<PAGE>

                                                                    Exhibit 99.3

                             Aerovox Incorporated
                                      and
                    American Stock Transfer & Trust Company
                           as successor Rights Agent

                            Amendment No. 2 to the
                               Rights Agreement
                         Dated as of December 1, 1989

                                Amendment No. 2
                                ---------------

     This Amendment No. 2, dated as of October 20, 1999 (this "Amendment"), is
                                                               ---------
among Aerovox Incorporated, a Delaware corporation (the "Company"), and American
                                                         -------
Stock Transfer & Trust Company, as successor Rights Agent:

     WHEREAS, pursuant to Section 21 of the Rights Agreement, the Company
removed ChaseMellon Shareholder Services (as successor rights agent to Mellon
Bank, N.A.) as Rights Agent and appointed American Stock Transfer & Trust
Company as successor Rights Agent, both effective October 13, 1999.

     WHEREAS, pursuant to Section 27 of the Rights Agreement (as defined below),
the Company may from time to time supplement or amend the Rights Agreement in
accordance with the provisions of Section 27 thereof;

     WHEREAS, the Company desires to make certain amendments to the Rights
Agreement; and

     WHEREAS, the execution and delivery of this Amendment by the Company and
the Rights Agent have been in all respects duly authorized by each of them;

     Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

     4. Rights Agreement; Definitions. This Amendment amends the Rights
        -----------------------------
Agreement (as in effect prior to giving effect to this Amendment, the "Rights
                                                                       ------
Agreement"). Terms defined in the Rights Agreement as amended hereby (the
---------
"Amended Rights Agreement") and not otherwise defined herein are used with the
 ------------------------
meaning so defined.

                                 Page 8 of 11
<PAGE>

     5. Amendment of Rights Agreement. Effective upon the date hereof, the
        -----------------------------
Rights Agreement is amended as follows:

          5.1. Amendment of Section 1(a). Section 1(a) of the Rights Agreement
               -------------------------
     is amended to read in its entirety as follows:

          "Acquiring Person" shall mean any Person (as such term is
          hereinafter defined) who or which, together with all
          Affiliates and Associates (as such terms are hereinafter
          defined) of such Person, shall be the Beneficial Owner (as
          such term is hereinafter defined) of 20% or more of the
          Common Shares of the Company then outstanding, but shall not
          include (i) the Company, (ii) any Subsidiary (as such term
          is hereinafter defined) of the Company, (iii) any employee
          benefit plan of the Company or of any Subsidiary of the
          Company, (iv) any Person organized, appointed or established
          by the Company or any Subsidiary of the Company pursuant to
          the terms of any plan described in clause (iii) above or (v)
          any Person who (A) has reported or is required to report
          such ownership on Schedule 13G under the Securities Exchange
          Act of 1934 (the "Exchange Act") (or any comparable or
          successor report) or on Schedule 13D under the Exchange Act
          (or any comparable or successor report) which Schedule 13D
          does not state any intention to or reserve the right to
          control or influence the management or policies of the
          Company or engage in any of the actions specified in Item 4
          of such Schedule (other than the disposition of the Common
          Shares), (B) within 10 Business Days of being requested
          (including but not limited to, by telephone or facsimile) by
          the Company to advise it regarding the same, certifies to
          the Company that such Person acquired Common Shares in
          excess of 19.9% inadvertently or without knowledge of the
          terms of the Rights, provided, however, that if the Person
                               --------  -------
          requested to so certify fails to do so within 10 Business
          Days, then such Person shall become an Acquiring Person
          immediately after such 10 Business Day Period, (C) together
          with all of such Person's Affiliates, thereafter does not
          acquire additional Common Shares while the Beneficial Owner
          of 20% or more of the Common Shares then outstanding and (D)
          if requested to do so by the Company, within a specified
          number of Business Days (to be specified by the Company, but
          in no case fewer than ten) following such request (including
          but not limited to, by telephone or facsimile) from the
          Company to such Person, reduces its Beneficial Ownership of
          Common Shares to below 20% of the Common Shares then
          outstanding provided, however, that if the Person requested
                      --------  -------
          to so reduce its Beneficial Ownership fails to do so within
          such specified number of Business Days, then such Person
          shall become an Acquiring Person immediately after such
          specified number of Business Days. Notwithstanding the
          foregoing, no Person shall become an "Acquiring Person" as
          the result of an acquisition of Common Shares by the Company
          which, by reducing the number of shares outstanding,
          increases the proportionate number of shares beneficially
          owned by such Person to 20% or more of the Common Shares of
          the Company then outstanding; provided, however, that if a
                                        --------  -------
          Person shall become the Beneficial Owner of 20% or more of
          the Common Shares of the Company then outstanding by reason
          of share purchases by the Company and shall, after such
          share purchases by the

                                 Page 9 of 11
<PAGE>

          Company, become the Beneficial Owner of any additional Common Shares
          of the Company (other than pursuant to the operation of any employee
          benefit plan of the Company), then such Person shall be deemed to be
          an "Acquiring Person".

          5.2. Amendment of Section 7(a). Section 7(a) of the Rights Agreement
               -------------------------
is amended to read in its entirety as follows:

          "Section 7. Exercise of Rights; Purchase Price; Expiration Date
                     ---------------------------------------------------
          of Rights. (a) The Rights are not exercisable until the
          ---------
          Distribution Date. The registered holder of any Right Certificate
          may exercise the Rights evidenced thereby (except as otherwise
          provided herein) in whole or in part at any time on or after the
          Distribution Date upon surrender of the Right Certificate, with
          the form of election to purchase and certification on the reverse
          side thereof duly executed, to the Rights Agent at the office of
          the Rights Agent designated for such purpose, together with
          payment of the Purchase Price for each one-hundredth of a
          Preferred Share as to which the Rights are exercised, at or prior
          to the earliest of (i) the close of business on December 1, 2009
          (the "Final Expiration Date"), (ii) the time at which the Rights
          are redeemed as provided in Section 23 hereof (the "Redemption
          Date"), or (iii) the time at which such Rights are exchanged as
          provided in Section 24 hereof."

     6. General. This Amendment may be executed in any number of counterparts,
        -------
which together shall constitute one instrument, and shall bind and inure to the
benefit of the parties and their respective successors and assigns. This
Amendment shall be governed by and construed in accordance with the laws (other
than the conflict of law rules) of The State of Delaware.

                                 Page 10 of 11
<PAGE>

     Each of the undersigned has caused this Amendment to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first written above.

                                AEROVOX INCORPORATED


                                By /s/ Robert D. Elliott
                                   ----------------------------------
                                   Name: Robert D. Elliott
                                   Title: President and Chief Executive Officer



                                AMERICAN STOCK TRANSFER
                                    & TRUST COMPANY,
                                 as successor Rights Agent


                                By /s/ Herbert J. Lemmer
                                   ----------------------------------
                                   Name: Herbert J. Lemmer
                                   Title: Vice President

                                 Page 11 of 11