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Exhibit 10.7
INDEMNIFICATION AGREEMENT
DIRECTORS AND OFFICERS
THIS AGREEMENT made and entered into this 8
th day of November 2006, by and between HECLA MINING
COMPANY, a Delaware corporation (the "Corporation"), and
_______________________ (the "Indemnitee").
WHEREAS, it is essential for the Corporation to
attract and retain competent and experienced persons as directors
or officers of publicly held corporations, which is difficult to do
unless they are provided with adequate protection against claims
and actions against them for their activities on behalf of such
corporations, generally through insurance and indemnification;
and
WHEREAS, uncertainties in the interpretation of
the statutes, regulations, case law and public policies relating to
indemnification of corporate directors and officers are such as to
make adequate, reliable assessment of the risks to which directors
and officers of publicly held corporations may be exposed
difficult, particularly in light of the proliferation of lawsuits
against directors and officers; and
WHEREAS, the adoption of new statutes, such as
the Sarbanes-Oxley Act and related rules of the New York Stock
Exchange have imposed new duties on corporate directors and
officers of public companies; and
WHEREAS, both the Corporation and the Indemnitee
recognize the increased risk of litigation and other claims being
asserted against directors and officers of public companies in
today’s environment; and
WHEREAS, basic protection against undue risk of
personal liability of directors and officers heretofore has been
provided through insurance coverage and the Indemnitee has relied
on the availability of such coverage; but as a result of
substantial changes in the marketplace for such insurance, it has
become increasingly more difficult to obtain such insurance on
terms providing reasonable protection at reasonable cost; and
WHEREAS, the Certificate of Incorporation and
By-laws of the Corporation require the Corporation to indemnify and
advance expenses to its directors and officers to the fullest
extent permitted by the Delaware General Corporation Law and
authorizes the Corporation to enter into contracts of
indemnification, and the Indemnitee has been serving and is willing
to continue to serve as a director or officer, or both, of the
Corporation in part in reliance thereon; and
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WHEREAS, in recognition of the
Indemnitee’s need for substantial protection against personal
liability in order to enhance the Indemnitee’s continued
service to the Corporation in an effective manner and any
inadequacy of the Corporation’s director and officer
liability insurance coverage, and to provide the Indemnitee with
the additional assurance resulting from a specific indemnification
contract as authorized by the Certificate of Incorporation
and
By-laws (including the additional assurance that
the promised protection will be available to the Indemnitee
regardless of, among other things, any change in the composition of
the Corporation’s Board of Directors or any acquisition
transaction relating to the Corporation), the Corporation wishes to
provide in this Agreement specific provisions for the
indemnification of, and the advancing of expenses to, the
Indemnitee to the full extent permitted by law and as set forth in
this Agreement and, to the extent insurance is maintained, for the
continued coverage of the Indemnitee under the Corporation’s
directors’ and officers’ liability insurance
policies;
NOW, THEREFORE, in consideration of the premises
and of the Indemnitee’s continuing to serve the Corporation
directly, or, at its request, with another enterprise, and
intending to be legally bound hereby, the parties hereto agree as
follows:
(a) Change in
Control : shall be deemed to have occurred if: (i) any "person"
(as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation or a corporation, owned directly or indirectly, by the
shareholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
said Act), directly or indirectly, or securities of the Corporation
representing 20% or more of the combined voting power of the
Corporation’s then outstanding Voting Securities; or (ii)
during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the
Corporation and any new director whose election by the Board of
Directors or nomination for election by the Corporation’s
shareholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved cease for any reason to
constitute a majority thereof; or (iii) the shareholders of the
Corporation approve a merger or consolidation of the Corporation
with any other corporation, other than a merger or consolidation
which would result in the Voting Securities of the Corporation
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 80% of the combined
voting power of the Voting Securities of the Corporation or such
surviving entity outstanding immediately after such merger or
consolidation, or (iv) the shareholders of the Corporation approve
a plan of complete liquidation of the Corporation or an agreement
for the sale or disposition by the Corporation of all or
substantially all the Corporation’s assets.
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(b)
Claim : any threatened, pending, or completed action, suit,
or proceeding or any inquiry or investigation, whether conducted by
the Corporation or any other party, that the Indemnitee in good
faith believes might lead to the institution of any such action,
suit, or proceeding, whether civil, criminal administrative,
investigative, or other.
(c) Expenses
: include attorneys’ fees and all other costs, expenses, and
obligations paid or incurred in connection with investigating,
defending, being a witness in, or participating in (including on
appeal) or preparing to defend, or participate in, any Claim
relating to any Indemnifiable Event.
(d)
Indemnifiable Event : any event or occurrence related to the
fact that the Indemnitee is or was a director, officer, employee,
agent, or fiduciary of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee,
trustee, agent, or fiduciary of another corporation, company,
partnership, joint venture, employee benefit plan, trust, or other
enterprise or by reason of anything done or not done by the
Indemnitee in any such capacity.
(e) Potential
Change in Control : shall be deemed to have occurred if (i) the
Corporation enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control; (ii) any
person (including the Corporation) publicly announces an intention
to take or to consider taking actions, which if consummated, would
constitute a Change in Control; (iii) any person, other than a
trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or a corporation owned, directly or
indirectly, by the shareholders of the Corporation in substantially
the same proportions as their ownership of stock of the
Corporation, who is or becomes the beneficial owner, directly or
indirectly, of securities of the Corporation representing 9.5% or
more of the combined voting power of the Corporation’s then
outstanding Voting Securities increases his or her beneficial
ownership of such securities by 5% or more over the percentage so
owned by such person on the date hereof; or (iv) the Board adopts a
resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
(f)
Reviewing Party : any appropriate person or body consisting
of a member or members of the Corporation’s Board of
Directors or any other person or body appointed by the Board
(including the special, independent counsel referred to in
Section 3) who is not a party to the particular Claim for
which the Indemnitee is seeking indemnification.
(g) Voting
Securities : any securities of the Corporation which vote
generally in the election of directors.
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2.
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Basic Indemnification
Arrangement .
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(a) In
the event the Indemnitee was, is, or becomes a party to or witness
or other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reason of (or arising
in part out of) an Indemnifiable Event, the Corporation shall
indemnify the Indemnitee to the fullest extent permitted by law as
soon as practicable, but in any event no later than 30 days after
written demand is presented to the Corporation, against any and all
Expenses, judgments, fines, penalties, and amounts paid in
settlement (including all interest, assessments, and other charges
paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties, or amounts paid in settlement) of such
Claim. Notwithstanding anything in this Agreement to the contrary,
prior to a Change in Control, the Indemnitee shall not be entitled
to indemnification pursuant to this Agreement in connection with
any Claim initiated by the Indemnitee against the Corporation or
any director or officer of the Corporation unless the Corporation
has joined in or consented to the initiation of such Claim. If so
requested by the
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