AMENDMENT TO RIGHTS AGREEMENT
THIS AMENDMENT between HEI Inc., a Minnesota corporation (the
"Company"), and Norwest Bank Minnesota, National Association, a national bank
association (the "Rights Agent"), dated as of March 13, 1998 (this
"Amendment"), to Rights Agreement dated as of May 27, 1988 (the "Original
Agreement") between the Company and Norwest Bank Minneapolis, N.A.
WHEREAS, the Company and the Rights Agent have entered into the
Original Agreement; and
WHEREAS, the Board of Directors of the Company and the Rights Agent
have determined to enter into this Amendment in accordance with Section 27 of
the Original Agreement.
ACCORDINGLY, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Section 3(a) of the Original Agreement is hereby amended in its
entirety to read as follows:
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the tenth Business Day (or, except as
hereinafter provided, such later date as may be determined by
action of the Board of Directors of the Company) after the Shares
Acquisition Date or (ii) the tenth Business Day (or, except as
hereinafter provided, such later date as may be determined by
action of the Board of Directors of the Company) after the date
of commencement of, or of the first public announcement of the
intention of a Person (other than the Company, a Subsidiary of
Company, an employee benefit plan of Company or Subsidiary of
Company or any entity holding Common Shares for or pursuant to the
term of any such plan) to commence a tender or exchange offer the
consummation of which would result in any Person becoming the
Beneficial Owner of Common Shares aggregating Thirty Percent (30%)
or more of the outstanding Common Shares (including any such date
which is after the date of this Agreement and prior to the issuance
of the Rights, the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by
the certificates for the Common Shares registered in the names of
the holders of the Common Shares (which certificates shall also be
deemed to be Rights Certificates) and not by separate Rights
Certificates, and (y) the right to receive Rights Certificates will
be transferable only in connection with the transfer of Common
Shares. Notwithstanding anything stated in clause (i) or (ii) of
the immediately preceding sentence, the Distribution Date may not
be extended by the Board of Directors of the Company to a date
later than the first Business Day after the first Trading Day (as
such term is hereinafter defined) on or after the date which would
otherwise be the Distribution Date on which the closing price of a
Common Share for such Trading Day (as determined pursuant to the
second sentence of
Section 11(d) hereof) equals or exceeds four times the Purchase
Price (as such term is hereinafter defined) per one-fourth (1/4) of
a full Common Share. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will
countersign and the Company (or the Rights Agent, if requested by
Company) will transmit by appropriate means to each record holder
of Common Shares as of the Close of Business on the Distribution
Date, as shown by the records of the Company, at the address of
such holder shown on such records, a Rights Certificate, in
substantially the form of Exhibit A hereto (a "Rights
Certificate"), evidencing one Right for each share of Common Stock
so held. As of the Distribution Date, the Rights will be evidenced
only by such Rights Certificates.
The Original Agreement shall remain in full force and effect
without amendment except this Amendment and any other amendment made in
accordance with Section 27 of the Agreement. All references in the Original
Agreement to "this Agreement" or the "Agreement" or "hereof" and all
references in this Amendment to the Agreement shall hereafter be deemed to be
references to the Original Agreement as amended by this Amendment and any
other amendment made in accordance with Section 27 of the Agreement. All
terms used in this Amendment that are defined in the Original Agreement but
are not defined herein shall have the meanings ascribed to them in the
Original Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the day and year first above written.
HEI, Inc.
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
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Its President
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Norwest Bank Minnesota, National
Association
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Its Officer
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