Document:

exv10w1

 

EXHIBIT
10.1

HEI, INC.

2006 NONEMPLOYEE DIRECTOR STOCK PURCHASE PLAN

SECTION 1. PURPOSES OF THE PLAN

     The purposes of this HEI, Inc. 2006 Nonemployee Director Stock Purchase Plan (the “Plan”) are
(a) to promote the long-term interests of HEI, Inc. (the “Company”) and its shareholders by
strengthening the Company’s ability to attract, motivate and retain key directors and (b) conserve
cash assets of the Company by allowing the nonemployee directors to receive shares of common stock
of the Company in exchange for cash compensation.

SECTION 2. DEFINITIONS

“Change
of Control”means a change of control of the Company, as such term is defined in the
Company’s 1998 Stock Option Plan for Nonemployee Directors, after the effective date of this Plan.

“Common Stock” means the common stock, $0.05 par value, of the Company.

“Company” means HEI, Inc., a Minnesota corporation.

“Effective Date” means the date that is one (1) business day after the Plan is approved by the
Board of Directors of the Company – January 13, 2006.

“Fair Market Value” means the closing price for the Common Stock on the NASDAQ Stock Market during
regular session trading for a single trading day as reported for such day in The Wall Street
Journal. If no reported price for the Common Stock exists for the applicable trading day, then
such price on the last preceding date for which such price exists shall be determinative of Fair
Market Value.

“Nonemployee Director” has the meaning set forth in Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, or any successor definition adopted by the Securities and Exchange
Commission.

“Participant” means any eligible person set forth in Section 3.1.

“Plan” means this HEI, Inc. 2006 Nonemployee Director Stock Purchase Plan.

“Restricted Stock” means any shares of Common Stock initially received under the Plan.

SECTION 3. PROVISIONS

3.1. Participation. Any Nonemployee Director may be a participant in the Plan (a “Participant”)

3.2. Issuance of Stock. At any time on the Effective Date, any Participant may elect to receive up
to Sixteen Thousand Dollars ($16,000.00) in Common Stock of the Company in lieu of such amount
being received as cash compensation for service as a Nonemployee Director. The Participant will
receive a number of shares of such stock equal to Sixteen Thousand Dollars ($16,000.00) divided by
the Fair Market Value of the Common Stock on the Effective Date. In

 

 

the event such number results in a fraction, the number shall be rounded down to the nearest whole
share.

3.3. Restricted Stock. Any stock received under the Plan shall be Restricted Stock, subject to
such terms, conditions and repurchase or forfeiture restrictions
provided in the non employee director stock purchase
Agreement, attached hereto as Exhibit A (which may be based principally on continuous
service with the Company for the balance of the term of a Participant’s directorship).

3.4. Consent of Participant. The amendment, suspension or termination of the Plan or a portion
thereof shall not, without the Participant’s consent, materially adversely affect any rights under
any issuance of Restricted Stock theretofore granted to the Participant under the Plan.

3.5. Waiver of Restrictions. Notwithstanding any other provisions of the Plan, the Board of
Directors, in its sole discretion, may waive any terms, conditions or restrictions or repurchase or
forfeiture periods on any Restricted Stock under such circumstances and subject to such terms and
conditions as the Board of Directors may deem appropriate.

3.6. Successors. All obligations of the Company under the Plan shall be binding on any successor
to the Company, whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all the business and/or
assets of the Company.

3.7. Choice of Law. The Plan and all determinations made and actions taken pursuant hereto, to the
extent not otherwise governed by the laws of the United States, shall be governed by the laws of
the State of Minnesota without giving effect to principles of conflicts of law.

Adopted by the Board of Directors of the Company on January 12, 2006.exv10w2

 

EXHIBIT
10.2

HEI, INC.

NONEMPLOYEE DIRECTOR STOCK PURCHASE AGREEMENT

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Participant:
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 
	Effective Date:

	 	 	 	 	 	 	 	, 20	 	 	 	 
	 	 	 
	 	 	 	 
	 	 
	Purchase Price Per Share:

	 	 	$	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 
	Number of Shares of Restricted Stock	 	 	 	 	 	 	 	Shares	 	 
	 	 	 
	 	 	 	 	 	 
	Restricted Stock Reference No.:
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 

 

     THIS RESTRICTED STOCK AGREEMENT is made as of the Effective Date (set forth above) by and
between HEI, Inc., a Minnesota corporation (the “Company”), and the individual named above (the
“Participant”) pursuant to the terms of the HEI, Inc. 2006 Nonemployee Director Stock Purchase
Plan, as such Plan may be amended from time to time (the “Plan”).

     The Company desires, by issuing to the Participant shares of the Company’s common stock, par
value $0.05 per share (the “Common Stock”), as hereinafter provided, to provide the Participant
with incentive to fulfill the balance of his or her term as a director of the Company.

     NOW, THEREFORE, in consideration of the provision of services by the Participant to the
Company, the mutual covenants hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Issuance of Shares of Restricted Stock. The Company hereby issues to the Participant
the number of shares of Common Stock set forth above (the “Restricted Stock”) on the terms and
conditions set forth in this Agreement.

2. Vesting; Term. All of the shares of Restricted Stock issued to the Participant pursuant
to Section 1 shall vest, and any restrictions on said shares shall terminate, as to the Restricted
Stock on the earlier of: a) September 1, 2006, or b) on a Change of Control, as such term is
defined in the Plan, or (c) on the date of Participant’s
death or disability (the “Vesting Date”) provided the Participant is and has been continuously
serving as a member of the Board of Directors of the Company from the Effective Date up to and
including the Vesting Date. In the event that Participant ceases to
continuously serve as a member of the Board of Directors of the
Company prior to the Vesting Date for any reason other than death or
disability, the shares of Restricted Stock shall vest, and any
restrictions on said shares shall terminate on a pro rata basis
(based on the percentage of actual service to the amount of service
that would have occurred through September 1, 2006).

 

 

3. Restrictions on Transfer; Forfeiture.

a. The shares of Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered by the Participant until such shares of Restricted Stock are vested as
hereinafter provided. Any attempt to dispose of shares of Restricted Stock in a manner
contrary to these restrictions shall be void and of no force or effect.

b. If the Participant’s service as a member of the Board of Directors of the Company ceases
for any reason other than death or disability before the shares of
Restricted Stock are vested, all shares of Restricted Stock that are
unvested shall immediately and
automatically terminate and be forfeited to the Company and the
Participant shall have no
rights with respect to such Restricted Stock.

4. Stock Certificates.

a. The Company will issue a stock certificate in the name of the Participant representing
the shares of Restricted Stock issued under this Plan. The Participant agrees that the
Company will hold such stock certificate in custody until the shares of Restricted Stock
vest or terminate and are forfeited, and that the certificate may bear an appropriate legend
referring to the terms, conditions and restrictions applicable to the issuance of shares of
Restricted Stock substantially in the following form:

THE TRANSFERABILITY OF THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF THE HEI, INC. 2005
NONEMPLOYEE DIRECTOR STOCK PURCHASE PLAN AND A RESTRICTED STOCK AGREEMENT
ENTERED INTO UNDER SUCH PLAN BETWEEN THE REGISTERED OWNER OF THIS STOCK
CERTIFICATE AND HEI, INC. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE AT
THE OFFICES OF HEI, INC.

b. As a condition of this issuance, the Participant agrees that, simultaneously with the
execution of this Agreement, the Participant will execute and deliver to the Company a stock
power in the form attached hereto as Exhibit A, endorsed in blank, relating to each
certificate evidencing the shares of Restricted Stock.

5. Consideration for Restricted Shares. The Participant is not required to pay any
additional consideration to the Company or its Affiliates upon the vesting of the shares of
Restricted Stock other than the rendering of services as a director to the Company.

6. Dividends. The Participant shall have the right to receive dividends and other
distributions with respect to the shares of Restricted Stock; provided, however, that all dividends
in stock, all stock rights and all stock issued upon split-ups or reclassifications shall be
subject to the same restrictions as the shares Restricted Stock upon which such stock dividends,
rights or additional shares are issued, and shall be held in custody by the Company until the
restrictions thereon shall have lapsed.

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7. Income Tax Withholding; Tax and Financial Advice. The Company shall have the right to
require the payment (through withholding from the Participant’s salary or otherwise) of any
federal, state or local taxes required by law to be withheld with respect to the issuance of the
shares of Restricted Stock or the vesting of such shares of Restricted Stock. The Participant
acknowledges and represents to the Company that the Participant has obtained advice with respect to
the tax and other financial consequences of the issuance of the shares of Restricted Stock.

8. Plan Governs. The provisions of this Restricted Stock Agreement are subject to the
Plan, and if any provision of this Restricted Stock Agreement conflicts with the Plan, the
provisions of the Plan shall govern. All capitalized terms used but not defined in this Restricted
Stock Agreement shall have the same meanings ascribed to them in the Plan. The Participant
acknowledges and represents to the Company that the Participant has received a copy of the Plan,
the Participant has reviewed the Plan and this Agreement and/or had them reviewed by the
Participant’s advisors to the Participant’s satisfaction, and that the Participant understands the
Plan and this Agreement.

9. Interpretation; Choice of Law. The interpretation and construction of any provision of
this Restricted Stock Agreement shall be made by the Board of Directors of the Company and shall be
final, conclusive and binding on the Participant and all other persons. This Restricted Stock
Agreement and all determinations made and actions taken pursuant hereto, to the extent not
otherwise governed by the laws of the United States, shall be governed by the laws of the State of
Minnesota without giving effect to principles of conflicts of law.

[signature page to follow]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in its corporate name by
its duly authorized officers and the Participant has executed this Agreement, as of the Effective
Date set forth above.

	 	 	 	 	 
	 	 	HEI, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name Typed or Printed
	 

	 	 	 	Its:
	 

	 	 	 	 

	 

	 	 	 	     Title Typed or Printed
	 
	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name Typed or Printed
	 

	 	 	 	the Participant’s Address:
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	the Participant’s Social Security or Tax

Identification Number:
	 
	 	 	 	 
	 

	 	 	 	 

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EXHIBIT A

STOCK POWER

(Assignment Separate from Certificate)

For Value Received,                                                             hereby sells, assigns and
transfers unto                                                                                                     
(                    ) shares of the common stock of HEI, Inc.
(the “Company”) standing in his/her/its name on the books of the Company represented by Stock
Certificate No.                                          herewith and does hereby irrevocably constitute and appoint
                                                             attorney-in-fact to transfer the said stock on the books of
the Company with full power of substitution in the premises.

Dated:                                        

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name Typed or Printed
	 
	 	 	 	 
	IN PRESENCE OF

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