PROXY TELVUE CORPORATION PROXY
This Proxy is Solicited on Behalf of the Board of Directors for
Annual Meeting of Stockholders on June 3, 1998
The undersigned hereby appoints Frank J. Carcione and Joseph M. Murphy
proxy and attorney, with full power of substitution, to vote all the shares
of the Common Stock of TelVue Corporation, a Delaware corporation, which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be
held at TelVue Corporation located at 16000 Horizon Way, Suite 500, Mt.
Laurel, New Jersey, 08054, on June 3, 1998 at 10:00 o'clock a.m., local time,
and any adjournment thereof upon the following matters set forth in the
notice of such meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted for Proposals 1 and 2.
1. ELECTION OF DIRECTORS
H.F. Lenfest, Frank J. Carcione, Donald L. Heller, Joseph M. Murphy, Joseph
A. DiJulio
____ 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
<PAGE>
Each share of common stock is entitled to 10 votes; provided, however,
that persons who have been the beneficial owner of shares of common stock for
less than two years or who did not acquire such shares in the course of the
spin-off of the Company from Science Dynamics Corporation are entitled to
only one vote per share. As provided in the Certificate of Incorporation,
the Board of Directors, on written application directed to the Secretary of
the Company at any time prior to the special meeting, may waive such holding
period requirements and provide that shares held by such stockholder shall
have 10 votes per share. Stockholders wishing to have the holding period
waived may make written application to the Board of Directors by sending
their request at any time prior to the annual meeting to the Secretary of the
Company at TelVue Corporation, 16000 Horizon Way, Suite 500, Mt. Laurel, NJ,
08054.
Please sign your name exactly as it is shown on the left. Corporate
Offices, 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:_________________________________, 1998
____________________________________________
____________________________________________
Signature(s) of stockholder(s)
<PAGE>
TELVUE CORPORATION
16000 HORIZON WAY, SUITE 500
MT. LAUREL, NJ 08054
(609) 273-8888
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AT 10:00 A.M.,
June 3, 1998
To the Stockholders of Telvue Corporation:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of the Stockholders of
TelVue Corporation, a Delaware corporation (the "Company"), will be held at
the executive offices of the Company located at 16000 Horizon Way, Suite 500,
Mt. Laurel, New Jersey on June 3, 1998 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 May 1, 1998, as the
record date for determination of holders of Common Stock of the Company
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 THE
COMPANY.
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 THE
COMPANY 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
May 2, 1998
<PAGE>
TELVUE CORPORATION
16000 HORIZON WAY, SUITE 500
MT. LAUREL, NJ 08054
(609) 273-8888
DATED May 2, 1998
PROXY STATEMENT
This Proxy Statement is furnished with the attached Notice of Annual
Meeting and with accompanying proxy on or about May 2, 1998, to each
stockholder of record of TelVue Corporation (the "Company") at the close of
business on May 1, 1998 ("Record Date"), in connection with the solicitation
of proxies by the Board of Directors to be voted at the Annual Meeting of
Stockholders of the Company to be held on June 3, 1998 at 10:00 A.M. at the
executive offices of the Company, 16000 Horizon Way, Suite 500, Mt. Laurel,
New Jersey 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 the Company 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 the Company. 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 the Company, 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 the
Company. The Company 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 the Company's Common Stock outstanding was 23,814,500 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 the Company's Preferred Stock outstanding. 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.
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 the Company 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 the Company. 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, 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 the Company to be a
beneficial owner of more than five percent (5%) of the Company's Common
Stock.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class (1)
H.F. (Gerry) Lenfest 67,931,746 (2) 88.0%
c/o The Lenfest Group
200 Cresson Boulevard
P.O. Box 989
Oaks, PA 19456-0989
Chairman of the Board and Director
As of the Record Date, 23,814,500 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 accrued but
unpaid interest on the subordinated $500,000 Note which may be converted into
shares of Preferred Stock. Also does not include accrued interest, as of
March 31, 1998, on the National Equipment Loan made to the Company or accrued
dividends on the shares of Preferred Stock owned by Mr. Lenfest, either of
which the Company may elect to pay in shares of Preferred Stock.
Security Ownership of Management
The following table sets forth, as of the Record Date, certain
information with respect to the Common Stock beneficially owned by the
directors and executive officers of the Company and by all directors and
executive officers as a group. 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 Percent
of Beneficial Owner Beneficial Ownership of Class (1)
H.F. (Gerry) Lenfest 67,931,746(2) 88.0%
c/o The Lenfest Group
200 Cresson Boulevard
P.O. Box 989
Oaks, PA 19456-0989
Chairman of the Board and Director
Joseph M. Murphy 90,000(3) *
Executive Vice President
Sales and Operations and Director
Donald L. Heller
Director 10,000 *
All Directors and Officers as
a Group (6 Persons) 68,031,746(2)(3) 88.1%
* Less than 1%
(1) As of the Record Date, 23,814,500 shares of Preferred 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 accrued but
unpaid interest on the subordinated $500,000 Note which may be converted into
shares of Preferred Stock. Also does not include accrued interest, as of
March 31, 1998, on the National Equipment Loan made to the Company or accrued
dividends on the shares of Preferred Stock owned by Mr. Lenfest, either of
which the Company may elect to pay in shares of Preferred Stock.
(3) Includes 15,000 shares issuable to Joseph M. Murphy upon exercise of
currently exercisable stock options held by Mr. Murphy.
PROPOSAL 1
ELECTION OF DIRECTORS
Five (5) directors will be elected to hold office subject to the provisions
of the Company's by-laws until the next Annual Meeting of Stockholders, and
until their respective successors are duly elected and qualified. The vote
of a majority of the votes entitled to be cast by stockholders present in
person or by proxy, is required to elect members of the Board of Directors.
The following table sets forth the name, age, position with the Company and
respective director service dates of each person who has been nominated to be
a director of the Company:
Name Age Position(s) Director
With The Company Since
H. F. (Gerry) Lenfest 68 Chairman and Director 1989
Frank J. Carcione 57 President, Chief Executive
Officer, and Director 1990
Donald L. Heller 52 Director 1993
Joseph M. Murphy 44 Vice President of Sales
and Operations and Director 1997
Joseph A. DiJulio 43 Director -
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 the Company since 1989. He is the
President, Chief Executive Officer and a director of Lenfest Communications,
Inc. and each of its subsidiaries (the "Lenfest Group"). The Lenfest Group
of companies are engaged in operating cable television systems, providing
cable advertising and programming and microwave communications. Mr.
Lenfest's principal occupation since 1974 has been the President and CEO of
Lenfest Communications, Inc. and the Lenfest Group of companies.
Frank J. Carcione has been a director of the Company since 1990. He became
the Executive Vice President in May 1990, and was elected President and Chief
Executive Officer in May 1991. From August 1989 to May 1990, he held the
position of Vice President (marketing sales, pay-per-view and franchise
relations) with Garden State Cablevision L.P., a New Jersey cable television
operator. 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.
Donald L. Heller has been a director of the Company since 1993. He has been
a Vice President of Lenfest Communications, Inc. since March 1993. Prior to
assuming his current position, Mr. Heller was, from June 1984 to January
1993, the Vice President and General Manager of Sportschannel Prism
Associates, a regional cable television service which provides movies and
professional sports.
Joseph M. Murphy has been a director of the Company since 1997. He is the
Executive Vice President of Sales and Operations of the Company. Mr. Murphy
was appointed to this position in September 1994. Prior to this appointment,
Mr. Murphy had been Vice President of Sales since joining the Company in
1986.
Joseph A. DiJulio has been the Vice President of Network Services since
January 1995 and General Manager since July 1988 of Suburban Cable TV
Company, Inc. ("Suburban"), a subsidiary of Lenfest Communications, Inc.
From January 1993 through December 1995, Mr. DiJulio was a Regional Manager
of Suburban. Mr. DiJulio has held various positions of increasing
responsibility with Suburban since joining the company in June 1984.
Certain Legal Proceedings
On December 6, 1995, the Securities and Exchange Commission (the "SEC") sued
Mr. Lenfest and his wife, in the United States District Court for the Eastern
District of Pennsylvania. The SEC alleges that, in October 1993, Mr.
Lenfest, while in possession of non-public information, recommended to one of
his sons that he purchase Tele-Communications, Inc. ("TCI") stock and that
Mr. Lenfest's wife traded in TCI stock in October 1993 on the basis of
information she misappropriated from her husband. Mr. Lenfest and his wife
have categorically denied that they engaged in any improper conduct and are
defending this action vigorously.
In April 1996, a former employee filed suit against the Company and Mr.
Lenfest, James T. Shelley vs. TelVue Corporation and H.F. Lenfest, with the
Superior Court of Burlington County, New Jersey, Civil Action Number 01368-
96. The complaint alleges breach of contract, breach of implied covenant of
good faith and fair dealing detrimental reliance and unjust enrichment. The
suit seeks damages for an unspecified amount for compensation and
compensatory damages. Based upon correspondence from Mr. Shelley's attorneys
prior to filing the suit, the Company's legal counsel believes that Mr.
Shelley is seeking actual damages of approximately $400,000 for commissions,
unpaid salary, stock options and other benefits. The Company believes the
employee's claims are without merit and continues to vigorously defend the
suit.
Meetings of the Board of Directors and Committees
The Board of Directors held two meetings during the year ended December 31,
1997, and acted by unanimous consent on several other occasions during 1997.
The Company has no nominating or compensation committees. The Audit
committee and Stock Option committee consists of Donald Heller. No meetings
of either committee were held during 1997. All directors attended at least
100% of the Board meetings except Mr. Lenfest and Mr. Heller who attended 50%
of the Board meetings.
The employee directors of the Company receive no compensation. Non-
employee directors (other than Mr. Lenfest) receive $500 paid in shares of
common stock of the Company for each meeting of the Board attended. The
shares are priced at the higher of $.05/share or the ask price on the date of
grant. During 1997, Mr. Heller received 10,000 shares of common stock.
Executive Compensation
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and Year Salary Commissions All Other
Principal Position Compensation
Frank J. Carcione 1997 $124,950 --- $3,124 (1)
Chief Executive Officer 1996 119,000 --- 2,761 (1)
1995 108,000 --- 997 (1)
Joseph Murphy 1997 $ 89,302 $44,155 $2,233 (1)
Executive Vice President 1996 85,362 53,710 2,134 (1)
of Sales and Operations 1995 81,623 30,461 1,869 (1)
(1) Company funded contributions to the Company's Simplified Pension
Plan (SEP).
AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
Number of Value of
Shares Value Unexercised Unexercised
Name Acquired Realized Options In-The-Money
on Exercisable/ Options
Exercise Unexercisable Exercisable/
Unexercisable
Frank J. Carcione --- --- --- ---
Chief Executive
Officer
Joseph M. Murphy --- --- $15,000 $1,050 (1)
Executive Vice
President of Sales
and Operations
(1) Values calculated based upon the average of the bid and ask price on
December 31, 1997.
Certain Relationships and Related Transactions
Since November 2, 1989, the Company has funded its expansion and
operating deficit from the $2,500,000 of proceeds from the sale of shares of
the Company's Common Stock and Preferred Stock to Mr. Lenfest and from
borrowings from Mr. Lenfest. From November 1989 to February 1996, the
Company borrowed an aggregate of $6,128,712 from Mr. Lenfest. The interest
rates on the loans range from a floating rate based on the prime rate of PNC
Bank to a fixed rate of 12% (see Note 5 to the financial statements of the
Company in the 1997 Annual Report). Interest on one of the loans in the
principal amount of $1,471,272 as of December 31, 1997, is payable quarterly
and, at the option of the Company may be paid by the delivery of shares of
the Company's Preferred Stock at the rate of one share of Preferred Stock for
each one dollar of accrued interest. Interest due on this loan through
December 31, 1997, in the amount of $473,682 has been paid with 473,682
shares of Preferred Stock. In addition, during January 1995, Mr. Lenfest
purchased from Science the Company's non-interest bearing note in the amount
of $541,000 (the "Prior Science Note").
Effective as of March 31, 1997, the Company obtained from Mr. Lenfest a
written agreement stating he will not demand repayment of his loans or the
cash payment of accrued interest on the loans through January 1, 2000.
During the fourth quarter of 1997, the Board of Directors of the Company
(with Mr. Lenfest not participating) authorized the Company to make monthly
principal payments of $150,000 to Mr. Lenfest. The Board (with Mr. Lenfest
not participating) also directed the Company to begin accruing interest on
all unpaid interest on all outstanding loans balances due to Mr. Lenfest
effective January 1, 1998. Mr. Lenfest has agreed to accept payments of
principal through December 31, 1998. During 1997, the Company made principal
payments of $2,050,000 to Mr. Lenfest. The aggregate outstanding loan
balances due to Mr. Lenfest as of the Record Date are $3,619,712. In
addition, the Board of Directors of the Company (with Mr. Lenfest not
participating) authorized that at management's discretion, the Company may
make monthly principal payments in excess of $150,000 when the Company has
excess cash not needed to fund operations.
On September 27, 1994, the Company entered into a service agreement with
Box Worldwide, Inc., formerly known as Video Jukebox Network, Inc. ("VJN") an
affiliate of Mr. Lenfest. The agreement provided that the Company would act
as a 900 call service bureau to facilitate the ordering, by VJN customers, of
music videos on the cable or home dish of the VJN customer. Mr. Lenfest had
loaned the Company $358,267 to purchase equipment and software needed to
provide service to VJN. In July 1996, VJN informed the Company that VJN
intended to terminate the service agreement. VJN agreed to reimburse the
Company $284,619. On January 10, 1997, VJN paid the Company $284,619.
At December 31, 1997, the Company was indebted to Mr. Lenfest in the
principal amount of $4,319,712.
Other related transactions are described in Notes 5, 7 and 10 of the
financial statements of the Company in the 1997 Annual Report.
STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
Proposals of stockholders intended to be presented for inclusion in the
proxy statement and form of proxy related to the 1998 Annual Meeting must be
received at the Company's executive offices at 16000 Horizon Way, Suite 500,
Mt. Laurel, New Jersey no later than January 4, 1999.
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Pressman Ciocca Smith LLP served as the Company's
independent public accountants for the year ended December 31, 1997. 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.
OTHER INFORMATION
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR 1997 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.
