United States
Securities and Exchange Commission
Washington, DC 20549
SCHEDULE 14A
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 16, 2005
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 16, 2005 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,
2005 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, 2005
TELVUE CORPORATION
16000 HORIZON WAY, SUITE 500
MT. LAUREL, NJ 08054
(856) 273-8888
DATED April 28, 2005
PROXY STATEMENT
This Proxy Statement is furnished with the attached Notice of Annual
Meeting and with the accompanying Proxy on or about April 28, 2005, to
each stockholder of record of TelVue Corporation ("TelVue") at the
close of business on April 27, 2005 ("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 16,
2005 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 24,857,274
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 of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class (1)
- -----------------------------------------------------------------------
H.F. (Gerry) Lenfest 67,931,746 (2) 86.8%
Five Tower Bridge, Suite 460
300 Barr Harbor Drive
West Conshohocken, PA
Chairman of the Board and Director
(1) As of the Record Date, 24,857,274 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, 2005, 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, named executive officers and a significant employee 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 Barr Harbor Drive
West Conshohocken, PA 19428
Chairman of the Board
and Director
Joseph M. Murphy 425,000 (3) 1.7%
President, Chief Executive
Officer and Director
Frank J. Carcione 467,500 (4) 1.8%
Director
Joy Tartar 46,417 .2%
Director
Robert Lawerence - -
Director
Randy Gilson 361,800 (5) 1.4%
Vice President of
Technical Services (5)
All Directors and Officers as 69,482,463 (2) (3) 88.1%
a Group(7 Persons) (4) (5) (6)
(1) As of the Record Date, 24,857,274 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, 2005, which may be
converted into shares of Common Stock.
(3) Includes 265,000 shares issuable to Joseph Murphy upon
exercise of vested stock options held by Mr. Murphy.
(4) Includes 275,000 shares issuable to Frank Carcione upon
exercise of vested stock options held by Mr. Carcione.
(5) Includes 100,000 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, 45, 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 125,000 shares of Common Stock owned by Irene DeZwaan
and 125,000 shares issuable upon exercise of vested stock
options held by Ms. DeZwaan. Ms. DeZwaan, 41, has been the
Controller, Treasurer and Secretary of TelVue since 1993.
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 Warrants and Rights Available for
and Rights Compensation Plans Future Issuance
Under Equity
- ------------------------------------------------------------------------------
Equity
Compensation 1,626,667 $.048 7,846,250
Plans Approved
By Security Holders
Equity
Compensation (a) (a) (a)
Plans Not Approved
By Security Holdrs
Total 1,626,667 $.048 7,846,250
(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 74 Chairman and Director 1989
Joseph M. Murphy 51 President, Chief 1997
Executive Officer
and Director
Frank J. Carcione 64 Director 1990
Joy Tartar 42 Director 2001
Robert Lawrence 46 Director 2004
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.
Joseph M. Murphy has been a director of TelVue since 1997. On
January 1, 2005, Mr. Murphy was appointed to the position of President and
Chief Executive Officer of TelVue. Mr. Murphy held the position of
Executive Vice President of Sales and Operations of TelVue from September
1994 through December 31, 2004 and also the position of Division President
of Source Communications Group ("Source") from March 2001 through December
31, 2004. Prior to these appointments, Mr. Murphy had been the Vice
President of Sales since joining TelVue in 1986 through August 1994.
Frank J. Carcione has been a director of TelVue since 1990. From
May 1991 through December 31, 2004, Mr. Carcione was the President and
Chief Executive Officer of TelVue. Mr. Carcione retired from this
position on January 1, 2005. Mr. Carcione held the position of
Executive Vice President of TelVue from May 1990 through 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.
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.
Robert Lawrence has been a director of TelVue since 2004. He has
been the Senior Vice President of Operations of StarNet LP, a national
satellite distributor of cable programming and digital video, and a former
subsidiary of Lenfest Communications, Inc., since October 2003. One of
the limited partners in StarNet, LP is H.F. Lenfest. Mr. Lawrence worked
as a consultant from June 2000 to October 2003. From 1996 to June 2000,
Mr. Lawrence was the Executive Vice President of Suburban Cable, a
subsidiary of Lenfest Communications, Inc. Prior to this appointment, Mr.
Lawrence held various positions with increasing responsibility since
joining Suburban Cable in 1978.
Meetings of the Board of Directors and Committees
The Board of Directors held three meetings during the year ended
December 31, 2004, and acted by unanimous consent on several other
occasions during 2004. All directors attended 100% of the Board meetings
except Robert Lawrence who attended none of the meetings and Neil Heller
who attended 67% of the meetings. Neil Heller resigned from the Board of
Directors in September 2004 and was replaced by Robert Lawrence in October
2004. All members of the Board of Directors are strongly encouraged, but
not required, to attend TelVue Corporation's annual meeting 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 Robert Lawrence. Neil Heller was a member of the Audit
Committee until he resigned from the TelVue Board of Directors in
September 2004. Mr. Lawrence assumed Mr. Heller's position on the Audit
Committee in October 2004. 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)). Joy Tartar
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 the Board
of Directors 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 four
meetings of the Audit Committee in 2004. TelVue has not adopted an audit
committee charter. The Stock Option Committee consists of Joy Tartar and
Robert Lawrence. Neil Heller was a member of the Stock Option Committee
until he resigned from the TelVue Board of Directors in September 2004.
Mr. Lawrence assumed his position on the Stock Option Committee. One
meeting of the Stock option Committee was held in 2004. TelVue does not
have a standing Nominating Committee. Accordingly, TelVue does not have a
nominating committee charter. 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. TelVue
does not have a standing compensation committee. The Chairman of the
Board of Directors has served and will continue to serve the functions of
such a committee. The Board of Directors consisted of Messrs. Lenfest,
Carcione, Heller, Murphy and Tartar from January 2004 to September 2004
and Messrs. Lenfest, Carcione, Lawrence, Murphy and Ms. Tartar from
October 2004 to present. Messrs. Carcione, Lawrence, Murphy and Ms.
Tartar are independent (as that term is defined by Nasdaq Rule 4200). See
"Description of Director Qualifications, Nominating Process and
Shareholder Nominations" below.
Description of Director Qualifications, Nominating Process and Shareholder
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 TelVue 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, 2004, for filing with the Securities and Exchange Commission.
Audit Committee:
Joy Tartar
Robert Lawrence
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
SUMMARY COMPENSATION TABLE
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.
Name and Principal Year Annual Bonus Annual Other Options/
Position Salary Commissions Annual SARs (#)
Compensation
- -----------------------------------------------------------------------------
Frank J. Carcione 2004 $185,653 - - $4,641 (1) 100,000(2)
Director (3) 2003 183,546 $8,837 - 4,589 (1) -
2002 171,600 - - 4,290 (1) -
Joseph Murphy 2004 $166,801 - - $4,170 (1) 150,000(2)
President and 2003 163,962 $7,894 - 4,130 (1) -
Chief Executive 2002 154,470 - $10,647 3,862 (1) -
Officer (4)
Randy Gilson 2004 $111,950 - - $2,799 (1) 100,000(2)
Vice President 2003 112,733 $5,288 - 2,766 (1) -
Of Technical
Services (5)
(1) Consists of company funded contributions to TelVue's Simplified
Pension Plan.
(2) Represents shares of common stock granted on August 3, 2004 under
the 1999 Stock Option Plan at a purchase price of $.025 per share.
(3) Frank Carcione retired as President and Chief Executive Officer of
TelVue on January 1, 2005. Pursuant to a retirement package, TelVue
will pay Mr. Carcione a onetime exit bonus of $100,000, and salary
during the following years of: Year 1 - $75,000, Year 2 - $60,000,
Year 3 - $50,000, Year 4 - $50,000, Year 5 - $40,000. In addition
Mr. Carcione will receive benefits in each of these years. Further
details of the retirement package can be found as Exhibit 10.14 to
TelVue's Annual Report on Form 10-KSB for the year ending December
31, 2004.
(4) Joseph Murphy was appointed President and Chief Executive officer of
TelVue on January 1, 2005.
(5) Randy Gilson had compensation of less than $100,000 in 2002 and
therefore no data is shown for that year.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding the grant of
stock options to the named executive officers, including a significant
employee, of TelVue during the fiscal year ended December 31, 2004.
Individual Grants
-----------------
Percent of Total
Options Granted
Name and Principal Options To Employees in Exercise Expiration
Position Granted Fiscal Year Price Date
- -------------------------------------------------------------------------
Frank J. Carcione 100,000 15% $.025/share 6/29/09
Director (1)
Joseph M. Murphy 150,000 23% $.025/share 6/29/09
President and Chief
Executive Officer (2)
Randy Gilson 100,000 15% $.025/share 6/29/09
Vice President
of Technical Services
(1) Frank Carcione retired as President and Chief Executive Officer
of TelVue on January 1, 2005.
(2) Joseph Murphy was appointed President and Chief Executive officer of
TelVue on January 1, 2005.
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 31, 2004.
Number of Value of
Unexercised Unexercised
Shares Options In-The-Money Options
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
- ------------------------------------------------------------------------------
Frank J. Carcione - - 275,000 - (1)
Director (2) exercisable
50,000 $1,000
unexercisable
Joseph M. Murphy - - 265,000 - (1)
President and Chief exercisable
Executive Officer (3) 75,000 $1,500
unexercisable
Randy Gilson - - 100,000 - (1)
Vice President exercisable
of Technical Services 50,000 $1,000
unexercisable
(1) Value calculated based upon the average of the bid and ask price on
December 31, 2004, which is less than the aggregate exercise price.
(2) Frank Carcione retired as President and Chief Executive Officer on
January 1, 2005.
(3) Joseph Murphy was appointed President and Chief Executive Officer on
January 1, 2005.
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 (the "Science
Note"). 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
2003, TelVue paid to Mr. Lenfest the remaining accrued interest balance 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 2004 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 had 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
first quarter of 2004, TelVue paid the remaining balance on the Source
Note in its entirety. In the second quarter of 2004, TelVue made a
decision to discontinue the operations of the Source (see Description of
Business in TelVue's 2004 Annual Report).
At December 31, 2004, TelVue was indebted to Mr. Lenfest in the
principal amount of $541,000. Other related transactions are described in
Notes 3, 6 and 13 of the financial statements of TelVue's 2004 Annual
Report. TelVue is currently negotiating a $3,800,000 line of credit note
with Mr. Lenfest.
During the first quarter of 2004, Neil Heller, a Director of TelVue
until September 2004, 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 of
2004.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Setion 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, 2004 all filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with except for the late filing of a Form 3 by Robert Lawrence.
STOCKHOLDER PROPOSALS FOR THE 2005 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, 2005. 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 14, 2006, 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 REGISTERED PUBLIC ACCOUNTANTS
The accounting firm of Pressman Ciocca Smith LLP served as TelVue's
independent registered public accountants for the years ended December 31,
2004 and 2003, and will serve as TelVue's independent registered public
accountants for the year ending December 31, 2005. 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, 2004 and 2003.
2004 2003
---- ----
Audit fees $ 44,857 $ 46,693
Audit related fees - -
Tax fees 8,000 7,561
All other fees - -
-------- --------
Total $ 52,857 $ 54,254
======== ========
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, 2004 and
2003, and the reviews of TelVue's quarterly financial statements
set forth in TelVue's Forms 10-QSB in 2004 and 2003.
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 2004 and 2003.
The Audit Committee has considered and determined that the non-audit
services provided by Pressman Ciocca Smith LLP in 2004 and 2003 are
compatible with maintaining the auditor's independence.
All of the 2004 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 2004.
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 2004 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
Appendix
PROXY TELVUE CORPORATION PROXY
This Proxy is Solicited on Behalf of the Board of Directors for
the Annual Meeting of Stockholders on June 16, 2005
The undersigned hereby appoints Joseph M. Murphy and Irene A.
DeZwaan 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 16, 2005 at 10:00 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,
Robert Lawrence
__ 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.
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 or 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:, 2005
-----------------------------
-----------------------------
-----------------------------
Signature(s) of stockholder(s)