Schedule 14A. (Rule 14a-101)
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material under Rule 14a-12
Name of Registrant as Specified In Its Charter:
Microwave Filter Company, Inc.
Name of Person(s) Filing Proxy Statement, if other than
the Registrant:
Furlong Fund, LLC
Daniel Rudewicz
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act
Rules 14a?6(i)(1) and 0?11
(1) Title of each class of securities to which
transaction applies:
N?A
(2) Aggregate number of securities to which transaction
applies:
N?A
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0?11
(set forth
the amount on which the filing fee is calculated and
state how it was determined):
N?A
(4) Proposed maximum aggregate value of transaction:
N?A
(5) Total fee paid:
N?A
[ ] Fee paid previously with preliminary materials.
N?A
[ ] 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. N?A
(1) Amount Previously Paid: N?A
(2) Form, Schedule or Registration Statement No.: N?A
(3) Filing Party: N?A
(4) Date Filed: N?A
Furlong Fund, LLC ("Furlong"), together with the other
participants named herein, is filing materials contained
in
this Schedule 14A and pursuant to 240.14a-12 with the
Securities and Exchange Commission (the "SEC") in
connection with the solicitation of proxies for the
election of its slate of director nominees and submission
of a
bylaw proposal to a vote at the 2012 annual meeting of
shareholders (the "Annual Meeting") of Microwave Filter
Company, Inc. Furlong Fund beneficially owns 77,875 shares
of the Company. As the sole general partner of Furlong
Fund, Furlong Financial, LLC may be deemed to
beneficially own the 77,875 shares beneficially owned by
Furlong Fund.
Daniel Rudewicz, as the managing member of Furlong
Financial, LLC, may be deemed to beneficially own the
77,875 shares deemed to be beneficially owned by Furlong
Financial, LLC.
Item 1: The following information is included in a
presentation prepared for Institutional Shareholder Services
Furlong Fund, LLC
Furlong Fund
Furlong Fund Presentation For Institutional Shareholder
Services
Disclaimer
THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF
AN OFFER
TO BUY INTERESTS IN THE INVESTMENT FUND FURLONG FUND,
LLC OR
ITS AFFILIATES. ANY SUCH OFFERING CAN BE MADE ONLY AT
THE TIME
A QUALIFIED OFFEREE RECEIVES A CONFIDENTIAL PRIVATE
OFFERING
MEMORANDUM AND OTHER OPERATIVE DOCUMENTS, WHICH CONTAIN
DETAILS WITH RESPECT TO RISKS, AND SHOULD BE CAREFULLY
READ. THIS PRESENTATION CONTAINS INFORMATION THE FURLONG
BELIEVES TO BE TRUE AT THE TIME THAT THE INFORMATION
WAS
TRANSMITTED. THIS IS NOT A SOLICITATION OF PROXIES OR
CONSENTS
IN CONNECTION WITH THE MARCH 28, 2012 ANNUAL MEETING OF
MICROWAVE FILTER COMPANY. FURLONG HAS FILED WITH THE SEC
AND
MAILED OUT DEFINITIVE PROXY MATERIALS TO THE SHAREHOLDERS
OF
MICROWAVE FILTER COMPANY IN RELATION TO THE MARCH 28,
2012
ANNUAL MEETING. FURLONG STRONGLY ADVISES ALL MICROWAVE
FILTER COMPANY SHAREHOLDERS TO READ FURLONG'S PROXY
MATERIALS. FOR REVIEW, FURLONG'S PROXY MATERIALS ARE
AVAILABLE AT WWW.PROXY14A.COM.
Furlong Fund S T R I C T L Y P R I V A T E
A N D C O N F I D E N T I A L 2
Agenda
I. Weak Financial Performance
II. Corporate Governance Concerns
III. Dissident Director Slate
IV. Company Has Not Proposed a Settlement
Furlong Fund S T R I C T L Y P R I V A T
E A N D C O N F I D E N T I A L 3
Ownership of the Company
Shares Beneficially Owned
Beneficial Owner, Number, Percent, Director Since
Carl F. Fahrenkrug (CEO)72,298 2.80p 1984
Frank S. Markovich 4,340 0.17p 1992
Daniel Galbally 0 0.00p 1995
Sidney Chong 1,000 0.04p 1995
Robert R. Andrews 1,214 0.05p 1992
Richard L. Jones (CFO) 0 0.00p 2004
Perry A. Harvey 0 0.00p n?a
John J. Kennedy 500 0.02p 2009
Anne Tindall 0 0.00p 2011
Robert D. Essig 0 0.00p n?a
All Directors and Executive Officers (10 Persons)
79,352 3.07p n?a
Furlong Fund 77,875 3.01p n?a
Total Shares Outstanding 2,586,227 100.00p n?a
Source: Company's DEF 14A Field with the SEC on 2?9?2012
NOTE: A majority of the current or nominated Board (five
of nine) served on the Board in
1996 when many of the supermajority provisions were put
in place.
Furlong Fund S T R I C T L Y P R I V A T
E A N D C O N F I D E N T I A L 4
Financial Performance Over Past 10 Years
DATE, 2-Sep, 3-Sep, 4-Sep, 5-Sep, 6-Sep, 7-Sep,8-Sep, 9-
Sep, 10-Sep, 11-Sep
Decrease in Sales -30.5p
SALES 7.25 Mil,5.06 Mil,4.88 Mil,5.53 Mil,4.54 Mil,4.63
Mil,5.23 Mil,4.61 Mil,4.69 Mil,5.04 Mil
EBIT 603,000,-446,000,-31,000, 352,000,-449,000,-292,000,
40,000, 83,000, 146,550, 215,540
Total Net Inc Past 10 Years 95,210
DEPRECIATION 280,000, 269,000, 223,000, 198,000, 163,000,
114,000 78,000, 83,000, 98,210, 107,900
TOTAL NET INCOME 436,000, -282,000, -177,000,
312,000, -411,000, -293,000, 39,000 82,000, 146,290,
242,920
EPS 0.15 -0.1 -0.06 0.1 -0.14 -0.1 0.01 0.03
0.06 0.09 0.04
Over the past ten fiscal years, the Company's total net
income was $95,210.
Furlong Fund S T R I C T L Y P R I V A T
E A N D C O N F I D E N T I A L
5
Balance Sheet Comparison
Assets 9?20?2011 Assets 9?30?2002
Current assets: Current assets:
Cash and cash equivalents 1,258,885
Cash and cash equivalents 649,196
Investments 1,377,765
Accounts receivable 352,054 Accounts receivable
378,636
Total current assets 2,297,142 Total current
assets 3,669,122
Property, plant and equipment, net 617,818 Property,
plant and equipment, net 1,196,763
Total Assets 2,914,960 Total Assets
4,865,885
Liabilities and Stockholders' Equity Liabilities
and Stockholders' Equity
Total current liabilities 639,032 Total current
liabilities 1,074,532
Deferred tax liability - noncurrent 29,999
Total liabilities 639,032 Total liabilities
1,104,531
Stockholders' equity: Stockholders' equity:
Total stockholders' equity Total stockholders'
equity
2,275,928 3,761,354
Total Liabilities and Stockholders'
2,914,960 Total Liabilities and
Stockholders' Equity
Equity 4,865,885
Book Value 2,275,928 3,791,353
Shares Outstanding 2,586,227 4,317,688
Book Value Per Share 0.88 0.87
Note: Book value can be affected by many factors including:
When a company trades
below book value - as MFCO
currently does -any share
repurchases
actually boost
book value per
share.
Furlong Fund S T R I C T L Y P R I V A
T E A N D C O N F I D E N T I A L 6
MFCO Stock Price vs. DJIA (^DJI) , NASDAQ (^IXIC), &
S&P500(^GSPC)
Furlong Fund S T R I C T L Y P R I V A
T E A N D C O N F I D E N T I A L 7
Agenda
I. Weak Financial Performance
II. Corporate Governance Concerns
III. Opposition Minority Director Slate Can Add Value
IV. Company Has Not Proposed a Settlement
Furlong Fund S T R I C T L Y P R I V A T
E A N D C O N F I D E N T I A L 8
Entrenchment: Overview
Entrenchment Bylaws Supermajority
NO to Proxy Access
The Company's current Many of the
The Company has
Bylaws have several entrenchment bylaws
stated in its proxy
provisions that could be require a supermajority
supplement that it is
potentially viewed as to be repealed, and a
against the proxy
entrenchment majority of the current
access proposal
provisions. Directors were on the
submitted by Furlong.
Company's Board when
the provisions were put
in place.
Furlong Fund S T R I C T L Y P R I V A
T E A N D C O N F I D E N T I A L 9
Entrenchment: Entrenchment Bylaws
Entrenchment Bylaws Supermajority NO to Proxy
Access
The Company's current Many of the The
Company has
Bylaws have several entrenchment bylaws stated
in its proxy
provisions that could be require a supermajority
supplement that it is
potentially viewed as to be repealed, and a
against the proxy
entrenchment majority of the current access proposal
provisions. Directors were on the submitted by
Furlong.
Company's Board when
the provisions were put
in place.
Classified Advanced Filling Written Removal
Special
Board Notice Vacancies Consent For
Cause Meetings
"... directors shall "a shareholder's "Vacancies
"Any action that "...the directors "Special
meetings
be divided, with notice shall be occurring in
the may be taken by may be removed ...may be
called
respect to the delivered ...not Board ...may
vote may be from office, for by ...two
terms for which later than the be filled by ... a
taken without a cause only, ...by thirds (2?3)
of
they severally close of business vote of the
meeting on vote of the the holders of the
written consent
hold office, into on the 60th day holders of
two- shareholders outstanding..."
....signed by the
three classes" nor earlier than thirds (2?3) of
holding two-
holders of all the
the close of the outstanding thirds (2?3) of
outstanding
business on the shares" the outstanding
shares entitled
90th day prior " shares"
to vote"
Furlong Fund S T R I C T L Y P R I V
A T E A N D C O N F I D E N T I A L
10
Entrenchment: Supermajority Provisions
Entrenchment Bylaws Supermajority NO to Proxy Access
The Company's current Many of the The
Company has
Bylaws have several entrenchment bylaws stated
in its proxy
provisions that could be require a supermajority
supplement that it is
potentially viewed as to be repealed, and a
against the proxy
entrenchment majority of the current
access proposal
provisions. Directors were on the
submitted by Furlong.
Company's Board when
the provisions were put
in place.
ARTICLE XIII, BYLAW CHANGES, AMENDMENT, REPEAL, ADOPTION,
ELECTION OF DIRECTORS CONFORMING AMENDMENT
"the Bylaws of the Corporation may be amended, repealed
or adopted by vote of the holders of record of
the shares at the time entitled to vote in the election
of any Directors; provided that Section 3 of Article
III, Sections 2, 3, 4, and 5 of Article IV and Section
(a) of Article XIII of the Bylaws shall not be altered,
amended or repealed and no provision inconsistent
therewith shall be adopted without the affirmative
vote of the holders of at least two-thirds (2?3) of the
outstanding shares entitled to vote in the election
of Directors."
Furlong Fund S T R I C T L Y P R I
V A T E A N D C O N F I D E N T I A L
11
Entrenchment: Rejecting Proxy Access
Supermajority NO to Proxy Access
The Company's current Many of the The Company
has
Bylaws have several entrenchment bylaws
stated in its proxy
provisions that could be require a supermajority
supplement that it is
potentially viewed as to be repealed, and a
against the proxy
entrenchment majority of the current access
proposal
provisions. Directors were on the submitted by
Furlong.
Company's Board when
the provisions were put
in place.
Against Correcting
The Board is against a
proposal that could
give shareholders who
disagree with the
current Board access
to the proxy card
Furlong Fund S T R I C T L Y P R I V A
T E A N D C O N F I D E N T I A L 12
Agenda
I. Weak Financial Performance
II. Corporate Governance Concerns
III. Opposition Minority Director Slate Can Add Value
IV. Company Has Not Proposed a Settlement
Furlong Fund S T R I C T L Y P R I V A T
E A N D C O N F I D E N T I A L 13
Largest Shareholder Has Expressed Support
In a recent 13D Filing, the managing member of
Hummingbird Capital, the largest shareholder of
the Company, stated the following:
"I plan to support Furlong Fund's proposals during
the 2012 Annual Meeting and have already voted
my proxies accordingly."
Furlong Fund S T R I C T L Y P R I V A T
E A N D C O N F I D E N T I A L 14
Furlong's Strong Corporate Governance Record
Furlong believes
in advocating for
corporate
governance best
practices
Furlong's efforts
in improving
corporate governance were
highlighted twice
in a recent issue
of ISS Governance
Weekly
Furlong Fund S T R I C T L Y P R I V A T
E A N D C O N F I D E N T I A L 15
Furlong's Nominees
Seeking Two Board Seats
Furlong is not seeking a majority, only 2 of 9 seats.
Share Ownership
Furlong Beneficially
owns more shares
than any other Board
Member.
Qualified Candidates
Both candidates have a background in capital
allocation by running investment funds.
Mr. Rudewicz is strongly incented
to act in the way that will best
benefit all shareholders.
CFA Program
Both candidates have completed the Chartered Financial
Analyst (CFA) Program.
Furlong Fund S T R I C T L Y P R I V A T
E A N D C O N F I D E N T I A L 16
Furlong's Nominees (Cont'd)
Daniel Rudewicz: Mr. Rudewicz has been the managing
member of Furlong Financial LLC and the portfolio
manager of the Furlong Fund LLC, and its related
entities, since 2008. Mr. Rudewicz also currently serves
as the
Chairman of the Furlong Foundation, a non-for-profit
corporation founded in 2007. Prior to managing the
Furlong Fund, Mr. Rudewicz worked as an analyst at
JPMorgan Investment Bank in 2008. From 2005 to 2008, Mr.
Rudewicz worked at Raymond James Financial.
Education: Mr. Rudewicz graduated with honors with a BA
in Economics from the University of Florida. He is
currently pursuing his Juris Doctorate in the Evening
Program at Georgetown University Law Center. He is a CFA
Charterholder.
Ryan Morris: Mr. Morris is the Managing Partner and
founded Meson Capital Partners, LP in February 2009.
Meson
Capital Partners focuses on deep value, activist
investment opportunities. Mr. Morris was recently a member
of
the equity committee for publicly traded HearUSA, Inc.
which was responsible for selling the company assets and
tripling the value to equity holders. Prior to founding
Meson Capital Partners, Mr. Morris was co-founder & CEO
of
VideoNote LLC, a small and profitable educational software
company with customers including Cornell University
and The World Bank.
Education: BSc., M.Eng Operations Research and
Information Engineering, Cornell University. He has passed
all
three levels of the CFA Program.
Furlong Fund S T R I C T L Y P R I V
A T E A N D C O N F I D E N T I A L
17
Agenda
I. Weak Financial Performance
II. Corporate Governance Concerns
III. Opposition Minority Slate Can Add Value
IV. Company Has Not Proposed a Settlement
Furlong Fund S T R I C T L Y P R I V A T
E A N D C O N F I D E N T I A L 18
Company Has Not Proposed A Settlement
Furlong Fund Is Open To Settling
Furlong Fund has communicated with the
Company that it is open to settling
However, to date, the Board has not proposed
anything to Furlong
Furlong Fund S T R I C T L Y P R I V A T
E A N D C O N F I D E N T I A L 19