SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE QUIGLEY CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
23-2577138
- --------------------------------------------------------------------------------
(I.R.S. employer identification no.)
10 South Clinton Street, PO Box 1349, Doylestown, PA 18901
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
1997 STOCK OPTION PLAN
- --------------------------------------------------------------------------------
(Full title of the plan)
Guy Quigley
President and Chief Executive Officer
The Quigley Corporation
10 South Clinton Street
P.O. Box 1349
Doylestown, PA 18901
(Name and address of agent for service)
(215) 345-0919
- --------------------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
- ------------------------------------------------------------------------------------------
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered share price fee
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common Stock,
$.0005 par value
per share 1,500,000 Shares(1)(2) $8.515(2) $12,772,500 $3,767.89
==========================================================================================
</TABLE>
(1) Represents an aggregate of 1,500,000 shares of Common Stock issuable by
the Registrant pursuant to the 1997 Stock Option Plan. Pursuant to Rule
416 promulgated under the Securities Act of 1933, as amended (the
"Act"), this Registration Statement also registers such number of
additional shares of Common Stock that may be offered or issued
pursuant to the 1997 Stock Option Plan to prevent dilution resulting
from stock splits, stock dividends or similar transactions.
(2) Represents an aggregate of 550,500 shares of Common Stock with respect
to which options have been granted under the Employee Plan at a
weighted average exercise price of $9.68 per share. Pursuant to Rule
457(h) under the Securities Act, the offering price for the additional
949,500 shares of Common Stock which may be issued under the 1997 Stock
Option Plan is estimated solely for the purpose of determining the
registration fee and is based on $7.84, the per share average of high
and low sale prices of the Common Stock as reported by the Nasdaq
National Market ("Nasdaq") for trading on August 7, 1998.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
EXPLANATORY NOTE
The information called for by Part I of this Registration Statement on
Form S-8 (the "Registration Statement") is included in the description of The
Quigley Corporation 1997 Stock Option Plan (the "Stock Option Plan") to be
delivered to persons eligible to participate in the Stock Option Plan. Pursuant
to the Note to Part I of Form S-8, this information is not being filed with or
included in this Registration Statement. However, included herein is a
Prospectus to be used in connection with certain reoffers and resales of shares
of common stock, par value $.0005 per share, of The Quigley Corporation acquired
pursuant to the Stock Option Plan. Such Prospectus has been prepared in
accordance with the requirements of Form S-3 pursuant to General Instruction C
of Form S-8.
<PAGE>
PROSPECTUS
1,500,000 SHARES
THE QUIGLEY CORPORATION
Common Stock ($.0005 par value)
This Prospectus relates to the reoffer and resale by certain selling
stockholders (the "Selling Stockholders") of The Quigley Corporation (the
"Company") of up to 1,500,000 shares (the "Shares") of Common Stock, par value
$.0005 per share, of the Company (the "Common Stock") pursuant to The Quigley
Corporation 1997 Stock Option Plan (the "Stock Option Plan").
The offer and sale of the Shares to the Selling Stockholders were
previously registered under the Securities Act of 1933, as amended (the
"Securities Act"). The Shares are being reoffered and resold for the accounts of
the Selling Stockholders and the Company will not receive any of the proceeds
from the resale of the Shares.
Sales by the Selling Stockholders may be effected from time to time in
one or more transactions in the over the counter market, in negotiated
transactions or otherwise at market prices prevailing at the time of the sale or
at prices otherwise negotiated. See "Plan of Distribution." The Company will
bear all expenses in connection with the preparation of this Prospectus, but all
selling and other expenses incurred by the Selling Stockholders will be borne by
such Selling Stockholders.
The Common Stock of the Company is traded on the Nasdaq National Market
("Nasdaq") under the symbol "QGLY." On August 7, 1998, the closing price for the
Common Stock, as reported by Nasdaq was $7.97. Prospective acquirors of Shares
are urged to obtain a current price quotation.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
CERTAIN MATTERS DISCUSSED IN THIS REGISTRATION STATEMENT ARE
FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE PROJECTED.
The date of this Prospectus is August ___, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; Northwest Atrium Center, Suite 1400, 500
West Madison Street, Chicago, Illinois 60661; and Seven World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, reports,
proxy statements and other information concerning the Company (symbol: QGLY) can
be inspected and copied at the offices of the Nasdaq Stock Market, 1735 K
Street, N.W., Washington, D.C. 20006, on which the Common Stock of the Company
is listed. Such material may also be accessed electronically by means of the
Commission's home page on the internet at http//www.sec.gov.
TABLE OF CONTENTS
AVAILABLE INFORMATION........................................................2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................3
RISK FACTORS.................................................................4
THE COMPANY.................................................................10
USE OF PROCEEDS.............................................................10
TRANSFER AGENT AND REGISTRAR................................................10
SELLING STOCKHOLDERS........................................................11
PLAN OF DISTRIBUTION........................................................13
LEGAL MATTERS...............................................................14
EXPERTS ...................................................................14
CHANGE OF ACCOUNTANTS.......................................................14
ADDITIONAL INFORMATION......................................................15
-2-
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-KSB for the year ended December
31, 1997, Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998
and June 30, 1998, and Current Report on Form 8-K dated January 9, 1998 are
incorporated by reference in this Prospectus and shall be deemed to be a part
hereof. All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of this
offering, are deemed to be incorporated by reference in this Prospectus and
shall be deemed to be a part hereof from the date of filing of such documents.
The Company's Application for Registration of its Common Stock under
Section 12(b) of the Exchange Act filed on October 25, 1996 is incorporated by
reference in this Prospectus and shall be deemed to be a part hereof.
Any statement contained in a document incorporated or deemed to be
incorporated by reference into this Prospectus will be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or any other subsequently filed document which also
is, or is deemed to be, incorporated by reference into this Prospectus modifies
or supersedes that statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents. Written requests for such copies should
be directed to P.O. Box 1349, Doylestown, PA 18901, Attention: George J. Longo.
Oral requests should be directed to such officer (telephone number (215)
345-0919).
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made hereby, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any Selling Stockholders. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, the securities offered
hereby to any person in any state or other jurisdiction in which such offer or
solicitation is unlawful. The delivery of this Prospectus at any time does not
imply that information contained herein is correct as of any time subsequent to
its date.
-3-
<PAGE>
RISK FACTORS
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. EACH
PROSPECTIVE INVESTOR SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS
INHERENT IN, AND EFFECTING THE BUSINESS OF, THE COMPANY BEFORE MAKING AN
INVESTMENT DECISION.
DEPENDENCE UPON SALES OF PRINCIPAL PRODUCT. The Company's future
performance will depend, almost entirely, on the continued customer acceptance
of the Company's principal product, Cold-Eeze(R). For the year ended December
31, 1997 and the six months ended June 30, 1998, substantially all of the
Company's revenues have been generated by sales of Cold-Eeze(R) or product
extensions of Cold- Eeze(R). The Company anticipates that substantially all of
its revenues for the foreseeable future will be generated by sales of
Cold-Eeze(R), both overseas and in the U.S. There can be no assurance that the
Company's Cold-Eeze(R) products will continue to receive market acceptance. The
inability to successfully commercialize Cold-Eeze(R), for any reason, would have
a material adverse effect on the Company's financial condition, prospects, and
ability to continue operations.
GOVERNMENT REGULATION. The manufacturing, processing, formulation,
packaging, labeling and advertising of the Company's cold-relief products are
subject to regulation by one or more federal agencies, including the United
States Food and Drug Administration ("FDA"), the Federal Trade Commission
("FTC"), the Consumer Product Safety Commission, the United States Department of
Agriculture, the United States Postal Service, the United States Environmental
Protection Agency and the Occupational Safety and Health Administration. In
particular, the FDA regulates the safety, labeling and distribution of dietary
supplements, including vitamins, minerals and herbs, food additives, food
supplements, over-the-counter and prescription drugs and cosmetics. In addition,
the FTC has overlapping jurisdiction with the FDA to regulate the promotion and
advertising of vitamins, over-the-counter drugs, cosmetics and foods.
Since the Company does not engage in the manufacturing process of its
cold-relief products, it is not subject to many of these regulations. In
addition, the Company's cold-relief product is a homeopathic remedy which is
regulated by the Homeopathic Pharmacopoeia of the United States ("HPUS"). HPUS
sets the standards for source, composition and preparation of homeopathic
remedies which are officially recognized in the Federal Food, Drug and Cosmetics
Act of 1938.
The Company's business is also regulated by various agencies of the
states and localities in which the Company's products are sold and governmental
regulations in foreign countries where the Company plans to commence or expand
sales may prevent or delay
-4-
<PAGE>
entry into a market or prevent or delay the introduction, or require the
reformulation, of certain of the Company's products.
In addition, the Company cannot predict whether new domestic or foreign
legislation regulating its activities will be enacted. Such new legislation
could have a material adverse effect on the Company. Failure to comply with any
applicable requirements can result in sanctions being imposed on the Company or
the manufacturers of its products, including warning letters, fines, product
recalls and seizures.
COMPETITION. Management of the Company believes that the Company's
cold-relief product, which has been clinically proven to reduce the severity and
duration of the common cold symptoms, offers a significant advantage over other
suppliers in the over-the-counter cold remedy market. Competition consists of
numerous suppliers of cold remedy products. This market is highly competitive,
and some companies with which the Company competes are substantially larger and
have significantly greater resources than the Company. The Company believes that
its ability to compete depends on a number of factors, including price, product
quality, availability and reliability and name recognition. There can be no
assurance that the Company will be able to compete successfully in the future.
MANAGING GROWTH. The Company has recently experienced a period of rapid
growth and expansion which has placed, and could continue to place, a
significant strain on the Company's management, customer service and support
operations, sales and administrative personnel and other resources. The
Company's ability to manage its planned growth requires the Company to continue
to expand its operating, management, information and financial systems, all of
which may increase its operating expenses. If the Company fails to achieve its
growth as planned or is unsuccessful in managing its anticipated growth, there
could be a material adverse effect on the Company. In addition, the loss of a
significant customer or a number of customers, or a significant reduction in
purchase volume by or financial difficulty of such customers, for any reason,
could have a material adverse effect on the Company.
DEPENDENCE ON KEY PERSONNEL. The Company's future success depends in
large part on the continued service of its key personnel. In particular, the
loss of the services of Guy Quigley, its Chairman of the Board, President and
Chief Executive Officer could have a material adverse effect on the operations
of the Company. The Company has an employment agreement with Mr. Quigley which
expires on May 31, 2005. The Company's future success and growth also depends on
its ability to continue to attract, motivate and retain highly qualified
employees. There can be no assurance that the Company will be able to attract,
motivate and retain such persons.
-5-
<PAGE>
DEPENDENCE ON THIRD-PARTY MANUFACTURING AND SUPPLIER. The Company does
not own or lease any manufacturing facilities, does not manufacture the
Cold-Eeze(R) product or any of its ingredients, and purchases all ingredients
from a single unaffiliated supplier. The Company has entered into a contract
with a single manufacturer to supply its zinc gluconate products. Should this
relationship terminate, the Company believes that the contingency plans which it
has formulated would prevent such termination from materially affecting the
Company's operations. Any such termination may, however, result in a temporary
delay in production until a replacement facility with available production time
is located. In addition, the terms on which suppliers and manufacturers will be
available could have a material effect on the success of the Company.
UNCERTAINTY OF PATENT PROTECTION; UNCERTAINTY OF PROTECTION OF
PROPRIETARY TECHNOLOGY. The strength of the Company's patent position may play
an important role in its long-term success. The Company currently owns no
patents. However, the Company has been granted an exclusive agreement for
worldwide representation, manufacturing, marketing and distribution rights to a
zinc/gluconate/glycine lozenge formulation developed by Dr. John C. Godfrey,
Ph.D. The zinc/gluconate/glycine lozenge formulation developed by Dr. John C.
Godfrey, Ph.D has been patented in the United States, Germany, France, Italy,
Sweden, Canada and Great Britain and a patent is pending in Japan. The Company
also has an exclusive license from George Eby Research for a United States use
patent for zinc gluconate. There can be no assurance that these patents will be
effective to protect the Company's product from duplication by others. In
addition, there can be no assurance that the Company or the patent holder will
be able to afford the expense of any litigation which may be necessary to
enforce its rights under any patent. Moreover, although the Company believes
that its product does not and will not infringe upon the patents or violate the
proprietary rights of others, it is possible that such infringement or violation
has or may occur. In the event that the Company's product is determined to
infringe upon the patents or proprietary rights of others, the Company could be
required to modify its product or obtain an additional license for the
manufacture and/or sale of the product, or could be prohibited from selling the
product. There can be no assurance that, in such an event, the Company would be
able to do so in a timely manner, upon acceptable terms and conditions, or at
all, and the failure to do any of the foregoing could have a material adverse
effect upon the Company. Furthermore, there can be no assurance that the Company
or the patent holders will have the financial or other resources necessary to
enforce or defend a patent infringement or proprietary rights violation action.
In addition, if the Company's product is deemed to infringe upon the patents or
proprietary rights of others, the Company could, under certain circumstances,
become liable for damages, which could also have a material adverse effect on
the Company.
-6-
<PAGE>
The Company also relies substantially upon its proprietary
technologies, utilizing non-disclosure agreements with its employees, suppliers,
consultants and customers to establish and protect the ideas, concepts and
documentation of its proprietary technology and know-how. Such methods, however,
may not afford complete protection, and there can be no assurance that third
parties will not independently develop such know-how or obtain access to the
Company's know-how, ideas, concepts and documentation, which could have a
material adverse effect on the Company.
SEASONALITY OF BUSINESS; QUARTERLY FLUCTUATIONS. A substantial portion
of the Company's business is highly seasonal, causing significant variations in
operating results from quarter to quarter. The consumer market for the Company's
cold-relief products tends to be highly seasonal. It is anticipated that a major
portion of the Company's revenues will come in the first and fourth quarters
since the primary cold season is from September to March. There can be no
assurance that the Company can maintain sufficient flexibility with respect to
its working capital needs and its ability to manufacture products to be able to
minimize the adverse effects of an unanticipated shortfall in or greater than
expected demand for its products. Failure to predict accurately and respond to
consumer demand may cause the Company to produce excess inventory. Conversely,
if the product achieves greater success than anticipated for any given quarter,
the Company may not have sufficient inventory to meet customer demand.
POTENTIAL PRODUCT LIABILITY EXPOSURE. The Company's business exposes it
to an inherent risk of potential product liability claims, including claims for
serious bodily injury or death, which could lead to substantial damage awards.
The Company currently maintains product liability and excess liability insurance
in the amount of and with a maximum payout of $61 million. A successful claim
brought against the Company in excess of, or outside of, its insurance coverage
could have a material adverse effect on the Company's results of operations and
financial condition. Claims against the Company, regardless of their merit or
eventual outcome, may also have a material adverse effect on the consumer demand
for the Company's products.
CONTROL BY PRINCIPAL STOCKHOLDER. Guy Quigley, the Chairman of the
Board and President of the Company, through his beneficial ownership has the
power to vote approximately 26.4% of the Common Stock. Mr. Quigley and the other
executive officers and directors of the Company collectively beneficially own
approximately 39.0% of the Company's Stock. These individuals have significant
influence over the outcome of all matters submitted to stockholders for
approval, including election of directors of the Company, thereby enabling them
to control all major decisions of the Company. In addition, such concentration
of ownership may have the effect of preventing a change of control of the
Company.
-7-
<PAGE>
VOLATILITY OF THE COMPANY'S COMMON STOCK PRICES. The market price of
the Company's Common Stock has experienced significant volatility, with per
share bids ranging from a low of approximately $6.25 to a high of approximately
$23.00 (after giving effect to a 2 for 1 stock split) over the twelve month
period from August 1, 1997 to July 31, 1998. Announcements of technological
innovations for new commercial products of the Company or its competitors,
developments concerning propriety rights or governmental regulation or general
conditions in the market for the Company's cold-relief products may have a
significant effect on the Company's business and on the market price of the
Company's securities. Sales of a substantial number of shares by existing
security holders could also have an adverse effect on the market price of the
Company's securities. In particular, the Company believes that its recent
authorization to repurchase up to 750,000 shares of its currently outstanding
Common Stock may cause increased volatility of its stock price in the
short-term.
SHARES ELIGIBLE FOR FUTURE SALE. The sale, or availability for sale, of
substantial amounts of Common Stock in the public market pursuant to Rule 144 or
otherwise could adversely affect the market price of the Common Stock and could
impair the Company's ability to raise additional capital through the sale of its
equity securities.
NO CASH DIVIDENDS. The Company has not paid cash dividends on its
Common Stock since its inception. The Company currently intends to retain
earnings, if any, for use in the business and does not anticipate paying any
dividends to its stockholders.
RIGHTS OF COMMON STOCK SUBORDINATE TO PREFERRED STOCK. The Articles of
Incorporation of the Company authorizes the issuance of a maximum of 1,000,000
shares of preferred stock, par value $.001 per share. No shares of preferred
stock are currently outstanding. If shares of preferred stock are issued in the
future, the terms of a series of preferred stock may be set by the Company's
Board of Directors without approval by the holders of the Common Stock of the
Company. Such terms could include, among others, preferences as to dividends and
distributions on liquidation as well as separate class voting rights. The rights
of the holders of the Company's Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of any preferred stock that may
be issued in the future.
BARRIERS TO TAKEOVER. The Company's Articles of Incorporation and
By-Laws contain certain provisions which may deter, discourage, or make more
difficult the assumption of control of the Company by another corporation or
person through a tender offer, merger, proxy contest or similar transaction or
series of transactions. These provisions include an unusually large number of
authorized common shares (50,000,000) and the prohibition of cumulative voting.
In addition, the future issuance of preferred stock by the Company
-8-
<PAGE>
could have the effect of making it more difficult for a third party to acquire,
or of discouraging a third party from acquiring, a majority of the outstanding
voting stock of the Company. The overall effect of these provisions may be to
deter a future tender offer or other takeover attempt that some stockholders
might view to be in their best interest as the offer might include a premium
over the market price of the Company's capital stock at the time. In addition,
these provisions may have the effect of assisting the Company's current
management in retaining its position and place it in a better position to resist
changes which some stockholders may want it to make if dissatisfied with the
conduct of the Company's business.
LIMITATIONS ON LIABILITY OF DIRECTORS AND OFFICERS. Section 78.751 of
the Nevada General Corporation Law ("NGCL") allows the Company to indemnify any
person who is or was made a party to, or is or was threatened to be made a party
to, any pending, completed, or threatened action, suit or proceeding by reason
of the fact that he or she is or was a director, officer, employee or agent of
the Company or is or was serving at the request of the Company as a director,
officer, employee or agent of any corporation, partnership, joint venture, trust
or other enterprise. The NGCL permits the Company to advance expenses to an
indemnified party in connection with defending any such proceeding, upon receipt
of an undertaking by the indemnified party to repay those amounts if it is later
determined that the party is not entitled to indemnification.
The foregoing provisions may reduce the likelihood of derivative
litigation against directors and officers and discourage or deter stockholders
from suing directors or officers for breaches of their duties to the Company,
even though such an action, if successful, might otherwise benefit the Company
and its stockholders. In addition, to the extent that the Company expends funds
to indemnify directors and officers, funds will be unavailable for operational
purposes.
-9-
<PAGE>
THE COMPANY
The Quigley Corporation (the "Company") is a Nevada corporation which
was organized on August 24, 1989 and commenced business operations in October
1989.
The Company's initial business was the marketing and distribution of a
line of nutritious health supplements called Nutri-Bars. Since June 1996, the
Company has concentrated its business operations exclusively on the
manufacturing, marketing and development of its proprietary Cold-Eeze(R) and
Cold-Eezer Plus cold- remedy lozenge products and on development of various
product extensions. The Company's lozenge products are based upon a proprietary
zinc gluconate glycine formula, which in a clinical study conducted by The
Cleveland Clinic, has been shown to reduce the severity and duration of the
common cold symptoms. The Quigley Corporation acquired world-wide manufacturing
and distribution rights to this formulation in 1992 from Dr. John Godfrey and
commenced national marketing in 1996. The Company markets its Cold-Eeze(R)
products through manufacturer's representatives, network marketing, commercial
dealerships and other sources of marketing and promotion including television
direct marketing. Since its inception, the Company has conducted research and
development into various types of health-related food supplements and
homeopathic cold remedies.
The Company's principal office is located at the Landmark Building, 10
South Clinton Street, Doylestown, PA (and its alternative mailing address is
P.O. Box 1349, Doylestown, PA 18901). The telephone number is (215) 345-0919.
USE OF PROCEEDS
This Prospectus relates to the reoffer and resale of Shares issuable to
the Selling Stockholders pursuant to the Stock Option Plan. The Company will not
receive any of the proceeds from the sale of the Shares by the Selling
Stockholders. The Company may, however, receive the exercise price of the
options held by the Selling Stockholders, if and when exercised. Such proceeds
will be used by the Company for working capital and other corporate purposes.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is American Stock
Transfer and Trust Company, New York, New York.
-10-
<PAGE>
SELLING STOCKHOLDERS
This Prospectus relates to the offer and sale by the Selling
Stockholders of up to 1,500,000 Shares issued under the Stock Option Plan to the
Selling Stockholders. This Prospectus also relates to such indeterminate number
of additional shares of Common stock that may be acquired by the Selling
Stockholders as a result of the antidilution provisions of the Stock Option
Plan. To the extent required, additional information regarding the identity of
the Selling Stockholders and certain other information relating to the Selling
Stockholders will be provided by supplement to this Prospectus.
The following table sets forth (i) the number of shares of Common Stock
beneficially owned by each Selling Stockholder prior to the Offering, (ii) the
number of Shares of Common Stock being offered for resale by each Selling
Stockholder and (iii) the number and percentage of shares of Common Stock that
each Selling Stockholder will beneficially own after completion of the Offering.
Except as set forth below, none of the Selling Stockholders has had a material
relationship with the Company during the past three years.
<TABLE>
<CAPTION>
No. of Shares
of Common Stock No. of
Beneficially Owned Shares Shares Beneficially Owned
NAME Prior to Offering OFFERED (1) After Offering (2)
- ------------------ ---------------------- ----------- ----------------------------------
<S> <C> <C> <C> <C> <C>
Guy J. Quigley (3).................... 3,921,854(4) 100,000 3,821,854 25.9%
Charles A. Phillips (5)............... 1,592,992(6) 100,000 1,492,992 10.5%
Eric H. Kaytes (7).................... 502,992(8) 100,000 402,992 2.9%
George J. Longo (9) .................. 250,000(10) 125,000 125,000 *
Gurney P. Sloan (11) ................. 10,500(12) 10,000 500 *
Jacqueline F. Lewis (13).............. 10,000(14) 10,000 0 *
* Less than 1%.
</TABLE>
- -----------------
(1) Consists solely of Common Stock issuable to the Selling Stockholders
upon the exercise of currently exercisable options.
(2) Assumes that all Common Stock offered by the Selling Stockholders is
sold and that no other shares of Common Stock owned by the Selling
Stockholders are sold.
(3) Mr. Quigley is the Chairman of the Board, President and Chief Executive
Officer of the Company.
(4) Includes 815,000 shares of Common Stock issuable to Mr. Quigley upon
the exercise of currently exercisable warrants and options and 800,000
shares directly owned by Mr. Quigley's wife and son.
(5) Mr. Phillips is the Vice President, Chief Operating Officer and a
Director of the Company.
-11-
<PAGE>
(6) Includes 710,000 shares of Common Stock issuable to Mr. Phillips upon
the exercise of currently exercisable warrants and options and 10,000
shares directly owned by Mr. Phillip's wife.
(7) Mr. Kaytes is the Vice President, Secretary, Treasurer and a Director
of the Company.
(8) Includes 270,000 shares of Common Stock issuable to Mr. Kaytes upon the
exercise of currently exercisable warrants and options.
(9) Mr. Longo is the Vice President, Chief Financial Officer and a Director
of the Company.
(10) Represents 250,000 shares of Common Stock issuable to Mr. Longo upon
the exercise of currently exercisable warrants and options.
(11) Mr. Sloan is a Director of the Company.
(12) Includes 10,000 shares of Common Stock issuable to Mr. Sloan upon the
exercise of currently exercisable options.
(13) Ms. Lewis is a Director of the Company.
(14) Represents 10,000 shares of Common Stock issuable to Ms. Lewis upon the
exercise of currently exercisable options.
There is no assurance that the Selling Stockholders will exercise the options
to purchase Common Stock from the Company or that any such Selling Stockholder
will otherwise opt to sell any of the Shares offered hereby.
The Shares covered by this Prospectus may be sold from time to time so long as
this Prospectus remains in effect; provided, however, that the Selling
Stockholders are first required to contact the Company's Corporate Secretary to
confirm that this Prospectus is in effect. The Company intends to distribute to
each Selling Stockholder a letter setting forth the procedures whereby such
Selling Stockholder may use the Prospectus to sell the shares and under what
conditions the Prospectus may not be used. The Selling Stockholders expect to
sell the Shares at prices then attainable, less ordinary brokers' commissions
and dealers' discounts as applicable.
The Selling Stockholders and any broker or dealer to or through whom any of
the Shares are sold may be deemed to be underwriters within the meaning of the
Securities Act with respect to the Common Stock offered hereby, and any profits
realized by the Selling Stockholders or such brokers or dealers may be deemed to
be underwriting commissions. Brokers' commissions and dealers' discounts, taxes
and other selling expenses to be borne by the Selling Stockholders are not
expected to exceed normal selling expenses for sales over-the-counter or
otherwise, as the case may be. The registration of the Shares under the
Securities Act shall not be deemed an admission by the Selling Stockholders or
the Company that the Selling Stockholders are underwriters for purposes of the
Securities Act of any Shares offered under this Prospectus.
-12-
<PAGE>
PLAN OF DISTRIBUTION
This Prospectus covers the resale of up to 1,500,000 Shares of the Company's
Common Stock issuable under the Stock Option Plan. The Selling Stockholders may
sell the Shares offered hereby from time to time in transactions on one or more
exchanges, in the over-the-counter market, in negotiated transactions, or a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices relating to prevailing
market prices or at negotiated prices and terms.
From time to time the Selling Stockholders may pledge their Shares pursuant to
the margin provisions of customer agreements with their respective brokers. Upon
a default by the Selling Stockholders, such brokers may offer and sell the
pledged Shares.
This Prospectus also may be used, with the Company's consent, by donees or
other transferees of the Selling Stockholders, or by other persons acquiring the
Common Stock under circumstances requiring or making desirable the use of this
Prospectus for the offer and sale of such shares.
Such transactions may be effected by selling the Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of the customary commissions). The Selling
Stockholders and any broker-dealers that participate with the Selling
Stockholders in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act and any
commissions received by them and any profit on the resale of the Shares may be
deemed to be underwriting commissions or discounts under the Securities Act. The
Selling Stockholders will pay any transaction costs associated with effecting
any sales that occur.
Any broker-dealer acquiring Common Stock offered hereby may sell such
securities either directly, in its normal market-making activities, through or
to other brokers on a principal or agency basis or to its customers. Any such
sales may be at prices then prevailing on Nasdaq, at prices related to such
prevailing market prices or at negotiated prices and terms to its customers or a
combination of such methods. In addition and without limiting the foregoing, the
Selling Stockholders will be subject to applicable provisions of Regulation M,
which may limit the timing of the purchases and sales of shares of Common Stock
by the Selling Stockholders.
-13-
<PAGE>
In addition, any Shares covered by this Prospectus which qualify for sale
pursuant to Rule 144 may be sold under Rule 144 instead of under this
Prospectus.
The Company has agreed to pay all fees and expenses incident to the
registration of the Shares, except selling commissions and fees and expenses of
counsel or any other professionals or other advisors, if any, to the Selling
Stockholders.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the Shares offered
hereby have been passed upon for the Company by Messrs. Olshan Grundman Frome &
Rosenzweig LLP, New York, New York.
EXPERTS
The financial statements as of September 30, 1996 and December 31, 1996, for
the year ended September 30, 1996 and for the interim period ended December 31,
1996, incorporated by reference in this prospectus and elsewhere in this
Registration Statement have been audited by Nachum Blumenfrucht CPA, independent
public accountant, as indicated in his report with respect thereto, and are
included herein in reliance upon the authority of Mr. Blumenfrucht as an expert
in giving said report.
The financial statements of The Quigley Corporation included in the report on
Form 10-KSB of the Company for the fiscal year ended December 31, 1997 referred
to above have been audited by PricewaterhouseCoopers LLP, successor to Coopers &
Lybrand L.L.P., independent accountants, as set forth in their report dated
February 20, 1998, accompanying such financial statements, and are incorporated
herein by reference in reliance upon the report of such firm, which report is
given upon their authority as experts in accounting and auditing.
Any financial statements and schedules hereinafter incorporated by reference
in the registration statement of which this prospectus is part that have been
audited and are subject of a report by independent accountants will be so
incorporated by reference in reliance upon such reports and upon the authority
of such firms as experts in accounting and auditing to the extent covered by
consents filed with the Commission.
CHANGE OF ACCOUNTANTS
On January 29, 1997, the Company determined to change accountants to Coopers &
Lybrand L.L.P. The Company's prior auditor, Nachum Blumenfrucht, CPA resigned
and on the same date, the Company engaged Coopers & Lybrand, L.L.P., to audit
its financial statements. The decision to change accountants was made
-14-
<PAGE>
with the approval of the Company's Board of Directors and was a result of the
dramatic expansion of business operations since the close of the fiscal year
ended September 30, 1996 and the interim period ended December 31, 1996.
The Company believes, and has been advised by Nachum Blumenfrucht that he
concurs in such belief, that, the Company and Mr. Blumenfrucht did not have any
disagreement on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of Mr. Blumenfrucht, would have caused him to make
reference in connection with his report on the Company's financial statements to
the subject matter of the disagreement.
No report of Mr. Blumenfrucht on the Company's financial statements for either
of the past two fiscal years contained an adverse opinion, a disclaimer or
opinion or a qualification (other than a going concern qualification) or was
modified as to uncertainty, audit scope or accounting principles. During such
fiscal periods, there were no "reportable events" within the meaning of Item
304(a)(1) of Regulation S-K promulgated under the Securities Act.
ADDITIONAL INFORMATION
The Company has also filed with the Commission a Registration Statement on
Form S-8 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Shares offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement. Statements contained in this Prospectus
as to the contents of any contract or other document are not necessarily
complete, and in each instance, reference is made to the copy of such contract
or document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
-15-
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by The Quigley Corporation (the
"Company") with the Securities and Exchange Commission are incorporated herein
by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998.
3. The Company's Current Report on Form 8-K dated January 9, 1998.
4. The description of the Company's Common Stock, $.0005 par value (the
"Common Stock"), in the Company's Registration Statement on Form 8-A filed
October 25, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended, after the
effective date of this registration statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference into this Prospectus will be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or any other subsequently filed document which also
is, or is deemed to be, incorporated by reference into this Prospectus modifies
or supersedes that statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Not applicable.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-laws authorize indemnification of directors and officers as
follows:
ARTICLE V - INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS
Section 1. The corporation shall indemnify any person who was or is a party or
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than action by or in the right of the corporation) by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. No officer, director or shareholder may become surety on behalf of
the corporation for any of its obligations under any circumstances whatsoever.
See Item 9(e) below for information regarding the position of the Commission
with respect to the effect of any indemnification for liabilities arising under
the Securities Act of 1933, as amended.
Section 78.751 of the Nevada General Corporation Law provides as follows:
"(1) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation,
or is or was serving at
II-2
<PAGE>
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with the
action, suit or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon
a plea of NOLO CONTENDERE or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and that, with respect to any criminal action or proceeding, he
had reasonable cause to believe that his conduct was unlawful.
(2) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses,
including amounts paid in settlement and attorneys' fees actually and
reasonably incurred by him in connection with the defense or settlement of the
action or suit if he acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to which
such a person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
(3) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense
of any claim, issue or matter therein, he must be indemnified by the
corporation against expenses, including attorneys' fees actually and
reasonably incurred by him in connection with the defense.
II-3
<PAGE>
(4) Any indemnification under subsections 1 and 2, unless ordered by a
court or advanced pursuant to subsection 5, must be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made:
(a) By the shareholders;
(b) By the board of directors by majority vote of a quorum consisting
of directors who were not parties to the act, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent legal counsel
in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the
act, suit or proceeding cannot be obtained, by independent legal counsel in a
written opinion.
(5) The articles of incorporation, the bylaws or an agreement made by
the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions of this
subsection do not affect any rights to advancement of expenses to which
corporate personnel other than directors or officers may be entitled under any
contract or otherwise by law.
(6) The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles
of incorporation or any bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, for either an action in his official
capacity or an action in other capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to subsection 2 or for the
advancement of expenses made pursuant to subsection 5, may not be made to or
on behalf of any director or officer if a final adjudication establishes that
his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action.
II-4
<PAGE>
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
EXHIBIT INDEX
EXHIBIT
4.1 Specimen Certificate of the Company's Common Stock
(incorporated by reference to Exhibit 4.1 of the
Company's Form 10-KSB dated April 4, 1997).
* 5.1 Opinion of Olshan Grundman Frome & Rosenzweig LLP.
* 10.1 The Quigley Corporation 1997 Stock Option Plan.
* 23.1 Consent of Nachum Blumenfrucht, independent public
accountant.
* 23.2 Consent of PricewaterhouseCoopers LLP, independent
accountants.
* 23.3 Consent of Olshan Grundman Frome & Rosenzweig LLP
(included in Exhibit 5.1).
* 24.1 Power of Attorney (included on the signature page
of this Registration Statement).
- --------------------
* Filed herewith
II-5
<PAGE>
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
a. To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) above do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement;
b. That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
c. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
II-6
<PAGE>
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against each such liabilities (other than the payment by the registrant of
expenses incurred or paid by a trustee, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-7
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Doylestown, State of Pennsylvania, on this 12th day of
August, 1998.
THE QUIGLEY CORPORATION
(Registrant)
By: /S/ GUY J. QUIGLEY
Guy J. Quigley
Chief Executive Officer and
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Guy J. Quigley and Charles A. Phillips,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent or his substitute may lawfully do or
cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ Guy J. Quigley Chairman of the Board,
- --------------------------- President, Chief
Guy J. Quigley Executive Officer
(principal executive
officer) August 12, 1998
/S/ Charles A. Phillips Executive Vice
- --------------------------- President, Chief
Charles A. Phillips Operating Officer and
Director August 12, 1998
/S/ George J. Longo Vice President, Chief
- --------------------------- Financial Officer and
George J. Longo Director (principal
financial and accounting
officer) August 12, 1998
/S/ Eric H. Kaytes Vice President,
- --------------------------- Secretary, Treasurer,
Eric H. Kaytes and Director August 12, 1998
/S/ Gurney P. Sloan, Jr. Director August 12, 1998
- ---------------------------
Gurney P. Sloan, Jr.
/S/ Jacqueline F. Lewis August 12, 1998
- --------------------------- Director
Jacqueline F. Lewis
II-8
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10039
August 12, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: The Quigley Corporation-
Registration Statement On Form S-8
----------------------------------
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-8
dated the date hereof (the "Registration Statement"), filed with the Securities
and Exchange Commission by the Quigley Corporation, a Nevada corporation (the
"Company"). The Registration Statement relates to an aggregate of 1,500,000
shares (the "Shares") of common stock, par value $.001 per share of the Company
(the "Common Stock"). The Shares will be issued and sold by the Company in
accordance with the Company's 1997 Stock Option Plan (the "Plan").
We advise you that we have examined originals or copies
certified or otherwise identified to our satisfaction of the Certificate of
Incorporation and By-laws of the Company, minutes of meetings of the Board of
Directors and stockholders of the Company, the Plan and such other documents,
instruments and certificates of officers and representatives of the Company and
public officials, and we have made such examination of the law, as we have
deemed appropriate as the basis for the opinion hereinafter expressed. In making
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the conformity
to original documents of documents submitted to us as certified or photostatic
copies.
<PAGE>
Securities and Exchange Commission
August 12, 1998
Page -2-
Based upon the foregoing, we are of the opinion that the
Shares, when issued and paid for in accordance with the terms and conditions set
forth in the Plan, will be duly and validly issued, fully paid and
non-assessable.
We are members of the bar of the State of New York.
Accordingly, this opinion is limited to the federal laws of the United States,
the laws of the State of New York and the General Corporation Law of the State
of Delaware. Insofar as the opinion expressed above relates to matters that are
governed by the laws of the State of Nevada, our investigation of the applicable
law has been limited exclusively upon our review of what we believe to be the
relevant provisions of the General Corporation Law of the State of Nevada.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus constituting a part of the
Registration Statement.
Very truly yours,
/s/ Olshan Grundman Frome & Rosenzweig LLP
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
1997 STOCK OPTION PLAN
OF
THE QUIGLEY CORPORATION
1. PURPOSE OF THE PLAN.
This 1997 Stock Option Plan (the "Plan") is intended as an incentive,
to retain in the employ or as directors, of The Quigley Corporation (the
"Company") and any Subsidiary of the Company (within the meaning of Section
424(f) of the Internal Revenue Code of 1986, as amended (the "Code")), persons
of training, experience and ability, to attract new employees, and directors
whose services are considered valuable, to encourage the sense of proprietorship
and to stimulate the active interest of such persons in the development and
financial success of the Company and its Subsidiaries.
It is further intended that certain options granted pursuant to the
Plan shall constitute incentive stock options within the meaning of Section 422
of the Code ("Incentive Options") while certain other options granted pursuant
to the Plan shall be nonqualified stock options ("Nonqualified Options").
Incentive Options and the Nonqualified Options are hereinafter referred to
collectively as "Options."
The Company intends that the Plan meet the requirements of Rule 16b-3
("Rule 16b-3") promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and that transactions of the type specified in
subparagraphs (c) to (f) inclusive of Rule 16b-3 by officers and directors of
the Company pursuant to the Plan will be exempt from the operation of Section
16(b) of the Exchange Act. In all cases, the terms, provisions, conditions and
limitations of the Plan shall be construed and interpreted consistent with the
Company's intent as stated in this Section 1.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee initially consisting of
Mr. Guy J. Quigley, and Mr. Charles A. Phillips (the "Committee"). Replacements
on the Committee shall be appointed by the Board of Directors of the Company
(the "Board"). The members of the Committee shall serve at the pleasure of the
Board. Notwithstanding the foregoing, with respect to any Options granted to
directors and "officers" (as such term is defined in Rule 16a-1 of the
Securities and Exchange Commission ("Rule 16a-1"), if and as Rule 16b-3 is then
in effect) of the Company, the Plan shall be administered by the entire Board,
unless the Committee at the time of grant, award or other acquisition under the
Plan of Options to any such person consists of two or more directors of the
Company that are "Non-Employee Directors" (as such term is defined in Rule 16b-3
of the Securities and Exchange Commission ("Rule 16b-3"), if and as Rule 16b-3
is then in effect).
The Committee, subject to Section 3 hereof, shall have full power and
authority to designate recipients of Options, to determine the terms and
conditions of respective Option
<PAGE>
agreements (which need not be identical) and to interpret the provisions and
supervise the administration of the Plan. Subject to Section 7 hereof, the
Committee shall have the authority, without limitation, to designate which
Options granted under the Plan shall be Incentive Options and which shall be
Nonqualified Options. To the extent any Option does not qualify as an Incentive
Option, it shall constitute a separate Nonqualified Option.
Subject to the provisions of the Plan, the Committee shall interpret
the Plan and all Options granted under the Plan shall make such rules as it
deems necessary for the proper administration of the Plan, make all other
determinations necessary or advisable for the administration of the Plan and
correct any defects or supply any omission or reconcile any inconsistency in the
Plan or in any Options granted under the Plan in the manner and to the extent
that the Committee deems desirable to carry the Plan or any Options into effect.
The act or determination of a majority of the Committee shall be deemed to be
the act or determination of the Committee and any decision reduced to writing
and signed by all of the members of the Committee shall be fully effective as if
it had been made by a majority at a meeting duly held. Subject to the provisions
of the Plan, any action taken or determination made by the Committee pursuant to
this and the other paragraphs of the Plan shall be conclusive on all parties.
In the event that for any reason the Committee is unable to act or if
the Committee at the time of any grant, award or other acquisition under the
Plan of Options or Stock as hereinafter defined does not consist of two or more
Non-Employee Directors, or if there shall be no such Committee, then the Plan
shall be administered by the Board and any such grant, award or other
acquisition may be approved or ratified in any other manner contemplated by
subparagraph (d) of Rule 16b-3.
Notwithstanding anything herein to the contrary, any options granted to
the Company's Chief Executive Officer or to any of the Company's other four most
highly compensation officers that are intended to qualify as performance-based
compensation under Section 162(m) of the Code may only be granted by a Committee
consisting of two or more directors of the Company that are "Outside Directors"
(as such term is defined in Section 162(m) of the Code).
3. DESIGNATION OF OPTIONEES.
The persons eligible for participation in the Plan as recipients of
Options ("Optionees") shall include full-time and part-time employees, officers
and directors of the Company or any Subsidiary; provided that Incentive Options
may only be granted to employees of the Company and the Subsidiaries. In
selecting Optionees, and in determining the number of shares to be covered by
each Option granted to Optionees, the Committee may consider the office or
position held by the Optionee, the Optionee's degree of responsibility for and
contribution to the growth and success of the Company or any Subsidiary, the
Optionee's length of service, promotions, potential and any other facts to which
the Committee may consider relevant. Subject to the next sentence, an employee
who has been granted an Option hereunder may be granted an additional Option or
Options, if the Committee shall so determine.
-2-
<PAGE>
4. STOCK RESERVED FOR THE PLAN.
Subject to adjustment as provided in Section 7 hereof, a total of one
million five hundred thousand (1,500,000) shares of common stock, $.0005 par
value ("Stock"), of the Company shall be subject to the Plan. The shares of
Stock subject to the Plan shall consist of unissued shares or previously issued
shares reacquired and held by the Company or any Subsidiary of the Company, and
such amount of shares of Stock shall be and is hereby reserved for such purpose.
Any of such shares of Stock which may remain unsold and which are not subject to
outstanding Options at the termination of the Plan shall cease to be reserved
for the purpose of the Plan, but until termination of the Plan the Company shall
at all times reserve a sufficient number of shares of Stock to meet the
requirements of the Plan. Should any Option expire or be canceled prior to its
exercise in full or should the number of shares of Stock to be delivered upon
the exercise in full of any Option be reduced for any reason, the shares of
Stock theretofore subject to such Option may again be subject to an Option under
the Plan.
Notwithstanding the foregoing, with respect to any options that are
intended to qualify as performance-based compensation under Section 162(m) of
the Code, the maximum number of shares of stock that may be subject to options
granted under the Plan to any individual in any calendar year shall not exceed
500,000, and the method of counting such shares shall conform to any
requirements applicable to performance-based compensation under Section 162(m)
of the Code.
5. TERMS AND CONDITIONS OF OPTIONS.
Options granted under the Plan shall be subject to the following
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a) OPTION PRICE. The purchase price of each share of Stock
purchasable under an Option shall be determined by the Committee at the
time of grant but shall not be less than 100% of the Fair Market Value
(as defined below) of such share of Stock on the date the Option is
granted in the case of an Incentive Option and not less than 80% of the
fair market value of such share of Stock on the date the Option is
granted in the case of a non-Incentive Option; PROVIDED, HOWEVER, that
with respect to an Incentive Option, in the case of an Optionee who, at
the time such Option is granted, owns (within the meaning of Section
424(d) of the Code) more than 10% of the total combined voting power of
all classes of stock of the Company or of any Subsidiary, then the
purchase price per share of stock shall be at least 110% of the Fair
Market Value per share of Stock at the time of grant, PROVIDED,
HOWEVER, that if an option granted to the Company's Chief Executive
Officer or to any of the Company's other four most highly compensation
officers is intended to qualify as performance-based compensation under
Section 162(m) of the Code, the exercise price of such Option shall not
be less than 100% of the Fair Market Value of such share of Stock on
the date the Option is granted. The purchase price of each share of
Stock purchasable under a Nonqualified Option shall not be less than
80%
-3-
<PAGE>
of the Fair Market Value of such share of Stock on the date the Option
is granted. The exercise price for each incentive stock option shall be
subject to adjustment as provided in Section 7 below. The fair market
value ("Fair Market Value") means the closing price of publicly traded
shares of Stock on the national securities exchange on which shares of
Stock are listed (if the shares of Stock are so listed) or on the
Nasdaq National Market (if the shares of stock are regularly quoted on
the Nasdaq National Market), or, if not so listed or regularly quoted,
the mean between the closing bid and asked prices of publicly traded
shares of Stock in the over-the-counter market, or, if such bid and
asked prices shall not be available, as reported by any nationally
recognized quotation service selected by the Company, or as determined
by the Committee in a manner consistent with the provisions of the
Code. Anything in this Section 5(a) to the contrary notwithstanding, in
no event shall the purchase price of a share of Stock be less than the
minimum price permitted under the rules and policies of the securities
exchange or automated quotation system on which the shares of Stock are
listed.
(b) OPTION TERM. The term of each Option shall be fixed by the
Committee, but no Option shall be exercisable more than ten years after
the date such Option is granted; PROVIDED, HOWEVER, that in the case of
an Optionee who, at the time such Option is granted, owns more than 10%
of the total combined voting power of all classes of stock of the
Company or any Subsidiary, then such Incentive Stock Option shall not
be exercisable with respect to any of the shares subject to such
Incentive Stock Option later than the date which is five years after
the date of grant.
(c) EXERCISABILITY. Subject to paragraph (j) of this Section
5, Options shall be exercisable at such time or times and subject to
such terms and conditions as shall be determined by the Committee at
grant.
(d) METHOD OF EXERCISE. Options may be exercised in whole or
in part at any time during the option period, by giving written notice
to the Company specifying the number of shares to be purchased,
accompanied by payment in full of the purchase price, in cash, by check
or such other instrument as may be acceptable to the Committee,
including a cashless exercise. As determined by the Committee, in its
sole discretion, at or after grant, payment in full or in part may also
be made in the form of Stock owned by the Optionee (based on the Fair
Market Value of the Stock owned by the Optionee (based on the Fair
Market Value of the Stock on the trading day before the Option is
exercised); PROVIDED, HOWEVER, that if such Stock was issued pursuant
to the exercise of an Incentive Option under the Plan, the holding
requirements for such Stock under the Code shall first have been
satisfied. An Optionee shall have the rights to dividends or other
rights of a shareholder with respect to shares subject to the Option
after (i) the Optionee has given written notice of exercise and has
paid in full for such shares and (ii) becomes a shareholder of record.
(e) TRANSFERABILITY OF OPTIONS. No Option granted hereunder
shall be transferable otherwise than by (i) will, (ii) the laws of
descent and distribution or (iii)
-4-
<PAGE>
pursuant to a qualified domestic relations order as defined by the
Internal Revenue Code or Title 1 of the Employee Retirement Income
Security Act of 1986, as amended, or the rules and regulations
promulgated thereunder; PROVIDED HOWEVER, that to the extent the option
agreement provisions do not disqualify such option for exemption under
Rule 16b- 3 under the Act of 1934, as amended, Nonqualified Options may
be transferable during an Optionee's lifetime to immediate family
members of an optionee, partnerships in which the only partners are
members of the Optionee's immediate family, and trusts established
solely for the benefit of such immediate family members.
(f) TERMINATION BY DEATH. Unless otherwise determined by the
Committee at grant, if any Optionee's employment with the Company or
any Subsidiary terminates by reason of death, the Option may thereafter
be immediately exercised, to the extent then exercisable (or on such
accelerated basis as the Committee shall determine at or after grant),
by the legal representative of the estate or by the legatee or the
Optionee under the will of the Optionee, for a period of one year from
the date of such death or until the expiration of the stated term of
such Option as provided under the Plan, whichever period is shorter.
(g) TERMINATION BY REASON OF DISABILITY. Unless otherwise
determined by the Committee at grant, if any Optionee's employment with
the Company or any Subsidiary terminates by reason of total and
permanent disability as determined under the Company's long term
disability policy ("Disability"), any Option held by such Optionee may
thereafter be exercised, to the extent it was exercisable at the time
of termination due to Disability (or on such accelerated basis as the
Committee shall determine at or after grant), but may not be exercised
after one year from the date of such termination of employment or the
expiration of the stated term of such Option, whichever period is
shorter; PROVIDED, HOWEVER, that, if the Optionee dies within such
one-year period, any unexercised Option held by such Optionee shall
thereafter be exercisable to the extent to which it was exercisable at
the time of death for a period of one year from the date of such death
or for the stated term of such Option, whichever period is shorter.
(h) OTHER TERMINATION. Unless otherwise determined by the
Committee at grant, if any Optionee's employment with the Company or
any Subsidiary terminates for any reason other than death, or
disability, any Option held by such Optionee may thereafter be
exercised to the extent it was exercisable at the time of such
termination of employment (or on such accelerated basis as the
Committee shall determine at or after grant), but may not be exercised
after one year from the date of such termination of employment or the
expiration of the stated term of such Option, whichever period is
shorter. Notwithstanding the foregoing, if any Optionee's employment
with the Company or any Subsidiary terminates for Cause, such Option
may not be exercised following the expiration of three months after the
date of such termination of employment. "Cause" shall mean a felony
conviction or the failure of an Optionee to contest prosecution for a
felony or an Optionee's willful misconduct or dishonesty, any of which
is harmful to the business or reputation of the Company or any
Subsidiary. The transfer of an Optionee
-5-
<PAGE>
from the employ of the Company to a Subsidiary, or vice versa, or from
one Subsidiary to another, shall not be deemed to constitute a
termination of employment for purposes of the Plan.
Notwithstanding anything herein to the contrary, Incentive
Options may not be exercised after three months from the date of such
termination of employment or the expiration of the stated term of such
Option, whichever period is shorter; PROVIDED, HOWEVER, that, if the
Optionee dies within such three-month period, any unexercised Option
held by such Optionee shall thereafter be exercisable, to the extent to
which it was exercisable at the time of death, for a period of one year
from the date of such death or for the stated term of such Option,
whichever period is shorter.
(i) LIMIT ON VALUE OF INCENTIVE OPTION. The aggregate Fair
Market Value, determined as of the date the Option is granted, of the
Stock for which Incentive Options are exercisable for the first time by
any Optionee during any calendar year under the Plan (and/or any other
stock option plans of the Company or any Subsidiary) shall not exceed
$100,000.
(j) DISPOSITION OF INCENTIVE OPTION SHARES. The stock option
agreement evidencing any Incentive Options granted under this Plan
shall provide that if the Optionee makes a disposition, within the
meaning of Section 424(c) of the Code and regulations promulgated
thereunder, of any share or shares of Stock issued to him pursuant to
his exercise of an Incentive Option granted under the Plan within the
two-year period commencing on the day after the date of the grant of
such Incentive Option or within a one-year period commencing on the day
after the date of transfer of the share or shares to him pursuant to
the exercise of such Incentive option, he shall, within ten days of
such disposition, notify the Company thereof and immediately deliver to
the Company any amount of federal income tax withholding required by
law.
6. TERM OF PLAN.
No Option shall be granted pursuant to the Plan on or after December 2,
2007, but Options granted may extend beyond that date.
7. CAPITAL CHANGE OF THE COMPANY.
In the event of any merger, reorganization or consolidation of the
Company with one or more corporations as a result of which the Company is not
the surviving corporation, or upon a sale of substantially all of the property
or more than 80% of the then-outstanding shares of Stock of the Company to
another corporation, all Options granted under the Plan shall immediately vest.
In the event of a stock dividend or recapitalization, or other change in
corporate structure affecting the Stock not covered in the first sentence of
this Section 7 (or in the event of a merger, reorganization or consolidation
where the Optionee has not held the Option for at last six months), the
Committee shall make an appropriate and equitable adjustment in the number and
-6-
<PAGE>
kind of shares reserved for issuance under the Plan and in the number and option
price of shares subject to outstanding Options granted under the Plan, to the
end that after such event each Optionees's proportionate interest shall be
maintained as immediately before the occurrence of such event.
8. PROPORTIONATE ADJUSTMENTS. If the outstanding shares of Stock are
increased, decreased, changed into or exchanged into a different number or kind
of shares of Stock or securities of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, an appropriate and proportionate adjustment
shall be made to the maximum number and kind of shares of Stock as to which
Options may be granted under this Plan. A corresponding adjustment changing the
number or kind of shares of Stock allocated to unexercised Options or portions
thereof, which shall have been granted prior to any such change, shall likewise
be made. Any such adjustment in the outstanding Options shall be made without
change in the purchase price applicable to the unexercised portion of the Option
with a corresponding adjustment in the exercise price of the shares of Stock
covered by the Option. Notwithstanding the foregoing, there shall be no
adjustment for the issuance of shares of Stock on conversion of notes, preferred
stock or exercise of warrants or shares of Stock issued by the Board for such
consideration as the Board deems appropriate.
9. PURCHASE FOR INVESTMENT.
Unless the Options and shares covered by the Plan have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or the
Company has determined that such registration is unnecessary, each person
exercising an Option under the Plan may be required by the Company to give a
representation in writing that he is acquiring the shares for his own account
for investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.
10. TAXES.
The Company may make such provisions as it may deem appropriate,
consistent with applicable law, in connection with any Options granted under the
Plan with respect to the withholding of any taxes or any other tax matters.
11. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on December 2, 1997 (the date that it was
approved by the Board), PROVIDED, HOWEVER, that the Plan shall subsequently be
approved by majority vote of the Company's shareholders not later than December
1, 1998.
-7-
<PAGE>
12. AMENDMENT AND TERMINATION.
The Board may amend, suspend, or terminate the Plan, except that no
amendment shall be made which would impair the right of any Optionee under any
Option theretofore granted without his consent, and except that no amendment
shall be made which, without the approval of the shareholders, would:
(a) materially increase the number of shares which may be
issued under the Plan, except as is provided in Sections 7 and 8;
(b) materially increase the benefits accruing to the
Optionees under the Plan;
(c) materially modify the requirements as to eligibility for
participation in the Plan;
(d) decrease the exercise price of an Incentive Option to
less than 100% of the Fair Market Value on the date of grant thereof or
the exercise price of a Nonqualified option to less than 80% of the
Fair Market Value on the date of grant thereof; or
(e) extend the Option term provided for in Section 5(b).
The Committee may amend the terms of any Option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Optionee without his consent. The Committee may also substitute new Options
for previously granted Options, including options granted under other plans
applicable to the participant and previously granted Options having higher
option prices, upon such terms as the Committee may deem appropriate.
13. GOVERNMENT REGULATIONS.
The Plan, and the granting and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such Options, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.
14. GENERAL PROVISIONS.
(a) CERTIFICATES. All certificates for shares of Stock
delivered under the Plan shall be subject to such stock transfer orders
and other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Stock is then
listed, and any applicable Federal or state securities law, and the
Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.
-8-
<PAGE>
(b) EMPLOYMENT MATTERS. The adoption of the Plan shall not
confer upon any Optionee of the Company or any Subsidiary, any right to
continued employment (or, in case the Optionee is also a director,
continued retention as a director) with the Company or a Subsidiary, as
the case may be, nor shall it interfere in any way with the right of
the Company or any Subsidiary to terminate the employment of any of its
employees at any time.
(c) LIMITATION OF LIABILITY. No member of the Board or the
Committee, or any officer or employee of the Company acting on behalf
of the Board or the Committee, shall be personally liable for any
action, determination, or interpretation taken or made in good faith
with respect to the Plan, and all members of the Board of the Committee
and each and any officer or employee of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination
or interpretation.
(d) REGISTRATION OF STOCK. Notwithstanding any other provision
in the Plan, no Option may be exercised unless and until the Stock to
be issued upon the exercise thereof has been registered under the
Securities Act and applicable state securities laws, or are, in the
opinion of counsel to the Company, exempt from such registration. The
Company shall not be under any obligation to register under applicable
federal or state securities laws any Stock to be issued upon the
exercise of any Option granted hereunder, or to comply with an
appropriate exemption from registration under such laws in order to
permit the exercise of an Option and the issuance and sale of the Stock
subject to such Option, however, the Company may in its sole discretion
register such Stock at such time as the Company shall determine. If the
Company chooses to comply with such an exemption from registration, the
Stock issued under the Plan may, at the direction of the Committee,
bear an a appropriate restrictive legend restricting the transfer or
pledge of the Stock represented thereby, and the Committee may also
give appropriate stop-transfer instructions to the transfer agent to
the Company.
-9-
N. BLUMENFRUCHT
Certified Public Accountant
1040 East 22nd Street
Brooklyn, N.Y. 11210
(718) 692-2743
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT
----------------------------------------
The Board of Directors
The Quigley Corporation
As independent public accountant, I hereby consent to the incorporation
in this Registration Statement on Form S-8 of (i) my report dated December 12,
1996 included in The Quigley Corporation's Form 10-KSB for the year ended
September 30, 1996, (ii) my report dated February 11, 1998 included in The
Quigley Corporation's Form 10-KSB for the year ended December 31, 1997 and (iii)
to all references to me included in this Registration Statement.
/S/ NACHUM BLUMENFRUCHT
Nachum Blumenfrucht
Certified Public Accountant
Brooklyn, New York
August 12, 1998
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated February 20, 1998, on our audit of the financial
statements of The Quigley Corporation as of and for the year ended December 31,
1997, appearing in and incorporated by reference in the Annual Report on
Form-10KSB under the Securities Exchange Act of 1934 of The Quigley Corporation
for the year ended December 31, 1997. We also consent to the references to our
firm under the caption "Experts."
/s/ PriceWaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
August 10, 1998
