<SEC-DOCUMENT>0000897101-14-000362.txt : 20140321
<SEC-HEADER>0000897101-14-000362.hdr.sgml : 20140321
<ACCEPTANCE-DATETIME>20140321165022
ACCESSION NUMBER:		0000897101-14-000362
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20140423
FILED AS OF DATE:		20140321
DATE AS OF CHANGE:		20140321
EFFECTIVENESS DATE:		20140321

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ELECTRO SENSORS INC
		CENTRAL INDEX KEY:			0000351789
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823]
		IRS NUMBER:				410943459
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-09587
		FILM NUMBER:		14710756

	BUSINESS ADDRESS:	
		STREET 1:		6111 BLUE CIRCLE DR
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343-9108
		BUSINESS PHONE:		9529300100

	MAIL ADDRESS:	
		STREET 1:		6111 BLUE CIRCLE DR
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>electro141011_def14a.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
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<H1 style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 0pt"><B><FONT style="FONT-SIZE: 14pt" face="'Times New Roman,serif'">SCHEDULE 14A - <BR>
INFORMATION REQUIRED IN PROXY STATEMENT</FONT></B></H1>
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 12pt" lang=EN-US face="'Times New Roman,serif'"></FONT>&nbsp;</P>
<H1 style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 0pt"><B><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Schedule 14A Information</FONT></B></H1>
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 12pt" lang=EN-US face="'Times New Roman,serif'"></FONT>&nbsp;</P>
<P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'">Proxy Statement Pursuant to Section 14(a) of the <BR>
Securities Exchange Act of 1934 <BR>
(Amendment No.____ ) </FONT></P>
<P style="MARGIN: 6pt 0in 0pt 13.7pt"><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'">Filed by the registrant&nbsp;&nbsp;&nbsp;</FONT><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'MS Mincho'">&#9746;</FONT></P>
<P style="MARGIN: 6pt 0in 0pt 13.7pt"><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'">Filed by a party other than the registrant&nbsp;&nbsp;&nbsp;</FONT><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'MS Mincho'">&#9744;</FONT></P>
<P style="MARGIN: 6pt 0in 0pt 13.7pt"><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'">Check the appropriate box:</FONT></P>
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<P style="MARGIN: 6pt 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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<P style="MARGIN: 6pt 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'MS Mincho'">&#9744;</FONT></P>
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<P style="MARGIN: 6pt 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Preliminary Proxy Statement </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'MS Mincho'">&#9744;</FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'MS Mincho'">&#9746;</FONT></P>
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     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=bottom width="92%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Definitive Proxy Statement </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'MS Mincho'">&#9744;</FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Definitive Additional Materials </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'MS Mincho'">&#9744;</FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Soliciting Material Under Section 240.14a-12 </FONT></P>
</TD></TR></TABLE></DIV>
<P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'"></FONT></B>&nbsp;</P>
<P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'">ELECTRO-SENSORS, INC.</FONT></B><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'"> <BR>
(Name of Registrant as Specified in Its Charter)</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'"></FONT>&nbsp;</P>
<P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'">N/A <BR>
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'">Payment of Filing Fee (Check the appropriate box):</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'"></FONT>&nbsp;</P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'MS Mincho'">&#9746;</FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">No fee required </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'MS Mincho'">&#9744;</FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">(1) </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Title of each class of securities to which transaction applies: </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">(2) </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Aggregate number of securities to which transactions applies: </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">(3) </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">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): </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">(4) </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Proposed maximum aggregate value of transaction: </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">(5) </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Total fee paid: </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'MS Mincho'">&#9744;</FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Fee paid previously with preliminary materials. </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'MS Mincho'">&#9744;</FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">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. </FONT></P>
</TD></TR>
<TR>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 8pt 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 8pt 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 8pt 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">(1) </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="88%">
<P style="MARGIN: 8pt 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Amount Previously Paid: </FONT></P>
</TD></TR>
<TR>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">(2) </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="88%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Form, Schedule or Registration Statement No.: </FONT></P>
</TD></TR>
<TR>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">(3) </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="88%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Filing Party: </FONT></P>
</TD></TR>
<TR>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">&nbsp; </FONT></P>
</TD>
     <TD style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" vAlign=top width="4%">
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">(4) </FONT></P>
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<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" face="'Times New Roman,serif'">Date Filed: </FONT></P>
</TD></TR></TABLE></DIV>
<P style="MARGIN: 0in 0in 0pt"><FONT style="FONT-SIZE: 10pt" lang=EN-US face="'Times New Roman,serif'"></FONT>&nbsp;</P>

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<P STYLE="margin: 0in 0in 0pt"></P>




<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0; text-align: center"><IMG SRC="image_001.jpg" ALT="" STYLE="height: 67px; width: 185px"></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">ELECTRO-SENSORS, INC.&nbsp;&nbsp;&nbsp;6111 Blue Circle
Drive&nbsp;&nbsp;&nbsp;Minnetonka, Minnesota 55343</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">(952) 930-0100</P>

<HR SIZE="2" NOSHADE ALIGN="CENTER" STYLE="width: 100%; color: black">

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>NOTICE OF ANNUAL MEETING OF SHAREHOLDERS</B></P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">To Be Held April 23, 2014</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">To the Shareholders of Electro-Sensors, Inc.:</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.25in">Notice is hereby given that the
Annual Meeting of Shareholders of Electro-Sensors, Inc. will be held at the Sheraton Minneapolis West Hotel, 12201 Ridgedale Drive,
Minnetonka, Minnesota, on Wednesday, April 23, 2014, at 2:00 pm, Central Time, for the following purposes:</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">1.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">To set the number of directors at five;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">2.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">To elect five directors to serve until the next Annual Meeting of Shareholders;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">3.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">To ratify the selection of Boulay PLLP as independent registered public accounting firm for
the Company for the fiscal year ending December 31, 2014; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">4.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">To take action upon any other business as may properly come before the meeting or any adjournment
or postponement thereof.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.25in">Accompanying this Notice of Annual
Meeting is a Proxy Statement, Form of Proxy and the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ended December
31, 2013.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-size: 10pt">The
Board of Directors has fixed the close of business on February 26, 2014 as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting of Shareholders. </FONT><FONT STYLE="font-size: 10pt">All shareholders
of record are cordially invited to attend the Annual Meeting in person. However, to ensure a quorum, the Board of Directors requests
that you promptly complete, sign, date and return the enclosed proxy card, which is solicited by the Board of Directors, whether
or not you plan to attend the Annual Meeting. The proxy is revocable and will not be used if you attend the Annual Meeting and
vote in person or otherwise provide notice of your revocation. If you have any questions regarding the completion of the enclosed
proxy card or would like directions to the Annual Meeting, please call the Company at (952) 930-0100.</FONT></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 0 50%">BY ORDER OF THE BOARD OF DIRECTORS,<BR>
&nbsp;<BR>
<IMG SRC="image_002.jpg" ALT="" STYLE="height: 51px; width: 156px"><BR>
David L. Klenk<BR>
President</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">Minnetonka, Minnesota</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">Dated:&nbsp;&nbsp;March 21, 2014</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0; text-align: center"><IMG SRC="image_003.jpg" ALT="" STYLE="height: 69px; width: 186px"></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">ELECTRO-SENSORS, INC.&nbsp;&nbsp;&nbsp;6111 Blue Circle
Drive&nbsp;&nbsp;&nbsp;Minnetonka, Minnesota 55343&nbsp;&nbsp;&nbsp;(952) 930-0100</P>

<HR SIZE="2" NOSHADE ALIGN="CENTER" STYLE="width: 100%; color: black">

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">PROXY STATEMENT</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>FOR</B></P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">ANNUAL MEETING OF SHAREHOLDERS</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">To Be Held April 23, 2014</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<HR SIZE="2" NOSHADE ALIGN="CENTER" STYLE="width: 100%; color: black">

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">GENERAL INFORMATION</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">This Proxy Statement is furnished
by the Board of Directors (the &ldquo;Board of Directors&rdquo;) of Electro-Sensors, Inc., a Minnesota corporation (the &ldquo;Company&rdquo;),
to the shareholders of the Company in connection with a solicitation of proxies to be voted at the Annual Meeting of Shareholders
(the &ldquo;Annual Meeting&rdquo;) to be held at 2:00 p.m., Central Time, on Wednesday, April 23, 2014, at the Sheraton Minneapolis
West Hotel, 12201 Ridgedale Drive, Minnetonka, Minnesota, and at any and all adjournments or postponements thereof. This Proxy
Statement and the accompanying materials are first being mailed to shareholders on or about March 24, 2014.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">If your shares are registered
in the name of a bank or brokerage firm, you may be eligible to vote your shares electronically via the Internet or telephone.
A large number of banks and brokerage firms are participating in the Broadridge Investor Communication Services online program.
This program provides eligible shareholders who receive a paper copy of the Annual Report and Proxy Statement the opportunity to
vote via the Internet or telephone. If your bank or brokerage firm is participating in Broadridge&rsquo;s program, your voting
form will provide instructions. If your voting form does not refer to Internet or telephone information, please complete and return
the paper proxy card in the postage paid envelope provided.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">Any proxy delivered pursuant to
this solicitation is revocable at the option of the person giving the proxy at any time before it is exercised. A proxy may be
revoked, prior to its exercise, by executing and delivering a later-dated proxy via the Internet, via telephone or by mail, by
delivering written notice of the revocation of the proxy to the Company&rsquo;s President prior to the Annual Meeting, or by attending
and voting at the Annual Meeting. Attendance at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy.
The shares represented by a proxy will be voted in accordance with the shareholder&rsquo;s directions if the proxy is duly submitted
and not validly revoked prior to the Annual Meeting. If no directions are specified on a duly submitted proxy, the shares will
be voted, in accordance with the recommendations of the Board of Directors, FOR approval of the number of directors to be set at
five, FOR the election of the directors nominated by the Board of Directors, FOR the ratification of the Company&rsquo;s selection
of independent registered public accounting firm for the fiscal year ending December 31, 2014, and in accordance with the discretion
of the persons appointed as proxies on any other matters properly brought before the Annual Meeting and any all adjournments or
postponements thereof.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The expense of preparing, printing,
and mailing this Proxy Statement and the proxies solicited hereby will be borne by the Company. The Company will request brokerage
firms, banks, nominees, custodians, and fiduciaries to forward proxy materials to the beneficial owners of shares of Common Stock
of the Company (&ldquo;Common Stock&rdquo;) as of the record date, and will provide reimbursement for the cost of forwarding the
proxy materials in accordance with customary practice. In addition to the use of the Internet and mail, proxies may be solicited
by officers, directors, and regular employees of the Company, without additional remuneration, in person or by telephone or facsimile
transmission.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>Important Notice Regarding the Availability of Proxy
Materials for the Annual Meeting:</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>The Proxy Statement, Form of Proxy, and Annual Report
on Form 10-K are available at</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>http://www.idelivercommunications.com/proxy/else</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>OUTSTANDING SHARES &amp; VOTING RIGHTS</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company fixed the close of
business on February 26, 2014 as the record date for determining shareholders entitled to notice of and to vote at the Annual Meeting.
At February 26, 2014, the Company had outstanding 3,395,521 shares of Common Stock, the only outstanding class of capital stock
of the Company. Each share of Common Stock outstanding on the record date entitles the holder thereof to one vote on each matter
to be voted upon by shareholders at the Annual Meeting. Holders of Common Stock are not entitled to cumulative voting rights.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">For the election of directors,
each shareholder will be entitled to vote for five nominees and the five nominees with the greatest number of votes will be elected.
With respect to the proposal to set the number of directors at five, ratification of our independent registered public accounting
firm for the fiscal year ending December 31, 2014, any other matter that properly comes before the meeting, the affirmative vote
of the holders of a majority of the shares of Common Stock represented in person or by proxy and entitled to vote on the proposal
will be required for approval. A properly executed proxy marked &ldquo;ABSTAIN&rdquo; with respect to any proposal will not be
voted, although it will be counted for purposes of determining whether there is a quorum. Accordingly, an abstention will have
the effect of a negative vote with respect to all proposals.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">A majority of the shares of Common
Stock entitled to vote at the Annual Meeting, present in person or by proxy, constitutes a quorum, which is required for the transaction
of business at the Annual Meeting. Proxies relating to &ldquo;street name&rdquo; shares that are voted by brokers on some matters,
but not on other matters as to which authority to vote is withheld from the broker (&ldquo;broker non-votes&rdquo;) absent voting
instructions from the beneficial owner, will be treated as shares present for purposes of determining the presence or absence of
a quorum but will not be deemed to be represented at the meeting for purposes of determining the approval of any matter submitted
to the shareholders for which voting authority is withheld. The Inspector of Election appointed by the Board of Directors will
determine the shares represented at the meeting and the validity of proxies and ballots, and will count all votes and ballots.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 12pt; text-align: center"><B>CORPORATE GOVERNANCE</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">The business affairs of
the Company are conducted under the direction of the Board of Directors in accordance with the Minnesota Business Corporation Act
and our Articles of Incorporation and Bylaws. The Board of Directors currently has five members: David L. Klenk, Jeffrey D. Peterson,
Joseph A. Marino, Scott C. Gabbard, and Michael C. Zipoy. Members of the Board of Directors are informed of our business through
discussions with management, by reviewing materials provided to them and by participating in meetings of the Board of Directors
and its committees, among other activities. The corporate governance practices that we follow are summarized below.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 12pt; text-align: justify"><B>Board Leadership Structure and Risk Management</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Board of Directors believes
that independent director Joseph A. Marino is best suited to serve as Chairman of the Board due to his extensive familiarity with
the Company&rsquo;s business and industry as well as his proven track record of leading dynamic and growing organizations. Additionally,
the Board believes Mr. Marino is most capable of effectively identifying strategic priorities and leading the discussion and execution
of strategy. The Board believes having an independent director as chairman provides for good governance and effectively balances
the roles of internal and external directors. Mr. Marino and the Company&rsquo;s other independent directors bring experience,
oversight and expertise from outside the company and industry, while Mr. David L. Klenk, as Chief Executive Officer and Chief Financial
Officer, brings company-specific experience and expertise. The Board believes that Mr. Klenk&rsquo;s participation on the board
in his role of Chief Executive Officer promotes strategy development and execution, and facilitates information flow between management
and the Board, which are essential to effective governance.&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">One of the key responsibilities
of the Board of Directors is to hold management accountable for the execution of strategy once it is developed. The Board believes
that its independent directors work together effectively to serve this oversight function, with no individual director serving
as a &ldquo;lead&rdquo; independent director.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">The Board of Directors
believes that oversight of the Company&rsquo;s risk management efforts is another key responsibility that is shared by the entire
Board.&nbsp; The Board regularly reviews risk management information regarding the Company&rsquo;s liquidity and operations.&nbsp;
Board members receive regular financial statements, which are discussed at quarterly meetings of the Board.&nbsp; In addition,
Mr. Klenk frequently has informal discussions with board members regarding key business issues and risk management.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 12pt; text-align: justify"><B>Independence</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 6pt; text-align: justify; text-indent: 0.5in">The Board of Directors has
determined that Messrs. Marino, Gabbard, and Zipoy are independent directors as defined by the listing standards of the Nasdaq
Stock Market, since none of them are believed to have any relationships that, in the opinion of the Board of Directors, would interfere
with the exercise of independent judgment in carrying out the responsibilities of a director. If Messrs. Marino, Gabbard, and Zipoy
are all elected at the Annual Meeting, they will constitute a majority of the Board of Directors. Mr. Klenk is precluded from being
considered independent by Nasdaq rules since he currently serves as an executive officer of the Company.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 6pt; text-align: justify; text-indent: 0.5in">For the past several years,
Jeffrey Peterson was precluded from being considered independent by Nasdaq Stock Market rules because his father served as an executive
officer of the Company until his death in January 2011. As a result of a purchase of the Company&rsquo;s stock in November 2013,
Nancy Peterson, the mother of Jeffrey Peterson, is the beneficial owner of, and has voting and dispositive control over, 51.7%
of the Company&rsquo;s common stock. As the majority shareholder of the Company, Nancy Peterson has the ability to elect all directors
of the Company. Nancy Peterson and the Company do not have a formal agreement with respect to the designation or election of Jeffrey
Peterson as a director of the Company. The Board intends to review all the facts and circumstances related to ownership of the
Company&rsquo;s common stock, and then determine if Jeffrey Peterson can qualify as an independent director under Nasdaq Stock
Market rules.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">The Board of Directors
has determined that each member of the Company&rsquo;s Audit Committee, Compensation Committee and Nominating Committee are independent
in accordance with the listing standards of the Nasdaq Stock Market.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 12pt; text-align: justify"><B>Code of Ethics and Business Conduct</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company has adopted the Electro-Sensors
Code of Ethics and Business Conduct (the &ldquo;Code of Conduct&rdquo;), a code of conduct that applies to all of our directors,
officers and employees. A copy of the Code of Conduct was provided with the Proxy Statement for the 2004 Annual Meeting of Shareholders
or may be obtained upon written request to the Chief Executive Officer. If we make any substantive amendments to the Code of Conduct
or grant any waiver, including any implicit waiver from a provision of the Code of Conduct to our directors or executive officers,
we will disclose the nature of the amendments or waiver on our website.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"><B>Director Attendance at Annual Meeting</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">Directors&rsquo; attendance at
Annual Meetings can provide our shareholders with an opportunity to communicate with directors about issues affecting the Company;
thus, all directors are expected to attend the Annual Meetings of Shareholders. All incumbent directors attended the 2013 Annual
Meeting of Shareholders.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"><B>Communications with the Board</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">Shareholders may communicate directly
with the Board of Directors. All communications should be directed to the Chairman of our Audit Committee at the address below
and should prominently indicate on the outside of the envelope that it is intended for the Board of Directors or for non-management
directors. If no director is specified, the communication will be forwarded to the entire Board. Shareholder communications to
the Board should be sent to:</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">Board of Directors</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">Attention: Chairman, Audit Committee</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">Electro-Sensors, Inc.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">6111 Blue Circle Drive</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">Minnetonka, Minnesota 55343-9108</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: justify">Committees and Meetings of the Board of Directors</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The present standing committees
of the Board of Directors are described below.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>Board Meetings</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Board of Directors met eight
times during the last fiscal year. Each incumbent member of the Board of Directors attended at least 75% of the total number of
meetings held by the Board of Directors and the committees on which he served.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: justify">Director Compensation</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">Directors who are not employees
of the Company receive $1,250 per board meeting for their services on the Board, and received equity awards in 2013. See &ldquo;Director
Compensation&rdquo; below.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>Audit Committee</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">Messrs. Marino, Gabbard, and Zipoy
currently serve as members of the Audit Committee. This committee met two times during 2013. The Audit Committee is responsible
for selecting the Company&rsquo;s independent registered public accounting firm, and for assisting the Board of Directors in its
oversight of corporate accounting and internal controls, reporting practices of the Company and the quality and integrity of the
financial reports of the Company. The Audit Committee Charter specifies the composition and responsibilities of the committee.
For more information concerning the Audit Committee, see the Report of the Audit Committee on page 11 and the Audit Committee Charter
posted on our corporate website under &ldquo;Investor Information - Corporate Governance.&rdquo;<B> </B>The Board has named Scott
Gabbard as the &ldquo;audit committee financial expert&rdquo; as defined by Item 407(d)(5)(ii) of Regulation S-K under the Securities
Act of 1933.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>Compensation Committee</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">Messrs. Marino, Gabbard, and Zipoy
currently serve as members of the Compensation/Stock Option Committee (the &ldquo;Compensation Committee&rdquo;). The Compensation
Committee did not act pursuant to a charter in 2013 and met twice during 2013. In February 2014, the Board of Directors adopted
a compensation committee charter, which is posted on our corporate website under &ldquo;Corporate Governance.&rdquo; The Compensation
Committee is responsible for making recommendations to the Board of Directors concerning compensation of the Company&rsquo;s employees,
officers, and directors, and is authorized to determine the compensation of the Company&rsquo;s executive officers. The Compensation
Committee is authorized to administer the various incentive plans of the Company and has all powers of the attendant thereto, including
the power to grant employee stock options.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>Nominating Committee </B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">Messrs. Marino, Gabbard, and Zipoy
currently serve as members of the Nominating Committee. The Nominating Committee met once during fiscal year 2013. The Nominating
Committee is responsible for evaluating and nominating or recommending candidates for the Company&rsquo;s Board of Directors. A
copy of the Nominating Committee Charter, which has been adopted by the Company&rsquo;s Board of Directors, is posted on our corporate
website under &ldquo;Corporate Governance.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>Nominating Policy</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Nominating Committee<B> </B>will
consider candidates for nomination as a director recommended by shareholders, directors, third party search firms and other sources.
The Nominating Committee believes that candidates for directors should have certain minimum qualifications, including being able
to read and understand basic financial statements, being over 18 years of age, having familiarity with the Company&rsquo;s business
and industry, having high moral character and mature judgment, being able to work collegially with others, and not currently serving
on more than three Boards of public companies. The Nominating Committee may modify these minimum qualifications from time to time.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">In evaluating director nominees
who meet the Company&rsquo;s minimum qualifications, the Nominating Committee considers the following factors and qualifications,
among others:</P>
<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the appropriate size and the diversity of the Company&rsquo;s Board of Directors; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the needs of the Board with respect to the particular talents and experience of its directors;
</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the knowledge, skills and experience of nominees, including experience in technology, business,
finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience
already possessed by other members of the Board; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">familiarity with domestic and international business matters; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">age and legal and regulatory requirements; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">experience with accounting rules and practices; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">appreciation of the relationship of the Company&rsquo;s business to the changing needs of society;
and </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the desire to balance the considerable benefit of continuity with the periodic injection of
the fresh perspective provided by new members. </FONT></TD></TR></TABLE>




<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Nominating Committee will
consider the attributes of the candidates and the needs of the Board, and will review all candidates in the same manner. The Nominating
Committee does not have a diversity policy; however, as summarized above, the Nominating Committee seeks to nominate candidates
with a diverse range of knowledge, experience, skills, expertise, and other qualities that will contribute to the overall effectiveness
of the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">A shareholder who wishes to recommend
one or more directors must provide a written recommendation to the Company at the address below by November 24, 2014. Notice of
a recommendation must include the name and address of the shareholder and the class and number of shares such shareholder owns.
With respect to the nominee, the shareholder should include the nominee&rsquo;s name, age, business address, residence address,
current principal occupation, five-year employment history with employer names and a description of the employer&rsquo;s business,
the number of shares beneficially owned by the nominee, whether such nominee can read and understand basic financial statements,
and other Board memberships, if any.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">Electro-Sensors, Inc.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">Attn: Chairman, Nominating Committee</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">6111 Blue Circle Drive</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">Minnetonka, MN 55343-9108</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The recommendation must be accompanied
by a written consent of the nominee to stand for election at the Annual Meeting if nominated by the Nominating Committee and to
serve if elected by the shareholders. The Company may require any nominee to furnish additional information that may be needed
to determine the eligibility of the nominee and whether the nominee has the attributes the Board believes are important in its
composition.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>ELECTION OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>Proposals #1 and #2</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Bylaws of the Company provide
that the shareholders at each Annual Meeting shall determine the number of directors, which shall not be less than one. The<B>
</B>Nominating Committee and the Board of Directors recommends that the number of directors be set at five and that five directors
be elected at the Annual Meeting to serve until the next Annual Meeting or until their successors are duly elected and qualified.
Under applicable Minnesota law and the Bylaws of the Company, approval of the proposal to set the number of directors at five requires
the affirmative vote of the holders of 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.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Nominating Committee recommended
and the Board of Directors selected<B> </B>the persons named below for election to the Board of Directors. All nominees are currently
directors of the Company. If, prior to the Annual Meeting, it should become known that any of the following individuals will be
unable to serve as a director after the Annual Meeting by reason of death, incapacity or other unexpected occurrence, the proxies
will be voted for such substitute nominee as is selected by the Board of Directors. The Board of Directors has no reason to believe
that any of the following nominees will be unable to serve. The Bylaws of the Company provide that directors will be elected by
a plurality of the votes cast by holders of shares present in person or by proxy and entitled to vote on the election of directors
at a meeting at which a quorum is present.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth
the principal occupations (for at least the last five years) and directorships of the nominees:</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: top">
    <TD STYLE="width: 25%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: justify"><font style="font-size: 8pt"><b>Name </b></font></td>
    <TD STYLE="width: 39%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: justify"><font style="font-size: 8pt"><b>Principal Occupation and Directorships</b></font></td>
    <TD STYLE="width: 18%; border-bottom: Black 1pt solid; font: bold 8pt Perpetua,serif; text-align: center"><font style="font: 8pt Times New Roman,serif"><B>Age</B></font></td>
    <TD STYLE="width: 18%; border-bottom: Black 1pt solid; font: bold 8pt Perpetua,serif; text-align: center"><font style="font: 8pt Times New Roman,serif"><B>Director Since</B></font></td></tr>
<tr style="vertical-align: top">
    <td style="font-family: Times New Roman,serif; text-align: justify">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: justify">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: justify">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center">&nbsp;</td></tr>
<tr style="vertical-align: top; background-color: #D6F3E8">
    <td style="font-family: Times New Roman,serif"><font style="font-size: 10pt">David L. Klenk</font></td>
    <TD STYLE="font-family: Times New Roman,serif"><font style="font-size: 10pt">President, CEO, and CFO of the Company since 2013, President and director of Harland Medical System, Inc. (a medical technology company) from 2007 to 2013</font></td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">49</font></td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">2013</font></td></tr>
<tr style="vertical-align: top">
    <td style="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="font-family: Times New Roman,serif"><font style="font-size: 10pt">Joseph A. Marino</font></td>
    <TD STYLE="font-family: Times New Roman,serif"><font style="font-size: 10pt">President and CEO of Cardia, Inc. (a medical equipment manufacturer) since 1998</font></td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">62</font></td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">1994</font></td></tr>
<tr style="vertical-align: top">
    <td style="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td></tr>
<tr style="vertical-align: top; background-color: #D6F3E8">
    <td style="font-family: Times New Roman,serif"><font style="font-size: 10pt">Scott A. Gabbard</font></td>
    <TD STYLE="font-family: Times New Roman,serif"><font style="font-size: 10pt">CFO of Magenic Technologies, Inc. (a software consulting organization) since 2006</font></td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">47</font></td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">2013</font></td></tr>
<tr style="vertical-align: top">
    <td style="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="font-family: Times New Roman,serif"><font style="font-size: 10pt">Jeffrey D. Peterson</font></td>
    <TD STYLE="font-family: Times New Roman,serif"><font style="font-size: 10pt">Private investor since 1998. Previously employed by John G. Kinnard and Company, a regional brokerage firm. </font></td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">57</font></td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">2011</font></td></tr>
<tr style="vertical-align: top">
    <td style="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</td></tr>
<tr style="vertical-align: top; background-color: #D6F3E8">
    <td style="font-family: Times New Roman,serif"><font style="font-size: 10pt">Michael C. Zipoy</font></td>
    <TD>
        <P STYLE="font: 10pt Times New Roman,serif; margin: 0">Investment executive with Feltl and Company (brokerage and investment banking
        firm) since 2005</P>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">66</font></td>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">2012</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">When considering whether the nominees
have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight
responsibilities effectively in light of the Company&rsquo;s business and structure, the Nominating Committee and the Board of
Directors focused on the biographical information set forth in the table above as well as considering other relevant individual
experiences that may be valuable to the Company.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">In particular with regard to Mr.
Marino, the Board of Directors considered his executive leadership experience in building both private and public companies, including
strategy formulation, execution, and investor relations. With regards to Mr. Zipoy, the Board of Directors considered his investment
experience in small and micro cap companies and his participation in public and private equity financing. With regards to Mr. Peterson,
the Board of Directors considered his significant experience in the investment industry and personal connections with many regional
businesses. With regards to Mr. Gabbard, the Board of Directors considered his extensive management experience, expertise, and
background with regard to strategic, accounting and financial matters for both public and private companies. With regard to Mr.
Klenk, the Board of Directors considered his years of leadership experience with emerging technology companies, his high levels
of customer and employee focus, and his demonstrated ability to lead companies through significant growth cycles.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>SECURITY OWNERSHIP OF CERTAIN</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>BENEFICIAL OWNERS AND MANAGEMENT</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth
information, as of March 21, 2014, regarding the beneficial ownership of the outstanding shares of Common Stock by persons known
by the Company to beneficially own more than 5% of the outstanding shares of Common Stock, by directors and director nominees,
by the executive officers named in the Summary Compensation Table, and by the Company&rsquo;s current directors and executive officers
as a group.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
    <td nowrap style="font: 8pt Times New Roman,serif">&nbsp;</td>
    <td nowrap style="font: 8pt Times New Roman,serif">&nbsp;</td>
    <td nowrap colspan="5" style="border-bottom: Black 1pt solid; font: bold 8pt Perpetua,serif; text-align: center"><font style="font: 8pt Times New Roman,serif"><B>Common Stock</B></font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="width: 52%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: center"><font style="font-size: 8pt"><b>Name and Address</b></font><br>
<font style="font-size: 8pt"><b>of Beneficial Owner</b></font></td>
    <td nowrap style="width: 2%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="width: 22%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: center"><font style="font-size: 8pt"><b>Number of Shares</b></font><br>
<font style="font-size: 8pt"><b>Beneficially Owned<sup>(1)(2)</sup></b></font></td>
    <td nowrap style="width: 2%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="width: 4%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="width: 2%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: center"><font style="font-size: 8pt"><b>Percent</b></font><br>
<font style="font-size: 8pt"><b>of Class</b></font></td></tr>
<tr style="background-color: #D6F3E8">
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif"><font style="font-size: 10pt">Nancy Peterson </font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;805 Main Street</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;Hopkins, MN 55343</font></td>
    <td nowrap style="vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">1,754,464 (3)</font></td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">51.7%</font></td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif"><font style="font-size: 10pt">David L. Klenk</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;6111 Blue Circle Dr</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;Minnetonka, MN 55343</font></td>
    <TD NOWRAP STYLE="vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">50,000 (4)</font></td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">1.5%</font></td></tr>
<tr style="background-color: #D6F3E8">
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif"><font style="font-size: 10pt">Joseph A. Marino</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;2900 Lone Oak Parkway, Suite 130</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;Eagan, MN&nbsp;&nbsp;55121</font></td>
    <td nowrap style="vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">12,500 (4)</font></td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">*</font></td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif"><font style="font-size: 10pt">Scott A. Gabbard</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;6111 Blue Circle Dr</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;Minnetonka, MN&nbsp;&nbsp;55343</font></td>
    <TD NOWRAP STYLE="vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">5,000 (4)</font></td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">*</font></td></tr>
<tr style="background-color: #D6F3E8">
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif"><font style="font-size: 10pt">Jeffrey D. Peterson</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;6111 Blue Circle Dr</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;Minnetonka, MN&nbsp;&nbsp;55343</font></td>
    <td nowrap style="vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">12,500 (4)</font></td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">*</font></td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif"><font style="font-size: 10pt">Michael C. Zipoy</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;10900 Wayzata Blvd Suite 200</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;Minnetonka, MN&nbsp;&nbsp;55305 </font></td>
    <TD NOWRAP STYLE="vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">12,500 (4)</font></td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">*</font></td></tr>
<tr style="background-color: #D6F3E8">
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif"><font style="font-size: 10pt">Officers and Directors as a Group (5 persons)</font></td>
    <td nowrap style="vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">92,500</font></td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center"><font style="font-size: 10pt">2.7%</font></td></tr>
<tr>
    <td nowrap style="vertical-align: top; padding-left: 0.25in; font-family: Times New Roman,serif">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td></tr>
<tr>
    <td nowrap style="vertical-align: top; padding-left: 0.25in; font-family: Times New Roman,serif"><font style="font-size: 10pt">*Indicates ownership of less than one percent (1.0%).</font></td>
    <td nowrap style="vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td>
    <td nowrap style="vertical-align: top; font-family: Times New Roman,serif; text-align: center">&nbsp;</td></tr>
</table>
<P STYLE="font: 12pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 13.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Except as otherwise indicated, each person named or included in
the group has the sole power to vote and sole power to direct the disposition of all shares listed as beneficially owned by him
or her.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 13.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Beneficial ownership information is based on information furnished
by the specified persons and is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934 (the &ldquo;Exchange
Act&rdquo;), as required for purposes of this Proxy Statement. Accordingly, it includes shares of Common Stock that are issuable
upon the exercise of stock options exercisable within 60 days of March 21, 2014. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 13.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-size: 10pt">(3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Includes 499,313 shares held in an IRA Plan. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 13.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-size: 10pt">(4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Represents shares issuable upon the exercise of stock options.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>TRANSACTIONS WITH RELATED PERSONS, </B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>PROMOTERS AND CERTAIN CONTROL PERSONS</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company was not a party to
any transactions with related persons, promoters or control persons during the last fiscal year, nor are any such transactions
currently being contemplated by the Company.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>EXECUTIVE COMPENSATION</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>Compensation Summary</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Century Gothic,sans-serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Times New Roman,serif">The
following table summarizes information concerning the compensation awarded or paid to, or earned by, the Company&rsquo;s Named
Executive Officers during the last two fiscal years. </FONT> <FONT STYLE="font: 10pt Times New Roman,serif">Mr. Slye was the only
person who served as an executive officer in 2012. Mr. Slye and Mr. Klenk were the only persons who served as executive officers
in 2013. Mr. Slye served as Chief Executive Officer and Chief Financial Officer until Mr. Klenk replaced him on July 17, 2013.</FONT></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>Summary Compensation Table</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 70%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
    <TD STYLE="width: 25%; border: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>Name and</b></font><br>
<font style="font-size: 8pt"><b>principal</b></font><br>
<font style="font-size: 8pt"><b>position</b></font></td>
    <TD STYLE="width: 9%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>Year</b></font></td>
    <TD STYLE="width: 12%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>Salary</b></font><br>
<font style="font-size: 8pt"><b>($)</b></font></td>
    <TD STYLE="width: 12%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>Bonus</b></font><br>
<font style="font-size: 8pt"><b>($)</b></font></td>
    <TD STYLE="width: 18%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>Option</b></font><br>
<font style="font-size: 8pt"><b>awards</b></font><br>
<font style="font-size: 8pt"><b>($)</b></font></td>
    <TD NOWRAP STYLE="width: 12%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>All</b></font><br>
<font style="font-size: 8pt"><b>other</b></font><br>
<font style="font-size: 8pt"><b>compensation</b></font><br>
<font style="font-size: 8pt"><b>($)(2)</b></font></td>
    <TD STYLE="width: 12%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>Total</b></font><br>
<font style="font-size: 8pt"><b>($)</b></font></td></tr>
<tr style="vertical-align: top; background-color: #D6F3E8">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt"><font style="font-size: 10pt">David L. Klenk,</font><br>
<font style="font-size: 10pt">President, CEO,</font><br>
<font style="font-size: 10pt">CFO</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">2013</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">&nbsp;&nbsp;62,885</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">20,833</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">89,302(1)</font></td>
    <td nowrap style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">&nbsp;&nbsp;7,367</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">180,387</font></td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt"><font style="font-size: 10pt">Bradley D. Slye</font><br>
<font style="font-size: 10pt">Chairman,</font><br>
<font style="font-size: 10pt">President, CEO,</font><br>
<font style="font-size: 10pt">CFO</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">2013</font><br>
<font style="font-size: 10pt">2012</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">179,160</font><br>
<font style="font-size: 10pt">181,496</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">&nbsp;&nbsp;8,162</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</font><br>
<font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</font></td>
    <td nowrap style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">23,482</font><br>
<font style="font-size: 10pt">25,003</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">210,804</font><br>
<font style="font-size: 10pt">206,499</font></td></tr>
</table>
<P STYLE="font: 12pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">(1)</FONT><FONT STYLE="font: 7pt Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 10pt">Mr. Klenk was awarded 50,000 stock options upon his appointment as President; those options
were fully vested when granted. The option value shown is the grant date fair value computed in accordance with FASB ASC Topic
718.</FONT></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">(2)</FONT><FONT STYLE="font: 7pt Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 10pt">Amounts reflect allocations to individual&rsquo;s account of Company contributions to the
ESOP, 401(k) Plan, and standard employee benefit plans. The Company matches 100% of the first 2% of employee 401(k) Plan contributions
and 50% of the next 4% of employee contributions.</FONT></P>

<P STYLE="font: 10pt Times New Roman Bold,serif; margin: 6pt 0"><B>Compensation of Executive Officer</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">Mr. Klenk does not have a written employment agreement
with the Company. He receives an annual salary at the rate of $150,000 per year, and is eligible to receive bonuses as determined
by the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 6pt 0">Outstanding Equity Awards as of December 31, 2013</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0in">The following table sets forth certain
information concerning equity awards outstanding to the Named Executive Officers at December 31, 2013:</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 70%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
    <td colspan="7" style="border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: center"><font style="font-size: 8pt"><b>Outstanding Equity Awards at Fiscal Year-End</b></font></td></tr>
<tr style="vertical-align: bottom">
    <td style="font: 8pt Times New Roman,serif; text-align: center">&nbsp;</td>
    <td style="font: 8pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 8pt"><b>Option Awards</b></font></td>
    <td style="border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td style="border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 20%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; text-align: center"><font style="font-size: 8pt"><b>Name</b></font></td>
    <TD NOWRAP STYLE="width: 1%; padding-right: 1.45pt; padding-left: 1.45pt; font: 8pt Times New Roman,serif; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="width: 22%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><FONT STYLE="font-size: 8pt"><B>Number
of<BR>
securities<BR>
underlying<BR>
unexercised options<BR>
(#) exercisable</B></FONT></td>
    <TD NOWRAP STYLE="width: 1%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="width: 27%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 8pt"><b>Number of securities<BR>
underlying unexercised<BR>
options <BR>
(#) unexercisable</b></font></td>
    <TD NOWRAP STYLE="width: 16%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 8pt"><b>Option</b></font><br>
<font style="font-size: 8pt"><b>Exercise Price</b></font><br>
<font style="font-size: 8pt"><b>($)</b></font></td>
    <TD NOWRAP STYLE="width: 13%; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 8pt"><b>Option</b></font><br>
<font style="font-size: 8pt"><b>Expiration</b></font><br>
<font style="font-size: 8pt"><b>Date</b></font></td></tr>
<tr style="vertical-align: top; background-color: #D6F3E8">
    <td style="font: 10pt Times New Roman,serif"><font style="font-size: 10pt">Mr. Klenk</font></td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 10pt">50,000</font></td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 10pt">None</font></td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 10pt">4.21</font></td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 10pt">7/23/2023</font></td></tr>
<tr style="vertical-align: top">
    <td style="font: 10pt Times New Roman,serif">&nbsp;</td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="font: 10pt Times New Roman,serif"><font style="font-size: 10pt">Mr. Slye</font></td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 10pt">None</font></td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center">&nbsp;</td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 10pt">None</font></td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 10pt">&#8213;</font></td>
    <td style="font: 10pt Times New Roman,serif; padding-right: 1.45pt; padding-left: 1.45pt; text-align: center"><font style="font-size: 10pt">&#8213;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>DIRECTOR COMPENSATION</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>Compensation Summary</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table summarizes
information concerning the compensation awarded or paid to, or earned by, the Company&rsquo;s non-employee directors during the
last fiscal year. Directors who are not employees of the Company receive $1,250 per board meeting for their services on the Board.
During 2013, Mr. Miller was paid an additional $6,000 to compensate him for the extra hours he spent on the Audit Committee. In
addition, Messrs. Marino, Peterson, and Zipoy received 50,000 stock options during 2013. Mr. Gabbard received 25,000 stock options
during 2013.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>Director Compensation Table</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 70%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
    <TD STYLE="width: 39%; border: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>Director Name</b></font></td>
    <TD STYLE="width: 22%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>Fees earned </b></font><br>
<font style="font-size: 8pt"><b>or paid in </b></font><br>
<font style="font-size: 8pt"><b>cash ($)</b></font></td>
    <TD STYLE="width: 20%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>Option</b></font><br>
<font style="font-size: 8pt"><b>awards</b></font><br>
<font style="font-size: 8pt"><b>($) (1)</b></font></td>
    <TD STYLE="width: 19%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 8pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 8pt"><b>Total</b></font><br>
<font style="font-size: 8pt"><b>($)</b></font></td></tr>
<tr style="background-color: #D6F3E8">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt"><font style="font-size: 10pt">Joseph A. Marino</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">7,500</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">81,059</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">88,559</font></td></tr>
<tr>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt"><font style="font-size: 10pt">Scott A. Gabbard</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">4,701</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">34,108</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">38,809</font></td></tr>
<tr style="background-color: #D6F3E8">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt"><font style="font-size: 10pt">Jeffrey D. Peterson</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">7,500</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">81,059</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">88,559</font></td></tr>
<tr>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt"><font style="font-size: 10pt">Michael C. Zipoy</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">7,500</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">81,059</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">88,559</font></td></tr>
<tr style="background-color: #D6F3E8">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt"><font style="font-size: 10pt">Geoffrey W. Miller</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">8,500</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font: 10pt Times New Roman,serif; padding: 2pt; text-align: center"><font style="font-size: 10pt">&nbsp;&nbsp;8,500</font></td></tr>
</table>
<P STYLE="font: 12pt Times New Roman,serif; margin: 0; text-align: right">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 0.25in"><FONT STYLE="font-size: 10pt">Messrs. Marino, Peterson, and Zipoy received
grants of 50,000 shares and Mr. Gabbard received a grant of 25,000 shares as a portion of their 2013 board compensation. The grants
vested 20% upon the date of grant and will fully vest in four years. The option values shown are the grant date fair value computed
in accordance with FASB ASC Topic 718.</FONT></TD></TR></TABLE>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">SECTION 16(a) BENEFICIAL OWNERSHIP</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>REPORTING COMPLIANCE</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">Pursuant to Section 16(a) of the Exchange Act, the
Company&rsquo;s directors, its executive officers, and any persons who beneficially own more than 10% of the Company&rsquo;s Common
Stock are required to report their initial ownership of Common Stock and subsequent changes in that ownership to the Securities
and Exchange Commission. Specific due dates for those reports have been established, and the Company is required to disclose in
this Proxy Statement any failure to file by those due dates during fiscal 2013. Based upon a review of such reports furnished to
the Company, or written representations that no reports were required, the Company believes that all of those filing requirements
were satisfied with respect to fiscal 2013.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>Proposal #3</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial Unicode MS,sans-serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman,serif">The
Company&rsquo;s Board of Directors retained Boulay PLLP</FONT> <FONT STYLE="font-family: Times New Roman,serif">as its principal
independent registered public accounting firm for the fiscal year ended December&nbsp;31, 2013 and has selected Boulay PLLP</FONT>
<FONT STYLE="font-family: Times New Roman,serif">to serve as the Company&rsquo;s independent registered public accounting firm
for the fiscal year ending December&nbsp;31, 2014. The Board of Directors desires that the selection of this independent registered
public accounting firm be submitted to the shareholders for ratification, which ratification requires the affirmative vote of the
holders of a majority of the shares of Common Stock represented at the Annual Meeting in person or by proxy and entitled to vote.
If the selection is not ratified, the Board of Directors will reconsider its decision.</FONT></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Arial Unicode MS,sans-serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman,serif">A
representative of Boulay PLLP</FONT> <FONT STYLE="font-family: Times New Roman,serif">is expected to be present at the Annual Meeting,
will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.</FONT></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>DISCLOSURE OF FEES PAID TO INDEPENDENT AUDITORS</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in">The following fees were paid to Boulay PLLP for fiscal
years 2013 and 2012:</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">FY 2013</TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">FY 2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(214,243,232)">
    <TD STYLE="width: 70%; text-align: left">Audit Fees</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">67,800</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">66,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Audit-Related fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(214,243,232)">
    <TD STYLE="text-align: left">Tax Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6,448</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">All Other Fees</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">830</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(214,243,232)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: right">Total&nbsp;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">75,078</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">71,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in; text-align: justify"><B>Audit Fees </B>were for professional services rendered
for the audit of the Company&rsquo;s consolidated financial statements and review of the interim consolidated financial statements
included in quarterly reports and services in connection with statutory and regulatory filings or engagements.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in; text-align: justify"><B>Audit-Related Fees</B> consist of the review of
and discussion with management regarding certain accounting treatment.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in; text-align: justify"><B>Tax Fees</B> were for professional services rendered
for preparation of the Company&rsquo;s annual tax return, quarterly estimates, and state returns. Tax examination consulting is
also included.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0; text-indent: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt"><B>All Other Fees</B></FONT>
<FONT STYLE="font-size: 10pt">represent fees for any professional services not included in the first three categories listed above.</FONT></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">Pursuant to its written charter,
the Audit Committee is required to pre-approve all audit services, as well as all non-audit services performed by the Company&rsquo;s
independent registered public accounting firm in order to ensure that the provision of these non-audit services does not impair
the auditor&rsquo;s independence. Unless a particular service has received general pre-approval by the Audit Committee in accordance
with the Audit Committee&rsquo;s pre-approval policy, each service provided must be specifically pre-approved. Any proposed services
exceeding pre-approved costs levels will require specific pre-approval by the Audit Committee.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">As part of the Company&rsquo;s
annual engagement agreement with its independent registered public accounting firm, the Audit Committee pre-approves the following
audit services to be provided by the independent auditor: statutory and financial audits for the Company and any of its subsidiaries
and affiliates, audit services associated with SEC registration statements, periodic reports and other documents filed with the
SEC, production of other documents issued by the independent registered public accounting firm in connection with securities offerings
(e.g., comfort letters, consents), and assistance in responding to SEC comment letters. The Audit Committee also provides pre-approval
in the annual engagement of consulting services provided by the independent registered public accounting firm related to the accounting
or disclosure treatment of transactions or events and the actual or potential impact of final or proposed rules, standards or interpretations
by the SEC, FASB, or other regulatory or standard-setting bodies.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Audit Committee has also provided
the Company&rsquo;s independent registered public accounting firm with a general pre-approval of certain non-audit services, primarily
tax services. The Audit Committee does not believe that performance of these tax services impairs the auditor&rsquo;s independence.
Specifically, the Audit Committee has given the independent registered public accounting firm pre-approval for U.S. federal, state,
and local tax planning and advice, U.S. federal, state, and local tax compliance, international tax planning and advice, international
tax compliance, and tax planning and advice related to merger and acquisition activities. The Company&rsquo;s independent registered
public accounting firm must inform the Audit Committee whenever a pre-approved service is provided. The aggregate amount of fees
for these pre-approved tax services may not exceed $8,000 without explicit approval by the Audit Committee.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The term of any pre-approval is
12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different term. The Audit Committee
retains the right to periodically revise the above list of pre-approved services.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>REPORT OF THE AUDIT COMMITTEE</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">The Audit Committee of the Board of Directors is comprised
of three directors who are independent of the Company and management as required by the NASDAQ corporate governance listing standards
and by SEC rules. The Audit Committee operates under a written charter adopted by the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">The Audit Committee oversees the Company&rsquo;s financial
reporting process on behalf of the Board of Directors. Management is responsible for the Company&rsquo;s financial statements and
the financial reporting process, including implementing and maintaining effective internal control over financial reporting and
for the assessment of, and reporting on, the effectiveness of internal control over financial reporting. The independent auditors
are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally
accepted in the United States.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">In fulfilling its oversight responsibilities, the
Audit Committee has reviewed and discussed with management and the independent auditors the Company&rsquo;s audited financial statements
for the year ended December 31, 2013, and discussed with management the effectiveness of the Company&rsquo;s internal control over
financial reporting as of December 31, 2013 contained in the Company&rsquo;s Annual Report on Form 10-K for the year ended December
31, 2013, including a discussion of the reasonableness of significant judgments and the clarity of disclosures in the financial
statements. The Audit Committee also reviewed and discussed with management and the independent auditors the disclosures made in
&ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo; included in the Company&rsquo;s
2013 Annual Report to Shareholders and its Annual Report on Form 10-K for the year ended December 31, 2013.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">The Audit Committee has discussed with the independent
auditors the matters required to be discussed by Public Company Accounting Oversight Board (&ldquo;PCAOB&rdquo;) Auditing Standards
AU Section 380, Communication With Audit Committees. In addition, the Audit Committee has discussed with the independent auditors
the auditor&rsquo;s independence from the Company and its management, including the matters in the written disclosures and the
letter provided by the independent auditors to the Audit Committee as required by applicable requirements of the PCAOB regarding
the independent auditor&rsquo;s communications with the Audit Committee concerning independence, and has considered the compatibility
of non-audit services with the auditor&rsquo;s independence.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">The Committee discussed with the Company&rsquo;s independent
auditors the overall scope and plans for their audit. The Committee meets with the independent auditors, with and without management
present, to discuss the results of their examinations, their evaluations of the Company&rsquo;s internal controls and the overall
quality of the Company&rsquo;s financial reporting.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">Based on the reviews and discussions referred to above,
the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements for
the year ended December 31, 2013 be included in the Company&rsquo;s Annual Report on Form 10-K for the year ended December 31,
2013 for filing with the SEC.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>Audit Committee</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><I>Scott A. Gabbard, Chair</I></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><I>Joseph A. Marino</I></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><I>Michael C. Zipoy</I></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><I>&nbsp;</I></P>


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<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>OTHER MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">The Board of Directors knows of
no other matters to be brought before the Annual Meeting. However, if any other matters are properly brought before the Annual
Meeting, it is the intention of the persons named in the accompanying proxy to vote in accordance with their judgment on such matters.</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0; text-align: center">SHAREHOLDER PROPOSALS</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">Shareholder proposals for the
proxy statement for the 2015 Annual Meeting of Shareholders of the Company must be received no later than November 24, 2014 at
the Company&rsquo;s principal executive offices, 6111 Blue Circle Drive, Minnetonka, Minnesota 55343, directed to the attention
of the Chairman of the Audit Committee, or the Chairman of the Nominating Committee if the proposal relates to the nomination of
a director, in order to be considered by the Board of Directors for inclusion in next year&rsquo;s Annual Meeting proxy material
under the SEC&rsquo;s proxy rules.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">Also, if a shareholder proposal
intended to be presented at the next Annual Meeting but not included in the Company&rsquo;s proxy statement and proxy is received
by the Company after February 7, 2015, then management named in the Company&rsquo;s proxy form for the next Annual Meeting will
have discretionary authority to vote shares represented by such proxies on the shareholder proposal, if presented at the meeting,
without including information about the proposal in the Company&rsquo;s proxy material.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: center"><B>FORM 10-K</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify; text-indent: 0.5in">A copy of the Company&rsquo;s
Annual Report to the Securities and Exchange Commission on Form 10-K for the fiscal year ended December 31, 2013 has been provided
with this Proxy Statement. The Company will furnish to any shareholder, upon written request, any exhibit described in the list
accompanying the Form 10-K upon the payment, in advance, of reasonable fees related to the Company&rsquo;s furnishing such exhibits(s).
Any such request should include a representation that the shareholder was the beneficial owner of shares of Electro-Sensors Common
Stock on February 26, 2014, the record date for the 2014 Annual Meeting, and should be directed to Mr. David Klenk, Chief Executive
Officer, at the Company&rsquo;s principal address.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>The foregoing Notice of Annual Meeting and Proxy
Statement are sent by order of the Board of Directors.</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">David L. Klenk</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0; text-align: justify">President</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">March 21, 2014</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0">&nbsp;</P>

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<P ALIGN=CENTER><FONT SIZE=3 FACE=ARIAL><B>ANNUAL MEETING OF SHAREHOLDERS OF</B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=6 FACE=ARIAL><B>ELECTRO-SENSORS, INC.</B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=3 FACE=ARIAL><B>April 23, 2014</B></FONT></P>

<TABLE align=center BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="58%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="1%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="38%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
<TR>
 <TD VALIGN=TOP>
 <P ALIGN=RIGHT><FONT FACE="WINGDINGS" SIZE="2"><B>&nbsp;</B> </FONT></P>
 </TD>
 <TD VALIGN=bottom>
 <P ALIGN=center><FONT FACE="ARIAL" SIZE="1"><B>GO GREEN</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT FACE="WINGDINGS" SIZE="2"><B>&nbsp;</B> </FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=RIGHT><FONT FACE="WINGDINGS" SIZE="2"><B>&nbsp;</B> </FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=justify><FONT FACE="ARIAL" SIZE="1">e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible
documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access. </FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT FACE="WINGDINGS" SIZE="2"><B>&nbsp;</B> </FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=CENTER><FONT FACE="ARIAL" SIZE="2"><U><B>IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF PROXY MATERIALS FOR THE ANNUAL MEETING</B></U>:<B><BR>
</B>The Proxy Statement, Form of Proxy, and Annual Report on Form 10-K <BR>
are available at http://www.idelivercommunications.com/proxy/else</FONT></P>

<BR><BR>

<P ALIGN=CENTER><FONT SIZE=5 FACE=ARIAL>Please sign, date and mail<BR>
your proxy card in the<BR>
envelope provided as soon<BR>
as possible.</FONT></P>
<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="25%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="50%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="25%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=RIGHT><FONT FACE="WINGDINGS" SIZE="2"><B>&#226;</B> </FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1  FACE=ARIAL>Please detach along perforated line and mail in the envelope provided.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT FACE="WINGDINGS" SIZE="2"><B>&#226;</B> </FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="4%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="46%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="50%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL> <IMG SRC="a130707001_v1.jpg" ALT="(GRAPHIC)"></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=3 FACE=ARIAL>20533000000000000000&nbsp;&nbsp;&nbsp;4</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3  FACE=ARIAL>042314</FONT></P>
 </TD>
 </TR>
</TABLE>
<BR>
<TABLE ALIGN=CENTER  BORDer=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
  <TD WIDTH="100%" VALIGN=TOP>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
 </TR>
  <TR>
  <TD  VALIGN=TOP style="border-bottom:solid black 1px;border-top:solid black 1px">
  <P ALIGN=CENTER><FONT FACE="ARIAL" SIZE="1"><B>THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR SUCH PROPOSAL AND FOR THE ELECTION OF EACH DIRECTOR
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.  PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE&nbsp;</B> </FONT><FONT FACE="WINGDINGS" SIZE="1"><B>x</B> </FONT></P>
  </TD>
 </TR>
</TABLE>


<DIV style="position:relative; float:left; width:52%; margin:0%">

<TABLE ALIGN=CENTER  BORDer=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
  <TD WIDTH="3%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="1%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="1%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="20%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="3%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="3%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="28%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="11%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="2%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="3%" style="border-right: solid black 1px" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1 FACE=ARIAL>2.</FONT></P>
  </TD>
  <TD  COLSPAN="7" VALIGN=TOP>
  <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:3.65PT;TEXT-INDENT:-3.65PT'><FONT SIZE=1 FACE=ARIAL>&nbsp;To elect five directors to serve until the next annual meeting of shareholders:</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="4" VALIGN=bottom>
  <P><FONT SIZE=1 FACE=ARIAL><BR><B>NOMINEES:</B></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" valign=middle>
  <P><FONT SIZE=3    FACE=WINGDINGS>o</FONT></P>
  </TD>
  <TD  COLSPAN="2"  valign=middle>
  <P><FONT FACE="ARIAL" SIZE="1"><B>FOR ALL NOMINEES</B> </FONT></P>
  </TD>

  <TD  VALIGN=bottom>
  <P ALIGN="LEFT"><FONT size=2 FACE="WINGDINGS">&#161;&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="3" VALIGN=bottom>
  <P><FONT SIZE=1 FACE=ARIAL>David L. Klenk</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD   valign=middle>
  <P><FONT size=2 FACE="WINGDINGS">&#161;</FONT></P>
  </TD>

  <TD  COLSPAN="3"  valign=middle>
  <P><FONT SIZE=1 FACE=ARIAL>Jeffrey D. Peterson</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" ROWSPAN=2 VALIGN=TOP>
  <P><FONT SIZE=3    FACE=WINGDINGS>o</FONT></P>
  </TD>
  <TD  COLSPAN="2" valign=TOP ROWSPAN=2>
  <P><FONT FACE="ARIAL" SIZE="1"><B>WITHHOLD AUTHORITY<BR>
FOR ALL NOMINEES</B></FONT></P>
  </TD>
  <TD  VALIGN=MIDDLE>
  <P><FONT size=2 FACE="WINGDINGS">&#161;</FONT></P>
  </TD>
  <TD  COLSPAN="3" VALIGN=MIDDLE>
 <P><FONT SIZE=1 FACE=ARIAL>Scott A. Gabbard</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>


 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT size=2 FACE="WINGDINGS">&#161;</FONT></P>
  </TD>
  <TD  VALIGN=TOP COLSPAN=3>

 <P><FONT SIZE=1 FACE=ARIAL>Joseph A. Marino</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>









 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT size=2 FACE="WINGDINGS">&#161;</FONT></P>
  </TD>
  <TD  COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1 FACE=ARIAL>Michael C. Zipoy</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" ROWSPAN=2 VALIGN=TOP>
  <P><FONT SIZE=3    FACE=WINGDINGS>o</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP ROWSPAN=2>
  <P><FONT FACE="ARIAL" SIZE="1"><B>FOR ALL EXCEPT</B><BR>
(See instructions below) </FONT> </P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT size=2 FACE="WINGDINGS">&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1 FACE=ARIAL>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>




<TR>
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  <P><FONT size=2 FACE="WINGDINGS"></FONT></P>
  </TD>
  <TD  COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1 FACE=ARIAL>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
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  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="3" VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
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  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <TD  VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="3" VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>

 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="3" VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="3" VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
<TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>

  <TD nowrap COLSPAN="3" VALIGN=TOP>
  <P>

<FONT FACE="ARIAL" SIZE="1"><U><B>INSTRUCTIONS:</B></U>&nbsp; </FONT></P>
  </TD>
  <TD  COLSPAN="6" VALIGN=TOP>
  <P>

<FONT FACE="ARIAL" SIZE="1">To withhold authority to vote for any individual nominee(s), mark
<B>&#147;FOR ALL EXCEPT&#148;</B> and fill in the circle next to each nominee you
wish to withhold, as shown here: </FONT><FONT FACE="WEBDINGS"> = </FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR style="font-size:1 px">
  <TD  VALIGN=TOP >&nbsp;


  </TD>
  <TD  COLSPAN="3" VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;


  </TD>
  <TD  COLSPAN="5" VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;


  </TD>
  <TD  VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;


  </TD>
  <TD  style="border-right: solid black 1px;border-bottom:solid black 1px" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
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  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
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  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>


 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR><TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  </TD>
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  </TD>
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  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR><TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
<TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
<TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
<TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  style="border-right: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR style="font-size:1 px">
  <TD  VALIGN=TOP>&nbsp;


  </TD>
  <TD  COLSPAN="7" VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;


  </TD>
  <TD  style="border-bottom:solid black 1px">&nbsp;


  </TD>
  <TD  VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;


  </TD>
  <TD  style="border-right: solid black 1px;border-bottom:solid black 1px" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  COLSPAN="7" VALIGN=TOP>
  <P ALIGN="JUSTIFY"><FONT SIZE=1 FACE=ARIAL>To change the address on your account, please check the box at right
and indicate your new address in the address space above. Please note that changes to the registered
name(s) on the account may not be submitted via this method.</FONT></P>
  </TD>
  <TD colspan=2><P ALIGN=right><FONT SIZE=5 FACE=WINGDINGS>o</FONT></P>
  </TD>
  <TD  VALIGN=TOP style="border-right: solid black 1px">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
<TR style="font-size:1 px">
  <TD  VALIGN=TOP >&nbsp;


  </TD>
  <TD  COLSPAN="7" VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;


  </TD>
  <TD  style="border-bottom:solid black 1px">&nbsp;


  </TD>
  <TD  VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;


  </TD>
  <TD  style="border-right: solid black 1px;border-bottom:solid black 1px" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
 </TR>
</TABLE>
</div>



<DIV style="position:relative; float:right; width:47%; margin:0%">

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="50%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT STYLE="FONT-SIZE:6pt"  FACE=ARIAL>FOR</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT STYLE="FONT-SIZE:6pt"  FACE=ARIAL>AGAINST</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT STYLE="FONT-SIZE:6pt"  FACE=ARIAL>ABSTAIN</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>1.</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1 FACE=ARIAL>To set the number of directors at five.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT STYLE="FONT-SIZE:6pt"  FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT STYLE="FONT-SIZE:6pt"  FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT STYLE="FONT-SIZE:6pt"  FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>3.</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1 FACE=ARIAL>To ratify the appointment of Boulay P.L.L.P as Independent Registered Public Accounting Firm for the fiscal year ending December 31,
2014.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT STYLE="FONT-SIZE:6pt"  FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT STYLE="FONT-SIZE:6pt"  FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT STYLE="FONT-SIZE:6pt"  FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>4.</FONT></P>
 </TD>
 <TD COLSPAN=8 VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1 FACE=ARIAL>To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD colspan=9 VALIGN=TOP>
 <P align=justify><FONT SIZE=1 face=arial><B>THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR
SUCH PROPOSAL AND FOR THE ELECTION OF EACH DIRECTOR.</B></FONT></P>
 </TD>





 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1 FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3 FACE=WINGDINGS>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3 FACE=WINGDINGS>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3 FACE=WINGDINGS>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3 FACE=WINGDINGS>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=8 VALIGN=TOP>
 <P ALIGN="JUSTIFY"><FONT SIZE=1 FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=8 VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1 FACE=ARIAL>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
</TABLE>

</div>



<BR clear="all">

<TABLE ALIGN=CENTER  BORDer=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
  <TD WIDTH="10%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="16%"  VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="1%"  VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="2%"  VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="10%"  VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="8%"  VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="16%"  VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="2%"  VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="10%"  VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=bottom nowrap>
  <P><FONT SIZE=1 FACE=ARIAL>&nbsp;&nbsp;Signature of Shareholder&nbsp;</FONT></P>
  </TD>
  <TD  style="border: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=bottom>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD   VALIGN=bottom>
  <P><FONT SIZE=1 FACE=ARIAL>Date:&nbsp;</FONT></P>
  </TD>
  <TD  style="border: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD   VALIGN=bottom nowrap>
  <P><FONT SIZE=1 FACE=ARIAL>&nbsp;Signature of Shareholder&nbsp;</FONT></P>
  </TD>
  <TD  style="border: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=bottom>
  <P><FONT SIZE=1 FACE=ARIAL>&nbsp;&nbsp;Date:&nbsp;</FONT></P>
  </TD>
  <TD  style="border: solid black 1px" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
</TABLE>








<TABLE ALIGN=CENTER  BORDer=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
  <TD WIDTH="2%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="2%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="4%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="90%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="2%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>

  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1 FACE=ARIAL><B>&nbsp;&nbsp;&nbsp;Note:&nbsp;&nbsp;</B></FONT></P>
  </TD>
  <TD  ROWSPAN="3" VALIGN=TOP>
  <P STYLE="margin-right:10px" ALIGN="JUSTIFY"><FONT SIZE=1 FACE=ARIAL>Please sign exactly as your name or names appear
 on this proxy. When shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>

  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
<TD  VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL> <IMG SRC="a130707001_v1.jpg" ALT="(GRAPHIC)"></FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
<TD  VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL> <IMG SRC="a130707001_v1.jpg" ALT="(GRAPHIC)"></FONT></P>
  </TD>
 </TR>

</table>
<BR>

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<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>

<TABLE ALIGN=CENTER  BORDer=0 CELLSPACING=0 CELLPADDING=0 width=100%>
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="94%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&#157;</FONT><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP bgcolor="#000000">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<BR><BR><BR><BR>
<P ALIGN=CENTER STYLE="LINE-HEIGHT:25PX"><FONT FACE="ARIAL" SIZE="4"><B>ELECTRO-SENSORS, INC.</B> </FONT><BR><FONT FACE="ARIAL" SIZE="4"><B>THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS<BR>PROXY FOR ANNUAL MEETING</B> </FONT><BR><FONT FACE="ARIAL" SIZE="3"><B>April 23, 2014</B> </FONT></P>

<P ALIGN="JUSTIFY"><FONT FACE=ARIAL SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby appoints DAVID L. KLENK, with full power of substitution, as his or her Proxy to represent and vote, as
designated below, all shares of the Common Stock of Electro-Sensors Inc. registered in the name of the undersigned at the Annual
Meeting of Shareholders of the Company to be held at the Sheraton Minneapolis West Hotel, 12201 Ridgedale Drive, Minnetonka,
Minnesota, at 2:00 p.m. local time, on April 23, 2014, and at any adjournment thereof. The undersigned hereby revokes all proxies
previously granted with respect to such meeting.</FONT></P>

<P ALIGN="CENTER"><FONT FACE="ARIAL" SIZE="3"><B>(Continued and to be signed on the reverse side.)</B> </FONT></P>
<BR><BR>
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