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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
Winland Electronics, Inc.
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(Name of Registrant as Specified In Its Charter)
Dyna Technology, Inc., and the Winland Shareholders' Protective Committee,
consisting of Ralph I. Call, Steven A. Fraley, Paul R. Holzhueter, James J.
Kamp, Thompson H. Davis, Robert L. Ring, Gerald E. Brown
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] 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:
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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.
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PRELIMINARY PROXY STATEMENT
DYNA TECHNOLOGY, INC.
225 SOUTH CORDOVA AVENUE
LECENTER, MN 56057
July , 2001
IMPORTANT NOTICE AFFECTING YOUR INVESTMENT
IN WINLAND ELECTRONICS, INC. STOCK
Dear Fellow Shareholder:
Through my company, Dyna Technology, Inc. ("Dyna Technology"), I am an
investor in Winland Electronics, Inc. ("Winland" or the "Company"). I am writing
this letter and furnishing these proxy materials as the chairman of a committee
that has been formed called the Winland Shareholders' Protective Committee (the
"Shareholders' Protective Committee" or the "Committee") to solicit the
shareholders of Winland to replace its current Board of Directors (the "Board").
I have no interest in the Company other than as an investor. I have never
before attempted to oust management of or in any way take over a public company.
The reason I feel compelled to appeal to you, my fellow shareholders is because
I am tired of watching the value of my investment in the Company deteriorate
while management continues to reap the rewards of running a public company.
There are many deep-seated problems at Winland. Many of them are based on
years of dominance of the board by W. Kirk Hankins. In its years as a public
company, Winland has never operated as a public company should, which is to
enhance shareholder value. All Winland shareholders have watched their
investments shrivel, as management have written themselves lavish contracts and
enjoyed ever increasing salaries, perks, options and benefits. An investor in
Winland who participated in the IPO six years ago has watched his or her dollar
shrink to 34 cents. There has never been a dividend paid. With proper
management, shareholder dollars should have grown into more dollars. Here, those
dollars have turned into pennies.
- Like you, I invested in Winland believing a story and concept for the
Company that I still believe is viable.
- Like you, I have waited patiently for my investment to pay off, listening
to and believing in management's ability and vision to make the Company
realize its potential.
- Like you, I have watched the value of my investment continue to
deteriorate while management makes no progress in turning the Company
around.
I cannot and will not make lofty promises or guaranties for the Company's
success. I can guaranty, however, that I, along with the other nominees on the
Shareholders' Protective Committee, will work as hard as we can to achieve a
turn around of this Company and help you to realize the value of your
investment. To that end, we are going to commit to achieving results for you
within two years, or we will not continue to stand for election to the Board.
What follows on the succeeding pages is our proxy materials. Combined with
what you have received from management of the Company, there is a lot to read.
You are going to learn about all of the measures which management has undertaken
to prevent the Shareholders' Protective Committee from being heard and to
increase the cost of this solicitation, in order to protect their positions,
with no tangible benefit to you, the owners of the Company. The basic question
as you are reading, though, is quite easy. Are you likely to be better off with
current management or our slate of directors? I urge you to read these materials
carefully and use your judgement about the answer to that question.
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We can determine the future of our investment in Winland Electronics.
Please submit your proxy and vote FOR the removal of the existing Board and the
election of our nominees as replacements. Please mark, sign, date, and return
the enclosed BLUE proxy card in the envelope provided. If you have already
returned the proxy card sent to you by the Company, you may revoke that proxy
and vote for the Committee nominees and proposals by marking, signing, dating,
and returning a later dated BLUE proxy card.
Sincerely,
Ralph I. Call
Chairman, Shareholders' Protective
Committee
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PROXY STATEMENT
NOTICE OF SPECIAL MEETING
TO REPLACE THE BOARD OF DIRECTORS
OF WINLAND ELECTRONICS, INC.
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SOLICITATION OF PROXIES IN FAVOR OF ELECTING CERTAIN PERSONS
TO THE BOARD OF DIRECTORS
INTRODUCTION; SOLICITATION OF PROXIES
This Proxy Statement and the enclosed BLUE proxy card are being sent to the
shareholders of Winland Electronics, Inc. (the "Company"), in connection with
the solicitation of proxies by Dyna Technology, Inc., a shareholder of the
Company with its business address at 225 South Cordova Avenue, LeCenter, MN
56057 ("Dyna Technology"), and Ralph I. Call, Steven A. Fraley, Paul R.
Holzhueter, James J. Kamp, Thompson H. Davis, Robert L. Ring and Gerald E.
Brown, who have formed the Winland Shareholders' Protective Committee. Proxies
solicited hereby are to be voted and/or utilized at the Special Meeting of
Shareholders of the Company to be held on August 21, 2001, at
p.m. Central Time at the Company's principal office located at 1950 Excel Drive,
Mankato, Minnesota, or any adjournments, postponements, continuations, or
reschedulings thereof (the "Special Meeting"), for the purpose of electing a
slate of seven directors proposed by the Committee to fill the vacancies created
by the resignations of W. Kirk Hankins and his son, Kirk P. Hankins and to
replace all of the current members of the Board of Directors of the Company.
This Proxy Statement is furnished in opposition to the Company's Proxy Statement
mailed on or about June , 2001 (the "Company's Proxy Statement").
In addition to solicitation by mail, the Shareholders' Protective Committee
may solicit proxies by telephone, facsimile, e-mail, in person or by
advertisement. The Committee may, but to date has not, specially engage Dyna
Technology employees, representatives or other persons to solicit the Company's
shareholders. The Committee also intends to request banks, brokers and other
custodians, nominees and fiduciaries to forward these proxy materials to their
customers who are the beneficial owners of the Shares they hold of record. The
Committee will reimburse such record holders for their reasonable out-of-pocket
expenses in so doing.
The cost of this solicitation is estimated to be $150,000 and will be borne
by Dyna Technology; provided, however, that in the event that the Committee's
proposed slate of directors is elected, Dyna Technology may seek reimbursement
of such costs from the Company only to the extent permitted by law and without
shareholder approval of such reimbursement, unless such approval is required by
law. As of June , 2001, Dyna Technology has incurred total expenditures of
approximately $100,000.00 in connection with the solicitation of the Company's
shareholders.
THIS SOLICITATION IS BEING MADE BY THE SHAREHOLDERS' PROTECTIVE
COMMITTEE AND NOT ON BEHALF OF THE INCUMBENT BOARD
OF DIRECTORS OF THE COMPANY.
YOU ARE URGED TO SIGN, DATE AND RETURN THE BLUE PROXY CARD
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
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BACKGROUND OF THE SOLICITATION
Dyna Technology began buying Winland stock in October 1999. At that time
the investment appeared to be an attractive investment opportunity because the
Company was growing rapidly and was beginning to show profitability. Key
management comprised the largest shareholders in the Company and logically, they
should have acted to enhance shareholder value. At that time, the stock was
trading between $2.00 and $2.25 per share. Ralph I. Call, the owner of Dyna
Technology, decided to consider taking action to protect his and the other
Winland shareholders' investment in Winland in the Fall of 2000, after repeated
attempts to communicate with management without receiving a satisfactory
response. In late March 2001, Mr. Call organized the Shareholders' Protective
Committee to seek to elect its members to replace the Winland Board and propose
amendments to the Company's Bylaws to remove various impediments which the Board
put in place earlier in the month.
As investors in Winland, the members of the Shareholders' Protective
Committee are deeply troubled by the performance of the Company and have serious
reservations about its continuing viability. The value of the Company's stock
has floundered since going public in 1995, barely ever having exceeded $3.50 per
share.
The performance of the Company's stock is, the Committee believes, a
reflection of its senior management and incumbent Board of Directors, which have
demonstrated an inability to design and pursue a successful business plan. The
Company's net income dropped by more than 20% in 1999 and the Company reported a
net loss of $309,523 for the year 2000. Gross profits have declined in each of
the past two fiscal years, dropping over 24% in the year 2000 alone. At the same
time, the Company has consumed cash at an alarming rate. In the 1999 Annual
Report, the Company reported that it had used approximately $1,500,000 of its
(then) $3,500,000 line of credit. By the end of 2000, that figure had increased
to just over $3,900,000 and the Company was forced to increase its line of
credit to $4,500,000.
While the financial performance of the Company slumped, the Board of
Directors granted senior management salary increases and additional incentive
compensation. In fact, in 2000, while the Company's stock continued to languish
in the cellar, the Board took advantage of the lower stock price to reprice
outstanding stock options granted to management. In 1999, the combined salaries
and bonuses of the Company's two primary officers, W. Kirk Hankins and Lorin E.
Krueger, totaled $293,574. In 2000, that figure was increased to $369,900. By
what measure did the Winland Board believe a 26% increase in compensation was
justified? The Committee strongly believes that such compensation is excessive
in light of the Company's performance.
The response of the incumbent Board of Directors and the Company's senior
management to shareholders who have expressed concern regarding the Company's
increasingly dire financial condition has been, the Committee believes,
superficial and evasive.
Ralph Call was so concerned about the Company's declining performance that
on October 10, 2000, he sent a letter to the non-management members of the Board
of Directors on behalf of Dyna Technology, Inc., which raised the following
questions:
1. Is any board member a true outsider with the ability to bring some
objective direction and critical experience and skills to the Company?
2. Why were stock options repriced?
3. Why have bonuses continued to be paid to management when performance has
been dismal?
4. Are wages and benefits paid to employees appropriate to their skills and
contributions to the Company?
5. Does the Company exhibit appropriate management discipline and control?
6. In 1999, you stated in the annual report that your cost of manufacturing
increased because you were preparing for Y2K, additional staffing to
support increased production levels, purchase of new manufacturing and
test equipment, ISO 9001, and reduced efficiencies due to new workers.
For the
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first six months of 2000, you stated that the lower margins were due to
increased manufacturing costs. Please explain.
7. Why has the customer base been allowed to concentrate over many years?
What is being done to broaden the customer base?
8. Why are you introducing new products with lower margins when your
current gross margins are inadequate? For a business to be healthy, you
need gross margins in the range of 30%.
9. Is the Company's debt properly managed?
10. Has the Company's large investment in engineering paid off? Will it
ever?
11. Why was the Company's stock moved to the American Stock Exchange? The
NASDAQ is where the action is.
12. Are you giving too much attention to form and not enough to function?
For example, the Company issues press releases concerning public
recognition and awards while profits languish and the shareholders get
a haircut.
13. In 2000, you have a commitment to pay down $657,000.00 of long-term
debt obligations. With your current projections for income and cash
flow, how do you propose to make that payment?
14. As directors of a public company, where neither the income statement
nor the balance sheet is improving, why have you sat on your hands?
The Company's reply was not signed by any Director and did not adequately
respond to the questions posed. Two additional letters sent to the
non-management Directors were ignored.
THE BY-LAW AMENDMENTS
The Company's senior management and incumbent Board of Directors seem less
concerned with the performance of the Company than the preservation of their
positions. Rather than appropriately responding to shareholder concerns about
the Company's failing performance, the Board of Directors recently sought to
entrench themselves and senior management in control of the Company by adopting
By-Law provisions which limit the rights of shareholders to nominate director
candidates and propose other changes to the status quo. Specifically, the
recently-amended By-Laws impose costly notice requirements with respect to
shareholder nominees and other proposals which, the Committee believes, serve no
purpose other then to warn the incumbent Board of Directors and allow them to
mount a more effective defense. Furthermore, the amendments limit the ability of
the shareholders to convene special meetings of the shareholders by raising the
threshold voting power required to call such meetings in certain instances.
Finally, the amendments limit the ability of shareholders to participate in
meetings of the shareholders by empowering the officers of the Company to
restrict access to shareholder meetings, to limit the amount of time allotted
for questions or comments and to unilaterally determine when the business of the
meetings has been completed. These amendments are not germane to the financial
performance of the Company or the best interests of its shareholders and have as
their sole purpose the preservation of power of senior management and the
incumbent Board of Directors.
SHAREHOLDERS' PROTECTIVE COMMITTEE; CONTRACT WITH WINLAND SHAREHOLDERS
Management and the Board has failed to successfully respond to the
challenges of operating a manufacturing concern. Far worse, they have put their
personal and financial interests ahead of their fiduciary duties to the
shareholders of the Company and have recently enacted purely selfish By-Law
provisions which sacrifice shareholder rights to preserve their positions of
power. Our philosophy in investing is one that we believe most investors
share -- an investment is an expression of confidence in management. For the
reasons expressed above, we have lost all confidence in senior management and
incumbent Board of Directors of the Company. We have not, however, lost hope for
the Company and the investments of our fellow shareholders.
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For that reason, we have organized a group of seven independent nominees for
election to the Company's Board of Directors at its upcoming 2001 Special
Meeting.
Your choices as a stockholder are rather limited. You can try to sell your
stock for which there is no market. You can vote in favor of retaining the
existing slate of directors. It is expected that their continued control of the
Company will reduce the value of your investment to zero. Or, you can vote for
the slate of directors nominated by the Shareholders Protective Committee. If we
are elected we will commit to do the following:
1. Remove existing directors and senior management.
2. Install a board of directors who are true outsiders and who bring
considerable experience, talent and energy to the Company. As a
shareholder you'll be able to communicate with your directors.
3. Appoint competent management and hold them accountable for their
performance. We will make management appointments based on merit, not
family relationships.
4. Properly represent shareholders and stakeholders and discharge our
fiduciary responsibilities.
5. Visit all key customers within the 1st month.
6. Diversify the customer base.
7. Have an independent audit conducted. Evaluate the Company and make
appropriate adjustments to gross margins and expense levels.
8. Develop a business plan.
9. Communicate honestly with you, the shareholders, and the media. We will
report good news and bad news and attempt to explain what we are doing
so that you can understand.
10. We will operate conservatively and work to decrease Company leverage
and enhance Company, and thus shareholder value. We will concentrate on
improving operations and let the PR follow.
Well, that's our top 10.
The Committee's group of nominees for election to the Company's board of
directors are individuals of integrity and experience who are committed to
enhancing value for all Shareholders. The election of our slate would provide
the Company with a fresh perspective based on a combined total of over 186 years
of management, investment and capital markets experience. The Committee nominees
view the opportunity to serve as directors of the Company as a contract with the
Company's shareholders to maximize shareholder value. Winland stockholders, as
the owners of the Company, have every right to be concerned about the value of
their investment. The nominees for the new board of directors all have as their
primary commitment the pursuit of a business strategy that will produce the
highest and best returns to the Company's shareholders and a management style
that is more democratic and responsive.
PROPOSAL: WINLAND SHAREHOLDERS' PROTECTIVE COMMITTEE NOMINEES AS DIRECTORS
The Board of Directors currently consists of five persons. The two vacant
director seats have not been filled. Each director elected at the 2001 Special
Meeting will be elected to serve until the Company's next Annual Meeting or
until a successor is duly elected/appointed and qualified.
The Committee submits for election to replace the incumbent Board of
Directors the seven persons named below. Proxies cannot be voted for a greater
number of persons than the number of nominees named below. The Committee
recommends a vote FOR all nominees, and it is intended that, unless contrary
written instructions are provided, BLUE Proxies accompanying this Proxy
Statement will be voted at the 2001 Special Meeting FOR the election to the
Board of all of the Committee nominees named, to the exclusion of the candidates
nominated by the Company and its incumbent Board of Directors. The Committee
believes that each nominee will be able to serve, but should any nominee be
unable to serve as a director, the persons named in the BLUE Proxy have advised
that they will vote for the election of such substitute nominee as Dyna
Technology may propose.
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The name, age, occupation/employment and business address of each person to
be nominated for election to the Company's Board of Directors, as furnished to
the Committee by the nominees, is as follows:
RALPH I. CALL, age 56, has been the President and Chief Executive
Officer of Dyna Technology, Inc., a Utah-based holding company, since 1996;
the Chairman and Chief Executive Officer of Winco, Inc., a Minnesota-based
industrial manufacturer and wholly-owned subsidiary of Dyna Technology,
Inc., since 1992; and the Chairman and Chief Executive Officer of Winpower,
Inc., a South Dakota-based industrial manufacturer and wholly-owned
subsidiary of Dyna Technology, Inc., since 1996. From 1989 to 1998, he was
also the President of Winco, Inc. The business address of Mr. Call's
principal occupation/employment is 225 South Cordova Ave., LeCenter, MN
56057.
STEVEN A. FRALEY, age 44, is the Vice-President and Chief Financial
Officer of Winco, Inc. Mr. Fraley has been employed with Winco since 1993.
The business address of his principal occupation/ employment is 225 South
Cordova Ave., LeCenter, MN 56057.
PAUL R. HOLZHUETER, age 47, has been the Director of Business
Development of the Malt-O-Meal Company, a Minnesota-based food company,
since 1998. From 1976 to 1997, he served in various capacities with Hubbard
Milling Company, a Minnesota-based food company, most recently as Vice
President for the Agri-Feed Group and Pet Food Division. The business
address of Mr. Holzhueter's principal occupation/employment is 101 North
Second St., Suite 110, Mankato, MN 56001.
JAMES J. KAMP, age 41, has been the Chief Financial Officer of the
Peripheral Technology Group, a Minnesota-based distributor of computer
hardware and software, since 1993, and the Controller of Innovative
Marketing Solutions, a Minnesota-based fulfillment organization, since
1995. The business address of his principal occupation/employment is 7580
Quattro Drive, Chanhassen, MN 55317.
THOMPSON H. DAVIS, age 55, has been a pilot for Delta Airlines since
1977. He has also been a real estate agent/broker since 1978 and an owner
of Colorado Business Associates, Inc., a Colorado-based commercial real
estate and property management company, since 1981. The business address of
Mr. Davis' principal occupation/employment is 8089 Deer Creek Road, Salt
Lake City, UT 84121.
ROBERT L. RING, age 58, has been an independent business process and
strategic planning consultant since 1994. The business address of his
principal occupation/employment is P.O. Box 4067, Wichita, KS 67204.
GERALD E. BROWN, age 53, has been the President of American HealthNet,
a Nebraska-based medical systems developer, since 1999. From 1994 to 1997,
he served as Executive Vice President of the Coleman Company, a
Kansas-based manufacturer of recreational and other consumer goods. From
1986 to 1997, Mr. Brown served in various capacities with Coleman
Powermate, a Nebraska-based affiliate of the Coleman Company and
manufacturer of portable generators, most recently as President and Chief
Executive Officer. The business address of his principal
occupation/employment is 2619 North 160th St., Omaha, NE 68116.
Mr. Call has entered into an agreement with each of the other proposed
nominees to form the Committee consisting of the nominees to solicit the
shareholders of the Company to elect its members to the Winland Board of
Directors (the "Agreement"). Pursuant to the Agreement, Mr. Call has agreed to
indemnify and hold harmless each of the members of the Committee from any and
all losses, claims, damages, counsel fees and expenses (including fees and
expenses incurred in defending or investigating any such claim) and all
liabilities to which each may become subject under any statute, under common law
or otherwise relating to, based upon or arising out of such person's actions
which relate to serving on the Committee or standing for election to the Board
of Directors of the Company (except to the extent that any such loss, claim,
damage, counsel fee or liability is found in a final judgment by a court, not
subject to further appeal, to have resulted from bad faith, willful misconduct
or gross negligence on the part of an affected Committee member). Except as
specified herein, to date, there are no other arrangements or understandings
between Dyna Technology, Inc. or Mr. Call and the persons identified above.
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INTEREST OF COMMITTEE MEMBERS IN THIS SOLICITATION
Nominee ownership of Winland Common Stock is as follows:
NOMINEE NUMBER OF SHARES PERCENT OF CLASS
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Ralph I. Call............................................... 404,800(1) 13.7%
Steven A. Fraley............................................ -- --
Paul R. Holzhueter.......................................... 85,100(2) 2.9%
James J. Kamp............................................... -- --
Thompson H. Davis........................................... -- --
Robert L. Ring.............................................. -- --
Gerald E. Brown............................................. -- --
All Nominees as a Group(3).................................. 489,900 16.6%
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1. Represents shares owned of record by Dyna Technology, Inc., which is owned
and controlled by Mr. Call and his spouse.
2. Represents shares owned beneficially by Mr. Holzhueter's spouse which Mr.
Holzhueter has the sole right to vote through a power of attorney.
3. For purposes hereof, each of the Nominees is deemed an associate of each of
the other Nominees and of Dyna Technology.
During the two year period ended June 30, 2001, the Nominees purchased
and/or sold shares of the Company's Common Stock as follows (except as
indicated, all purchases were made with the particular nominee's personal
funds):
AMOUNT OF PURCHASE OR PRICE PER
NOMINEE DATE OF TRANSACTION WEX SHARES SOLD SHARE
------- ------------------- ---------- ----------- ---------
Paul R. Holzhueter........ June 10, 1999 3,000 Sold 500 @ $3.625; 500 @ $3.75
1000 @ $3.50; 1000@ $3.25
Paul R. Holzhueter........ June 15, 1999 3,000 Sold $2.8125
Paul R. Holzhueter........ July 6, 1999 3,000 Sold $2.8125
Paul R. Holzhueter........ July 7, 1999 2,000 Sold $2.875
Paul R. Holzhueter........ July 12, 1999 3,000 Sold $2.625
Paul R. Holzhueter........ July 13, 1999 3,000 Sold $2.75
Paul R. Holzhueter........ July 21, 1999 900 Sold $2.875
Paul R. Holzhueter........ July 22, 1999 300 Sold $2.875
Paul R. Holzhueter........ Sept. 22, 1999 3,800 Sold $2.375
Paul R. Holzhueter........ Sept. 23, 1999 500 Sold $2.375
Paul R. Holzhueter........ Sept. 27, 1999 1,700 Sold $2.375
Dyna Technology........... Oct. 14, 1999 2,500 Purchase $2.00
Dyna Technology........... Oct. 21, 1999 17,500 Purchase $2.00
Dyna Technology........... Oct. 21, 1999 5,500 Purchase $2.25
Dyna Technology........... Oct. 21, 1999 1,000 Purchase $2.24
Dyna Technology........... Nov. 09, 1999 4,200 Purchase $2.25
Dyna Technology........... Nov. 10, 1999 5,200 Purchase $2.25
Dyna Technology........... Nov. 10, 1999 4,100 Purchase $2.25
Dyna Technology........... Nov. 11, 1999 4,600 Purchase $2.25
Dyna Technology........... Nov. 12, 1999 2,000 Purchase $2.25
Dyna Technology........... Nov. 16, 1999 900 Purchase $2.25
Dyna Technology........... Nov. 18, 1999 2,100 Purchase $2.25
Dyna Technology........... Nov. 19, 1999 200 Purchase $2.25
Dyna Technology........... Nov. 22, 1999 9,600 Purchase $2.25
Dyna Technology........... Nov. 23, 1999 1,900 Purchase $2.25
Dyna Technology........... Nov. 24, 1999 1,100 Purchase $2.25
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AMOUNT OF PURCHASE OR PRICE PER
NOMINEE DATE OF TRANSACTION WEX SHARES SOLD SHARE
------- ------------------- ---------- ----------- ---------
Dyna Technology........... Nov. 29, 1999 1,100 Purchase $2.25
Dyna Technology........... Nov. 30, 1999 4,400 Purchase $2.25
Dyna Technology........... Dec. 02, 1999 500 Purchase $2.25
Dyna Technology........... Dec. 08, 1999 6,700 Purchase $2.25
Dyna Technology........... Dec. 10, 1999 17,900 Purchase $2.25
Dyna Technology........... Dec. 10, 1999 500 Purchase $2.19
Dyna Technology........... Dec. 13, 1999 8,100 Purchase $2.25
Dyna Technology........... Dec. 14, 1999 3,200 Purchase $2.25
Dyna Technology........... Dec. 14, 1999 4,000 Purchase $2.31
Dyna Technology........... Dec. 15, 1999 11,200 Purchase $2.375
Dyna Technology........... Dec. 17, 1999 9,100 Purchase $2.375
Dyna Technology........... Dec. 17, 1999 200 Purchase $2.31
Dyna Technology........... Dec. 20, 1999 1,800 Purchase $2.375
Dyna Technology........... Dec. 20, 1999 500 Purchase $2.31
Dyna Technology........... Dec. 21, 1999 1,400 Purchase $2.375
Dyna Technology........... Dec. 23, 1999 7,000 Purchase $2.375
Dyna Technology........... Dec. 23, 1999 7,500 Purchase $2.25
Dyna Technology........... Dec. 27, 1999 500 Purchase $2.25
Dyna Technology........... Dec. 30, 1999 100 Purchase $2.19
Dyna Technology........... Dec. 30, 1999 100 Purchase $2.22
Dyna Technology........... Dec. 30, 1999 5,000 Purchase $2.25
Dyna Technology........... Dec. 31, 1999 200 Purchase $2.25
Dyna Technology........... Jan. 3, 2000 2,600 Purchase $2.25
Paul R. Holzhueter........ Jan. 27, 2000 3,000 Sold $2.5625
Paul R. Holzhueter........ Feb. 1, 2000 2,500 Sold $2.6875
Paul R. Holzhueter........ Feb. 3, 2000 800 Sold $2.6875
Paul R. Holzhueter........ Feb. 8, 2000 2,000 Sold $2.6875
Paul R. Holzhueter........ Feb. 9, 2000 1,200 Sold $2.6875
Paul R. Holzhueter........ Feb. 11, 2000 2,000 Sold $2.6875
Paul R. Holzhueter........ Feb. 14, 2000 9,900 Sold $2.50
Paul R. Holzhueter........ Feb. 29, 2000 1,500 Sold $2.50
Paul R. Holzhueter........ Mar. 1, 2000 500 Sold $2.50
Dyna Technology........... May 3, 2000 5,800 Purchase $2.00
Dyna Technology........... May 5, 2000 18,200 Purchase $2.00
Dyna Technology........... May 24, 2000 20,000 Purchase $2.00
Dyna Technology........... May 24, 2000 1,000 Purchase $1.875
Dyna Technology........... May 26, 2000 19,000 Purchase $1.875
Dyna Technology........... May 31, 2000 1,000 Purchase $1.875
Dyna Technology........... June 1, 2000 2,000 Purchase $1.875
Dyna Technology........... July 27, 2000 25,400 Purchase $1.875
Dyna Technology........... Aug. 1, 2000 6,100 Purchase $1.875
Dyna Technology........... Aug. 2, 2000 5,000 Purchase $1.875
Dyna Technology........... Aug. 3, 2000 500 Purchase $1.875
Dyna Technology........... Aug. 4, 2000 1,000 Purchase $1.875
Paul R. Holzhueter........ Aug. 10, 2000 10,000 Purchase $1.9375
Paul R. Holzhueter........ Aug. 11, 2000 4,500 Purchase $1.9375
Paul R. Holzhueter........ Aug. 14, 2000 1,000 Purchase $1.9375
Paul R. Holzhueter........ Aug. 15, 2000 2,500 Purchase $1.9375
Paul R. Holzhueter........ Aug. 16, 2000 4,800 Purchase $2.00
Paul R. Holzhueter........ Aug. 21, 2000 400 Purchase $1.9375
Paul R. Holzhueter........ Aug. 22, 2000 300 Purchase $1.9375
9
11
AMOUNT OF PURCHASE OR PRICE PER
NOMINEE DATE OF TRANSACTION WEX SHARES SOLD SHARE
------- ------------------- ---------- ----------- ---------
Paul R. Holzhueter........ Aug. 23, 2000 1,100 Purchase $1.9375
Paul R. Holzhueter........ Aug. 24, 2000 2,000 Purchase $1.9375
Paul R. Holzhueter........ Aug. 25, 2000 600 Purchase $1.9375
Paul R. Holzhueter........ Aug. 28, 2000 3,000 Purchase $1.9375
Paul R. Holzhueter........ Aug. 29, 2000 2,600 Purchase $1.9375
Paul R. Holzhueter........ Aug. 31, 2000 2,700 Purchase $1.9375
Paul R. Holzhueter........ Sept. 1, 2000 200 Purchase $1.9375
Paul R. Holzhueter........ Sept. 5, 2000 500 Purchase $1.9375
Dyna Technology........... Sept. 6, 2000 39,000 Purchase $1.94
Paul R. Holzhueter........ Sept. 6, 2000 5,600 Purchase $1.9375
Dyna Technology........... Sept. 7, 2000 2,500 Purchase $1.94
Paul R. Holzhueter........ Sept. 7, 2000 200 Purchase $1.9375
Dyna Technology........... Sept. 8, 2000 4,600 Purchase $1.94
Paul R. Holzhueter........ Sept. 11, 2000 6,800 Purchase $1.9375
Dyna Technology........... Sept. 12, 2000 200 Purchase $1.94
Paul R. Holzhueter........ Sept. 12, 2000 2,600 Purchase $1.9375
Dyna Technology........... Sept. 14, 2000 2,600 Purchase $1.94
Paul R. Holzhueter........ Sept. 14, 2000 1,400 Purchase $1.9375
Dyna Technology........... Sept. 15, 2000 3,900 Purchase $1.94
Paul R. Holzhueter........ Sept. 15, 2000 1,200 Purchase $1.9375
Paul R. Holzhueter........ Sept. 19, 2000 100 Purchase $1.9375
Paul R. Holzhueter........ Sept. 20, 2000 2,700 Purchase $1.9375
Paul R. Holzhueter........ Sept. 20, 2000 12,300 Purchase $2.00
Dyna Technology........... Sept. 21, 2000 2,000 Purchase $1.94
Dyna Technology........... Sept. 22, 2000 4,200 Purchase $1.94
Dyna Technology........... Sept. 25, 2000 8,000 Purchase $1.94
Dyna Technology........... Sept. 26, 2000 500 Purchase $1.94
Dyna Technology........... Sept. 28, 2000 3,500 Purchase $1.94
Dyna Technology........... Sept. 29, 2000 8,000 Purchase $1.94
Dyna Technology........... Oct. 12, 2000 10,000 Purchase $1.50
Dyna Technology........... Oct. 13, 2000 1,500 Purchase $1.50
Paul R. Holzhueter........ Oct. 18, 2000 1,200 Purchase $1.5625
Paul R. Holzhueter........ Oct. 20, 2000 200 Purchase $1.5625
Paul R. Holzhueter........ Oct. 23, 2000 1,500 Purchase $1.5625
Paul R. Holzhueter........ Oct. 24, 2000 500 Purchase $1.5625
Paul R. Holzhueter........ Oct. 25, 2000 1,600 Purchase $1.5625
Dyna Technology........... Nov. 2, 2000 500 Purchase $1.56
Dyna Technology........... Nov. 3, 2000 8,000 Purchase $1.625
Dyna Technology........... Nov. 7, 2000 1,700 Purchase $1.625
Dyna Technology........... Nov. 9, 2000 1,000 Purchase $1.625
Dyna Technology........... Nov. 14, 2000 1,000 Purchase $1.625
Dyna Technology........... Nov. 16, 2000 3,000 Purchase $1.625
Dyna Technology........... Nov. 20, 2000 400 Purchase $1.625
Paul R. Holzhueter........ Dec. 4, 2000 1,500 Purchase $1.25
Dyna Technology........... Dec. 5, 2000 23,000 Purchase $1.25
Paul R. Holzhueter........ Dec. 5, 2000 200 Purchase $1.25
Dyna Technology........... Dec. 6, 2000 600 Purchase $1.25
Paul R. Holzhueter........ Dec. 6, 2000 1,300 Purchase $1.25
Paul R. Holzhueter........ Dec. 18, 2000 2,100 Purchase $1.3125
Paul R. Holzhueter........ Dec. 19, 2000 4,900 Purchase 2,000 @ $1.25;
2,900 @ $1.3125
10
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AMOUNT OF PURCHASE OR PRICE PER
NOMINEE DATE OF TRANSACTION WEX SHARES SOLD SHARE
------- ------------------- ---------- ----------- ---------
Dyna Technology........... Dec. 21, 2000 14,700 Purchase $1.25
Dyna Technology........... Dec. 22, 2000 300 Purchase $1.25
Dyna Technology........... Dec. 26, 2000 6,000 Purchase $1.25
Dyna Technology........... Dec. 28, 2000 4,300 Purchase $1.25
Dyna Technology........... Dec. 29, 2000 4,700 Purchase $1.25
Dyna Technology........... Jan. 5, 2001 4,700 Purchase $1.25
Dyna Technology........... Jan. 9, 2001 100 Purchase $1.25
- -------------------------
* Mr. Holzhueter's purchases between August 28, 2000 and December 19, 2000 were
financed in part with a line of credit from a bank (made in the bank's
ordinary course of business) to Mr. Holzhueter for the purchase of Winland and
other securities, which has been repaid.
Except as set forth herein, none of the nominees or their respective
associates (i) directly or indirectly beneficially owns any securities of the
Company; (ii) has had any relationship with the Company in any capacity other
than as a shareholder; (iii) knows of any transactions, or series of similar
transactions, since the beginning of the Company's last fiscal year, or any
currently proposed transaction, or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeds $60,000 and in which any of them or their respective affiliates
had, or will have, a direct or indirect material interest; (iv) is, or within
the past year was, a party to any contract, arrangement or understanding with
any person with respect to any securities of the Company; or (v) has any
arrangement or understanding with any person with respect to any future
employment by the Company or its known affiliates or any future transactions to
which the Company or any of its known affiliates will or may be a party. Other
than the compensation regularly paid by the Company to its directors, executive
officers and consultants, the nominees will not receive any compensation for
their services as directors of the Company.
PRINCIPAL SHAREHOLDERS
Reference is made to the Company's Proxy Statement filed with the
Securities and Exchange Commission as of June , 2001, by the Board of
Directors of the Company for certain information about the Company's principal
owners and certain other matters required to be disclosed by the Company.
VOTING, EXECUTION AND REVOCATION OF PROXIES
According to the Company's Proxy Statement, only stockholders of record at
the close of business on June 25, 2001, will be entitled to vote. As of that
date, again according to the Company's Proxy Statement, the Company had
2,952,313 shares of Common Stock outstanding and entitled to vote and each share
is entitled to one vote. The presence in person or by proxy of the holders of a
majority of the shares of stock entitled to vote at the Special Meeting
constitutes a quorum for the transaction of business.
Because the Committee seeks election of its slate of director-nominees in
opposition to the incumbent Board of Directors of the Company, broker-dealers,
banks and other entities holding securities for the beneficial ownership of
their customers will not be permitted to vote shares of the Company's Common
Stock for which they have not received voting instructions from the beneficial
owners thereof. Accordingly, shares beneficially owned by persons who abstain
from voting will not count toward the quorum required for the Special Meeting or
toward the votes required for the election of directors. Similarly, shares not
voted by broker-dealers, banks and other entities holding securities for the
beneficial ownership of their customers will not count toward the quorum
required for the Special Meeting or toward the votes required for the election
of directors.
The election of the Committee's slate of director-nominees requires the
affirmative vote of the holders of a majority of the voting power of all issued
and outstanding shares of the Company's Common Stock. Shares deemed present in
the quorum for the Special Meeting, but which are not voted (either because of
an
11
13
abstention or a broker-dealer non-vote), will not count toward the election of
the Committee's or management's slate of directors.
Each properly executed and timely returned BLUE Proxy will be voted in
favor of the election of all of the Committee's director-nominees to the
exclusion of all of the director-nominees proposed by the Company and its Board
of Directors. However, shareholders of the Company desiring to vote for some of
the Committee's director-nominees should execute and return the Committee's BLUE
Proxy, but should write the full name of the Committee nominee or nominees, for
whom the shareholder desires to withhold authority to vote. The Committee's BLUE
Proxy will revoke any prior proxy or proxies given and will be revoked by any
subsequent proxy or proxies given. Accordingly, shareholders of the Company
desiring to vote for some or all of the director-nominees proposed by the
Company or against election of all of the Committee's director-nominees, or who
desire to abstain from voting, should not execute or return a BLUE Proxy. The
BLUE Proxy cannot be used to vote for some of the Committee's and for some of
the Company's candidates.
Shareholders not giving a BLUE Proxy solicited hereby may vote for or
against all or some of the Committee's director-nominees, and for or against
election of all or some of the director-nominees proposed by the Company and its
Board of Directors, in person or by another proxy of their choice.
12
14
[BLUE COLORED PAPER]
PROXY SOLICITED IN OPPOSITION TO THE BOARD OF DIRECTORS
BY DYNA TECHNOLOGY, INC., RALPH I. CALL, STEVEN A. FRALEY, PAUL R. HOLZHUETER,
JAMES J. KAMP,
THOMPSON H. DAVIS, ROBERT L. RING AND GERALD E. BROWN
FOR THE SPECIAL MEETING OF THE SHAREHOLDERS OF WINLAND ELECTRONICS, INC.,
TO BE HELD AUGUST 21, 2001
The undersigned hereby constitutes and appoints Dyna Technology,
Inc., and Ralph I. Call as attorneys and proxies (each with the power to
act alone and with the power of substitution and revocation) to attend
the Special Meeting of Shareholders of Winland Electronics, Inc. (the
"Company" or "WEX") to be held on August 21, 2001, at p.m., Central
Daylight Time, and any and all adjournments thereof, and there to act
for and to vote all of the shares of Common Stock held in the name of
the undersigned, in the manner specified below, upon the following
matters:
1. Election of the seven directors listed below, each to serve until the
earlier of the election of his successor or his earlier resignation,
removal, disqualification or death:
RALPH I. CALL, STEVEN A. FRALEY, PAUL R. HOLZHUETER, JAMES J. KAMP,
THOMPSON H. DAVIS, ROBERT L. RING AND GERALD E. BROWN
[ ] FOR all nominees (except as indicated to the contrary below) [
] WITHHOLD AUTHORITY to vote for all nominees
(INSTRUCTION: To withhold authority to vote for one or more nominees,
write the full name(s) of such nominees in the space provided below.)
------------------------------------------------------------------------
PLEASE FILL IN, SIGN, AND DATE ON THE REVERSE SIDE AND MAIL IN THE
ENCLOSED ENVELOPE. IF YOU NEED ASSISTANCE WITH THIS PROXY CARD, PLEASE
CONTACT ________________________________ .
15
(continued from other side)
IF THIS PROXY IS EXECUTED IN SUCH A MANNER AS TO NOT WITHHOLD
AUTHORITY TO VOTE FOR THE ELECTION OF ANY NOMINEE, IT SHALL BE DEEMED TO
GRANT AUTHORITY TO VOTE FOR THE ELECTION OF ANY SUCH NOMINEE.
THIS PROXY REVOKES ANY PRIOR PROXY OR PROXIES GIVEN. SHAREHOLDERS
WHO DO NOT WISH TO VOTE FOR ANY DIRECTOR-NOMINEES PROPOSED BY THE
COMMITTEE, OR WHO WISH TO VOTE FOR ANY DIRECTOR-NOMINEES PROPOSED BY THE
COMPANY'S MANAGEMENT, SHOULD NOT EXECUTE OR RETURN THIS PROXY.
SHAREHOLDERS WHO DO NOT GIVE THIS PROXY CAN VOTE FOR OR AGAINST THE
ELECTION OF SOME OR ALL OF THE COMMITTEE'S DIRECTOR-NOMINEES IN PERSON
OR THROUGH ANOTHER PROXY OF THEIR CHOICE.
Dated this ____ day of
__________ , 2001
--------------------------
Signature
--------------------------
Signature
IMPORTANT: This Proxy
should be signed exactly
as your name appears on
your WEX stock
certificate. In the case
of joint tenants, both
should sign. Fiduciaries
should indicate full title
and authority. Corporation
should sign in full
corporate name by the
President or other
authorized officer.
Partnerships should sign
in partnership name by an
authorized person.