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 10:30 A.M.,
JUNE 1, 2006
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, 2006 at 10:30 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 26,
2006 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 27, 2006
TELVUE CORPORATION
16000 HORIZON WAY, SUITE 500
MT. LAUREL, NJ 08054
(856) 273-8888
DATED April 27, 2006
PROXY STATEMENT
This Proxy Statement is furnished with the attached Notice of Annual
Meeting and with the accompanying Proxy on or about April 27, 2006, to each
stockholder of record of TelVue Corporation ("TelVue") at the close of
business on April 26, 2006 ("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, 2006 at 10:30 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 48,336,407 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. 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 38,016,586 78.7%
Five Tower Bridge, Suite 460
300 Barr Harbor Drive
West Conshohocken, PA
Chairman of the Board and Director
(1) As of the Record Date, 48,336,407 shares of Common Stock
were outstanding.
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, the named executive officers, including a consultant and a
significant employee of TelVue and by all directors and officers as a group.
With the exception of Mr. Lenfest, the address of all the persons listed
below 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 38,016,586 78.7%
Five Tower Bridge, Suite 460
300 Barr Harbor Drive
West Conshohocken, PA
Chairman of the Board and Director
Joseph M. Murphy 500,000 (2) 1.0%
President, Chief Executive
Officer and Director
Frank J. Carcione 517,500 (3) 1.1%
Director
Joy Tartar 56,417 .1%
Director
Robert Lawrence 10,000 -
Director
Randy Gilson 411,800 (4) .8%
Vice President of
Technical Services
Stanley Green 125,000 (5) .3%
Senior Vice President/
Consultant
All Directors and Officers 39,912,303 (2) (3) (4) (5) (6) 82.6%
as a Group (8 Persons)
(1) As of the Record Date, 48,336,407 shares of Common Stock were
outstanding.
(2) Includes 340,000 shares issuable to Joseph Murphy upon exercise of
vested stock options held by Mr. Murphy.
(3) Includes 325,000 shares issuable to Frank Carcione upon exercise of
vested stock options held by Mr. Carcione.
(4) Includes 150,000 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, 46, 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.
(5) Includes 100,000 shares issuable to Stanley Green upon exercise of
vested stock options held by Mr. Green. Mr. Green is a consultant
to TelVue who, from September 2004 through December 2005, managed
the TVTN sales staff. Mr. Green, 49, has held the title of Senior
Vice President of TVTN since May 2005.
(6) Includes 125,000 shares of Common Stock owned by Irene DeZwaan and
150,000 shares issuable upon exercise of vested stock options held
by Ms. DeZwaan. Ms. DeZwaan, 42, has been the Controller,
Treasurer and Secretary of TelVue since 1993.
Equity Compensation Plan Information
Number of Securities to Weighted-Average Number of
be Issued Upon Exercise Exercise Price of Securities
Plan Category of Outstanding Options, Outstanding Options, Remaining Available
Warrants and Rights Warrants and Rights for Future Issuance
Compensation Plans Under Equity
________________________________________________________________________________
Equity Compensation 1,866,667 $.045 7,561,250
Plans Approved by
Security Holders
Equity Compensation 200,000 (b) .03 (b) (b)
Plans Not Approved by
Security Holders (a)
__________________________________________________________
Total 2,066,667 $.045 7,561,250
(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.
(b) In September 2005, TelVue issued 200,000 stock options to certain
consultants of its TVTN service.
PROPOSAL 1
ELECTION OF DIRECTORS
Five (5) directors will be elected to hold office subject to the
provisions of TelVue's bylaws 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 Since
With TelVue
_________________________________________________________________________
H. F. (Gerry) Lenfest 75 Chairman and Director 1989
Joseph M. Murphy 52 President, Chief Executive 1997
Officer and Director
Frank J. Carcione 65 Director 1990
Joy Tartar 43 Director 2001
Robert Lawrence 47 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. Since
January 1, 2005, Mr. Carcione has been an advisor to TelVue Corporation.
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 Chief Operating Officer of StarNet LP, a national satellite distributor
of cable programming and digital video, and a former subsidiary of Lenfest
Communications, Inc., since June 2005. One of the limited partners in
StarNet, LP is H.F. Lenfest. Mr. Lawrence held the position of Senior Vice
President of Operations of Starnet LP from October 2003 through May 2005.
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, and 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 two meetings during the year ended December
31, 2005, and acted by unanimous consent on several other occasions during
2005. All directors attended 100% of the Board meetings except Robert
Lawrence who attended 50% of the meetings. 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. The Board of Directors has determined that
Ms. 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)). Ms. 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"). 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 2005. TelVue
has not adopted an audit committee charter. The Stock Option Committee
consists of Joy Tartar and Robert Lawrence. No meetings of the Stock Option
Committee were held in 2005. 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, Murphy, Carcione, Lawrence and Ms. Tartar from October 2004
to present. Mr. Lawrence 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, 2005,
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 consultant and a
significant employee.
Other
Name and Principal Annual Annual Annual Options/
Position Year Salary Bonus Commissions Compensation(1) SARs (#)
______________________________________________________________________________
Joseph Murphy 2005 $177,554 - - $4,439 -
President and 2004 166,801 - - 4,170 150,000(3)
Chief Executive 2003 163,962 $7,894 - 4,130 -
Officer(2)
Frank J. Carcione 2005 $ 75,000 $100,000 - $1,875 -
Advisor(4) 2004 185,653 - - 4,641 100,000(3)
2003 183,546 8,837 - 4,589 -
Randy Gilson 2005 $116,422 - - $2,882 -
Vice President of 2004 111,950 - - 2,799 100,000(3)
Technical Services 2003 112,733 $5,288 - 2,766 -
Stanley Green 2005 $125,356 - - - -
Senior Vice
President/
Consultant(5)
(1) Consists of company funded contributions to TelVue's Simplified
Pension Plan.
(2) Joseph Murphy was appointed President and Chief Executive officer
of TelVue on January 1, 2005.
(3) Represents shares of common stock granted on August 3, 2004 under
the 1999 Stock Option Plan at a purchase price of $.025 per share.
(4) Frank Carcione retired as President and Chief Executive Officer
of TelVue on January 1, 2005. He continues to serve as a director
and advisor to TelVue. Pursuant to a retirement package, TelVue
paid Mr. Carcione a onetime exit bonus of $100,000 in January
2005, and salary during the following years of: Year 2005 -
$75,000, Year 2006 - $60,000, Year 2007 - $50,000, Year 2008 -
$50,000, Year 2009 - $40,000. In addition Mr. Carcione will
receive benefits in each of these years.
(5) Stanley Green had compensation of less than $100,000 in 2004 and
no compensation in 2003 and therefore no data is shown for these
years. Mr. Green is a consultant to TelVue who, from September
2004 through December 2005, managed the TVTN sales staff, and has
the title of Senior Vice President of TVTN.
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 consultant and a
significant employee, of TelVue during the fiscal year ended December 31,
2005.
Individual Grants
Percent of Total
Options Granted To
Name and Principal Options Employees In Exercise Expiration
Position Granted Fiscal Year Price Date
__________________________________________________________________________
Stanley Green 100,000 20% $.03/share 9/01/15
Senior Vice
President/Consultant
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 consultant and a significant employee,
of TelVue during the fiscal year ended December 31, 2005.
Number of Value of Unexercised
Shares Unexercised Options In-The-Money Options
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
______________________________________________________________________________
Joseph M. Murphy - - 340,000 - (1)
President and exercisable
Chief Executive
Officer
Frank J. Carcione - - 325,000 - (1)
Advisor exercisable
Randy Gilson - - 150,000 - (1)
Vice President of exercisable
Technical Services
Stanley Green - - 100,000 - (1)
Senior Vice exercisable
President/Consultant
(1) Value calculated based upon the average of the bid and ask price
on December 31, 2005, which is less or equal to the aggregate
exercise price.
Certain Relationships and Related Transactions
Since November 2, 1989, TelVue has funded its expansion and operating
deficit from the proceeds of the sale of shares of TelVue's common stock and
Preferred Stock to Mr. H.F. Lenfest, TelVue's majority stockholder and from
loans from Mr. Lenfest. From November 1989 to February 1996, TelVue borrowed
an aggregate of $6,128,712 from Mr. Lenfest. These loans and accrued
interest were repaid in their entirety during 2003. On March 5, 2001,
TelVue borrowed $650,000 from Mr. Lenfest to fund a portion of the Source
acquisition, at an interest rate of prime plus one percent (1%) compounded
and due on or before January 1, 2004. This loan was repaid in its entirety
in 2001.
In addition to the borrowings noted above, 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").
The Science Note was originally issued by TelVue to Science and was payable
December 31, 1996. The maturity date of the Science Note had been extended
by TelVue and Mr. Lenfest on a yearly basis. On June 16, 2005, the
independent members of the Board of Directors of TelVue and Mr. Lenfest,
extended the maturity date of the non-interest bearing Science Note in the
principal amount of $541,000 to January 1, 2011 (see TelVue's Forms 8-K and
8-K/A dated June 16, 2005 filed with the SEC).
On March 9, 2001, with the acquisition of the assets of Source for $1.3
million, TelVue paid $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 were 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. On April 27,
2005, TelVue entered into a Line of Credit Note (the "Note") with Mr.
Lenfest. The Note was secured to provide funding to grow the TVTN service.
Under the terms of the Note, TelVue may borrow, from time to time, up to
the maximum principal amount of the Note which is $3,800,000. The
minimum advance under the Note is $100,000 and the interest rate of the
Note is equal to the prime rate plus one percent (1%). The Note contains
customary events of default, including, among others, non-payment of
principal and interest and in the event TelVue is involved in certain
insolvency proceedings. In the event of a default, all of the obligations
of TelVue under the Note may be declared immediately due and payable. The
Note is unsecured and will expire six years from the date of the first
advance under the Note unless extended or renewed. TelVue's first borrowing
under the terms of the Note was on November 23, 2005 for $200,000. The
outstanding borrowings under the Note as of December 31, 2005 were $200,000.
On June 16, 2005, Mr. Lenfest, the holder of all of TelVue's outstanding
Class A Redeemable Convertible Preferred Stock (the "Preferred Stock"),
informed TelVue of his intent to convert all of his 3,518,694 shares of
Preferred Stock into TelVue's common stock. Each share of Preferred Stock
was convertible into 6.667 shares of common stock. The conversion of the
Preferred Stock to common stock occurred on August 2, 2005, upon Mr.
Lenfest's delivery of the Preferred Stock in the form of a lost certificate
affidavit. As a result of the conversion, TelVue issued 23,459,133 shares
of Common stock to Mr. Lenfest. Mr. Lenfest's beneficial ownership
interest in the common stock of TelVue, after the cancellation of the
Warrants to purchase common stock described below, was approximately 78.7
percent as of December 31, 2005. The Preferred Stock was eliminated and
is included as 23,459,133 shares of common stock in the stockholders'
equity section of the balance sheet as of December 31, 2005. The Preferred
Stock had a par value of $1 per share and provided for a cumulative six
percent (6%) semiannual dividend. The dividend was payable in cash or
additional shares of Preferred Stock at $1 per share, at TelVue's option.
TelVue had accrued dividends on the Preferred Stock since the beginning of
1998, but no dividends had been paid. On June 16, 2005, Mr. Lenfest agreed
to relinquish his right to all accrued but unpaid dividends attributable to
the Preferred Stock. Therefore, $3,061,269 of accrued dividends was reversed
and is included in stockholders' equity as a decrease to TelVue's accumulated
deficit at December 31, 2005.
On June 16, 2005, the independent members of the Board of Directors of
TelVue and Mr. Lenfest agreed to terminate a Warrant Agreement between Mr.
Lenfest and TelVue. Pursuant to the Warrant Agreement, Mr. Lenfest had the
right to purchase up to 29,915,160 shares of TelVue's common stock for $.01
per share, the fair market value of the common stock on the grant date. The
Warrant Agreement was entered into on March 15, 1991, in connection with a
prior line of credit to TelVue provided by Mr. Lenfest.
At December 31, 2004, TelVue was indebted to Mr. Lenfest in the principal
amount of $741,000. Other related transactions are described in Notes 3, 6,
7, 9 and 13 of the financial statements of TelVue's 2005 Annual Report.
On January 1, 2005, Frank J. Carcione retired from his position as
President and Chief Executive Officer of TelVue and Joseph Murphy was
appointed to this position. Mr. Carcione continues to serve as a director and
advisor to TelVue. Pursuant to his retirement package, TelVue paid Mr.
Carcione a onetime exit bonus of $100,000 in January 2005, and salary during
the following years of: $75,000 in Year 2005, $60,000 in Year 2006, $50,000
in Year 2007, $50,000 in Year 2008 and $40,000 in Year 2009. In addition Mr.
Carcione will receive benefits in each of these years.
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, 2005 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 4 by H.F. Lenfest and Stanley Green.
STOCKHOLDER PROPOSALS FOR THE 2006 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 28, 2006. 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 13,
2007, 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,
2005 and 2004, and will serve as TelVue's independent registered public
accountants for the year ending December 31, 2006. 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, 2005
and 2004.
2005 2004
---- ----
Audit fees $ 44,593 $ 44,491
Audit related fees - -
Tax fees 4,500 3,514
All other fees - -
________________________
Total $ 49,093 $ 48,005
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, 2005 and 2004 and the
reviews of TelVue's quarterly financial statements set forth in TelVue's
Forms 10-QSB in 2005 and 2004
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 2005 and 2004.
The Audit Committee has considered and determined that the non-audit
services provided by Pressman Ciocca Smith LLP in 2005 and 2004 are compatible
with maintaining the auditor's independence.
All of the 2005 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 2005. 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 2005 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 1, 2006
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 1, 2006 at 10:30 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, Joseph M. Murphy, Frank J. Carcione, 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:, 2006
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Signature(s) of stockholder(s)