SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14(a)-12
THE QUIGLEY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-1-
<PAGE>
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ /
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
-2-
<PAGE>
THE QUIGLEY CORPORATION
LANDMARK BUILDING
10 SOUTH CLINTON STREET
P. O. BOX 1349
DOYLESTOWN, PA 18901
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 7, 1999
------------------
TO THE STOCKHOLDERS OF THE QUIGLEY CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of THE QUIGLEY
CORPORATION, a NEVADA Corporation (the "Company") will be held at Aldie Mansion,
85 Old Dublin Pike, Doylestown, PA 18901 on Friday, May 7, 1999, at 4:00 P.M.,
local time, for the following purposes:
(i) To elect a Board of Directors to serve for the ensuing year
until the next Annual Meeting of Stockholders and until their
respective successors have been duly elected and qualified.
(ii) To ratify the appointment of PricewaterhouseCoopers LLP as
independent auditors for the year ending December 31, 1999.
(iii) To transact such other business as may properly come before the
Meeting and any adjournments thereof.
Only stockholders of record at the close of business on March 15, 1999 will be
entitled to notice of and to vote at the Meeting or any adjournment thereof. Any
stockholder may revoke a proxy at any time prior to its exercise by filing a
later-dated proxy, or a written notice of revocation with the Secretary of the
Company, or by voting in person at the Meeting. If a stockholder is not
attending the Meeting, any proxy or notice should be returned in time for
receipt no later than the close of business on the day preceding the Meeting.
DUE TO LIMITED SEATING CAPACITY, ADMISSION WILL BE LIMITED TO ONE (1) SEAT PER
STOCKHOLDER OF RECORD. IF YOUR SHARES ARE HELD BY A BANK OR BROKER, YOU MUST
BRING YOUR BANK OR BROKERS' STATEMENT EVIDENCING YOUR BENEFICIAL OWNERSHIP OF
THE QUIGLEY CORPORATION STOCK TO THE MEETING.
By Order of the Board of Directors
/s/ Eric H. Kaytes
-------------------------
ERIC H. KAYTES, Secretary
Doylestown, PA
April 6, 1999
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE URGED TO FILL
IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
THE QUIGLEY CORPORATION
LANDMARK BUILDING
10 SOUTH CLINTON STREET
P. O. BOX 1349
DOYLESTOWN, PA 18901
------------------
PROXY STATEMENT
------------------
APRIL 6, 1999
This Proxy Statement is being furnished in connection with the solicitation of
proxies by the Board of Directors of The Quigley Corporation, (the "Company")
for use at the Annual Meeting of Stockholders of the Company to be held at Aldie
Mansion, 85 Old Dublin Pike, Doylestown, PA 18901, on Friday, May 7, 1999 at
4.00 P.M., local time, and any adjournments thereof (the "Meeting").
The principal executive offices of the Company are located at the Landmark
Building, 10 South Clinton Street, P.O. Box 1349, Doylestown, Pennsylvania
18901. The approximate date on which this Proxy Statement and the accompanying
Proxy will first be sent or given to stockholders is April 6, 1999.
At the Meeting, the following proposals will be presented to the Stockholders
for approval:
(i) To elect a Board of Directors to serve for the ensuing year
until the next Annual Meeting of Stockholders and until their
respective successors have been duly elected and qualified.
(ii) To ratify the appointment of PricewaterhouseCoopers LLP as
independent auditors for the year ending December 31, 1999.
(iii) To transact such other business as may properly come before the
Meeting and any adjournments thereof.
DUE TO LIMITED SEATING CAPACITY, ADMISSION WILL BE LIMITED TO ONE (1) SEAT PER
STOCKHOLDER OF RECORD. IF YOUR SHARES ARE HELD BY A BANK OR BROKER, YOU MUST
BRING YOUR BANK OR BROKERS' STATEMENT EVIDENCING YOUR BENEFICIAL OWNERSHIP OF
THE QUIGLEY CORPORATION STOCK TO THE MEETING.
RECORD AND VOTING SECURITIES
Only stockholders of record at the close of business on March 15, 1999 will be
entitled to notice of and to vote at the Meeting. At the close of business on
such record date, the Company had 12,016,986 shares of Common Stock, par value
$.0005 per share (the "Common Stock") outstanding and entitled to vote at the
Meeting. Each outstanding share of Common Stock is entitled to one vote. There
was no other class of voting securities of the Company outstanding on the Record
Date. A majority of the outstanding shares of Common Stock present in person or
by Proxy is required for a quorum.
PROXIES AND VOTING RIGHTS
Shares of Common Stock represented by Proxies that are properly executed, duly
returned and not revoked will be voted in accordance with the instructions
contained therein. If no instructions are contained in a Proxy, the shares of
Common Stock represented thereby will be voted (i) for election as directors of
the persons who have been nominated by the Board of Directors, (ii) for
ratification of the appointment of PricewaterhouseCoopers LLP as the Company's
independent auditors for the year ending December 31, 1999, and (iii) upon any
other matter that may properly be brought before the Meeting, in accordance with
the judgment of the person or persons voting the Proxy. The execution of a Proxy
will in no way affect a stockholder's right to attend the Meeting and to vote in
person. Any Proxy executed and returned by a stockholder may be revoked at any
time thereafter by written notice of revocation given to the Secretary of the
Company prior to the vote to be taken at the Meeting, by execution of a
subsequent Proxy that is presented at the Meeting, or by voting in person at the
Meeting, in any such case, except as
<PAGE>
to any matter or matters upon which a vote shall have been cast pursuant to the
authority conferred by such Proxy prior to such revocation.
ANNUAL REPORT PROVIDED WITH PROXY STATEMENT
-------------------------------------------
Copies of the Company's Annual Report containing audited financial statements of
the Company for the year ended December 31, 1998, are being mailed together with
this Proxy Statement to all stockholders entitled to vote at the Meeting.
SECURITY OWNERSHIP
------------------
The following table sets forth information concerning ownership of the Company's
Common Stock as of March 15, 1999 by each person known by the Company to be the
beneficial owner of more than five percent of the Common Stock, each director
and executive officer and by all directors and executive officers of the Company
as a group. Unless otherwise indicated, the address of each person or entity
listed below is the Company's principal executive office.
Five Percent Stockholders, Directors, and Common Stock
all Executive Officers and Beneficially Percent
Directors as a Group Owned (1) of Class
----------------------------------------------------------------------------
GUY J. QUIGLEY (2) (3) (4) 3,921,854 29.6
CHARLES A. PHILLIPS (2) (3) (5) 1,592,992 12.5
GEORGE J. LONGO (2) (3) (6) 250,000 2.0
ERIC H. KAYTES (2) (3) (7) 502,992 4.1
GURNEY P. SLOAN, JR., ESQUIRE (2) (8) 11,500 --
JACQUELINE F. LEWIS (2) (9) 10,000 --
ALL DIRECTORS AND OFFICERS (10) 6,289,338 43.3
(Six Persons)
(1) Beneficial ownership has been determined in accordance with Rule
13d-3 under the Exchange Act ("Rule 13d-3") and unless otherwise
indicated, represents shares for which the beneficial owner has sole
voting and investment power. The percentage of class is calculated
in accordance with Rule 13d-3 and includes options of other rights
to subscribe which are exercisable within sixty (60) days of March
15, 1999.
(2) Director of the Company.
(3) Officer of the Company.
(4) Mr. Quigley's beneficial ownership includes options and warrants
exercisable within sixty (60) days from March 15, 1999, to purchase
815,000 shares of Common Stock, options and warrants to purchase
420,000 shares of Common Stock beneficially owned by Mr. Quigley's
wife and an aggregate of 380,000 shares beneficially owned by
members of Mr. Quigley's immediate family.
(5) Mr. Phillips' beneficial ownership includes options and warrants
exercisable within sixty (60) days from March 15, 1999, to purchase
710,000 shares of Common Stock, and options to purchase 10,000
shares of Common Stock beneficially owned by Mr. Phillips' wife.
(6) Mr. Longo's beneficial ownership includes options and warrants
exercisable within sixty (60) days from March 15, 1999, to purchase
250,000 shares of Common Stock.
(7) Mr. Kaytes' beneficial ownership includes options and warrants
exercisable within sixty (60) days from March 15, 1999, to purchase
270,000 shares of Common Stock.
(8) Mr. Sloan's address is The Farm at Doylestown, 220 Farm Lane,
Doylestown, PA 18901. Mr. Sloan's beneficial ownership includes
options exercisable within sixty (60) days from March 15, 1999, to
purchase 10,000 shares of Common Stock.
-2-
<PAGE>
(9) Ms. Lewis' address is 3805 Old Easton Road, Doylestown, PA 18901.
Ms. Lewis' beneficial ownership includes options exercisable within
sixty (60) days from March 15, 1999, to purchase 10,000 shares of
Common Stock.
(10) Includes an aggregate of 2,495,000 shares of Common Stock underlying
options and warrants that are exercisable within sixty (60) days
from March 15, 1999.
COMPENSATION AND OTHER INFORMATION
----------------------------------
CONCERNING DIRECTORS AND OFFICERS
---------------------------------
EXECUTIVE COMPENSATION
- ----------------------
The following table provides summary information concerning cash and certain
other compensation for the years ended December 31, 1998 and 1997, three months
ended December 31, 1996 (5), and year ended September 30, 1996, paid or accrued
by the Company to or on behalf of the Company's Chief Executive Officer and each
of the other most highly compensated executive officers of the Company whose
compensation exceeded $100,000 during 1998:
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------------- ------------------------------
Other Annual Securities All Other
Name and Principal Position Salary Bonus Compensation Underlying Compensation
Year (1) (2) (3) (6) Options (4)
($) ($) ($) (#) ($)
- --------------------------------------------------------------------------------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C>
Guy J. Quigley 1998 350,000 262,500 1,289,963 55,903
Chairman of the 1997 250,000 437,500 2,546,262 240,000
Board, President, 1996 (5) 21,450 121,931 75,000
Chief Executive Officer 1996 125,000 500,000
Charles A. Phillips 1998 245,000 183,750 430,923 42,959
Executive Vice President 1997 175,000 306,250 847,990 185,000
Chief Operating Officer 1996 (5) 21,450 40,644 75,000
1996 85,000 450,000
George J. Longo 1998 210,000 157,500 17,820
Vice President, 1997 150,000 262,500 200,000
Chief Financial Officer 1996 (5) 50,000
1996 (7)
Eric H. Kaytes 1998 160,000 120,000 17,039
Vice President, MIS, 1997 100,000 175,000 135,000
Secretary-Treasurer, 1996 (5) 11,532 25,000
Chief Information Officer 1996 11,300 110,000
</TABLE>
(1) Compensation paid pursuant to employee agreements.
(2) Bonus's paid pursuant to the Company attaining specified sales and
net income goals.
(3) Additional payments, including founder's commission at 3.75% of
sales collected less certain deductions for Mr. Quigley, and
founder's commission at 1.25% of sales collected less certain
deductions for Mr. Phillips.
(4) Includes amounts attributable to the executive officers for reverse
split dollar life insurance policies on which the Company pays the
premiums. These insurance policies currently provide for the
proceeds to be used by the Company for, among other things, the
purchase of the officer's stock, at the fair market value, from the
officer's estate if desired by the executor of the estate.
(5) Represents interim three-month period ended December 31, 1996.
-3-
<PAGE>
(6) The value of personal benefits for the executive officers of the
Company that might be attributable to management as executive fringe
benefits, such as vehicles can not be specifically or precisely
determined; however, it would not exceed the lesser of $50,000 or
10% of the total annual salary and bonus reported for any individual
named above.
(7) Mr. Longo commenced employment with the Company on January 6, 1997.
COMPENSATION PURSUANT TO PLANS
- ------------------------------
The Company maintains neither a pension nor a profit-sharing plan. An incentive
stock option plan was instituted in 1997, (the "1997 Stock Option Plan") and
approved by the stockholders in 1998. Options pursuant to the 1997 Stock Option
Plan have been granted to directors, executive officers, and employees during
1998.
OTHER COMPENSATION
- ------------------
The Company, since its inception, has granted to its executive officers,
directors and employees, Common Stock Purchase Warrants and Stock Options as
additional non-cash compensation. As of December 31, 1998, executive officers
and directors of the Company have been issued an aggregate of 2,495,000 warrants
and options to purchase shares of the Company's Common Stock at various exercise
prices. There were no stock option grants made to the executive officers during
1998, although certain previously issued options were re-priced during the year.
See "Option Re-pricing Table". In addition, no stock options were exercised by
the executive officers during 1998 and none of the executive officers has held
or exercised separate SARs. The following table sets forth certain information
regarding unexercised options and warrants held by each of the executive
officers at December 31, 1998, all of which were fully exercisable on such date.
1998 YEAR-END OPTION VALUES
---------------------------
<TABLE>
<CAPTION>
Value of Unexercised In-the
Number of Securities Exercise or Money Options at Year End
Underlying Unexercised Base Price ($) $5.531 per share ($)
Name Options
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Guy J. Quigley 100,000 9.68(1) --
140,000 10.00(2) --
75,000 2.50(3) 227,325
300,000 1.75(4) 1,134,300
200,000 .50(5) 1,006,200
Charles A. Phillips 100,000 9.68(1) --
85,000 10.00(2) --
75,000 2.50(3) 227,325
300,000 1.75(4) 1,134,300
150,000 .50(5) 754,650
George J. Longo 125,000 9.68(1) --
75,000 10.00(2) --
50,000 2.50(3) 151,550
Eric H. Kaytes 100,000 9.68(1) --
35,000 10.00(2) --
25,000 2.50(3) 75,775
50,000 1.75(4) 189,050
60,000 .50(5) 301,860
</TABLE>
(1) Options granted in December 1997, which were re-priced in May 1998.
See "Option Re-pricing Table". These options expire in December
2007.
(2) Warrants granted in May 1997, and expire in May 2002.
(3) Warrants granted in November 1996, and expire in November 2001.
(4) Warrants granted in July 1996, and expire in June 2001.
(5) Warrants granted in December 1995, and expire in December 2000.
-4-
<PAGE>
OPTION RE-PRICING TABLE
- -----------------------
As discussed in the Report on Executive Compensation below, in May 1998 certain
employee stock options, including options held by executive officers, were
re-priced to $9.68 per share, with all other terms and conditions remaining
unchanged. The following table sets forth certain information regarding the
re-pricing of stock options for executive officers of the Company in May1998 and
within the ten previous years.
Ten-Year Option Re-pricing
<TABLE>
<CAPTION>
Number of Market Price of Exercise Length of
Securities Stock at Time Price at New Original Term
Re-pricing Underlying of Time of Exercise Remaining at
Name Date Options Re-priced Re-pricing Re-pricing Price Date of
(#) ($) ($) ($) Re-pricing
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Guy J. Quigley 5/08/98 100,000 9.68 15.00 9.68 9 yrs. 7 mos.
Charles A. Phillips 5/08/98 100,000 9.68 15.00 9.68 9 yrs. 7 mos.
George J. Longo 5/08/98 115,000 9.68 15.00 9.68 9 yrs. 7 mos.
5/08/98 10,000 9.68 17.50 9.68 9 yrs. 7 mos.
Eric H. Kaytes 5/08/98 90,000 9.68 15.00 9.68 9 yrs. 7 mos.
5/08/98 10,000 9.68 17.50 9.68 9 yrs. 7 mos.
</TABLE>
ROYALTY AND EMPLOYMENT AGREEMENTS
- ---------------------------------
The Cold-Eeze(R) product is manufactured for the Company by an independent
manufacturer and marketed by the Company in accordance with the terms of the
licensing agreement (between the Company and Godfrey Science & Design, Inc. and
John C. Godfrey, Ph.D.; hereinafter "Dr. Godfrey"). The contract is assignable
by the Company with Dr. Godfrey's consent. Throughout the duration of the
agreement Dr. Godfrey is to receive a three percent (3%) royalty on sales
collected, less certain deductions, of the Company's Cold-Eeze(R) products.
A separate consulting agreement between the parties referred to directly above
was similarly entered into on May 4, 1992 whereby Dr. John C. Godfrey and Dr.
Nancy J. Godfrey are to receive a consulting fee of two percent (2%) on sales
collected, less certain deductions of the Company's Cold-Eeze(R) products for
consulting services to the Company with respect to such products.
Pursuant to the license agreement entered into between the Company and George
Eby Research, the Company pays a royalty fee. Throughout the duration of the
agreement, George Eby of George Eby Research, is to receive a three percent (3%)
royalty on sales collected, less certain deductions, of the Company's
Cold-Eeze(R) products.
An employment agreement between the Company and Guy J. Quigley was entered into
on June 1, 1995, whereby Guy J. Quigley is employed as the Chief Executive
Officer of the Company for a term ending on May 31, 2005. In addition to
compensation for services as an officer of the Company, Mr. Quigley is entitled
to receive a founder's commission of five percent (5%) on sales collected, less
certain deductions, of the Company's Cold-Eeze(R) products, which is shared with
Charles A. Phillips in a ration of 75% and 25%. Upon the termination of the
contract for any reason, Mr. Quigley is entitled to the remainder of his
compensation owed him through May 31, 2005.
An employment agreement between the Company and Charles A. Phillips was entered
into on June 1, 1995, whereby Charles A. Phillips is employed as the Executive
Vice President and Chief Operating Officer of the Company for a term ending on
May 31, 2005. In addition to compensation for services as an officer of the
Company, Mr. Phillips is entitled to receive twenty five percent (25%) of the
founder's commission received by Guy J. Quigley, either directly from Guy J.
Quigley or, if requested, directly from the Company. Should Mr. Phillips make
such a request upon the Company, the amount owed to him would be deducted from
any commissions due Guy J. Quigley. Upon the termination of the contract for any
reason, Mr. Phillips is entitled to the remainder of his compensation owed him
through May 31, 2005.
-5-
<PAGE>
George J. Longo is employed as the Chief Financial Officer of the Company
pursuant to an employment agreement dated November 5, 1996, for a term ending on
December 31, 2001. The agreement provides for a base salary of $150,000, or such
greater amount, as the Board of Directors may from time to time determine, with
annual increases over the prior year's base salary. In the event of his
disability, Mr. Longo is to receive the full amount of his base salary for
eighteen months. Upon a change of control of the Company, Mr. Longo is entitled
to receive severance compensation equal to forty-eight months of his current
compensation. Upon early termination by the Company without cause (as defined in
the agreement), the Company is required to pay Mr. Longo the remainder of the
salary owed him through December 31, 2001.
The Company entered into an employment agreement dated as of January 1, 1997,
with Eric H. Kaytes on terms substantially similar to those of George J. Longo's
employment agreement for a term ending on December 31, 2001. Mr. Kaytes's
agreement provides for his employment by the Company as its Chief Information
Officer at a base salary of $100,000, or such greater amount, as the Board of
Directors may from time to time determine, with annual increases over the prior
year's base salary. Mr. Kaytes is entitled to receive severance compensation
equal to twelve months of his current compensation upon a change of control of
the Company. Upon early termination by the Company without cause (as defined in
the agreement), the Company is required to pay Mr. Kaytes the remainder of the
salary owed him through December 31, 2001.
REPORTS ABOUT OWNERSHIP OF THE COMPANY'S COMMON STOCK AND COMPLIANCE WITH
-------------------------------------------------------------------------
SECTION 16 (A) OF THE SECURITIES AND EXCHANGE ACT OF 1934
---------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities Exchange Commission (the
"Commission"). Officers, directors and greater than ten-percent stockholders are
required by the Commission's regulations to furnish the Company with copies of
all Section 16(a) forms they file.
Each of Messrs. Quigley, Phillips, Longo, Kaytes and Ms. Lewis filed on a timely
basis an annual statement of changes in beneficial ownership of securities for
fiscal 1998 as required by Section 16(a). Mr. Sloan failed to file on a timely
basis his purchase of 1,000 shares of the Company's Common Stock, and has
subsequently reported all required transactions to the Commission, indicating
that he now holds 1,500 shares of the Company's Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
For the years ended December 31, 1998 and 1997, three months ended December 31,
1996 and year ended September 30, 1996, $1,720,886, $3,394,252, $162,575, and
$0, respectively, were made as payments under founder's commission agreements
between the Company and Guy J. Quigley and Charles A. Phillips, who share a
commission of 5% on sales collected, less certain deductions, of the Company's
Cold-Eeze(R) products.
PROPOSALS TO BE SUBMITTED FOR STOCKHOLDER APPROVAL
--------------------------------------------------
PROPOSAL 1. ELECTION OF A BOARD OF DIRECTORS
The Directors of the Company are elected annually and hold office for the
ensuing year until the next annual meeting of stockholders and until their
successors have been duly elected and qualified. The directors are elected by
plurality of votes cast by stockholders. The Company's by-laws state that the
number of directors constituting the entire Board of Directors shall be
determined by resolution of the Board of Directors. The number of directors
currently fixed by the Board of Directors is six.
No proxy may be voted for more people than the number of nominees listed below.
Shares represented by all proxies received by the Board of Directors and not so
marked as to withhold authority to vote for any individual director (by
-6-
<PAGE>
writing that individual director's name where indicated on the proxy) or for all
directors will be voted "FOR" the election of all the nominees named below
(unless one or more nominees are unable or unwilling to serve). The Board of
Directors knows of no reason why any such nominee would be unable or unwilling
to serve, but if such should be the case, proxies may be voted for the election
of substitute nominees selected by the Board of Directors.
The following table and the paragraphs following the table sets forth
information regarding the current ages, terms of office and business experience
of the current directors and executive officers of the Company, all of whom are
being nominated for re-election to the Board of Directors:
<TABLE>
<CAPTION>
YEAR FIRST
NAME POSITION AGE ELECTED
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Guy J. Quigley (1) Chairman of the Board, President, CEO 57 1989
Charles A. Phillips* (1) Executive Vice President, COO and Director 51 1989
George J. Longo Vice President, CFO and Director 52 1997
Eric H. Kaytes Vice President, CIO and Director 44 1989
Gurney P. Sloan, Jr., Esquire* Director 67 1997
Jacqueline F. Lewis* Director 53 1997
* Member of the audit committee (1) Member of the compensation committee
</TABLE>
GUY J. QUIGLEY has been Chairman of the Board, President, and Chief Executive
Officer of the Company since September 1989. Prior to this date, Mr. Quigley, an
accomplished author, established and operated various manufacturing, sales,
marketing and real estate companies in the United States, Europe and the African
Continent.
CHARLES A. PHILLIPS has been Executive Vice President, Chief Operations Officer
and a Director of the Company since September 1989. Before his employment with
the Company, Mr. Phillips founded and operated KEB Enterprises, a gold and
diamond mining operation that was based in Sierra Leone, West Africa. In
addition, Mr. Phillips served as a technical consultant for Re-Tech, Inc.,
Horsham, Pennsylvania, where he was responsible for full marketing and
production of a prototype electrical device.
GEORGE J. LONGO currently serves as Vice President, Chief Financial Officer and
Director of the Company. Mr. Longo assumed his duties as Vice President and
Chief Financial Officer for the Company in January 1997. Mr. Longo was also
appointed as a Director of the Company in March 1997. Before joining the
Company, Mr. Longo served as Chief Financial Officer of two privately held
international manufacturing firms and Manager of Corporate Accounting with the
predecessor pharmaceutical company to Rhone-Poulenc, Inc. (NYSE-RP), being
responsible for SEC and IRS compliance, and was involved in acquisition and
general accounting issues. Prior to that, Mr. Longo was with KPMG LLP.
ERIC H. KAYTES currently serves as Vice President, Chief Information Officer,
Secretary, Treasurer and Director of the Company. From 1989 until January 1997,
Mr. Kaytes also served as the Chief Financial Officer of the Company. Prior to
1989 and concurrent with his responsibilities for the Company, Mr. Kaytes had
been an independent programmer and designer of computer software.
GURNEY P. SLOAN, JR., ESQUIRE, appointed to the Board of Directors in December
1997, is presently an attorney, executive, trustee, and investor. From 1966
until the end of 1997, Mr. Sloan's law practice, a professional corporation, had
been engaged in, both independently and in association or partnership, with
various prestigious Philadelphia law firms, for the practice of securities and
corporate law, with particular interest in new ventures. Since 1984 and until
the end of 1998, Mr. Sloan served as a director of Rorer Asset Management, an
investment advisor with $4.5 billion under management. Prior to the practice of
law, Mr. Sloan's experience included serving as Vice-President, Marketing with
the predecessor pharmaceutical company to Rhone-Poulenc, Inc. (NYSE-RP).
-7-
<PAGE>
JACQUELINE F. LEWIS, appointed to the Board of Directors in December 1997 is
presently Vice President and Chief Operating Officer of D. A. Lewis, Inc., a
direct mail advertising company that she co-founded in 1976. D. A. Lewis now
employs 250 people. Ms. Lewis has also served on the Board of Directors of
Suburban Community Bank since 1993.
BOARD OF DIRECTORS
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- -------------------------------------------------
For the fiscal year ended December 31, 1998, there were five meetings of the
Board of Directors. In addition, members of the Board of Directors consulted
regularly with each other and from time to time acted by unanimous written
consent pursuant to the laws of the State of Nevada.
The Company has three standing committees, the Audit Committee, Executive
Operating Committee and Compensation Committee. Prior to establishing these
Committees, the customary functions of such committees had been performed by the
entire Board of Directors. The Board of Directors does not presently have a
standing nominating committee, the customary functions of such committee being
performed by the entire Board of Directors.
The members of the Audit Committee are Mr. Phillips, Mr. Sloan and Ms. Lewis.
The Audit Committee reviews, analyzes and makes recommendations to the Board of
Directors with respect to the Company's accounting policies, controls and
statements, consults with the Company's independent public accountants, and
reviews filings containing financial information of the Company to be made with
the Securities and Exchange Commission. The Audit Committee met one time during
1998.
The members of the Executive Operating Committee are Messrs. Quigley, Phillips,
Longo, and Kaytes. The Executive Operating Committee possesses and exercises all
the power and authority of the Board of Directors in the management and
direction of the business and affairs of the Company, except as limited by law,
and except for the power to change the membership or to fill vacancies on the
Board of Directors or the Executive Operating Committee. The Executive Operating
Committee met three times during 1998.
The members of the Compensation Committee are Messrs. Quigley and Phillips. The
Compensation Committee reviews and recommends the salary and other compensation
of officers and key employees of the Company, including non-cash benefits, and
designates the employees entitled to participate in the Company's benefits plans
and other arrangements, as from time to time constituted. The Compensation
Committee also administers the Company's Stock Option Plans and recommends the
terms of grants of stock options and the persons to whom such options shall be
granted in accordance with such plans. These recommendations are then subject to
approval by the full Board of Directors. The Compensation Committee met two
times during 1998.
COMPENSATION OF DIRECTORS
- -------------------------
Outside directors receive compensation annualized at $10,000. In the event that
there are more than five meetings of the Board during any particular year, such
director will receive an additional $2,000 for each such meeting. In addition,
in 1998 the Board of Directors approved the grant of Options to purchase 10,000
shares of Common Stock to each of the outside directors under the Company's 1997
Stock Option Plan. Officers of the Company receive no compensation for their
service on the Board or on any Committee.
REQUIRED VOTE
- -------------
Directors are elected by a plurality of the votes cast, in person or by proxy,
at the Meeting. Votes withheld and broker non-votes are not counted toward a
nominee's total.
RECOMMENDATION OF THE BOARD OF DIRECTORS
- ----------------------------------------
The Board of Directors of the Company recommends a vote "FOR" the election of
each of the nominees.
-8-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- -----------------------------------------------------------
The Board of Directors as a whole provides overall guidance and approval of the
Company's executive compensation program. All members of the Board participate
in the approval of each of the components of the Company's executive
compensation program described in the "Report on Executive Compensation" except
that no director who is also a Company employee participates in the approval of
their respective compensation. Mr. Quigley serves on the Compensation Committee
and Mr. Phillips serves on the Compensation and Audit Committees. No other
executive officer of the Company served on any other committee or the
compensation committee of another entity performing similar functions during the
fiscal year.
REPORT ON EXECUTIVE COMPENSATION
- --------------------------------
GENERAL
- -------
The Compensation Committee reviews and recommends the salary and other
compensation of officers and key employees of the Company. The Compensation
Committee also administers the Company's Stock Option Plan and recommends the
terms of grants of stock options and the persons to whom such options shall be
granted in accordance with such plan. These recommendations, as previously
indicated, are subject to approval by the full Board of Directors.
COMPENSATION PHILOSOPHY
- -----------------------
In reaching decisions regarding executive compensation, the committee as well as
the full board upon approval of such recommendations, balances the total
compensation package for each executive, and makes it variable, with sales and
profits attained as well as achievement of annual and long-term goals.
Competitive levels of compensation are necessary in attracting, rewarding,
motivating, and retaining qualified management. The board also believes that the
potential for equity ownership by management is beneficial in aligning
management's and stockholders' interests in the enhancement of stockholder
value. Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), places a limit of $1,000,000 on the amount of compensation that may be
deducted by the Company in any year with respect to certain of the Company's
highest paid executives. Certain performance-based compensation that has been
approved by stockholders is not subject to the deduction limit. If necessary,
the Company may attempt to qualify certain compensation paid to executive
officers for deductibility under the Code, including Section 162(m). However,
the Company may from time to time pay compensation to its executive officers
that may not be deductible.
COMPENSATION PROGRAM
- --------------------
The Company has a comprehensive compensation program, which consists of cash
compensation, both fixed and variable, and equity-based compensation. Overall
compensation is predicated on industry and peer group comparisons and on
performance judgements as to the past and expected future contributions of the
individual executive officer. Specific compensation for each executive is
designed to fairly remunerate that employee of the Company for the effective
exercise of their responsibilities, their management of the business functions
for which they are responsible, their extended period of service to the Company
and their dedication and diligence in carrying out their responsibilities for
the Company.
The fixed aspect is intended to meet the requirements of the employment
contracts in effect for all of the Company's officers. See "Executive
Compensation-Royalty and Employment Agreements". Employment agreements are in
place to insure the Company of consistency of leadership and the retention of
qualified executives, and to foster a spirit of employment security, which
thereby encourages decisions that will benefit long-term stockholders. Variable
compensation is based upon the entire board adopting and approving annually,
sales and profit goals to be attained for the ensuing year.
Equity-based compensation is through options periodically granted under the 1997
Stock Option Plan. These grants are designed to directly reward and create a
proprietary interest, among the executive officers and other employees, in the
Company, which will be an incentive for these employees to work to maximize the
long-term total return to stockholders
-9-
<PAGE>
OPTION RE-PRICING
- -----------------
In May 1998, following stockholder approval of the 1997 Stock Option Plan, the
Board amended certain stock options previously granted under such plan to
certain employees of the Company, including certain options held by Messrs.
Quigley, Phillips, Longo and Kaytes. The options re-priced were approved by the
Board of Directors in light of the decline in the market value of the Common
Stock that had occurred since the options were originally granted. The Board
believed that drop in market price was due to factors unrelated to the
accomplishments and efforts of the employees whose options were re-priced and
that such re-pricing would afford these individuals with a significant incentive
that the options were originally intended to provide.
Compensation Committee: Guy J. Quigley, Charles A. Phillips
PERFORMANCE GRAPH
The following graph reflects a five-year comparison, calculated on a dividend
reinvested basis, of the cumulative total stockholder return on the Common Stock
of the Company, the NASDAQ Market Index, and a "peer group" index classified as
drug related products by Media General Financial Services. The comparisons
utilize an investment of $100 on January 1, 1994 for the Company and the
comparative indices, which then measure the values for each group at December 31
of each year presented. There can be no assurance that the Company's stock
performance will continue with the same or similar trends depicted in the
following performance graph.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE QUIGLEY CORPORATION,
NASDAQ MARKET INDEX AND PEER GROUP INDEX
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
COMPANY/INDEX/MARKET 12/31/1993 12/30/1994 12/29/1995 12/31/1996 12/31/1997 12/31/1998
<S> <C> <C> <C> <C> <C> <C>
Quigley 100.00 100.00 87.50 1743.74 2888.00 1106.00
Drug Related Producs 100.00 52.29 53.32 79.87 111.11 74.39
NASDAQ Market Index 100.00 104.99 136.18 169.23 207.00 291.96
</TABLE>
-10-
<PAGE>
PROPOSAL 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed PricewaterhouseCoopers LLP as the Company's
independent public auditor for the fiscal year ending December 31, 1999.
Although the selection of auditors does not require ratification, the Board of
Directors has directed that the appointment of PricewaterhouseCoopers LLP be
submitted to stockholders for ratification due to the significance of their
appointment to the Company. A representative of PricewaterhouseCoopers LLP is
expected to be present at the Meeting. Such representative will have an
opportunity to make a statement if so desired, and will be available to respond
to appropriate questions from stockholders.
REQUIRED VOTE
- -------------
The affirmative vote of the holders of a majority of the shares of Common Stock
present, in person or by Proxy is required for ratification of the appointment
of PricewaterhouseCoopers LLP as independent auditors of the Company. An
abstention, withholding of authority to vote or broker non-vote, therefore, will
not have the same legal effect as an "against" vote and will not be counted in
determining whether the proposal has received the requisite stockholder vote.
RECOMMENDATION OF THE BOARD OF DIRECTORS
- ----------------------------------------
The Board of Directors of the Company recommends a vote "FOR" the ratification
of the appointment of PricewaterhouseCoopers LLP as the Company's independent
auditors for the year ending December 31, 1999.
STOCKHOLDER PROPOSALS
---------------------
Proposals of stockholders intended for inclusion in the Proxy Statement to be
furnished to all stockholders entitled to vote at the next Annual Meeting of
Stockholders of the Company must be received at the Company's principal
executive offices not later than December 7, 1999. In order to curtail
controversy as to the date on which a proposal was received by the Company, it
is suggested that proponents submit their proposals by Certified Mail - Return
Receipt Requested.
With respect to any stockholder proposals to be presented at the next annual
meeting which are not included in the Company's proxy materials, management
proxies for such meeting will be entitled to exercise their discretionary
authority to vote on such proposals notwithstanding that they are not discussed
in the proxy materials unless the proponent notifies the Company of such
proposal by not later than February 20, 2000.
EXPENSES AND SOLICITATION
-------------------------
All expenses in connection with this solicitation will be borne by the Company.
In addition to the use of the mails, proxy solicitation may be made by
telephone, telegraph and personal interview by officers, directors and employees
of the Company. The Company will, upon request, reimburse brokerage houses and
persons holding shares in the names of their nominees for their reasonable
expenses in sending soliciting material to their principals.
OTHER BUSINESS
--------------
The Board of Directors knows of no business that will be presented for
consideration at the Meeting other than those items stated above. If any other
business should come before the Meeting, votes may be cast, pursuant to proxies,
in respect to any such business in the best judgment of the person or persons
acting under the proxies.
Dated: April 6, 1999 THE QUIGLEY CORPORATION
By:/s/ Eric H. Kaytes
-------------------------
ERIC H. KAYTES, Secretary
-11-
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE QUIGLEY CORPORATION
PROXY -- ANNUAL MEETING OF STOCKHOLDERS
MAY 7, 1999
The undersigned, a stockholder of The Quigley corporation, a Nevada
corporation (the "Company"), does hereby appoint Guy J. Quigley and Charles A.
Phillips and each of them, the true and lawful attorneys and proxies with full
power of substitution, for and in the name, place and stead of the undersigned,
to vote all of the shares of Common Stock of the Company which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Stockholders of the Company to be held at the Aldie Mansion, 85 Old Dublin Pike,
Doylestown, Pennsylvania 18901, on Friday, May 7, 1999 at 4:00 p.m., local time,
or at any adjournment or adjournments thereof.
The undersigned hereby instructs said proxies or their substitutes:
1. ELECTION OF DIRECTORS:
The election of the following directors to serve until the
next annual meeting of stockholders and until their successors
have been duly elected and qualified. Nominees: Guy J.
Quigley, Charles A. Phillips, George J. Longo, Eric H. Kaytes,
Gurney P. Sloan, Jacqueline F. Lewis
TO WITHHOLD AUTHORITY
TO VOTE FOR ANY NOMINEE(S),
PRINT NAME(S) BELOW
FOR ____ WITHHELD ____ _________________________
2. RATIFICATION OF APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS
THE COMPANY'S INDEPENDENT PUBLIC AUDITORS.
FOR _____ AGAINST _____ ABSTAIN _____
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE
GIVEN, UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE
DIRECTORS, TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE
COMPANY'S INDEPENDENT PUBLIC AUDITORS AND IN ACCORDANCE WITH THE DISCRETION OF
THE PROXIES OR PROXY WITH RESPECT TO ANY OTHER BUSINESS TRANSACTED AT THE ANNUAL
MEETING.
<PAGE>
The undersigned hereby revokes any proxy or proxies heretofore given
and acknowledges receipt of a copy of the Notice of Annual Meeting and Proxy
Statement, both dated April 6, 1999, and a copy of the Company's Annual Report
to Shareholders for the year ended December 31, 1998.
Dated _______________________, 1999
_____________________________ (L.S.)
_____________________________ (L.S.)
Signature(s)
NOTE: YOUR SIGNATURE SHOULD APPEAR THE
SAME AS YOUR NAME APPEARS HEREON. IN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE INDICATE THE CAPACITY IN WHICH
SIGNING. WHEN SIGNING AS JOINT TENANTS, ALL
PARTIES IN THE JOINT TENANCY MUST SIGN. WHEN A
PROXY IS GIVEN BY A CORPORATION, IT SHOULD BE
SIGNED BY AN AUTHORIZED OFFICER AND THE CORPORATE
SEAL AFFIXED. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
