SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
TELVUE CORPORATION
(Name of Registrant as Specified In Its Charter)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
/PAGE
TELVUE CORPORATION
16000 HORIZON WAY, SUITE 500
MT. LAUREL, NJ 08054
(856) 273-8888
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AT 10:00 A.M.,
June 1, 2004
TO THE STOCKHOLDERS OF TELVUE CORPORATION:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of the Stockholders of
TelVue Corporation, a Delaware corporation ("TelVue"), will be held at the
executive offices of TelVue located at 16000 Horizon Way, Suite 500, Mt.
Laurel, NJ 08054 on June 1, 2004 at 10:00 A.M. for consideration of and
action upon the following matters:
I. Election of five (5) directors to hold office for the ensuing year
and until their successors have been duly elected and qualified; and
II. Such other matters as may properly come before the Annual Meeting.
The Board of Directors has fixed the close of business on April 27,
2004 as the Record Date for determination of holders of Common Stock of
TelVue entitled to notice of, and to vote at, the Annual Meeting and any
adjournments thereof. A list of stockholders and their stockholdings as
of such Record Date will be available to all stockholders at the time and
place of this meeting.
THE ACCOMPANYING FORM OF PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF TELVUE.
STOCKHOLDERS (WHETHER THEY OWN ONE OR MANY SHARES AND WHETHER THEY
EXPECT TO ATTEND THE ANNUAL MEETING OR NOT) ARE REQUESTED TO VOTE, SIGN,
DATE AND RETURN PROMPTLY THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. A PROXY MAY BE
REVOKED AT ANY TIME PRIOR TO ITS EXERCISE (a) BY NOTIFYING THE SECRETARY
OF TELVUE IN WRITING, (b) BY DELIVERING A DULY EXECUTED PROXY BEARING A
LATER DATE, OR (c) BY ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS:
Irene A. DeZwaan, Secretary
April 28, 2004
TELVUE CORPORATION
16000 HORIZON WAY, SUITE 500
MT. LAUREL, NJ 08054
(856) 273-8888
DATED April 28, 2004
PROXY STATEMENT
This Proxy Statement is furnished with the attached Notice of Annual
Meeting and with the accompanying Proxy on or about April 28, 2004, to each
stockholder of record of TelVue Corporation ("TelVue") at the close of
business on April 27, 2004 ("Record Date"), in connection with the
solicitation of proxies by the Board of Directors to be voted at the Annual
Meeting of Stockholders of TelVue to be held on June 1, 2004 at 10:00 A.M.
at the executive offices of TelVue located at 16000 Horizon Way, Suite 500,
Mt. Laurel, NJ 08054, and at any adjournment or adjournments thereof for
the purposes stated below. The form of Proxy is enclosed.
REVOCABILITY OF PROXY
Subject to the conditions set forth elsewhere in this Proxy Statement,
the shares represented by each executed Proxy will be voted at the Annual
Meeting in accordance with the instructions given. If no instruction is
given on the Proxy, the Proxy will be voted FOR the Board's nominees for
director, and FOR any other matter properly presented for a vote at the
meeting.
Any Proxy given pursuant to this solicitation may be revoked at any
time prior to its exercise by notifying the Secretary of TelVue in writing,
by delivering a duly executed Proxy bearing a later date, or by attending
the Annual Meeting and voting in person.
DISSENTER'S RIGHT OF APPRAISAL
The matters submitted to the stockholders for their approval will not
give rise to dissenter's appraisal rights under Delaware law.
PERSONS MAKING THE SOLICITATION
The accompanying Proxy is being solicited on behalf of the Board of
Directors of TelVue. In addition to mailing the proxy materials,
solicitation may be made in person or by telephone or telegraph by
directors, officers or regular employees of TelVue, none of whom will
receive any additional compensation in connection with such solicitation.
The expense of the solicitation of the Proxies for the Annual Meeting will
be borne by TelVue. TelVue will request banks, brokers and other nominees
to forward proxy materials to beneficial owners of stock held by them and
will reimburse such banks, brokers and other nominees for their reasonable
out-of-pocket expenses in doing so.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only stockholders of record as of the close of business on the Record
Date will be entitled to vote on all matters presented for vote at the
Annual Meeting. At the close of business on the Record Date, the total
number of shares of TelVue's Common Stock outstanding was 24,847,274
shares. Each share of Common Stock will be entitled to either one vote
per share or ten votes per share on all business to come before the Annual
Meeting, as described below. In addition, on the Record Date there also
were 3,518,694 shares of TelVue's Preferred Stock outstanding. The
Preferred Stock does not have any voting rights until it is converted
into Common Stock. The Preferred Stock is convertible at any time at
the election of the holder into Common Stock at 6.667 shares of Common
Stock for each share of Preferred Stock. At the Record Date, no shares
of Preferred Stock had been converted into shares of Common Stock.
The holders of a majority of the outstanding shares of each class
entitled to vote at the meeting, present in person or represented by
proxy, shall constitute a quorum. If a broker that is a record holder
of common stock does not return a signed Proxy, the shares of common
stock represented by such Proxy will not be considered present at the
meeting and will not be counted toward establishing a quorum.
If a broker that is a record holder of common stock does return a
signed Proxy, but is not authorized to vote on one or more matters, each
such vote being a broker non-vote, the shares of common stock represented
by such Proxy will be considered present at the meeting for purposes of
determining the presence of a quorum. A plurality of the votes cast is
required for the election of directors. Abstentions and broker non-votes
will have no effect on the outcome of the election of directors.
Article 17(f) of the Certificate of Incorporation provides that any
shares of Common Stock not owned beneficially for two years or not
received in the course of the original spin-off of TelVue from Science
Dynamics Corporation, cannot be voted at their full voting power of ten
votes per share unless the Board shall determine that the same were
acquired neither for purposes adverse to the best interests of
stockholders nor for purposes of disrupting the normal course of
operations of TelVue. Stockholders wishing to have the holding period
waived may make written application to the Board of Directors by sending
their request at any time prior to the Annual Meeting to the Secretary of
TelVue Corporation, 16000 Horizon Way, Suite 500, Mt. Laurel, New Jersey,
08054.
Security Ownership of Certain Beneficial Owners
The following table sets forth, as of the Record Date, certain
information with respect to each person who was known to TelVue to be
a beneficial owner of more than five percent (5%) of TelVue's Common Stock.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class (1)
H.F. (Gerry) Lenfest 67,931,746 (2) 86.8%
Five Tower Bridge, Suite 460
300 Bar Harbor Drive
West Conshohocken, PA 19428
Chairman of the Board
and Director
(1) As of the Record Date, 24,847,274 shares of Common Stock
were outstanding.
(2) Includes 23,459,133 shares of Common Stock issuable upon conversion
of Preferred Stock owned by Mr. Lenfest. Includes warrants to
acquire up to 29,915,160 additional shares of Common Stock. Does
not include undeclared and unpaid dividends on the Preferred Stock
as of March 31, 2004, which may be converted into shares of Common
Stock.
Security Ownership of Management
The following table sets forth, as of the Record Date, certain
information with respect to the Common Stock beneficially owned by the
directors and named executive officers of TelVue and by all directors and
named executive officers as a group, including a significant employee. The
address of all directors and executive officers is c/o TelVue Corporation,
16000 Horizon Way, Suite 500, Mt. Laurel, NJ 08054.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class (1)
H.F. (Gerry) Lenfest 67,931,746 (2) 86.8%
Five Tower Bridge, Suite 460
300 Bar Harbor Drive
West Conshohocken, PA 19428
Chairman of the Board
and Director
Frank J. Carcione 417,500 (3) 1.7%
Chief Executive Officer,
President and Director
Joseph M. Murphy 350,000 (4) 1.4%
Executive Vice President
Sales and Operations Division
President of Source
Communications Group
and Director
Joy Tartar 46,417 .2%
Director
Neil Heller 29,274 .1%
Director
Randy Gilson 311,800 (5) 1.3%
Vice President of
Technical Services (5)
All Directors and Officers as 69,311,737 (2) (3) 88.0%
a Group(7 Persons) (4) (5) (6)
(1) As of the Record Date, 24,847,274 shares of Common Stock were
outstanding.
(2) Includes 23,459,133 shares of Common Stock issuable upon conversion
of Preferred Stock owned by Mr. Lenfest. Includes Warrants to
acquire up to 29,915,160 additional shares of Common Stock. Does
not include undeclared and unpaid dividends on the Preferred
Stock as of March 31, 2004, which may be converted into shares of
Common Stock.
(3) Includes 225,000 shares issuable to Frank Carcione upon exercise of
vested stock options held by Mr. Carcione.
(4) Includes 190,000 shares issuable to Joseph Murphy upon exercise of
vested stock options held by Mr. Murphy.
(5) Includes 50,000 shares issuable to Randy Gilson upon exercise of
vested stock options held by Mr. Gilson. Mr. Gilson is a
significant employee of TelVue. Mr. Gilson has been the Vice
President of Technical Services since July 1993. Prior to this
appointment, Mr. Gilson held positions of increasing responsibility
since joining TelVue in 1986.
(6) Includes 100,000 shares issuable to Irene DeZwaan, Controller,
Treasurer and Secretary, upon exercise of vested stock options held
by Ms. DeZwaan.
Equity Compensation Plan Information
Number of Securities Weighted-Average Number of
to be issued Upon Exercise Price of Securities
Plan Category Exercise of Outstanding Outstanding Options, Remaining
Options, Warrants and Warrants and Rights Available for
Rights Compensation Plans Future Issuance
Under Equity
Equity
Compensation 942,917 $.078 8,530,000
Plans Approved
By Security Holders
Equity
Compensation (a) (a) (a)
Plans Not Approved
By Security Holdrs
Total 942,917 $.078 8,530,000
(a) In December 1997, the Company adopted a director compensation plan.
Under this plan, each non-employee director, other than the majority
stockholder, is compensated $500 for each meeting attended by
receiving shares of Common Stock issued at the higher of per share
fair market value of the Common Stock as of the Board of Directors
meeting date or $.05 per share.
PROPOSAL 1
ELECTION OF DIRECTORS
Five (5) directors will be elected to hold office subject to the
provisions of TelVue's by-laws until the next Annual Meeting of
Stockholders, and until their respective successors are duly elected and
qualified. A plurality of the votes cast is required for the election of
directors. Abstentions and broker non-votes will have no effect on the
outcome of the election of directors. The following table sets forth the
name, age, position with TelVue and respective director service dates of
each person who has been nominated to be a director of TelVue:
Name Age Position(s) Director
With TelVue Since
H. F. (Gerry) Lenfest 73 Chairman and Director 1989
Frank J. Carcione 63 President, Chief 1990
Executive Officer,
and Director
Joseph M. Murphy 50 Executive Vice 1997
President of Sales
and Operations,
Division President of
Source Communications
Group, and Director
Joy Tartar 41 Director 2001
Neil Heller 53 Director 2002
The Board of Directors has unanimously recommended the slate of
nominees for election as directors at the Annual Meeting. The Board of
Directors recommends that the stockholders vote FOR the election of the
entire slate of nominees.
Principal Occupation of the Director Nominees
H. F. Lenfest has been a director of TelVue since 1989. Mr. Lenfest
has interests in various privately held companies and has been the
Chairman of the Lenfest Group, LLC since January 2000. From 1974 until
January 2000, Mr. Lenfest was the President, CEO and a director of
Lenfest Communications, Inc. and each of its subsidiaries. Lenfest
Communications, Inc. and its subsidiaries were engaged in operating cable
television systems, and providing cable advertising and programming. Mr.
Lenfest has been a director of Environmental Tectonics Corporation since
March 2003.
Frank J. Carcione has been a director of TelVue since 1990. He
became the Executive Vice President in May 1990, and was elected
President and Chief Executive Officer in May 1991. From August 1989 to
May 1990, he held the position of Vice President (marketing, sales,
pay-per-view and franchise relations) with Garden State Cablevision, L.P.,
a New Jersey cable television operator and an affiliate of The Lenfest
Group of companies. From November 1980 until August 1989, he held the
same position with New York Times Cable TV, the predecessor to Garden
State Cablevision, L.P.
Joseph M. Murphy has been a director of TelVue since 1997. He is the
Executive Vice President of Sales and Operations of TelVue and Division
President of Source Communications Group ("Source"). Mr. Murphy was
appointed to the position of Division President in March 2001. Mr. Murphy
has held the position of Executive Vice President of Sales and Operations
since September 1994. Prior to this appointment, Mr. Murphy had been Vice
President of Sales since joining TelVue in 1986.
Joy Tartar, CPA, has been a director of TelVue since 2001. She has
been the Chief Financial Officer for the Lenfest Group, LLC since January
2000. From January 1996 through December 1999, Ms. Tartar was the Vice
President of Finance for Radius Communications, a cable advertising and
sales company serving the greater Philadelphia and Harrisburg, PA areas,
and a former subsidiary of Lenfest Communications, Inc. From January
1994 through December 1995, Ms. Tartar was the Controller for Starnet,
Inc., a national satellite distributor of cable programming and digital
video, and a former subsidiary of Lenfest Communications, Inc.
Neil Heller has been a director of TelVue since 2002. He has been
the Co-Founder of Katalyst LLC since the company's inception in September
1999. He is also the Co-Founder and Managing General Partner of Katalyst
Venture Partners I. Katalyst LLC offers business advisory and merchant
banking services to companies in a variety of businesses. Katalyst Venture
Partners I operates as a venture fund. H.F. Lenfest owns a minority
interest in Katalyst LLC. In addition, Mr. Heller has been the Managing
Partner of The Heller Group since January 2004. The Heller Group offers
business advisory services, primarily to the media business. From 1991
to 1998 Mr. Heller was the CEO of TVSM, Inc, the largest publisher of
customized cable magazines in the United States. Mr. Heller held the
position of President of TVSM, Inc. from 1980 through 1990. TVSM, Inc.
was sold in 1998 to Newscorp, the owner of TV Guide Magazine.
Meetings of the Board of Directors and Committees
The Board of Directors held two meetings during the year ended
December 31, 2003, and acted by unanimous consent on several other
occasions during 2003. All directors attended 100% of the Board meetings
except Neil Heller who attended 50% of the meetings. All members of the
Board of Directors are strongly encouraged, but not required, to attend
TelVue Corporation's annualmeeting of stockholders.
The employee directors of TelVue receive no compensation for serving
as directors. Non-employee directors (other than H.F. Lenfest) receive
$500 paid in shares of common stock of TelVue for each meeting of the
Board attended. H.F. Lenfest receives no compensation for serving as
a director.
TelVue has a standing Audit Committee consisting of two members, Joy
Tartar and Neil Heller. The Board of Directors has determined that Joy
Tartar, the Chairman of the Audit Committee, is independent (as that term
is defined by Rule 4350(d) of the Nasdaq Stock Market, Inc.'s audit
committee independence rules (as currently in effect)) and possesses the
attributes of an audit committee financial expert (as that term is defined
in Item 401(e)(2) of Regulation S-B of the regulations promulgated by the
Securities and Exchange Commission ("SEC"), and has, therefore, designated
her as the Audit Committee financial expert. The Audit Committee is
responsible for monitoring the integrity of TelVue's financial reporting
process and systems of internal controls for finance, accounting and
regulatory compliance and reviewing the independence and performance of
TelVue's independent auditors and internal auditing functions, and related
matters. There were two meetings of the Audit Committee in 2003. TelVue
has not adopted an audit committee charter. The Stock Option Committee
consists of Joy Tartar and Neil Heller. No meetings of the Stock option
Committee were held in 2003. TelVue does not have a standing Nominating
Committee. The Board of Directors has determined not to create a standing
Nominating Committee because the Board has and will continue to serve the
functions of such a committee. See "Description of Director Qualifications,
Nominating Process and Shareholder Nominations" below.
Description of Diretor Qualifications, Nominating Process and Shareholders
Nominations
Members of TelVue's Board of Directors should meet certain minimum
qualifications including being at least 21 years old and possessing (1)
the ability to read and understand corporate financial statements,
(2) relevant business experience and professional skills, (3) high moral
character and personal and professional integrity, and (4) the willingness
to commit sufficient time to attend to his or her duties and
responsibilities as a director of a public corporation. In addition, the
Board of Directors may consider a variety of other qualities and skills,
including (i) expertise in the businesses in which TelVue and divisions
may engage, (ii) the ability to exercise independent decision-making,
(iii) the absence of conflicts of interest, (iv) diversity of gender,
ethnic background, and experience, and (v) the ability to work effectively
with other directors in collectively serving the long-term interests of all
shareholders. Nominees must also meet any applicable requirements of SEC
regulations, state law, and TelVue's charter and bylaws
The Board of Directors will annually assess the qualifications,
expertise, performance and willingness to serve of existing directors.
If at this time or at any other time during the year the Board of Directors
determines a need to add a new director with specific qualifications or to
fill a vacancy on the Board, the Chairman of the Board will then initiate
the search, working with staff support and seeking input from other
directors and senior management, considering nominees previously submitted
by shareholders, and, if deemed necessary or appropriate, hiring a search
firm. An initial slate of candidates satisfying the specific
qualifications, if any, and otherwise qualifying for membership on the
Board, will then be identified and presented to the Board of Directors
which will then prioritize the candidates and determine if any of the
members of the Board or senior management have relationships with the
preferred candidates and can initiate contacts. If not, contact would
be initiated by a search firm. The Chairman, CEO and at least one member
of the Board of Directors will interview the prospective candidate(s).
Evaluations and recommendations of the interviewers will be submitted
to the Board of Directors for final evaluation. The Board of Directors
will meet to consider such recommendations and to approve the final
candidate; and will evaluate all nominees for director, including
nominees recommended by a shareholder, on the same basis.
The Board of Directors will consider director candidates recommended
by TelVue's shareholders in accordance with the following procedures:
Shareholders may make recommendations with regard to nominees for
election to the Board of Directors at future annual meetings of
shareholders by submitting in writing a notice, received by the
Secretary of the Corporation at least 60 days prior to the date on which
TelVue first mailed its proxy materials for the prior year's annual meeting
of shareholders, or, if TelVue did not have an annual meeting of
shareholders in the prior year, 90 days prior to the date of the annual
meeting. Each notice of nomination must set forth (i) the name, age,
business address and, if known, residence address of each nominee, (ii)
the principal occupation or employment of each such nominee, (iii) the
number of shares of common stock of TelVue which are beneficially owned by
each such nominee, (iv) the qualifications of such nominee for service on
the Board of Directors, (v) the name and residence address of the
proposing shareholder(s), and (vi) the number of shares of common stock
owned by the proposing shareholder(s). All nominees for director,
including nominees recommended by a shareholder, shall be evaluated on
the same basis.
Shareholder Communications With The Board of Directors
TelVue has established procedures for shareholders to communicate
directly with the Board of Directors on a confidential basis. Shareholders
who wish to communicate with the Board or with a particular director may
send a letter to the Secretary of TelVue Corporation at 16000 Horizon Way,
Suite 500, Mt. Laurel, NJ 08054. The mailing envelope must contain a clear
notation indicating that the enclosed letter is a "Shareholder-Board
Communication" or "Shareholder-Director Communication." All such letters
must identify the author as a shareholder and clearly state whether the
intended recipients are all members of the Board or just certain specified
individual directors. The Secretary will make copies of all such letters
and circulate them to the directors addressed. To the extent that a
shareholder wishes the communication to be confidential, such shareholder
must clearly indicate on the envelope that the communication is
"confidential." The Secretary will then forward such communication,
unopened, to the Chairman of the Board of Directors.
Audit Committee Report
The Audit Committee has reviewed and discussed TelVue's audited
financial statements with management. The Audit Committee has discussed
the matters required to be discussed by SAS 61 (Communication with Audit
Committee) with Pressman Ciocca Smith LLP, TelVue's independent accountants.
The Audit Committee has received written disclosures from Pressman
Ciocca Smith LLP required by Independence Standards Board Standard No. 1
(which relate to the accountant's independence from TelVue) and has
discussed with Pressman Ciocca Smith LLP their independence from TelVue.
The Audit Committee has considered whether the provision of the foregoing
services is compatible with maintaining Pressman Ciocca Smith LLP's
independence.
Based on the review and discussions referenced above the Audit
Committee recommended that TelVue's audited financial statements be
included in its Annual Report on Form 10-KSB for the year ended December
31, 2003, for filing with the Securities and Exchange Commission.
Audit Committee:
Joy Tartar
Neil Heller
Code of Ethics
TelVue has adopted a Code of Ethics (as that term is defined in Item
406 of Regulation S-B of the regulations promulgated by the SEC) that
applies to TelVue's Chief Executive Officer and Senior Financial
Officers. A copy of the Code of Ethics is available, without charge, by
requesting it from the Secretary of TelVue Corporation at 16000 Horizon
Way, Suite 500, Mount Laurel, NJ 08054 or by calling 1-856-273-8888.
TelVue will publicly disclose any waivers or amendments to the Code of
Ethics that applies to its chief executive officer and senior financial
officers pursuant to the requirements of the SEC.
Executive Compensation
The following table sets forth a summary of compensation paid or
accrued by TelVue for services rendered for each of the last three fiscal
years by each of the named executive officers, including a significant
employee, of TelVue.
SUMMARY COMPENSATION TABLE
Name and Principal Year Annual Bonus Annual Other Options/
Position Salary Commissions Annual SARs (#)
Compensation
Frank J. Carcione 2003 $183,546 $8,837 - $4,589 (1) -
President and 2002 171,600 - - 4,290 (1) -
Chief Executive 2001 165,000 - - 4,125 (1) -
Officer
Joseph Murphy 2003 $163,962 $7,894 - $4,130 (1) -
Executive Vice 2002 154,470 - $10,647 3,862 (1) -
President of Sales 2001 143,933 - 23,753 3,457 (1) -
and Operations and
Division President
of Source
Randy Gilson 2003 $112,733 $5,288 - $2,766 (1) -
Vice President
Of Technical
Services (2)
(1) Company funded contributions to TelVue's Simplified Pension Plan.
(2) Randy Gilson had compensation of less than $100,000 in 2002 and
2001, and therefore no data is shown for those two years.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
The following table sets forth information regarding the exercise of
stock options and the value of any unexercised stock options of each of
the named executive officers, including a significant employee, of TelVue
during the fiscal year ended December 31, 2003.
Number of Value of
Unexercised Unexercised
Options In-The-Money Options
Shares Value Exercisable/ Exercisable/
Acquired on Realized Unexercisable Unexercisable
Frank J. Carcione - - 225,000 - (1)
President and Chief exercisable
Executive Officer
Joseph M. Murphy - - 190,000 - (1)
Executive Vice exercisable
President of Sales
and Operations and
Division President
of Source
Randy Gilson - - 50,000 - (1)
Vice President exercisable
of Technical Services
(1) Value calculated based upon the average of the bid and ask price on
December 31, 2003, which is less than the exercise price.
Certain Relationships and Related Transactions
Since November 2, 1989, TelVue has funded its expansion and operating
deficit from the proceeds from the sale of shares of TelVue's Common Stock
and Preferred Stock to Mr. H.F. Lenfest, TelVue's majority stockholder
("Mr. Lenfest") and from borrowings from Mr. Lenfest. From November 1989
to February 1996, TelVue borrowed an aggregate of $6,128,712 from Mr.
Lenfest. In addition to these borrowings, during January 1995, Mr.
Lenfest purchased from Science Dynamics Corporation ("Science") TelVue's
non-interest bearing note in the amount of $541,000. On March 5, 2001,
TelVue borrowed $650,000 from Mr. Lenfest to fund a portion of the Source
Communications Group acquisition, at an interest rate of prime plus one
percent (1%) compounded and due on or before January 1, 2004 (the
"Acquisition Note") (see below). TelVue repaid the Acquisition Note in
its entirety in 2001 (see below). During the year ended December 31,
2003, TelVue made total interest payments to Mr. Lenfest of $1,250,097,
thereby paying the accrued interest on prior borrowings in its entirety.
The aggregate outstanding loan balance due to Mr. Lenfest as of the Record
Date, is $541,000 in loan principal for the non-interest bearing Science
note. TelVue intends to negotiate the repayment terms of the $541,000 note
with Mr. Lenfest and does not have a payment schedule in place as of the
Record Date.
On March 9, 2001, TelVue acquired substantially all of the assets of
J.D. Kraengel and Associates, Inc. f/k/a Dacon Corporation d/b/a Source
Communications Group ("Source") for $1.3 million (see Description of
Business in the TelVue 2003 Annual Report). The assets, which consisted
primarily of material contracts with equipment, software and communication
service providers, were purchased for $1,000,000 in cash and $300,000
pursuant to a promissory note (the "Source Note"). The Source Note has a
term of three years. Interest only was payable monthly during year one at
the rate of 8% per annum. Beginning in year two, both principal and
interest was payable monthly at the rate of 5.06% per annum. During the
year ended December 31, 2003, TelVue made total payments of $158,034 on the
Source Note. From January 1, 2004 through the Record Date, TelVue has made
payments of $39,508 on the Source Note, thereby paying the Source Note in
its entirety. The acquisition of Source was part of TelVue's long-term
business strategy to expand and diversify its operations.
At December 31, 2003, TelVue was indebted to Mr. Lenfest in the principal
amount of $541,000. Other related transactions are described in Notes 2, 5
and 12 of the financial statements of TelVue in the 2003 Annual Report.
During the first quarter of 2004, Neil Heller, a Director, served as a
consultant to TelVue through The Heller Group to provide a business analysis
for the TVTN (TelVue Virtual Television Networks) product and service.
TelVue paid The Heller Group $50,000 for its services which were completed
in the first quarter.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the TelVue's officers and directors, and persons who own more
than ten percent of a registered class of TelVue's equity securities, to
file reports of ownership and changes in ownership with SEC. Officers,
directors and greater than ten percent stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on TelVue's review of such forms received by it, or
written representation from certain reporting persons that no Forms 5 were
required for such persons, TelVue believes that during the fiscal year
ended December 31, 2003 all filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with.
STOCKHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING
Stockholders intending to submit proposals to be included in TelVue's
next Proxy Statement must send their proposal to the Secretary of TelVue at
16000 Horizon Way, Suite 500, Mt. Laurel, New Jersey, 08054 not later
than December 29, 2004. Such proposals must relate to matters appropriate
for stockholder action and be consistent with regulations of the Securities
and Exchange Commission.
Stockholders intending to present proposals at the next annual meeting
of TelVue, and not intending to have such proposals included in TelVue's
next Proxy Statement must send their proposal to the Secretary of TelVue at
16000 Horizon Way, Suite 500, Mt. Laurel, New Jersey, 08054 not later than
March 15, 2005. If notification of a stockholder proposal is not received
by the above date, TelVue may vote, in its discretion, any and all of the
proxies received in its solicitation against such proposal.
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Pressman Ciocca Smith LLP served as TelVue's
independent certified public accountants for the years ended December 31,
2003 and 2002, and will serve as TelVue's independent certified public
accountants for the year ending December 31, 2004. A representative of
Pressman Ciocca Smith LLP is expected to attend the Annual Meeting and will
have the opportunity to make a statement and respond to appropriate
questions of stockholders.
The following table sets forth the aggregate fees for services rendered by
Pressman Ciocca Smith LLP to TelVue for the years ended December 31, 2003
and 2002.
2003 2002
---- ----
Audit fees $ 39,498 $ 37,114
Audit related fees - -
Tax fees 8,500 13,522
All other fees - -
-------- ---------
Total $ 47,998 $ 50,636
======== =========
Audit Fees: These amounts include fees for professional services rendered
in auditing TelVue's financial statements set forth in TelVue's Forms
10-KSB for the years ended December 31, 2003 and 2002, and the reviews of
TelVue's quarterly financial statements set forth in TelVue's Forms 10-QSB
in 2003 and 2002.
Tax Fees: These amounts include fees for tax consultation and tax
compliance services.
Pressman Ciocca Smith LLP did not render any other services to TelVue in
2003.
The Audit Committee has considered and determined that the non-audit
services provided by Pressman Ciocca Smith LLP in 2003 are compatible with
maintaining the auditor's independence.
All of the 2003 services described above were approved by the Audit
Committee pursuant to the SEC rule that requires audit committee pre-
approval of audit and non-audit services provided by TelVue's independent
auditors, to the extent that rule was applicable during fiscal year 2003.
On an ongoing basis, management will communicate specific projects and
categories of services for which advance approval of the Audit Committee
is required. The Audit Committee will review these requests and advise
management and the independent auditors if the Audit Committee pre-approves
the engagement of the independent auditors for such projects and services.
On a periodic basis, the independent auditors will report to the Audit
Committee the actual spending for such projects and services compared to
the approved amounts. The Audit Committee may delegate the ability to
pre-approve audit and permitted non-audit services to a sub-committee
of the Audit Committee, provided that any such pre-approvals are reported
at the next Audit Committee meeting.
OTHER INFORMATION
A COPY OF TELVUE'S ANNUAL REPORT ON FORM 10-KSB FOR 2003 AS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE BY
WRITING TO: PRESIDENT, TELVUE CORPORATION, 16000 HORIZON WAY, SUITE 500, MT.
LAUREL, NEW JERSEY 08054.
/PAGE
PROXY TELVUE CORPORATION PROXY
This Proxy is Solicited on Behalf of the Board of Directors for Annual
Meeting of Stockholders on June 1, 2004
The undersigned hereby appoints Frank J. Carcione and Joseph M. Murphy
proxy and attorney, with full power of substitution, to vote all the shares
of the Common Stock of TelVue Corporation, a Delaware corporation, which
the undersigned is entitled to vote at the Annual Meeting of Stockholders to
be held at the executive offices of TelVue Corporation located at 16000
Horizon Way, Suite 500, Mt. Laurel, NJ 08054 on June 1, 2004 at 10:00
o'clock a.m., local time, and any adjournment thereof upon the following
matters set forth in the notice of such meeting.
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is made,
this proxy will be voted for Proposal 1. By returning this proxy card, the
undersigned gives the proxies discretionary authority regarding any other
business which may properly come before the Annual Meeting or any
adjournment or postponement thereof, and any matter incident to the conduct
of the annual meeting.
1. ELECTION OF DIRECTORS
H.F. Lenfest, Frank J. Carcione, Joseph M. Murphy, Joy Tartar,
Neil Heller
FOR all nominees listed above (except as marked to the contrary below.)
WITHHOLD AUTHORITY to vote for nominees listed above (INSTRUCTION: To
withhold authority to vote for any individual nominee, write that nominee's
name on the space provided below.)
2. IN THEIR DISCRETION, ON SUCH OTHER MATTERS INCIDENT TO THE SUBJECT
MATTER OF THE ANNUAL MEETING AND ANY ADJOURNMENT(S) THEREOF AND MATTERS
INCIDENT TO THE CONDUCT OF SUCH MEETING.
/PAGE
PLEASE SIGN ON REVERSE SIDE AND RETURN IN THE ENCLOSED ENVELOPE
Each share of common stock is entitled to 10 votes; provided, however,
that persons who have been the beneficial owner of shares of common stock
for less than two years or who did not acquire such shares in the course of
the spin-off of the Company from Science Dynamics Corporation are entitled
to only one vote per share. As provided in the Certificate of
Incorporation, the Board of Directors, on written application directed to
the Secretary of the Company at any time prior to the special meeting, may
waive such holding period requirements and provide that shares held by such
stockholder shall have 10 votes per share. Stockholders wishing to have
the holding period waived may make written application to the Board of
Directors by sending their request at any time prior to the annual meeting
to the Secretary of the Company at TelVue Corporation, 16000 Horizon
Way, Suite 500, Mt. Laurel, NJ, 08054.
Please sign your name exactly as it is shown on the left. Corporate
Officers, executors, administrators, trustees, guardians and attorneys
should give their full title. All joint tenants, tenants in common, and
tenants by the entirety should sign.
Date: , 2004
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Signature(s) of stockholder(s)