Microwave Filter Company, Inc.
6743 Kinne Street
East Syracuse, New York 13057
Notice of Annual Meeting Of Shareholders
To the Shareholders of Microwave Filter Company, Inc.:
At the direction of the Board of Directors of Microwave Filter
Company, Inc., a New York corporation (the "Company"), notice is hereby given
that the Annual meeting of Shareholders of the Company (the "Meeting") will be
held at 10:00 a.m. on Wednesday, April 10, 2002 at the Holiday Inn, Carrier
Circle, East Syracuse, New York 13057 for the purpose of voting on the
following matters:
Proposal 1. The election of 3 directors to hold office until
the Annual Meeting of the Shareholders at which their term expires or until
their successors have been duly elected.
Proposal 2. The ratification of PricewaterhouseCoopers LLP
as the Company's independent auditors for the fiscal year ending September 30,
2002.
The Board of Directors has fixed the close of business on February 25,
2002 as the record date for the determination of shareholders entitled to
notice of and to vote at the Meeting, or any adjournments thereof.
By order of the Board of Directors
Louis S. Misenti
Chairman of the Board
Dated: March 4, 2002
Syracuse, New York
YOUR VOTE IS IMPORTANT. YOU ARE THEREFORE REQUESTED TO SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, EVEN IF YOU EXPECT TO BE PRESENT AT
THE MEETING. YOU MAY WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO THE MEETING, OR
IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AT THAT TIME AND
VOTE IN PERSON IF YOU WISH.
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MICROWAVE FILTER COMPANY, INC.
Proxy Statement for Annual Meeting of Shareholders
General
The enclosed Proxy is solicited on behalf of the Board of Directors of
Microwave Filter Company, Inc. (the "Company") for use at the Company's Annual
Meeting of Shareholders (the "Annual Meeting") to be held on Wednesday, April
10, 2002 at 10:00 a.m. local time or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting of Shareholders. The Annual Meeting will be held at the
Holiday Inn, Carrier Circle, East Syracuse, New York 13057.
The Company's principal executive offices are located at 6743 Kinne
Street, East Syracuse, New York 13057. The telephone number at that address
is (315) 438-4700.
These proxy solicitation materials and the Annual Report to
Shareholders were first mailed on or about March 4, 2002 to all shareholders
entitled to vote at the Annual Meeting.
Record Date and Shares Outstanding
Shareholders of record at the close of business on February 25, 2002
are entitled to notice of, and to vote at, the Annual Meeting. At the record
date 2,904,781 shares of the Company's common stock were issued, outstanding
and entitled to vote at the Annual Meeting.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
the Company a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Annual Meeting and voting in person.
Voting and Solicitation
Every shareholder voting for the election for Directors and on the
other matters presented in this proxy is entitled to one vote for each share
held of record on the record date. Directors are elected by a plurality of the
votes cast at the meeting. Abstentions count for the purpose of determining a
quorum. Broker non-votes do not count for the purpose of determining a
quorum. Abstentions will not count as a vote for proposals 1 and 2. Broker
non-votes will count as a vote for proposals 1 and 2.
The cost of this solicitation will be borne by the Company. The
Company has retained Regan & Associates to assist in the solicitation of
proxies at a fee of $3,500 (which includes expenses.) In addition, the Company
may reimburse brokerage firms and other persons representing beneficial owners
of shares for their expenses in forwarding solicitation material to such
beneficial owners. Proxies also may be solicited by certain of the Company's
directors, officers and regular employees, without additional compensation,
personally or by telephone or by telegram.
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Deadline for Receipt of Shareholder Proposals
Proposals of shareholders which are intended to be presented by such
shareholders at the Company's 2003 Annual Meeting must be received by the
Secretary of the Company at the Company's principal executive offices no later
than November 8, 2002 in order to be included in the proxy soliciting material
relating to that meeting.
Board Meetings and Committees
The Board of Directors held a total of four meetings during the fiscal
year ending September 30, 2001. No Director attended fewer than 75% of all
such meetings of the Board of Directors and of the Committees, if any, on
which such Directors served.
The Company's Finance and Audit Committee currently consists of
Sidney Chong, Chair, Daniel Galbally, Frank S. Markovich and Robert R.
Andrews. The Finance and Audit Committee reviews and approves the scope of
the audit performed by the Company's independent auditors as well as the
Company's accounting principles and internal accounting controls. The Finance
and Audit Committee held one meeting during fiscal year 2001.
The Company's Compensation Committee currently consists of Trudi B.
Artini, Chair, Sidney Chong, David B. Robinson, M.D., and Daniel Galbally.
The Compensation Committee reviews compensation and benefits for the Company's
executives. The Compensation Committee held one meeting during fiscal year
2001.
The Company's Nominating Committee currently consists of David B.
Robinson, M.D., Chair, Trudi B. Artini, Carl F. Fahrenkrug, P.E., Milo
Peterson and Frank S. Markovich. The Nominating Committee will consider
nominees for the Board of Directors recommended by shareholders if such
recommendations are in writing and are mailed to the Secretary of the Company
at the Company's principal executive office. The Nominating Committee did not
hold any meetings during fiscal year 2001.
The Company also has a standing Executive Committee.
Compensation of Directors
Non-officer Directors received fees of $400.00 per board meeting and
$400.00 per committee meeting. MFC also reimburses Directors for reasonable
expenses incurred in attending meetings. The Chairman of the Board and
Officer members receive no compensation for their attendance at meetings.
During fiscal 2001, the Company paid Louis S. Misenti $25,000 in compensation
for his services as Chairman of the Board of Directors of Microwave Filter
Company, Inc.
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Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding
beneficial ownership of the Company's common stock as of February 25, 2002 (i)
by each person who is known by the Company to own beneficially more than 5% of
the Company's common stock, (ii) each Director of the Company and (iii) all
Directors and Executive Officers as a group.
Directors, Officers Shares Beneficially Owned
5% Shareholders Number Percent
Louis S. Misenti * 250,000 8.6%
140 Clearview Road
Dewitt, NY 13214
Milo Peterson * 80,000 2.8%
Trudi B. Artini * 82,435 2.8%
Carl F. Fahrenkrug * 132,373 4.6%
David B. Robinson, M.D.* 58,571 2.0%
Frank S. Markovich * 4,340 **
Daniel Galbally * 1,489 **
Sidney Chong * 13,335 **
Robert R. Andrews * 1,214 **
All Directors and Executive
Officers as a group (ten persons) 625,643 21.5%
*Directors of the Company.
**Denotes less than one percent of class.
Frederick A. Dix 244,007 8.4%
and Margorie Dix
209 Watson Road
N. Syracuse, NY 13212
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EXECUTIVE COMPENSATION AND OTHER MATTERS
Executive Compensation
The following table sets forth the annual and long-term compensation
of the Company's Chief Executive Officer for services to the Company during
the three fiscal years ended September 30, 2001.
Annual Compensation
Salary
Name and Principal Position Year $
Carl F. Fahrenkrug 2001 126,832
President and CEO 2000 120,197
1999 110,966
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee was or is an officer or
employee of the Company or any of its subsidiaries.
Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities, to file reports of
ownership and changes of ownership with the Securities and Exchange Commission
and the National Association of Securities Dealers, Inc. Such officers,
directors and 10% shareholders are also required by SEC Rules to furnish the
Company with copies of all Section 16(a) forms that they file. Based solely on
its review of such reports received by it, the Company believes that its
officers, directors and 10% shareholders complied with all Section 16(a)
filing requirements for the fiscal year ended September 30, 2001.
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PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
Three Directors (Class III) are to be elected at the Annual Meeting.
Unless otherwise instructed, the proxy holders will vote the proxies received
by them for the three nominees named below, all of whom are presently
Directors of the Company. In the event that any nominee is unable or declines
to serve as a Director at the time of the Annual Meeting, the proxies will be
voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. A term of office of three years for each person
elected as a Director will continue to the Annual Meeting of Shareholders at
which their term expires or until his or her successor has been elected and
qualified. It is not expected that any nominee will be unable or will decline
to serve as a Director.
The name of and certain information regarding each nominee are set
forth below.
Director Principal Occupation
CARL F. FAHRENKRUG Mr. Fahrenkrug was appointed President and Chief
Age 59 Executive Officer of MFC on October 7, 1992. He
Director since 1984 has also served as President and Chief Executive
Officer of NSI since prior to 1986. He served as
Vice President of Engineering at Microwave Systems,
Inc., Syracuse, N.Y. from 1972 - 1976. Mr. Fahrenkrug
has a B.S. and M.S. in Engineering and an MBA from
Syracuse University.
DANIEL GALBALLY Mr. Galbally is an accountant for Nucor Steel
Age 54 Auburn, Inc. in Auburn, N.Y. Prior to joining
Director since 1995 Nucor Steel Auburn, he was the controller of Diamond
Card Exchange, Inc. in Syracuse, N.Y. He was the
Controller of Evaporated Metal Films (EMF) in Ithaca,
N.Y. Before joining EMF, he worked as Controller and
acting vice president of finance at Philips Display
Components Co. He has a B.S. degree in accounting and
an MBA from Syracuse University.
FRANK S. MARKOVICH Mr. Markovich is a consultant in the manufacturing
Age 56 operations and training field. Prior to that, he was
Director since 1992 the Director of the Manufacturing Extension Partnership
at UNIPEG Binghamton. He held various high level
positions in operations, quality and product
management in a 20 year career with BF Goodrich
Aerospace, Simmonds Precision Engine Systems of
Norwich, N.Y. He completed US Navy Electronics and
Communications Schools and received an MBA from
Syracuse University.
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PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On the recommendation of the Audit and Finance Committee, the Board of
Directors has appointed PricewaterhouseCoopers LLP, independent certified
public accountants, to audit the Company's financial statements for the fiscal
year ending September 30, 2002 and recommends that shareholders vote for
ratification of such appointment.
PricewaterhouseCoopers LLP has audited the Company's financial
statements since the fiscal year ended September 30, 1992. A representative
is expected to be present at the Annual Meeting, will have an opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions.
The Board of Directors unanimously recommends a vote "FOR" the
ratification of the appointment of PricewaterhouseCoopers LLP as independent
auditors.
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REPORT OF AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee operates pursuant to a Charter approved by the
Company's Board of Directors. The Audit Committee reports to the Board of
Directors and is responsible for overseeing financial accounting and
reporting, the system of internal controls established by management and the
audit process of the Company. The Audit Committee Charter sets out the
responsibilities, authority and specific duties of the Audit Committee. The
Charter specifies, among other things, the structure and membership
requirements of the Committee, as well as the relationship of the Audit
Committee to the independent accountants and management of the Company. A copy
of the Audit Committee Charter is attached to this Proxy Statement as Appendix
A.
The Audit Committee consists of four members, all of whom have been
determined by the Board of Directors to be "independent" under the NASDAQ
listing standards as previously in effect and as amended. The Committee
members do not have any relationship to the Company that may interfere with
the exercise of their independence from management and the Company. None of
the Committee members are current officers or employees of the Company or its
affiliates.
Audit Committee Report
The Audit Committee of the Company's Board of Directors has issued the
following report with respect to the audited financial statements of the
Company for the fiscal year ended September 30, 2001:
. The Audit Committee has reviewed and discussed with the Company's
management the Company's fiscal 2001 audited financial statements;
. The Audit Committee has discussed with the Company's independent
auditors (PricewaterhouseCoopers LLP) the matters required to be discussed by
Statement on Auditing Standards No. 61, as amended by SAS No. 90;
. The Audit Committee has received the written disclosures and letter from
the independent auditors required by Independence Standards Board No. 1 (which
relates to the auditor's independence from the Company and its related
entities) and has discussed with the auditors their independence from the
Company; and
. Based on the review and discussions referred to in the three items
above, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 2001.
Submitted by the Audit Committee of the Company's Board of Directors:
Sidney K. Chong, Robert R. Andrews, Daniel P. Galbally, Frank S. Markovich
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FEES PAID TO INDEPENDENT AUDITORS
Set forth below are the aggregate fees billed for professional services
rendered to the Company by its independent auditors for fiscal 2001.
Audit Fees: $41,990
Financial Information Systems Design
and Implementation Fees 0
All Other Fees:
Tax Services 9,450
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Total fees $51,440
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Other Matters
The Company knows of no other matters to be submitted at the meeting.
If any other matters properly come before the meeting, it is the intention of
the persons named in the enclosed proxy to vote the shares they represent as
the Board of Directors may recommend.
THE BOARD OF DIRECTORS
Dated: March 4, 2002
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Appendix A
MICROWAVE FILTER COMPANY, INC.
AUDIT COMMITTEE CHARTER
Composition:
The Board of Directors shall designate an Audit Committee consisting of three
or more directors, each of whom shall have no relationship to the Corporation
that may interfere with the exercise of their independence from management and
the Corporation and shall otherwise satisfy the applicable membership
requirements under the rules of the NASDAQ, as such requirements are
interpreted by the Board of Directors in its business judgment.
Purposes:
The function of the Audit Committee is oversight. The management of the
Corporation is responsible for the preparation, presentation and integrity of
the Corporation's financial statements. Management is responsible for
maintaining appropriate accounting and financial reporting principles and
policies and internal controls and procedures designed to assure compliance
with accounting standards and applicable laws and regulations. The
independent auditor is responsible for planning and carrying out a proper
audit and reviews, including reviews of the Corporation's quarterly financial
statements prior to the filing of each quarterly report on Form 10-Q, and
other procedures. In fulfilling their responsibilities hereunder, it is
recognized that members of the Audit Committee are not full-time employees of
the corporation and are not, and do not represent themselves to be,
accountants or auditors by profession or experts in the fields of accounting
or auditing. As such, it is not the duty or responsibility of the Audit
Committee or its members to conduct "field work" or other types of auditing or
accounting reviews or procedures, and each member of the Audit Committee shall
be entitled to rely on (i) the integrity of those persons and organizations
within and outside the Corporation that it receives information from and (ii)
the accuracy of the financial and other information provided to the Audit
Committee by such persons or organizations absent actual knowledge to the
contrary (which shall be promptly reported to the Board of Directors).
Key Responsibilities:
The Committee's job is one of oversight and it recognizes that the Company's
management is responsible for preparing the Company's financial statements and
that the outside auditors are responsible for auditing those financial
statements. Additionally, the Committee recognizes that financial management ,
as well as the outside auditors, have more time, knowledge and more detailed
information on the Company than do Committee members; consequently, in
carrying out its oversight responsibilities, the Committee is not providing
any expert or special assurance as to the Company's financial statements or
any professional certification as to the outside auditor's work.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These functions are set
forth as a guide with the understanding that the Committee may diverge from
this guide as appropriate given the circumstances.
* The Committee shall review with management and the outside auditors the
audited financial statements to be included in the Company's Annual Report on
Form 10-K (or the Annual Report to Shareholders if distributed prior to the
filing of Form 10-K) and review and consider with the outside auditors the
matters required to be discussed by Statement of Auditing Standards ("SAS")
No. 61.
* As a whole, or through the Committee chair, the Committee shall review with
the outside auditors the Company's interim financial results to be included in
the Company's quarterly reports to be filed with Securities and Exchange
Commission and the matters required to be discussed by SAS No. 61; this review
will occur prior to the Company's filing of the Form 10-Q.
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* The Committee shall:
* Request from the outside auditors annually, a formal written statement
delineating all relationships between the auditor and the Company consistent
with Independence Standards Board Standard Number 1;
* Discuss with the outside auditors any such disclosed relationships and their
impact on the outside auditor's independence; and
* Recommend that the Board take appropriate action to oversee the independence
of the outside auditor The Committee, subject to any action that may be taken
by the full Board, shall have the ultimate authority and responsibility to
select (or nominate for shareholder approval), evaluate and, where
appropriate, recommend replacement of the outside auditor.
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PROXY
This proxy is Solicited
by The Board of Directors of Microwave Filter Company, Inc.
Proxy for 2002 Annual Meeting of Shareholders
The undersigned hereby appoints Louis S. Misenti and Carl F. Fahrenkrug
proxies of the undersigned, with full power of substitution, to vote shares of
common stock of the Company which the undersigned is entitled to vote at the
2002 Annual Meeting of the Shareholders to be held on Wednesday, April 10,
2002 at 10:00 a.m. and any adjournments thereof as follows:
(1) ELECTION OF DIRECTORS
Instructions: To vote for all nominees, place an X in box number 1.
To withhold authority to vote for any individual
nominee, place an X in box number 2, and draw a line
through his/her name in the list below.
1. [ ] For All Nominees
2. [ ] For All Nominees Except Those With A Line Through Their Name
Carl F. Fahrenkrug Daniel Galbally Frank S. Markovich
(2) Proposal to ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for the fiscal year ending September 30, 2002.
The Board of Directors recommends a vote FOR this proposal.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
In their discretion, the proxies are authorized to vote upon other matters
properly coming before the meeting or any adjournments thereof.
This proxy will be voted as directed by the undersigned. IF NO DIRECTION IS
GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL (1) and (2).
NOTE: Please date and sign exactly as your name or names appear below and
return in the enclosed postage paid envelope.
When signing as an Attorney, Executor, Trustee, Guardian or Officer of a
Corporation, please give title as such.
_______________________ _________
Signature Date
_______________________ _________
Signature if held jointly Date
IMPORTANT: To assist the Company in planning the Annual Meeting please check
the following:
I plan to attend the Annual Meeting _____
I do not plan to attend the Annual Meeting _____