SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. ____)
Filed by the Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission Only
[x] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
WINLAND ELECTRONICS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] 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 its filing:
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
WINLAND ELECTRONICS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held
May 9, 1996
TO THE SHAREHOLDERS OF WINLAND ELECTRONICS, INC.:
The 1996 Annual Meeting of Shareholders of Winland Electronics, Inc.
will be held at the Company's corporate offices located at 1950 Excel Drive,
Mankato, Minnesota, at 7:00 p.m. on Thursday, May 9, 1996, for the following
purposes:
1. To set the number of members of the Board of Directors at six (6).
2. To elect members of the Board of Directors.
3. To ratify the appointment of the Company's independent auditors for
the year ending December 31, 1996.
4. To take action on any other business that may properly come before the
meeting or any adjournment thereof.
Accompanying this Notice of Annual Meeting is a Proxy Statement, form
of Proxy and the Company's 1995 Annual Report to Shareholders.
Only shareholders of record as shown on the books of the Company at the
close of business on March 22, 1996 will be entitled to vote at the 1996 Annual
Meeting or any adjournment thereof. Each shareholder is entitled to one vote per
share on all matters to be voted on at the meeting.
You are cordially invited to attend the 1996 Annual Meeting. Whether or
not you plan to attend the 1996 Annual Meeting, please sign, date and mail the
enclosed form of Proxy in the return envelope provided as soon as possible. The
Proxy is revocable and will not affect your right to vote in person in the event
you attend the meeting. The prompt return of proxies will help your Company
avoid the unnecessary expense of further requests for proxies.
BY ORDER OF THE BOARD OF DIRECTORS,
W. Kirk Hankins, President
Dated: March 25, 1996
Mankato, Minnesota
WINLAND ELECTRONICS, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
to be held
May 9, 1996
The accompanying Proxy is solicited by the Board of Directors of
Winland Electronics, Inc. (the "Company") for use at the 1996 Annual Meeting of
Shareholders of the Company to be held on Thursday, May 9, 1996, at the location
and for the purposes set forth in the Notice of Annual Meeting, and at any
adjournment thereof.
The cost of soliciting proxies, including the preparation, assembly,
and mailing of the proxies and soliciting material, as well as the cost of
forwarding such material to the beneficial owners of stock, will be borne by the
Company. Directors, officers and regular employees of the Company may, without
compensation other than their regular remuneration, solicit proxies personally
or by telephone.
Any shareholder giving a Proxy may revoke it any time prior to its use
at the 1995 Annual Meeting by giving written notice of such revocation to the
Secretary or any other officer of the Company or by filing a later dated written
Proxy with an officer of the Company. Personal attendance at the 1996 Annual
Meeting is not, by itself, sufficient to revoke a Proxy unless written notice of
the revocation or a later dated Proxy is delivered to an officer before the
revoked or superseded Proxy is used at the 1996 Annual Meeting. Proxies will be
voted as directed therein. Proxies which are signed by shareholders but which
lack specific instruction with respect to any proposal will be voted in favor of
such proposal as set forth in the Notice of Meeting or, with respect to the
election of directors, in favor of the number and slate of directors proposed by
the Board of Directors and listed herein.
The presence at the Annual Meeting in person or by proxy of the holders
of a majority of the outstanding shares of the Company's Common Stock entitled
to vote shall constitute a quorum for the transaction of business. If a broker
returns a "non-vote" proxy, indicating a lack of voting instructions by the
beneficial holder of the shares and a lack of discretionary authority on the
part of the broker to vote on a particular matter, then the shares covered by
such non-vote shall be deemed present at the meeting for purposes of determining
a quorum but shall not be deemed to be represented at the meeting for purposes
of calculating the vote required for approval of such matter. If a shareholder
abstains from voting as to any matter, then the shares held by such shareholder
shall be deemed present at the meeting for purposes of determining a quorum and
for purposes of calculating the vote with respect to such matter, but shall not
be deemed to have been voted in favor of such matter. An abstention as to any
proposal will therefore have the same effect as a vote against the proposal.
The mailing address of the principal executive office of the Company is
1950 Excel Drive, Mankato, Minnesota 56001. The Company expects that this Proxy
Statement, the related Proxy and Notice of Meeting will first be mailed to
shareholders on or about March 25, 1996.
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OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed March 22, 1996 as the
record date for determining shareholders entitled to vote at the 1996 Annual
Meeting. Persons who were not shareholders on such date will not be allowed to
vote at the 1995 Annual Meeting. At the close of business on March 22, 1996,
there were 2,583,311 shares of the Company's Common Stock, par value $.01 per
share, issued and outstanding. The Common Stock is the only outstanding class of
capital stock of the Company. Each share of Common Stock is entitled to one vote
on each matter to be voted upon at the 1996 Annual Meeting. Holders of Common
Stock are not entitled to cumulative voting rights.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT SHAREHOLDINGS
The following table provides information as of March 22, 1996
concerning the beneficial ownership of the Company's Common Stock by (i) the
persons known by the Company to own more than 5% of the Company's outstanding
Common Stock, (ii) each director of the Company, (iii) the named executive
officers in the Summary Compensation Table, and (iv) all directors and executive
officers as a group. Except as otherwise indicated, the persons named in the
table have sole voting and investment power with respect to all shares of Common
Stock owned by them.
Name (and Address of 5% Number of Shares Percent
Owner) or Identity of Group Beneficially Owned(1) of Class (1)
W. Kirk Hankins (2) 306,443 11.6%
1950 Excel Drive
Mankato, MN 56001
Swen E. Farland 189,946 7.3%
R.R. 5, Box 1000
Mankato, MN 56001
Lorin E. Krueger 226,723 8.6%
1950 Excel Drive
Mankato, MN 56001
Kirk P. Hankins (2) 69,000 2.6%
S. Robert Dessalet 21,950 *
Thomas J. de Petra 4,000 *
Steven N. Bronson 408,920 15.7%
2101 W. Commercial Blvd., #1500
Ft. Lauderdale, FL 33309
Bruce C. Barber 186,993 7.2%
2101 W. Commercial Blvd., #1500
Ft. Lauderdale, FL 33309
Eric R. Elliott 160,687 6.2%
2101 W. Commercial Blvd., #1500
Ft. Lauderdale, FL 33309
All Executive Officers 832,462 30.1%
and Directors as a Group
(7 Individuals)
- ---------------------
* Less than 1% of the outstanding shares of Common Stock.
(1) Under the rules of the SEC, shares not actually outstanding are deemed to
be beneficially owned by an individual if such individual has the right to
acquire the shares within 60 days. Pursuant to such SEC Rules, shares
deemed beneficially owned by virtue of an individual's right to acquire
them are also treated as outstanding when calculating the percent of the
class owned by such individual and when determining the percent owned by
any group in which the individual is included.
(2) W. Kirk Hankins is the father of Kirk P. Hankins. W. Kirk Hankins and Kirk
P. Hankins disclaim any beneficial ownership of shares owned by each other.
(3) Includes 77,342 shares held by Mr. Hankins's spouse, which shares Mr.
Hankins disclaims beneficial ownership of, and 57,360 shares which may be
purchased by Mr. Hankins upon exercise of currently exercisable options.
(4) Includes 5,000 shares which may be purchased by Mr. Farland upon exercise
of a currently exercisable option.
(5) Includes 800 shares held by Mr. Krueger's spouse and 42,240 shares which
may be purchased by Mr. Krueger upon exercise of currently exercisable
options.
(6) Includes 36,000 shares which may be purchased by Mr. Hankins upon exercise
of currently exercisable options.
(7) Includes 850 shares owned jointly by Mr. Dessalet and his spouse and 21,100
shares which may be purchased by Mr. Dessalet upon exercise of currently
exercisable options.
(8) Includes 4,000 shares which may be purchased by Mr. de Petra upon exercise
of currently exercisable options.
(9) Includes 110,000 shares owned by Private Opportunity Partners, Ltd., its
general partner being B & B Management, Inc., of which Messrs. Bronson,
Barber and Elliott are affiliates and share voting and investment power
over such shares; however, they disclaim beneficial ownership of the
shares.
(10) Includes 28,212 shares which may be purchased by Mr. Bronson upon exercise
of a currently exercisable warrant.
(11) Includes 6,660 shares which may be purchased by Mr. Barber upon exercise of
a currently exercisable warrant.
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(12) Includes 2,128 shares which may be purchased by Mr. Elliott upon exercise
of a currently exercisable warrant.
(13) Includes 78,142 shares held by spouses of officers and directors, 850
shares held jointly with spouse of director, and 180,100 shares which may
be purchased upon exercise of currently exercisable options.
ELECTION OF DIRECTORS
(Proposals #1 and #2)
The Bylaws of the Company provide that the number of directors shall be the
number set by the shareholders, which shall be not less than one. The Board of
Directors unanimously recommends that the number of directors be set at six and
that six directors be elected. Unless otherwise instructed, the Proxies will be
so voted.
Under applicable Minnesota law, approval of the proposal to set the number
of directors at six and the election of the nominees to the Board of Directors
require the affirmative vote of the holders of the greater of (1) a majority of
the voting power of the shares represented in person or by proxy at the Annual
Meeting with authority to vote on such matter, or (2) a majority of the voting
power of the minimum number of shares that would constitute a quorum for the
transaction of business at the Annual Meeting.
In the absence of other instruction, the Proxies will be voted for each of
the individuals listed below. If elected, such individuals shall serve until the
next annual meeting of shareholders and until their successors shall be duly
elected and shall qualify. All of the nominees are members of the present Board
of Directors. If, prior to the 1996 Annual Meeting of Shareholders, it should
become known that any one of the following individuals will be unable to serve
as a director after the 1996 Annual Meeting by reason of death, incapacity or
other unexpected occurrence, the Proxies will be voted for such substitute
nominee(s) as is selected by the Board of Directors. Alternatively, the Proxies
may, at the Board's discretion, be voted for such fewer number of nominees as
results from such death, incapacity or other unexpected occurrence. The Board of
Directors has no reason to believe that any of the following nominees will be
unable to serve.
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Current Positions with the Company
Name and Age and Principal Occupations and other Director
of Director Information for the Past Five Years Since
W. Kirk Hankins - Chairman of the Board, Chief Executive 1983
68 Officer and Chief Financial Officer of the
Company since December 1983 and President of
the Company since April 1985; President,
Chairman and Chief Financial Officer of
Playtronics Corporation from 1985 until
March 1990, when Playtronics merged into the
Company; Associate Professor of Accounting
at Mankato State University and owner and
operator of a management consulting firm
from 1976 to 1984; W. Kirk Hankins is the
father of Kirk P. Hankins.
Swen E. Farland - Production Specialist on a part-time basis for 1985
66 the Company; self-employed barber in
Mankato, Minnesota from June 1980 to August
1994 when he retired; original founder of
the Company, holding a variety of offices
including serving as a Director with the
Company from its formation through 1983.
Lorin E Krueger - Senior Vice President of Operations of the 1978
40 Company since March 1987 and Secretary of
the Company since 1983 (served as Vice
President of the Company from January 1977
to March 1987); employee of the Company
since 1976.
Kirk P. Hankins - Vice President of Marketing of the Company 1990
34 since April 1989; Secretary of Playtronics
from October 1985 until March 1990; Vice
President of Playtronics from October 1985
until April 1989; Marketing Manager of the
Company from 1984 to 1985; Kirk P.
Hankins is the son of W. Kirk Hankins.
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S. Robert Dessalet - Vice President Finance and Administration of 1985
63 Rimage Corporation, a manufacturer of
computer software duplication and finishing
systems since September 1995; Vice President
Finance and Administration of Dunhill
Software Services, Inc., a software
duplication company, from May 1994 to
September 1995; consultant for Dessalet &
Associates, a business consulting firm, from
January 1993 to May 1994; employed by
National Poly Products, Inc., a producer of
polyethylene packaging film in Mankato,
Minnesota, from June 1968 to January 1993 in
various capacities including Chief Financial
Officer.
Thomas J. de Petra - Chief Executive Officer and a director of 1994
49 Nortech Forest Technologies, Inc., a
manufacturer of animal repellents, since
February 1996; management consultant to
Minnesota-based manufacturing companies
from June 1993 to February 1996; Chief
Information Officer of IDC Holdings, Ltd. from
June 1993 to November 1994; President and
owner of DePetra & Associates, Inc., a
financial communications firm, formerly
known as First Financial Investor Relations,
Inc., from August 1986 to October 1993.
BOARD AND COMMITTEE MEETINGS
During 1995, the Board of Directors held five formal meetings. Each
director attended 75% or more of the meetings of the Board and the committees on
which such director served during 1995.
The Company's Board of Directors has three standing committees, the Audit
Committee, Compensation Committee and Stock Option Committee. The Company does
not have a nominating committee.
The Audit Committee members are S. Robert Dessalet and Thomas J. de Petra.
This committee reviews the selection and work of the Company's independent
auditors and the adequacy of internal controls for compliance with corporate
policies and directives. The Audit Committee met once during 1995.
- 6 -
The Compensation Committee members are S. Robert Dessalet, Swen E. Farland
and Thomas J. de Petra. This committee recommends to the Board of Directors from
time to time the salaries to be paid to executive officers of the Company and
any plan for additional compensation it deems appropriate. The Compensation
Committee met once during 1995 and took action by unanimous written consent
once.
The Stock Option Committee members are S. Robert Dessalet, Swen E. Farland
and Thomas J. de Petra. This committee is vested with the same authority as the
Board of Directors with respect to the granting of options and the
administration of the Company's 1989 Stock Option Plan. The Stock Option
Committee met once during 1995, and it took action by unanimous written consent
once.
EXECUTIVE OFFICERS OF THE COMPANY
The name and ages of all of the Company's executive officers and the
positions held by them are listed below.
Name Age Position
W. Kirk Hankins 68 Chairman of the Board, President,
Chief Executive Officer and Chief
Financial Officer
Lorin E. Krueger 40 Senior Vice President of
Operations and Secretary
Kirk P. Hankins 34 Vice President of Marketing
Thomas E. Brockman 39 Vice President of Engineering
The business experience of W. Kirk Hankins, Lorin E. Krueger and Kirk P.
Hankins is set forth in the section of this Proxy Statement entitled Election of
Directors.
Mr. Brockman joined the Company in September 1993 as Manager of Engineering
and was elected as Vice President of Engineering on May 23, 1994. From August
1989 to September 1983, Mr. Brockman served as Manager of Electronics for
Hiniker Company, a Mankato based agricultural equipment manufacturer. Prior to
1989, Mr. Brockman served as Manager of Test and Development for Continental
Machine Incorporated, a subsidiary of DoAll Corporation.
- 7 -
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding compensation
paid or accrued during each of the Company's last three fiscal years to the
Chief Executive Officer. No other executive officer's total annual salary and
bonus exceeded $100,000 based on salary and bonus earned during fiscal year
1995.
Long Term Compensation
-----------------------------------------------
Awards Payouts
-----------------------------------------------
Restricted LTIP All Other
Name and Principal Fiscal Stock Payouts Compen-
Position Year Annual Compensation Awards ($) Options ($) sation ($)
- ---------------------- ----- ---------- ------- ----- ----------
---------------------------------------
Salary ($) Bonus ($) Other ($)
------- --------- ---------
W. Kirk Hankins, 1995 105,000 -- -- -- 22,000 -- 2,829(1)
Chief Executive 1994 95,000 46,000 -- -- -- -- 2,273(1)
Officer, President, 1993 90,000 7,500 -- -- -- -- 1,960(1)
and Chief Financial
Officer
(1) Represents contribution to the Company's 401(k) Plan for executive
officer's benefit.
Option Grants During 1995 Fiscal Year
The following table provides information regarding stock options granted
during fiscal 1995 to the named executive officer in the Summary Compensation
Table. The Company has not granted any stock appreciation rights.
Percent of
Total Options Exercise or
Options granted Base Price
Name Granted in Fiscal Year Per Share Expiration Date
W. Kirk Hankins 10,000(1) 12.2% $3.30 05/22/00
12,000(2) 14.6% $2.96 12/21/00
- ------------------
(1) Option becomes exercisable with respect to 25% of the shares covered
thereby on each of the first four anniversary dates of the date of grant,
May 22, 1995. The exercise price is equal to 110% of the fair market value
of the Common Stock on the date of grant.
(2) Option became exercisable on December 21, 1995, the date of grant. The
exercise price is equal to 110% of the fair market value of the Common
Stock on the date of grant.
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Option Exercises During 1995 Fiscal Year and Fiscal Year-End Option Values
The following table provides information as to options exercised by the
named executive officer in the Summary Compensation Table during fiscal 1995 and
the number and value of options at December 31, 1995. The Company does not have
any outstanding stock appreciation rights.
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares December 31, 1995 December 31, 1995
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable(1)
W. Kirk Hankins -- -- 46,020 exercisable $89,047 exercisable
21,340 unexercisable $29,682 unexercisable
- ------------------
(1) Value is calculated on the basis of the difference between the option
exercise price and the average between the bid and asked prices for the
Company's Common Stock at December 31, 1995 as quoted by the Nasdaq
SmallCap Market multiplying by the number of shares of Common Stock
underlying the option.
Compensation to Directors
The Company does not pay fees to the members of the Board of Directors and
has no present plans to pay directors' fees, although it does reimburse them for
out-of-pocket expenses incurred while attending Board or Committee meetings. The
Company has in the past granted options to directors.
The 1989 Plan provides for automatic option grants to each director who is
not an employee of the Company (a "Non-Employee Director"). Each Non-Employee
Director who was serving on the Board on December 22, 1994, the date the 1989
Plan was amended to provide for automatic options, or who was elected for the
first time as a director on or after December 22, 1994 was granted a
nonqualified option to purchase 2,000 shares of the Common Stock. Each
Non-Employee Director who is re-elected as a director of the Company or whose
term of office continues after a meeting of shareholders at which directors are
elected shall, as of the date of such re-election or shareholder meeting,
automatically be granted a nonqualified option to purchase 2,000 shares of the
Common Stock. No director shall receive more than one option pursuant to the
formula plan in any one fiscal year. All options granted pursuant to these
provisions are granted at a per share exercise price equal to 100% of the fair
market value of the Common Stock on the date of grant, and they are immediately
exercisable and expire on the earlier of (i) three months after the optionee
ceases to be a director (except by death) and (ii) five (5) years after the date
of grant. In the event of the death of a Non-Employee Director, any option
granted to such Non-Employee Director pursuant to this formula plan may be
exercised at any time within six months of the death of such Non-Employee
Director or until the date on which the option, by its terms, expires, whichever
is earlier.
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Employment Agreements and Termination of Employment Arrangements
The Company entered into an Employment Agreement dated May 15, 1995 with W.
Kirk Hankins, President, Chief Executive Officer and Chief Financial Officer,
which agreement has an initial term which expires December 31, 1997 and
additional one-year terms thereafter, unless either party gives notice to the
other party 60 days prior to the end of such term that such party wishes to
terminate the agreement. The agreement provided for a base salary of $65,625 for
the period May 15, 1995 through December 31, 1995 and provides for an annual
base salary of $113,400 for 1996 and $122,472 for 1997. Mr. Hankins is entitled
to receive an annual bonus consisting of stock options and/or a cash payment at
the sole discretion of the Compensation Committee. Mr. Hankins did not receive a
cash bonus for 1995; however, he did receive a five-year, immediately
exercisable, option to purchase 12,000 shares at $2.96 per share. If Mr. Hankins
terminates his employment for good reason during the two years following a
change in control of the Company, he is entitled to an amount equal to the
salary and bonus paid for the two fiscal years preceding such termination, which
amount shall be paid in 24 equal monthly installments. Mr. Hankins has agreed
that, during the two-year period following the termination of his employment,
except following a change of control as hereinbefore described, he will not (i)
compete with the Company, (ii) solicit or communicate with the Company's
customers or (iii) solicit any of the Company's employees to leave the Company.
As consideration for entering into the agreement and agreeing to the
noncompetition provisions in the agreement, Mr. Hankins received a five-year
option to purchase 10,000 shares of the Company's Common Stock at $3.30 per
share, which option vests to the extent of 25% of the shares on each of the
first four anniversary dates.
The Company entered into an Employment Agreement dated May 15, 1995 with
Lorin E. Krueger, Senior Vice President of Operations. The agreement provided
for a base salary of $48,750 for the period May 15, 1995 through December 31,
1995 and provides for an annual base salary of $84,240 for 1996 and $90,979 for
1997. Mr. Krueger did not receive a cash bonus for 1995; however, he did receive
a five-year, immediately exercisable, option to purchase 12,000 shares at $2.69
per share. As consideration for entering into the agreement and agreeing to the
noncompetition provisions in the agreement, Mr. Krueger received a five-year
option to purchase 10,000 shares of the Company's Common Stock at $3.00 per
share, which option vests to the extent of 25% of the shares on each of the
first four anniversary dates. All other terms of the agreement with Mr. Krueger
are identical to the terms of the agreement with W. Kirk Hankins described
above.
The Company entered into an Employment Agreement dated July 15, 1995 with
Kirk P. Hankins, Vice President of Marketing. The agreement provided for a base
salary of $27,958 for the period July 15, 1995 through December 31, 1995 and
provides for an annual base salary of $65,880 for 1996 and $71,150 for 1997. Mr.
Hankins did not receive a cash bonus for 1995; however, he did receive a
five-year option to purchase 12,000 shares at $2.96 per share. As consideration
for entering into the agreement and agreeing to the noncompetition provisions in
the agreement, Mr. Hankins received a five-year option to purchase 10,000 shares
of the Company's Common Stock at $3.64 per share. Both of the options granted to
Mr. Hankins pursuant to the agreement, vest to the extent of 25% of the shares
on each of the first four anniversary dates. All other terms of the agreement
with Mr. Hankins are identical to the terms of the agreement with W. Kirk
Hankins described above.
- 10 -
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than tenpercent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, the
Company believes that, during fiscal year 1995, all officers, directors and
greater than ten-percent beneficial owners complied with the applicable filing
requirements, except that the grants of options were reported late on a Form 5
by S. Robert Dessalet and Thomas J. de Petra.
Certain Transactions
On May 12, 1993, in consideration for consulting services and $200, the
Company issued a warrant to purchase 200,000 shares of the Company's Common
Stock at an average exercise price of $1.25 to Barber and Bronson Incorporated
("BBI"), of which Steven Bronson, Bruce Barber and Eric Elliott, principal
shareholders of the Company, are affiliates. On November 1, 1994, the warrant
was transferred to BBI's affiliates, including Messrs. Bronson, Barber and
Elliott, who received warrants to purchase 152,500, 36,000 and 11,500 shares,
respectively, of the Company's Common Stock, which warrants were exercised on
March 16, 1995. On January 19, 1995, the Company entered into a Placement Agency
Agreement with BBI, pursuant to which BBI served as the exclusive agent of the
Company in connection with the sale of 370,000 shares of its Common Stock, which
sale was completed on March 13, 1995. BBI received commissions in the amount of
$74,000, reimbursement of its legal expenses in the amount of $5,000 and a
warrant to purchase 37,000 shares of the Company's Common Stock at $2.20 per
share, which warrant was transferred to BBI's affiliates, including Messrs.
Bronson, Barber and Elliott, who received warrants to purchase 28,212, 6,660 and
2,128 shares, respectively, of the Company's Common Stock.
INDEPENDENT PUBLIC ACCOUNTANT
(Proposal #3)
Ahern Montag & Vogler, Ltd. has served as the Company's independent
auditors since September 1991, when William B. Montag, the Company's independent
auditor from 1983 until that date, joined Ahern Montag & Vogler, Ltd. Mr.
Montag, as a representative of Ahern Montag & Vogler, Ltd., is expected to be
present at the 1996 Annual Meeting and will be given an opportunity to make a
statement regarding financial and accounting matters of the Company, if he so
desires, and will be available to respond to appropriate questions from the
Company's shareholders.
The Board of Directors recommends that the shareholders ratify the
appointment of Ahern Montag & Vogler, Ltd. as the Company's independent public
accountants for the Company for the year ended December 31, 1996. The
ratification of Ahern Montag & Vogler, Ltd. as independent accountants for the
Company requires the affirmative vote of a majority of the shares represented in
person or by proxy at the Annual Meeting.
- 11 -
OTHER BUSINESS
Management knows of no other matters to be presented at the 1996 Annual
Meeting. If any other matter properly comes before the 1996 Annual Meeting, the
appointees named in the proxies will vote the proxies in accordance with their
best judgment.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 1997 Annual Meeting must be received by the
Company by November 25, 1996 to be included in the Company's proxy statement and
related proxy for the 1997 Annual Meeting.
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1995, including financial statements, accompanies this Notice
of Annual Meeting and Proxy Statement. No portion of the Annual Report is
incorporated herein or is to be considered proxy soliciting material.
FORM 10-KSB
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND A LIST OF EXHIBITS TO SUCH FORM 10-KSB. THE COMPANY WILL FURNISH
TO ANY SUCH PERSON ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING THE FORM
10-KSB UPON THE ADVANCE PAYMENT OF REASONABLE FEES. REQUESTS FOR A COPY OF THE
FORM 10-KSB AND/OR ANY EXHIBIT(S) SHOULD BE DIRECTED TO THE PRESIDENT OF WINLAND
ELECTRONICS, INC., 1950 EXCEL DRIVE, MANKATO, MINNESOTA 56001. YOUR REQUEST MUST
CONTAIN A REPRESENTATION THAT, AS OF MARCH 22, 1996, YOU WERE A BENEFICIAL OWNER
OF SHARES ENTITLED TO VOTE AT THE 1996 ANNUAL MEETING OF SHAREHOLDERS.
BY ORDER OF THE BOARD OF DIRECTORS
W. Kirk Hankins, President
Dated: March 25, 1996
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WINLAND ELECTRONICS, INC.
PROXY
for Annual Meeting to be held May 9, 1996
The undersigned hereby appoints W. KIRK HANKINS and LORIN E. KRUEGER, and each
of them, with full power of substitution, his or her Proxies to represent and
vote, as designated below, all shares of the Common Stock of Winland
Electronics, Inc. registered in the name of the undersigned at the 1995 Annual
Meeting of Shareholders of the Company to be held at the Company's corporate
offices located at 1950 Excel Drive, Mankato, Minnesota at 7:00 p.m., on
Thursday, May 9, 1996, and at any adjournment thereof. The undersigned hereby
revokes all proxies previously granted with respect to such Annual Meeting.
The Board of Directors recommends that you vote "FOR" each proposal.
1. Set the number of directors at six (6).
/ / FOR / / AGAINST / / ABSTAIN
2. Elect Directors. Nominees: W. Kirk Hankins Lorin E. Krueger Kirk P. Hankins
Swen E. Farland S. Robert Dessalet Thomas J. de Petra
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY to
(except those whose names have vote for all nominees
been written on the line below) listed above.
3. Ratify the appointment of Ahern Montag & Vogler, Ltd. as the Company's
independent auditors for the year ending December 31, 1996.
/ / FOR / / AGAINST / / ABSTAIN
4. Other Matters. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL SPECIFICALLY IDENTIFIED ABOVE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Date: , 1996
PLEASE DATE AND SIGN ABOVE
exactly as name appears at
the left, indicating, where
proper, official position
or representative capacity.
For stock held in joint
tenancy, each joint owner
should sign.