SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant ( )
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( ) Preliminary Proxy Statement ( ) Confidential, for Use of the Commission
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( ) Definitive Proxy Statement
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( ) Soliciting Material Pursuant to Section 240.14a-11 or Section 240.14a-12
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HEI, Inc.
(Name of Registrant as Specified In Its Charter)
FANT INDUSTRIES INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(x) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and
0-11.
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applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2)and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of filing.
(1) Amount Previously Paid:
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Advertisement, published July 15, 1998.
Dear Fellow HEI Shareholder,
Success is rarely achieved by chance, and it does not come easily. In my own
life, success in business has come only through clear thinking, hard work and
persistence. Some people say that luck is the key. If it is, then I say that
my luck starts at 4:30 every morning. Not to say that luck is a bad thing, but
you sure can't count on it.
One thing you can count on is that our group will bring leadership and
vitality to HEI. We believe that, in any business, the difference between
success and mediocrity is leadership. Success depends on the ability to see
changes that should be made and the courage to act decisively. We know from
experience that there are no cookie-cutter schemes for real growth. No short
cuts. No easy solutions. This is because no two businesses are exactly alike.
Each business has its own unique strengths, issues and opportunities. This is
certainly true of HEI.
Our experience is in looking analytically at a business and then plotting a
course for creating increased value. For each of our nominees - Ed Finch,
David Ortlieb, Steve Tondera and Mack Traynor, as well as myself - this skill
has been honed through many years of practice. Each of us have done it time
and again, and today it is second nature.
Our yardstick for measuring HEI's success will be earnings growth and
shareholder value. We have set the bar at $25 per share. Under our leadership,
no director will enjoy the rewards of stock options until HEI's stock reaches
this price. This way, there will be no question about whether we have earned
your support. We don't get rewarded unless you have been rewarded first.
This change - to create the right incentives for success - is basic, important
and long overdue, and we will initiate it on day one. With all due respect to
the incumbent directors, they have raked in major stock options, at no
personal risk, year after year no matter how the Company has performed. Even
more troubling, they habitually have exercised the HEI stock options at the
earliest opportunity, and turned around and sold then the next day for a quick
buck. As a result of this continual selling, the collective holdings of the
incumbent board of directors are only slightly more than 2% of the Company's
outstanding shares. Their actions contradict all of their recent words about
their commitment to HEI and their faith in its bright future.
My own investment in HEI is in the millions of dollars and is truly a
long-term commitment. I own 18% of HEI's shares. And just like you, I bought
each one of them at market price. As a result, my interests are completely
aligned with your interests in the Company, and you can count on me to fight
to ensure success for both of us.
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Please join with us by voting FOR each proposal on the GREEN proxy card. We
need for your support in this contest and I personally appreciate your voting
with us. Together we can realize HEI's true potential.
Sincerely yours,
Anthony J. Fant
July 15, 1998
FANT INDUSTRIES INC.
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Advertisement, published July 16, 1998.
To the Shareholders of HEI, Inc.:
HEI's directors are showing you pages and pages of statistics to
convince you that they are doing a great job, that they are optimistic
about HEI's future under their leadership and that they deserve the stock
compensation they've been taking.
As you know, we have a different view. But you don't have to take our
word for it.
Ask yourself...
If the directors are doing so well, then why is HEI's stock
performing so poorly, even when the stock market, and
especially technology stocks, have soared over recent years?
Ask yourself...
If the directors really think that HEI has a bright future under
their leadership, then why do they hold so little stock themselves and why do
they consistently sell their stock within days of exercising their options?
Ask yourself...
Do you think that top management deserved the 250,000 stock
options - more than 6% of the Company's shares - given to them from December
1997 to March 1998, after your HEI shares lost more than 50% of their value?
Ask yourself...
Do you want your investment sitting with directors who have failed to
find ways for HEI to participate in the industry's growth and who
appear to be fearful of change
or...
Do you want to participate in revitalizing HEI with Anthony Fant,
who has an unquestionable record of success in identifying growth
opportunities and creating value.
<PAGE>
[Bar graph with the following heading: Ask Yourself... Which Track Record
Merits Your Support?
Data for graph:
Fant HEI, Inc.
$10,000 invested in June 1993 $10,000 $10,000
Value of that $10,000 as of June 1998 $109,900 $7,030
+999% -30%
Footnote to June 1998 Fant value: Represents the net proceeds upon
disposition of, less the equity investment in, Fant's businesses. Fant's
businesses are privately held, and the figure shown is based on asset values
derived from selling the businesses. Accordingly, the Fant value may reflect
significant control premiums that are not necessarily reflected in the stock
market value of a public company. Past performance is not necessarily
indicative of future results.
Footnote to June 1998 HEI, Inc. value: Represents the difference between
HEI's stock price of $9.25 on June 30, 1993 and $6.50 on June 30, 1998. No
dividends were paid during this period.
FANT INDUSTRIES INC.
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Shareholder Letter, dated July 15, 1998.
July 15, 1998
A Message to Fellow Shareholders of HEI, Inc. from Anthony J. Fant,
We are very pleased to let you know that we have increased our tender
offer price for HEI shares to $9.00 in cash.
We believe that this is a very strong offer and that it demonstrates
our commitment to HEI and our confidence in its future under our leadership.
If you share our belief that this is a strong offer, we urge you to
tender your shares and send in your GREEN proxy cards today. You are not
required to vote your proxy card to tender your shares. However, for us to
deliver this value to you, it is essential that the proposals on the GREEN
proxy cards are passed at the Special Meeting of Shareholders on Tuesday,
August 4th.
We, like you, have seen many statistics developed by HEI's directors
recently in their effort to convince you that they have earned your support.
We invite you simply to compare their track record to our track record and
then decide for yourself. As shown in the attached graph, a $10,000 investment
in HEI five years ago is worth only about $7,000 today. In contrast, a $10,000
investment in our group of businesses five years ago is worth well over
$100,000 today.
We believe that our offer and track record speak for themselves. We
hope that you agree and that you will join with us in revitalizing HEI.
<PAGE>
Attention Shareholders of HEI, Inc.:
FANT INDUSTRIES INC.
is pleased to announce
that it has increased its cash tender offer
for 11.5% of the shares of HEI, Inc.
to $9.00 per share cash.
You are not required to vote your proxy card to tender your shares.
However, for us to deliver this value to you, it is essential that the
proposals on the GREEN proxy cards are passed.
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The Fant Industries tender offer, proration period, and withdrawal
rights have been extended and will expire on Tuesday, August 4, 1998,
at 12:00 midnight, New York City Time, unless extended further. All
shareholders whose shares are validly tendered and not withdrawn and
accepted for payment pursuant to the offer, including shares
previously tendered, will receive the increased price of $9.00 per
share. To date, approximately 1,485,000 shares of the Company's
Common Stock have been tendered.
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If you have questions or need assistance in tendering or voting your shares,
please contact Beacon Hill Partners at (800) 253-3814.
FANT INDUSTRIES INC.
