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 5, 2007
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 5, 2007 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 26,
2007 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:
John Fell, Secretary
April 30, 2007
TELVUE CORPORATION
16000 HORIZON WAY, SUITE 500
MT. LAUREL, NJ 08054
(856) 273-8888
DATED April 30, 2007
PROXY STATEMENT
This Proxy Statement is furnished with the attached Notice of Annual
Meeting and with the accompanying Proxy on or about April 30, 2007, to each
stockholder of record of TelVue Corporation ("TelVue") at the close of
business on April 26, 2007 ("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 5, 2007 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 48,356,407 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 78.6%
Five Tower Bridge, Suite 460
300 Barr Harbor Drive
West Conshohocken, PA
Chairman of the Board and Director
(1) As of the Record Date, 48,356,407 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 78.6%
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%
Director
Joy Tartar 66,417 .1%
Director
Robert Lawrence 20,000 -
Director
Randy Gilson
Vice President of Technical Services 411,800 (4) .8%
Stanley Greene
Sr. Vice President/Consultant - -
All Directors, Officers and 39,532,303 (2) (3) (4) 81.6%
Significant Employees as a Group
(9 Persons)
(1) As of the Record Date, 48,356,407 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.
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 Equity 2,016,667 $.045 7,411,250
Compensation
Plans Approved by
Security Holders
Equity Compensation 400,000 (b) .045 (b) (b)
Plans Not Approved by
Security Holders (a)
------------- -------------- -------------
Total 2,416,667 $.045 7,411,250
============= ============= =============
(a) In December 1997, TelVue 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) Shares issued by TelVue to certain consultants of its TelVue Virtual
Television Network (TVTN) business segment.
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 76 Chairman and Director 1989
Joseph M. Murphy 53 President,Chief Executive 1997
Officer and Director
Frank J. Carcione 66 Director 1990
Joy Tartar 44 Director 2001
Robert Lawrence 48 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.
Corporate Governance
The Board of Directors held two meetings during the year ended December
31, 2006, and acted by unanimous consent on several other occasions during
2006. All directors attended 100% of the Board meetings. All members of
the Board of Directors are strongly encouraged, but not required, to attend
TelVue Corporation's annual meeting of stockholders. All Board members
attended the 2006 annual meeting of stockholders with the exception of Mr.
Lenfest.
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 4200 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 407(d)(5) 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 2006. TelVue
has not adopted an audit committee charter. The Stock Option Committee
consists of Joy Tartar and Robert Lawrence. There were two meetings of the
Stock Option Committee held in 2006. 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. TelVue does not have a nominating committee
charter.
TelVue does not have a standing compensation committee. Based on the
small size of the company and the related number of employees, the Board of
Directors has determined that a compensation committee is not currently
necessary. The Chairman of the Board of Directors has served and will
continue to serve the functions of such a committee. The Chairman has sole
authority in determining director compensation, using company performance
and market conditions as an aid. The President and CEO makes
recommendations regarding compensation for other executives based on the
same parameters. These recommendations are reviewed and approved by the
Chairman of the Board on an annual basis. TelVue has not adopted a
compensation committee charter.
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). By
virtue of his stock ownership and their employment status, Messers. Lenfest,
Murphy and Carcione, respectively, are not independent.
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, 2006,
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 Officers and Other Significant Employees of TelVue
Name Age Position(s)
With TelVue
- -----------------------------------------------------------------------
Joseph M. Murphy 53 President, Chief
Executive Officer
Frank J. Carcione 66 Advisor
John Fell 43 Secretary, Treasurer,
Controller
Jesse Lerman 34 Executive Vice President
of Engineering
Randy Gilson 46 Vice President of
Technical Services
Biographical and Other Information Regarding the Executive Officers of TelVue
Executive officers are appointed by the Board of Directors. Each
executive officer is appointed to serve until their successor is duly
elected and qualified.
Joseph M. Murphy. See "Election of Directors."
Frank J. Carcione. See "Election of Directors."
John Fell has served as Secretary, Treasurer and Controller of TelVue since
April 2, 2007. Prior to joining TelVue, Mr. Fell was the Controller of WPHL-TV
in Philadelphia, a Division of Tribune Television Company from April
2003 to March 2007. He also served as an Assistant Treasurer of Tribune
Television Company during the same time period. Prior to that, he was
Assistant Controller for WPHL-TV from September 2000 to March 2003.
Jesse Lerman is a significant employee of TelVue. He has served as
Executive Vice President of Engineering for TelVue Corporation since March
12, 2007 when Princeton Server Group, Inc. was acquired by TelVue. Prior to
joining TelVue, Mr. Lerman was CEO of Princeton Server Group, Inc., a
digital video server company which he co-founded in 2003. Prior to that, he
served a number of technical roles including Director of Software at Cable
Video-on-Demand pioneers Sarnoff Real-Time Corporation and DIVA Systems,
Inc. from July 1994 to October 2002.
Randy Gilson is a significant employee of TelVue. Mr. Gilson has been the
Vice President of Technical Services since July 1993. Prior to that
appointment, Mr. Gilson held positions of increasing responsibility since
joining TelVue in 1986.
Executive Compensation
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of compensation paid or
accrued by TelVue for services rendered during the fiscal year ended
December 31, 2006 by each of the named executive officers, including a
consultant and a significant employee.
Name and Principal Annual All Other
Position Year Salary ($) Compensation(1) Total ($)
- ------------------------------------------------------------------------
Joseph Murphy 2006 $194,808 $4,943 $ 199,751
President and
Chief Executive
Officer
Frank J. Carcione 2006 $ 60,108 - $ 60,108
Advisor(2)
Randy Gilson 2006 $121,774 $3,329 $ 125,103
Vice President of
Technical Services
Stanley Green 2006 $163,201 $ 938 $ 164,139
Senior Vice
President/
Consultant(3)
(1) Consists of company funded contributions to TelVue's Simplified Pension
Plan, for the period January 1, 2006 through February 28, 2006 and
company funded contributions to TelVue's 401k Plan for the period March
1, 2006 though December 31, 2006.
(2) 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 - $60,108, Year 2007
- $50,000, Year 2008 - $50,000, Year 2009 - $40,000. In addition Mr.
Carcione will receive benefits in each of these years.
(3) Stanley Greene worked as consultant of TelVue for the period September
2004 through June 2006 and managed the TVTN sales staff, and held the
title of Senior Vice President of TVTN. Mr. Greene worked as an employee
of TelVue from July 2006 through December 7, 2006. His 2006 annual
salary reflects both his fees as a consultant and he wages as an employee
combined. As a result of his termination of employment with TelVue in
December 2006, Mr. Greene was paid severance equivalent to 16 weeks pay
totaling $60,000 less applicable payroll taxes.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth information of outstanding equity awards of
each named executive officers, including a former consultant and a significant
employee, of TelVue during the fiscal year ended December 31, 2006.
OPTION AWARDS
Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised Options
Options (#) Options (#) Exercise Options
Name Exercisable Unexercisable Price Expiration Date
- -------------------------------------------------------------------------------
Joseph M. Murphy 190,000 - $ .070 6/29/09
President and CEO 150,000 - .025 8/03/14
Frank J. Carcione 225,000 - $ .070 6/29/09
Advisor 100,000 - .025 8/03/14
Randy Gilson
VP of
Technical Services 50,000 - $ .070 6/29/09
100,000 - .025 8/03/14
Stanley Greene 100,000 - $.03 3/07/07 (1)
Senior VP of TVTN/
Consultant
(1) Stanley Greene's employment with TelVue ended on December 7, 2006. Under
the terms of his stock option agreement he had three months from his date
of separation in which to exercise his options. His options were not
excised during this time period and they expired.
DIRECTOR COMPENSATION
Name Stock Awards/Total
---- ------------------
Joy Tartar $500
Robert Lawrence $500
Transactions with Related Persons and Certain Control Persons
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 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.
On March 9, 2001, with the acquisition of the assets of Source for
$1,300,000, 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 "2005
Note"*) with Mr. Lenfest. The 2005 Note was secured to provide funding to
grow the TVTN Network. Under the terms of the 2005 Note, TelVue may borrow,
from time to time, up to the maximum principal amount of the 2005 Note which
is $3,800,000. The minimum advance under the 2005 Note is $100,000 and the
interest rate of the 2005 Note is equal to the prime rate plus one percent
(1%). The 2005 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 2005 Note may be declared immediately
due and payable. The 2005 Note is unsecured and will expire six years from
the date of the first advance, which is November 23, 2011, unless extended
or renewed. Principal and interest on the 2005 Note are also due and payable
on November 23, 2011. During the year ended December 31, 2006, TelVue
borrowed $2,000,000 under the terms of the 2005 Note, bringing outstanding
borrowings under the 2005 Note to $2,200,000 and accrued interest on the
borrowings to $111,735 as of December 31, 2006. TelVue is borrowing
approximately $200,000 per month under the 2005 Note and anticipates that
the funds will be exhausted by August 2007 or sooner.
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
78.3 percent as of December 31, 2006. 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. On August 21, 2006, the Board of
Directors, with Mr. Lenfest abstaining from the action, waived the two year
holding period required to receive the full voting power of ten votes per
share for the 23,459,133 shares of common stock Mr. Lenfest received for the
conversion of his preferred stock. 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.
On June 16, 2005, the 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.
On November 3, 2006, TelVue entered into an additional Line of Credit
Note (the "2006 Note") with Mr. Lenfest in the principal amount of Ten Million
Dollars ($10,000,000). Under this Line of Credit, TelVue may request up to
$5,000,000 for general working capital. TelVue may request up to an additional
$5,000,000 available under this Line of Credit for purposes other than general
working capital upon mutual agreement by TelVue and Mr. Lenfest. The minimum
advance under the 2006 Note is $100,000 and the interest rate on the 2006 Note
is equal to the prime rate plus one percent (1%). The 2006 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 2006 Note may be declared immediately due and payable. The 2006 Note is
unsecured and will expire six years from the date of the first advance under
the 2006 Note unless extended or renewed. Principal and interest on the 2006
Note are also due and payable six years from the date of the first advance under
the 2006 Note, which was December 26, 2006. As of December 31, 2006 the
outstanding borrowings under the 2006 Note was $400,000 (see below for
description of this borrowing).
On December 26, 2006, TelVue borrowed $400,000 from Mr. Lenfest under
the 2006 Note, to loan to Princeton Server Group ("PSG") to fund their
operating expenses (the "PSG Note"). The PSG Note was a convertible note
that bore interest at a rate of six percent (6%) per annum. No payments of
principal or interest were due until July 1, 2007. Under the PSG Note
interest accrued through July 1, 2007 was to be added to the principal.
Interest was payable monthly from July 1, 2007 through January 1, 2008. The
remaining balance was payable in forty eight (48) monthly installments of
principal and interest commencing February 1, 2008. The note was scheduled
to mature in January 2012. The Company had the option to convert the unpaid
principal balance of the note and all accrued interest into common stock of
PSG. In connection with the PSG Note the TelVue received a warrant, which
entitled TelVue to purchase 129,629 shares of common stock of PSG for $1.08
per share. The warrant was to commence on July 1, 2007 and expire on
December 31, 2016. The PSG Note was forgiven on March 12, 2007, in
connection with TelVue's acquisition of all of the outstanding stock of PSG
(see below).
On March 12, 2007, PSG was acquired by TelVue, for $6.1 million and the
forgiveness of the PSG Note (described above). TelVue borrowed $6.1 million
from Mr. Lenfest under the 2006 Note. PSG develops high performance digital
video systems, appliances, and software that support capture, storage,
manipulation and play-out of digital media in multiple popular formats. PSG
markets their product to PEG TV and local origination broadcast stations,
professional broadcast stations and schools and universities. TelVue
acquired PSG as a complement to its TVTN Network with the objective being to
offer towns, municipalities and schools a complete technology and support
solution to owners and operators of PEG Access Channels.
At December 31, 2006, TelVue was indebted to Mr. Lenfest in the principal
amount of $3,141,000 and accrued interest of $111,735. Other related
transactions are described in Notes 3, 6, 7, 9 and 13 of the financial
statements of TelVue's 2006 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, 2006 all filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with.
..
STOCKHOLDER PROPOSALS FOR THE 2007 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
January 1, 2008. 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 17, 2008, 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,
2006 and 2005, and will serve as TelVue's independent registered public
accountants for the year ending December 31, 2007. 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, 2006
and 2005.
2006 2005
---- ----
Audit fees $ 48,435 $ 44,593
Audit related fees 18,113 -
Tax fees 5,411 4,500
All other fees - _
-------- --------
Total $ 71,959 $ 49,093
======== ========
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, 2006 and 2005 and the reviews of TelVue's
quarterly financial statements set forth in TelVue's Forms 10-QSB in 2006
and 2005.
Audit-Related Fees:
These amounts consisted up fees for due diligence in
connection with the Princeton Server Group, Inc. acquisition.
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
2006 and 2005.
The Audit Committee has considered and determined that the non-audit
services provided by Pressman Ciocca Smith LLP in 2006 and 2005 are
compatible with maintaining the auditor's independence.
All of the 2006 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 2006.
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 2006 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 5, 2007
The undersigned hereby appoints Joseph M. Murphy and John Fell
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 5, 2007 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:, 2007
-----------------------------
-----------------------------
-----------------------------
Signature(s) of stockholder(s)