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
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] 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] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
<PAGE>
WINLAND ELECTRONICS, INC.
-----------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held
May 14, 1998
-----------------------
TO THE SHAREHOLDERS OF WINLAND ELECTRONICS, INC.:
The 1998 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 14, 1998, for the following
purposes:
1. To set the number of members of the Board of Directors at
seven (7).
2. To elect members of the Board of Directors.
3. 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 1997 Annual Report to Shareholders.
Only shareholders of record as shown on the books of the Company at the
close of business on March 23, 1998 will be entitled to vote at the 1998 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 1998 Annual Meeting. Whether or
not you plan to attend the 1998 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 30, 1998
Mankato, Minnesota
<PAGE>
WINLAND ELECTRONICS, INC.
-----------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held
May 14, 1998
-----------------------
The accompanying Proxy is solicited by the Board of Directors of
Winland Electronics, Inc. (the "Company") for use at the 1998 Annual Meeting of
Shareholders of the Company to be held on Thursday, May 14, 1998, 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 1998 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 1998 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 1998 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 30, 1998.
<PAGE>
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed March 23, 1998 as the
record date for determining shareholders entitled to vote at the 1998 Annual
Meeting. Persons who were not shareholders on such date will not be allowed to
vote at the 1998 Annual Meeting. At the close of business on March 23, 1998,
there were 2,833,039 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 1998 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 23, 1998
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 and nominee of the Company, (iii) the named
executive officers in the Summary Compensation Table and (iv) all current
executive officers and directors 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 281,443 (2) 9.9%
1950 Excel Drive
Mankato, MN 56001
Lorin E. Krueger 234,223 (3) 8.2%
1950 Excel Drive
Mankato, MN 56001
Kirk P. Hankins 64,000 (4) 2.3%
S. Robert Dessalet 22,000 (5) *
Thomas J. dePetra 9,000 (6) *
David L. Ewert 0 *
Peter D. Jones 6,000 (7) *
Viola Rose Farland 164,946 (8) 5.8%
R.R. 5, Box 100
Mankato, MN 56001
Steven N. Bronson 318,920 (9) 11.1%
201 S. Biscayne Blvd., #2950
Miami, FL 33131
All Current Executive Officers 757,761 (10) 25.5%
and Directors as a Group
(10 Individuals)
- ---------------------
<PAGE>
* 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) Includes 69,842 shares held by Mr. Hankins's spouse, which shares Mr.
Hankins disclaims beneficial ownership of, and 19,500 shares which may
be purchased by Mr. Hankins upon exercise of currently exercisable
options.
(3) Includes 800 shares held by Mr. Krueger's spouse and 19,500 shares
which may be purchased by Mr. Krueger upon exercise of currently
exercisable options.
(4) Includes 11,000 shares which may be purchased by Mr. Hankins upon
exercise of currently exercisable options.
(5) Includes 850 shares owned jointly by Mr. Dessalet and his spouse and
11,000 shares which may be purchased by Mr. Dessalet upon exercise of
currently exercisable options.
(6) Includes 9,000 shares which may be purchased by Mr. de Petra upon
exercise of currently exercisable options.
(7) Represents shares held by Mr. Jones's spouse.
(8) Represents shares held by Viola Rose Farland as a trustee of trusts.
(9) Includes 28,212 shares which may be purchased by Mr. Bronson upon
exercise of a currently exercisable warrant.
(10) Includes 70,642 shares held by spouses of officers and directors, 850
shares held jointly with spouse of director, and 134,850 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 seven
and that seven 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 seven and the election of the nominees to the Board of
Directors require the affirmative vote of the holders of the greater of (i) 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 (ii) 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.
<PAGE>
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, except David Ewert and Peter
Jones, are members of the present Board of Directors. If, prior to the 1998
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 1998
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.
Name and Age of Current Position Director
Director/Nominee Age with the Company Since
W. Kirk Hankins 70 Chairman of the Board, President, 1983
Chief Executive Officer and
Chief Financial Officer
Lorin E Krueger 42 Senior Vice President of 1978
Operations and Director
Kirk P. Hankins 36 Vice President of Marketing 1990
and Director
S. Robert Dessalet 65 Director 1985
Thomas J. de Petra 51 Director 1994
David L. Ewert 47 Director Nominee N/A
Peter D. Jones 39 Director Nominee N/A
W. Kirk Hankins has served as Chairman of the Board, Chief Executive
Officer and Chief Financial Officer of the Company since December 1983 and as
President of the Company since April 1985. Mr. Hankins served as President,
Chairman and Chief Financial Officer of Playtronics Corporation from 1985 until
March 1990, when Playtronics merged into the Company. He was 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, a director and Vice President of Marketing, and Kimberley E.
Kleinow, Vice President of Procurement and Materials.
Lorin E. Krueger has served as Senior Vice President of Operations of
the Company since March 1987 and as Secretary of the Company since 1983. Mr.
Krueger has been an employee of the Company since 1976 and served as its Vice
President from January 1977 to March 1987.
Kirk P. Hankins has served as Vice President of Marketing of the
Company since April 1989. Mr. Hankins served as Secretary of Playtronics from
October 1985 until March 1990, when Playtronics merged into the Company, and as
Vice President of Playtronics from October 1985 until April 1989. From 1984 to
1985, Mr. Hankins was the Marketing Manager of the Company. Kirk P. Hankins is
the son of W. Kirk Hankins, Chairman, President, Chief Executive Officer and
Chief Financial Officer, and the brother of Kimberley E. Kleinow, Vice President
of Procurement and Materials.
<PAGE>
S. Robert Dessalet has been self-employed as a management consultant
since January 1997. From September 1996 to January 1997, he served as Vice
President-Finance and Administration of Rimage Corporation, a manufacturer of
computer software duplication and finishing systems. He served as Vice
President-Finance and Administration of Dunhill Software Services, Inc., a
software duplication company, from May 1994 to September 1995. Mr. Dessalet was
a consultant for Dessalet & Associates, a business consulting firm, from January
1993 to May 1994. He was 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 has served as Chief Operating Officer of Illuminated
Media Inc., a Minneapolis advertising company, since October 1997. From February
1996 to June 1997, Mr. de Petra served as Chief Executive Officer and as a
director of Nortech Forest Technologies, Inc., a manufacturer of animal
repellents, and continued providing full-time services as a consultant until
October 1997. Mr. de Petra was a management consultant to Minnesota-based
manufacturing companies from June 1993 to February 1996, and he was Chief
Information Officer of IDC Holdings, Ltd. from June 1993 to November 1994. Mr.
de Petra was 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.
David L. Ewert has served as President of Jones Metal Products, Inc.
since April 1997, prior to which he served in various capacities, including Vice
President, Treasurer and Controller, since he joined Jones Metal Products in
August 1973. Mr. Ewert has also served as Accounting Manager for Katolight
Corporation since 1991. From 1972 to December 1973, Mr. Ewert was a Staff
Accountant with Frentz, Lieske and Rogers, a public accounting firm.
Peter D. Jones has served as President of Crysteel Mfg., a national
manufacturer of truck bodies and related equipment located in Lake Crystal,
Minnesota, since January 1994. From 1988 through 1993, Mr. Jones served as Vice
President of Sales and Marketing for Crysteel and as its National Sales Manager
from 1986 through 1988.
BOARD AND COMMITTEE MEETINGS
During fiscal 1997, the Board of Directors held five formal meetings.
Each director attended 100% of the meetings of the Board and the committees on
which such director served during 1997.
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. During 1997, the Audit Committee met once.
<PAGE>
The Compensation Committee members are S. Robert Dessalet 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. During 1997, the Compensation
Committee met three times.
The Stock Option Committee members are S. Robert Dessalet 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 Stock Option Plans. The Stock Option Committee did not meet during
1997, but it took action by unanimous written consent three times.
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 70 Chairman of the Board, President,
Chief Executive Officer and Chief
Financial Officer
Lorin E. Krueger 42 Senior Vice President of Operations,
Secretary and Director
Kirk P. Hankins 36 Vice President of Marketing and Director
Thomas E. Brockman 41 Vice President of Engineering
Terry E. Treanor 35 Vice President of Manufacturing
Kimberley E. Kleinow 30 Vice President of Procurement and Materials
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.
Thomas E. 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 1993, 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 Machines Inc., a manufacturer of power tools and
equipment.
Terry E. Treanor joined the Company in July 1994 and was elected as
Vice President of Manufacturing on June 28, 1996, prior to which he served in
various capacities, including Quality Assurance Manager and Operations Manager.
Mr. Treanor was employed by Onan Corp., a power generation company, from January
1985 until July 1994, serving most recently as Supplier Quality Engineer.
<PAGE>
Kimberley E. Kleinow joined the Company in October 1991 and was elected
as Vice President of Procurement and Materials on December 22, 1997, prior to
which she served as Director of Materials from November 1996 to December 1997
and as Purchasing Manager from October 1991 to November 1996. Kimberley Kleinow
is the daughter of W. Kirk Hankins and the sister of Kirk P. Hankins, both of
whom are officers and directors of the Company.
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 and to the only other executive officer
whose total annual salary and bonus earned or accrued exceeded $100,000 during
fiscal year 1997.
<TABLE>
<CAPTION>
Long Term Compensation
Awards Payouts
Annual Compensation
Restricted LTIP All Other
Name and Principal Fiscal Stock Payouts Compensation
Position Year Salary ($) Bonus ($) Other ($) Awards ($) Options ($) ($)(1)
- ------------------------------- ---------- --------- --------- ---------- ------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
W. Kirk Hankins, 1997 122,472 75,521 -- -- -- -- 3,167
Chief Executive 1996 113,000 49,105 -- -- -- -- 3,021
Officer, President, 1995 105,000 -- -- -- 22,000 -- 2,829
and Chief Financial
Officer
Lorin E. Krueger, 1997 90,979 63,098 -- -- -- -- 3,167
Senior Vice President 1996 84,240 40,405 -- -- -- -- 1,868
of Operations and 1995 78,000 -- -- -- 22,000 -- 1,469
Secretary
- ----------------
</TABLE>
(1) Represents contribution to the Company's 401(k) Plan for executive
officer's benefit.
Option Grants During 1997 Fiscal Year
No stock options were granted during fiscal 1997 to the named executive
officers in the Summary Compensation Table. The Company has not granted any
stock appreciation rights.
Option Exercises During 1997 Fiscal Year and Fiscal Year-End Option Values
The following table provides information as to options exercised by the
named executive officers in the Summary Compensation Table during fiscal 1997
and the number and value of options at December 31, 1997. The Company does not
have any outstanding stock appreciation rights.
<PAGE>
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares December 31, 1997 December 31, 1997
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized(1) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
W. Kirk Hankins -- -- 17,000 exercisable (2)
5,000 unexercisable
Lorin E. Krueger 25,440 $64,999 17,000 exercisable (2)
5,000 unexercisable
</TABLE>
- ------------------
(1) Value is calculated on the basis of the difference between the option
exercise price and the closing sale price for the Company's Common
Stock on the date of exercise as quoted by the Nasdaq SmallCap Market,
multiplied by the number of shares of Common Stock to which the
exercise relates.
(2) The option exercise price exceeds the $2.50 closing sale price for the
Company's Common Stock on December 31, 997 as quoted by the Nasdaq
SmallCap Market.
Compensation to Directors
The outside directors are paid $500 for attendance at each Board
meeting and $250 for each committee meeting, plus expenses. All directors also
received a $500 gift certificate for travel services at the end of the year. In
addition, the Company's 1997 Stock Option 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 is elected for the first time as a
director is granted a nonqualified option to purchase 3,000 shares of 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 3,000 shares
of 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 (6) months of the death of such Non-Employee
Director or until the date on which the option, by its terms, expires, whichever
is earlier.
<PAGE>
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's initial term expired December 31, 1997, with
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 an annual base salary of
$122,472 for 1997 and has been automatically renewed for an additional one-year
term ending December 31, 1998 with a base salary of $135,000. 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. 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 to him 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.
The Company entered into an Employment Agreement dated May 15, 1995
with Lorin E. Krueger, Senior Vice President of Operations. The agreement
provided for an annual base salary of $90,979 for 1997 and has been
automatically renewed for an additional one-year term ending December 31, 1998
with a base salary of $102,000. All other terms of the agreement with Mr.
Krueger are identical to the terms of the agreement with W. Kirk Hankins
described above.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive 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"). Executive officers, directors and greater than
ten-percent 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 1997, all executive officers,
directors and greater than ten-percent beneficial owners complied with the
applicable filing requirements, except that Mr. Krueger reported an option
exercise late on a Form 5 that was timely filed and Mr. Bronson failed to report
one transaction, which transaction was reported on a Form 5 that was not timely
filed.
INDEPENDENT PUBLIC ACCOUNTANT
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, or another representative of Ahern Montag & Vogler, Ltd., is expected to
be present at the 1998 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 Company is considering changing its independent
accountants and therefore has not selected an accountant for the current fiscal
year. There is no disagreement between the Company and Ahern Montag & Vogler,
Ltd.
<PAGE>
OTHER BUSINESS
Management knows of no other matters to be presented at the 1998 Annual
Meeting. If any other matter properly comes before the 1998 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 1998 Annual Meeting must be received by the
Company by November 30, 1998 to be included in the Company's proxy statement and
related proxy for the 1999 Annual Meeting.
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the fiscal
year ended December 31, 1997, 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,
1997, 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 23, 1998, YOU WERE A
BENEFICIAL OWNER OF SHARES ENTITLED TO VOTE AT THE 1997 ANNUAL MEETING OF
SHAREHOLDERS.
BY ORDER OF THE BOARD OF DIRECTORS
W. Kirk Hankins, President
Dated: March 30, 1998
<PAGE>
WINLAND ELECTRONICS, INC.
------------------
PROXY
for Annual Meeting to be held May 14, 1998
------------------
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 1998 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 14, 1998, 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 seven (7).
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Elect Directors. Nominees: W. Kirk Hankins Kirk P. Hankins
Lorin E. Krueger Thomas J. de Petra
S. Robert Dessalet David L. Ewert
Peter D. Jones
[ ] 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. 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: ______________________________, 1998
___________________________________________
___________________________________________
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.
