities of Executive that such
parties may have under this Agreement or applicable law.

Section 17.                                      Waivers and
Further Agreements.  Any waiver of
any terms or conditions of this Agreement shall not operate as a waiver of any
other breach of such terms or conditions or any other term or condition, nor
shall any failure to enforce any provision hereof operate as a waiver of such
provision or of any other provision hereof, unless it, by its own terms,
explicitly provides to the contrary, nor shall it be construed to effect a
continuing waiver of the provision being waived and no such waiver in any instance
shall constitute a waiver in any other instance or for any other purpose or
impair the right of the party against whom such waiver is claimed in all other
instances or for all other purposes to require full compliance with such
provision.  Each of the parties hereto
agrees to execute all such further instruments and documents and to take all
such further action as the other party may reasonably require in order to
effectuate the terms and purposes of this Agreement.

Section 18.                                      Amendments.  This Agreement may not be amended, nor shall
any waiver, change, modification, consent, or discharge be effected except by
an instrument in writing executed by or on behalf of the party against whom
enforcement of any such waiver, change, modification, consent, or discharge is
sought.

 10
 

Section 19.                                      Severability.  If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the conflict
of any provision with any constitution or statute or rule of public policy or
for any other reason, such circumstance shall not have the effect of rendering
the provision or provisions in question invalid, inoperative, or unenforceable
in any other jurisdiction or in any other case or circumstance or of rendering
any other provision or provisions herein contained invalid, inoperative, or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such constitution, statute, or rule of public policy,
but this Agreement shall be reformed and construed in any such jurisdiction or
case as if such invalid, inoperative, or unenforceable provision had never been
contained herein and such provision reformed so that it would be valid,
operative, and enforceable to the maximum extent permitted in such jurisdiction
or in such case.

Section 20.                                      Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

Section 21.                                      Section
Headings.  The headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.

Section 22.                                      General
Provisions.

(a)                                           Executive
further agrees that his obligations under Sections 9 and 10 of
this Agreement shall be binding upon him irrespective of the duration of his
employment by the Company, the reasons for any cessation of his employment by
the Company, or the amount of his compensation and shall survive the
termination of this Agreement (whether such termination is by the Company, by
Executive, upon expiration of this Agreement or otherwise).

(b)                                          Executive
represents and warrants to the Company that he is not now under any obligations
to any person, firm, or corporation, and has no other interest that is
inconsistent or in conflict with this Agreement, or that would prevent, limit
or impair, in any way, the performance by him of any of the covenants or duties
in his employment.

Section 23.                                      Gender.  Whenever used herein, the singular number
shall include the plural, the plural shall include the singular, and the use of
any gender shall include all genders.

Section 24.                                      Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the law of Washington.  Venue for any action arising from or in
connection with this Agreement shall be in Spokane County, Washington.

Signature Page Follows.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

	
  

  	
  MINES MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Glenn M. Dobbs

  
	
   

  	
  Name:

  	
  Glenn M. Dobbs

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James H. Moore

  
	
   

  	
  James H. Moore

  

 

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