UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act ofPROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No.(AMENDMENT NO. )
Filed by the registrant [X]Registrant /X/
Filed by a partyParty other than the registrant [ ]Registrant / /
Check the appropriate box:
[ ]/ / Preliminary Proxy Statement
[ ]/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)2)
[X])
/X/ Definitive Proxy Statement
[ ]/ / Definitive Additional Materials
[ ]/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14(a)-12
THE QUIGLEY CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) filingFiling Proxy Statement, if other thanOther Than Registrant)
Payment of filing fee (checkFiling Fee (Check the appropriate box):
[X]/X/ No fee required.
[ ]/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1)(1) Title of each class of securities to which transaction applies:
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2)(2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to(3) Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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4)(4) Proposed maximum aggregate value of transaction:
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5)(5) Total fee paid:
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[ ]
/ / 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)(1) Amount Previously Paid:
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2)(2) Form, Schedule or Registration Statement no.:
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4)(4) Date Filed:
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THE QUIGLEY CORPORATION
Kells BuildingKELLS BUILDING
621 Shady Retreat RoadSHADY RETREAT ROAD
P. O. BoxBOX 1349
Doylestown,DOYLESTOWN, PA 18901
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held April 30, 2003TO BE HELD JUNE 23, 2004
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TO THE STOCKHOLDERS OF THE QUIGLEY CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of THE QUIGLEY CORPORATION, a NEVADANevada Corporation (the "Company") will be held at
Doylestown
Country Club, Green Street, P.O. Box 417,the Aldie Mansion, 85 Old Dublin Pike, Doylestown, PA 18901 on Wednesday, April 30, 2003,June
23, 2004, 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, 2003.2004.
(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 6, 2003April 30, 2004 will be
entitled to notice of and to vote at the Annual Meeting of Stockholders 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
CHARLES A. PHILLIPS, Secretary
Doylestown, PA
March 31, 2003May 21, 2004
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.
THE QUIGLEY CORPORATION
Kells BuildingKELLS BUILDING
621 Shady Retreat RoadSHADY RETREAT ROAD
P. O. BoxBOX 1349
Doylestown,DOYLESTOWN, PA 18901
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PROXY STATEMENT
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March 31, 2003MAY 21, 2004
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 Doylestown Country Club, Green Street, P.O. Box 417,the
Aldie Mansion, 85 Old Dublin Pike, Doylestown, PA 18901, on Wednesday, April 30, 2003June 23,
2004 at 4:00 P.M., local time, and any adjournments thereof (the "Meeting").
The principal executive offices of the Company are located at the Kells
Building, 621 Shady Retreat Road, 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 March 31, 2003.May 21, 2004.
At the Meeting, the following proposals will be presented to the Stockholdersstockholders
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, 2003.2004.
(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 6, 2003April 30, 2004 (the
"Record Date") will be entitled to notice of and to vote at the Meeting. At the
close of business on such record date, the Company had 11,456,61711,515,255 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, 2003,2004, 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 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.
Broker "non-votes" and the shares of Common Stock as to which a stockholder
abstains are included for purposes of determining the presence or absence of a
quorum for the transaction of business at the Meeting. A broker "non-vote"
occurs when a nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting power
with respect to that item and has not received instructions from the beneficial
owner.
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, 2002,2003, 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 6, 2003April 30, 2004 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 of Class
Directors as a Group Owned (1)
Class
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GUY J. QUIGLEY (2) (3) (4) 4,097,264 32.54,161,264 32.7
CHARLES A. PHILLIPS (2) (3) (5) 1,830,377 14.91,875,377 15.2
GEORGE J. LONGO (2) (3) (6) 555,000 4.6595,000 4.9
JACQUELINE F. LEWIS (2) (7) 70,00080,000 -
ROUNSEVELLE W. SCHAUM (2) (8) 50,00036,487 -
STEPHEN W. WOUCH (2) (9) 10,000 -
TERRENCE O. TORMEY (2) (10) - -
ALL DIRECTORS AND OFFICERS (10) 6,602,641 47.0(11) 6,758,128 47.4
(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 or other rights to subscribe
which are exercisable within sixty (60) days of March 6,
2003.April 30, 2004.
(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 6, 2003,April 30, 2004, to purchase
885,000935,000 shares of Common Stock, options and warrants to purchase
251,000265,000 shares of Common Stock beneficially owned by Mr. Quigley's
wife and an aggregate of 514,705 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 6, 2003,April 30, 2004, to purchase
817,000862,000 shares of Common Stock and 1,671 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 6, 2003,April 30, 2004, to purchase
515,000555,000 shares of Common Stock.
(7) Ms. Lewis' address is 3805 Old Easton Road, Doylestown, PA 18901. Ms.
Lewis' beneficial ownership includes options exercisable within sixty
(60) days from March 6, 2003,April 30, 2004, to purchase 70,00080,000 shares of Common
Stock.
(8) Mr. Schaum's address is 294 Valley Road, Middletown,157 Harrison Ave, Newport, RI 02842.02840. Mr.
Schaum's beneficial ownership includes options exercisable within
sixty (60) days from March 6, 2003,April 30, 2004, to purchase 50,00025,000 shares of
Common Stock.
(9) Mr. Wouch's address is 415 Sargon Way, Suite J, Horsham, PA 1904419044. Mr.
Wouch's beneficial ownership includes options exercisable within sixty
(60) days from April 30, 2004, to purchase 10,000 shares of Common
Stock.
(10) Mr. Tormey's address is 4842 Mountain Top Road West, New Hope, PA
18938.
(11) Includes an aggregate of 2,588,0002,732,000 shares of Common Stock underlying
options and warrants that are exercisable within sixty (60) days from
March 6, 2003.April 30, 2004.
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COMPENSATION AND OTHER INFORMATION
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CONCERNING DIRECTORS AND OFFICERS
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EXECUTIVE COMPENSATION
The following table provides summary information concerning cash and certain
other compensation for the years ended December 31, 2003, 2002 2001 and 20002001 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 $100,000 during 2002:2003:
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
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Other Annual Securities All Other
Name and Principal Position Salary Bonus Compensation Underlying Compensation
Year (1) (2) (3)(4) Options (5)
($) ($) ($) (#) ($)
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Guy J. Quigley 2003 604,800 226,800 667,006 50,000 14,396
Chairman of the 2002 504,000 126,000 519,574 45,000 146,646
Chairman of theBoard, President, 2001 504,000 126,000 489,460 70,000 66,403
Board, President, 2000 504,000 536,851 70,000 66,403
Chief Executive Officer
Charles A. Phillips 2003 423,400 158,775 222,334 45,000 14,258
Executive Vice President, 2002 352,800 88,200 173,192 42,000 71,190
Executive Vice President,Chief Operating Officer 2001 352,800 88,200 162,154 60,000 52,101
Chief Operating Officer 2000 352,800 178,949 70,000 52,101
George J. Longo 2003 347,800 130,425 40,000 14,258
Vice President, 2002 302,400 75,600 40,000 42,974
Vice President,Chief Financial Officer 2001 302,400 75,600 55,000 28,320
Chief Financial Officer 2000 302,400 70,000 28,320
Eric H. Kaytes* 2002 203,815 10,000 8,530
Vice President, 2001 230,400 57,600 25,000 27,539
Secretary-Treasurer, 2000 230,400 70,000 27,539
Chief Information Officer
* Resigned as of 9-30-02
(1) Compensation paid pursuant to employment agreements.
(2) Bonus'sBonuses paid pursuant to the Company attaining specified sales and net
income goals.
(3) Additional compensation, 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) 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.
(5) Includes amounts attributable to the executive officers for reverse
split dollar life insurance policies on which the Company paid the
premiums. These insurance policies, which were cancelled in November
2002, did 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. Also, included are matching contributions attributable to
each officer in the Company's 401(k) Plan.Plan and term insurance.
COMPENSATION PURSUANT TO PLANS
An incentive stock option plan was instituted in 1997, (the "1997 Stock Option
Plan"), amended in 2000 and approved by the stockholders in 1998 and 2001,
respectively. Options pursuant to the 1997 Stock Option Plan have been granted
to directors, executive officers, and employees during 2003, 2002 and 2001. In
early 1999, the Company implemented a defined contribution plan for its
employees with the Company's contribution to the plan being based on the amount
of the employee plan contribution.
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SECURITIES AUTHORIZED UNDER EQUITY COMPENSATION
The following table sets forth certain information regarding stock option and
warrant grants made to employees, directors and consultants:
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
Number of Weighted Number of Securities
Securities to be Average Remaining Available for
Issued Upon Exercise Price Future Issuance Under Equity
Exercise of Outstanding Compensation Plans
Plan Category Outstanding Options & (Excluding Securities
Options & Warrants Warrants Reflected in Column A)
(A) (B) ( C )
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Equity Plans Approved by Security Holders(1) 2,191,000 $5.46 700,000
Equity Plans Not Approved by Security Holders(2) 2,410,000 $6.34 -
Total 4,601,000 $5.92 700,000
(1) An incentive stock option plan was instituted in 1997, (the "1997 Stock
Option Plan") and approved by the stockholders in 1998. Options pursuant to
the 1997 Stock Option Plan have been granted to directors, executive
officers, and employees.
(2) Other grants of warrants are specific and not part of a plan. These
specific grants were to executive officers, employees during 2002, 2001 and 2000. In early 1999, the Company implemented a
defined contribution planconsultants for
its employees with the Company's contribution to
the plan being based on the amount of the employee plan contribution.
-3-
services.
OPTION GRANTS TABLE
The following table sets forth certain information regarding stock option grants
made to each of the executive officers during 2002:2003:
OPTION GRANTS IN LASTDURING 2003 FISCAL YEAR
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Potential Realizable
Percent of Value at Assumed Rates
PercentNumber of Total Options of Annual Rates of Stock
Number of Total OptionsSecurities Granted to Price Appreciation for
Securities Granted to Option ($) (1)
Underlying Employees in Exercise Option($)(1)
Options Fiscal Year or Base Price Expiration
Name Granted (%) ($/sh) Date 5% 10%
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Guy J. Quigley 45,000 9.4 5.19 7/30/12 146,700 372,15050,000 11.8 8.11 10/29/13 255,000 646,500
Charles A. Phillips 42,000 8.8 5.19 7/30/12 136,920 347,34045,000 10.6 8.11 10/29/13 229,500 581,850
George J. Longo 40,000 8.4 5.19 7/30/12 130,400 330,800
Eric H. Kaytes* 10,000 2.1 5.19 7/30/12 32,600 82,700
* Resigned as of 9-30-029.4 8.11 10/29/13 204,000 517,200
(1) The potential realizable portion of the foregoing table illustrates value
that might be realized upon exercise of options immediately prior to the
expiration of their term, assuming (for illustrative purposes only) the
specified compounded rates of appreciation on the Company's Common Stock
over the term of the option. These numbers do not take into account
provisions providing for termination of the option following termination of
employment or non-transferability.
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES TABLE
The following table sets forth certain information concerning stock options
exercised during 20022003 and stock options, which were unexercised at the end of
20022003 with respect to the executive officers:
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY
COMPLETED FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
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Shares Number of Value of
Shares
Acquired Value Securities Unexercised
on Exercise Realized Underlying In-the Money
Name (#) ($) Unexercised Options at Year
Name Options End ($End($)(1)
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Guy J. Quigley - - 885,000 2,020,750935,000 5,648,150
Charles A. Phillips - - 817,000 1,977,420862,000 5,490,150
George J. Longo - - 515,000 761,225
Eric H. Kaytes* - - 365,000 718,475
* Resigned as of 9-30-02555,000 2,649,525
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(1) Represents the total gain that would be realized if all in-the-money
options held at December 31, 20022003 were exercised, determined by multiplying
the number of shares underlying the options by the difference between the
per share option exercise price and $5.50$10.64 per share, which was the closing
price per share of the Company's Common Stock on December 31, 2002.2003. An
option is in-the-money if the fair market value of the underlying shares
exceeds the exercise price of the option.option..
EMPLOYMENT AGREEMENTS
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 ratio of 75% and 25%, respectively. 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.
-4-
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.
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
May 31, 2005. 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 the remainder of compensation for the remaining term of the agreement
until May 31, 2005. 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 May 31, 2005.
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, 2002. Mr. Kaytes'
agreement provided 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 was entitled to receive severance compensation
equal to twelve months of his current compensation upon a change of control of
the Company. Mr. Kaytes resigned from the Company as an Officer and Director as
of September 30, 2002.
REPORTS ABOUT OWNERSHIP OF THE COMPANY'S COMMON STOCK AND COMPLIANCE WITH
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SECTION 16 (a) OF THE SECURITIES AND EXCHANGE ACT OF 1934
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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 and 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.
Based solely on its review of the copies of such forms received by it, the
Company believes that, during fiscal year ended December 31, 20022003 all filing
requirements applicable to its executive officers, directors, and greater than
ten-percent beneficial owners were complied with, except that Mr. KaytesSchaum did not
file onea Form 54 timely on a timely basis. At the time Mr. Kaytes was required to file
such Form 5, he was no longer an executive officer, director, or greater than
ten-percent beneficial owner of the Company. Such Form 5 has been subsequently
filed.three occasions for four transactions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
For the year ended December 31, 2002, $692,7662003, $889,340 was paid or payable 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) lozenge and gum products.
Certain individuals related to the Company's Chief Executive Officer are also
employees of the Company whose aggregate compensation for 20022003 was $227,250$263,586 and
an aggregate of option grants to purchase 32,000 shares of the Company's Common
Stock.
The Company is in the process of acquiring licenses in certain countries through
related party entities including arrangements with ScandaSystems Ltd. (UK) and
ScandaSystems Ltd. (USA) whose Presidentofficer and major stockholder, isrespectively
-5-
are Mr. Gary Quigley, a relative of the Company's Chief Executive Officer.
Approximately $33,941$96,000 was paid or payable by the Company to such firm during
20022003 and fees amounting to $277,493$273,000 have been paid to another related entity to
obtain such licenses. The Company believes that the services performed by these
firms and employees are on terms no more favorable than could have otherwise
been obtained from an unaffiliated third party.
-5-
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.seven.
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 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 set 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:
Year First
Name Position Age ElectedYEAR FIRST
NAME POSITION AGE ELECTED
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Guy J. Quigley (1) Chairman of the Board, President, CEO 6162 1989
Charles A. Phillips (1) Executive Vice President, COO and Director 5556 1989
George J. Longo Vice President, CFO and Director 5657 1997
Jacqueline F. Lewis* Director 5758 1997
Rounsevelle W. Schaum* Director 7071 2000
Stephen W. Wouch* Director 4849 2003
Terrence O. Tormey Director 49 2004
* MemberCurrent member of the audit committeeAudit & Compensation Committees.
(1) Member of the compensation committeeCompensation Committee until December 31, 2003.
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 KPB 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
a 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 Aventis S.A. (NYSE-AVE), 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.
-6-
JACQUELINE F. LEWIS, appointed to the Board of Directors in December 1997, and
since 2003, is presentlythe President and director of CPC, a list management and
marketing company. ShePrevious to 2003, she co-founded and managed for 27 years D.
A. Lewis, Inc., a direct mail advertising company.
Ms. Lewis has also served on the Board of Directors of Suburban
Community Bank since 1993.
-6-
ROUNSEVELLE W. SCHAUM, was appointed to the Board of Directors in March 2000.
Since 1993, Mr. SchaumShaum has served as Chairman of Newport Capital Partners, Inc.,
an investment-banking firm, specializing in the private placement of equity and
convertible debt securities. In such capacity, Mr. Schaum has directed and
organized over thirty private equity placements and served on the board of
directors of numerous public and private emerging growth companies. Prior to
1993, Mr. Schaum held senior management positions with international
manufacturing companies. He also served as the Chairman of the California Small
Business Development Corporation, a private venture capital syndicate, and was
the founder of the Center of Management Sciences, a management-consulting firm
that services multinational high technology companies and government agencies,
including NASA and the Department of Defense. Mr. Schaum also serves on the
Board of Directors of ECOM Corporation.DSTAGE.COM, INC. (Nasdaq: DSTG.OB).
STEPHEN W. WOUCH, was appointed to the Board of Directors in January 2003. Since
1988, Mr. Wouch has been Managing Partner of Wouch, Maloney & Co., LLP,
Certified Public Accountants, a regional public accounting firm with offices in
Pennsylvania and Florida. This firm has a diverse client base that encompasses
various industries such as health care, manufacturing, construction and service
providers. Prior to 1988, Mr. Wouch held senior management positions with other
Certified Public Accounting firms. Mr. Wouch is an author, lecturer and a
licensed Certified Public Accountant in Pennsylvania, New Jersey and Florida.
TERRENCE O. TORMEY, was appointed to the Board of Directors in April 2004. Mr.
Tormey is currently the President and founder of TOTormey, Inc., a sales and
marketing consulting firm whose services also include film and video productions
for a variety of industries including the healthcare industry. During the years
2000 to 2003, Mr. Tormey was the President and Chief Operating Officer of Nelson
Professional Sales, a division of Publicis SA, Paris. For the years 1994 to
2000, Mr. Tormey was the President and co-owner of The Medical Phone Company(R),
a firm that eventually grew to the largest healthcare telesales company in the
country, whose clients included virtually every major pharmaceutical company in
the United States. Additionally, his experience includes holding various senior
sales, sales training and sales management positions with various US
pharmaceutical companies including Johnson & Johnson Inc. (NYSE-JNJ) and
American Home Products Corporation (Wyeth - NYSE-WYE). Mr. Tormey also serves on
the Board of Directors of Global Pharmaceutical Resources, a worldwide
consortium of Contract Sales Organizations.
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.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
For the fiscal year ended December 31, 2002,2003, there were sixfive meetings of the
Board of Directors. Each of the directors attended (or participated by
telephone) more than 75% of such meetings of the Board of Directors and
Committeescommittees on which they served in 2002.2003. During 2002,2003, the Board of Directors
also acted by unanimous written consent in lieu of a meeting on one occasion.
The independent members of the Board of Directors met in executive session on
six occasions during 2003. Messrs. Schaum, Wouch and Tormey and Ms. Lewis are
deemed to be independent under NASD Rule 4200 and with such our Board of
Directors contains a majority of independent directors as required by NASD Rule
4350.
Each director is expected to make reasonable efforts to attend Board of
Directors meetings, meetings of committees of which such director is a member
and the Annual Meeting of Stockholders. Five members of the Board of Directors
attended the 2003 Annual Meeting of Stockholders.
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 Company does not have a designated nominating
committee.
-7-
As of December 18, 2003, decisions concerning nominees for the Board of
Directors are made by Messrs. Schaum and Wouch and Ms. Lewis, who are
independent directors, as defined under NASD Rule 4200(a)(15). The Board of
Directors does not presently haveconsider a
standing nominating committee necessary in that its
independent directors perform the customary functionssame role as a nominating committee. The
Company has not adopted a formal policy with respect to minimum qualifications
for Board members. However, in making its nominations, Messrs. Schaum and Wouch
and Ms. Lewis consider, among other things, an individual's business experience,
industry experience, financial background, breadth of such committee being
performedknowledge about issues
affecting the Company, time available for meetings and consultation regarding
Company matters and other particular skills and experience possessed by the
entire Board of Directors.individual. Stockholders wishing to recommend candidates for consideration by
the Board of Directors may do so by writing to the Secretary of the Company and
providing the candidate's name, biographical data and qualifications.
The members of the Audit Committee are Messrs. Schaum and Wouch who joined the
Audit Committee in January 2003, and Ms. Lewis.
Mr. Schaum, serves as Chairman of
the Audit Committee. Prior to his resignation as of September 30, 2002, Mr.
Genuardi served on the Audit Committee. 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 threefive times during 2002.2003.
The members of the Executive Operating Committee are Messrs. Quigley, Phillips
and Longo. 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 threetwo times during 2002.2003.
The members of the Compensation Committee arefor 2003 were 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 1997 -7-
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 are
then subject to approval by the full Board of Directors. The Compensation
Committee met four timesone time during 2002.2003. Effective, January 1, 2004, the members of
the Compensation Committee are Messrs. Schaum and Wouch and Ms. Lewis.
COMPENSATION OF DIRECTORS
Outside directors receive compensation annualized at $12,000. In$18,000. Effective January
1, 2004, each outside director that serves on the event that
there are more than five meetingsAudit Committee will receive
compensation annualized at $27,000 and the Chairman of the Board during any particular year, such
directorAudit Committee will
receive an additional $2,400 for each such meeting.compensation annualized at $30,000. In addition, in July 2002December 2003 the
Board of Directors approved the grant of Options to purchase 15,00010,000 shares of
Common Stock to each of the then current 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.
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. Messrs. Quigley and Phillips serveserved on the
Compensation Committee.Committee during 2003. 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. There are certain related
parties of Mr. Quigley that receive compensation from the Company. See Related
Party Transactions.
The report of the Audit Committee, the report of the Compensation Committee and
the performance graph that follow shall not be deemed incorporated by reference
by any general statement incorporating by reference this proxy statement or
future filings into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates the information by reference, and shall not otherwise
be deemed filed under such Acts.
-8-
OTHER CORPORATE GOVERNANCE
During 2002, the Company formed a Disclosure Committee in response to Management
Certification Responsibilities under Sections 302 and 404 of the Sarbanes-Oxley
Act of 2002. The Disclosure Committee will assistassists the Chief Executive Officer, the
Chief Financial Officer and the Audit Committee in monitoring (1) the integrity
of the financial statements, policies, procedures and the internal financial and
disclosure controls and risks of the Company, (2) the compliance by the Company
with legal and regulatory requirements, to the extent that these policies,
procedures and controls may generate either financial or non-financial
disclosures in the Company's filings with the Securities and Exchange
Commission. Additionally, in 2002, the Company also initiated a Code of Ethics
for all employees of the Company as indicated in Exhibit II.Company.
Based on their evaluation, as of a date within 90 daysthe end of the filing ofperiod covered by this Form 10-K,report,
the Company's Chief Executive Officer and Chief Financial Officer have concluded
the Company's disclosure controls and procedures (as defined in Rules 13a-14 and
15d-14 under the Securities Exchange Act of 1934) are effective. There have been
no significant changes in internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
-8-PROCEDURES FOR CONTACTING DIRECTORS
The Company has adopted a procedure by which stockholders may send
communications as defined within Item 7(h) of Schedule 14A under the Exchange
Act to one or more members of the Board of Directors by writing to such
director(s) at their respective address listed in the Security Ownership section
of this Proxy Statement or to the whole Board of Directors care of the Corporate
Secretary, The Quigley Corporation, Kells Building, 621 Shady Retreat Road, P.O.
Box 1349, Doylestown, PA 18901. Any such communications addressed to the whole
Board of Directors will be promptly distributed by the Secretary to each
director.
-9-
REPORT OF THE AUDIT COMMITTEE
The members of the Audit Committee are Messrs. Schaum and Wouch, and Ms. Lewis.
Prior to his resignationLewis,
who are independent directors as defined under NASD Rule 4200(a)(15). All of September 30, 2002, Mr. Genuardi served on the
Audit Committee. Messrs. Schaum, Genuardi and Wouch, who joinedmembers of the Audit Committee in January 2003,are financially literate under current listing
standards of Nasdaq. Messrs. Schaum and Ms. LewisWouch are independentfinancial experts as defined
under the rules of NASD and operateNASD. The Audit Committee operates under a written charter
adopted by the Board of Directors in 2000 and amended in 2002 (Attached as Exhibit I).2002. The Audit
Committee has reviewed and reassesses the adequacy of the charter on an annual
basis.
We have reviewed and discussed with management the Company's audited financial
statements as of and for the year ended December 31, 2002.2003.
We have discussed with the independent auditors, PricewaterhouseCoopers LLP, the
matters required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, by the Auditing Standards Board
of the American Institute of Certified Public Accountants.
Additionally, audit fees, audit related fees, tax fees and all other service
fees that were paid or payable to PricewaterhouseCoopers LLP for 20022003 and 20012002
were discussed and amounted toto:
Description 2003 2002
----------- -------- --------
Audit fees $274,800 $123,000
zero, $17,870, zero and $101,400, zero, $27,757, zero,
respectively.Audit related fees - -
Tax fees 15,826 17,870
All other fees - -
-------- --------
Total $290,626 $140,870
======== ========
The Company's Audit Committee has not yet adopted / enacted pre-approval
policiesshall review and procedures forpre-approve both audit and
non-audit services. Therefore,services to be provided by the proxy
disclosure does not include pre-approval policies and procedures and related
information. The Company is early-adopting componentsindependent auditor (other than with
respect to the de minimis exceptions permitted by the Act). This duty may be
delegated to one or more designated members of the proxy fee
disclosure requirements;Audit Committee with any such
pre-approval reported to the requirement does not become effective untilAudit Committee at its next regularly scheduled
meeting. Approval of non-audit services shall be disclosed to investors in
periodic annual filings forreports required by Section 13(a) of the first fiscal year ending after December 15,
2003.Securities Exchange Act of
1934.
We have received and reviewed written disclosures and the letter from
PricewaterhouseCoopers LLP required by Independent Standards No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with the auditors the auditor's independence.
Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 20022003 for filing with the Securities and Exchange Commission.
Audit CommitteeAUDIT COMMITTEE
Rounsevelle W. Schaum, Chairman
Jacqueline F. Lewis
Stephen W. Wouch
-9--10-
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 1997 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 Compensation
Committee as well as the full Board of Directors 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
of Directors 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 judgments 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 - 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 of Directors 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.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Quigley's compensation was $1,149,574$1,498,606 in 2002.2003. Mr. Quigley's compensation is
based upon the factors described in the compensation program section paragraphs
above and is set forth in his employment contract. Effective January 1, 2004,
Messrs. Schaum and Wouch and Ms. Lewis comprise the Compensation Committee.
COMPENSATION COMMITTEE
Guy J. Quigley
Charles A. Phillips
-10--11-
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 ("MG Group Index").
The comparisons utilize an investment of $100 on January 1, 19971998 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.
[OBJECT OMITTED]
-11-COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE QUIGLEY CORPORATION,
NASDAQ MARKET INDEX AND MG GROUP INDEX
1998 1999 2000 2001 2002 2003
THE QUIGLEY CORPORATION 100.00 28.81 14.70 41.58 99.43 192.36
MG GROUP INDEX 100.00 85.87 74.19 108.46 108.66 200.84
NASDAQ MARKET INDEX 100.00 176.37 110.86 88.37 61.64 92.68
-12-
ProposalPROPOSAL 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, 2003.2004.
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, 2003.2004.
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 submit their proposals by Certified Mail -
Return Receipt Requested and be received at the Company's principal executive
offices not later than December 3, 2003.2004.
With respect to any stockholder proposals to be presented at the next Annual
Meeting of Stockholders, 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 and must submit their proposals by Certified Mail - Return Receipt
Requested ofand that such proposal be received at the Company's principal
executive offices not later than February 13, 2004.11, 2005.
EXPENSES AND SOLICITATION
All expenses in connection with this solicitation will be borne by the Company.
In addition to the use of the mail, 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: March 31, 2003May 21, 2004 THE QUIGLEY CORPORATION
By:/s/ Charles A. Phillips
--------------------------------
----------------------------------------
CHARLES A. PHILLIPS, Secretary
-12-
Exhibit I
THE QUIGLEY CORPORATION
AUDIT COMMITTEE CHARTER
-----------------
December 2002
ORGANIZATION
This charter governs the operations of the Audit Committee of The Quigley
Corporation (the "Company"). The Audit Committee shall review and reassess the
charter at least annually and obtain the approval of the charter from the Board
of Directors. The Audit Committee shall be appointed by the Board of Directors
and shall be comprised entirely of directors who are independent as defined by
applicable Nasdaq rules and regulations. In general, members of the Audit
Committee shall be considered independent if they have no relationship that may
interfere with the exercise of their independence from management and the
Company. All Audit Committee members shall be financially literate, or shall
become financially literate at the time of their appointment to the Audit
Committee, and at least one member shall have accounting or related financial
management expertise.
STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling its oversight responsibility to the stockholders, potential
stockholders, the investment community and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the annual independent audit of the
Company's financial statements and the legal compliance and ethics programs as
established by management and the Board. In so doing, it is the responsibility
of the Audit Committee to maintain free and open communication between the Audit
Committee, independent auditors and management of the Company in discharging its
oversight role. The Audit Committee is empowered to investigate any matter
brought to its attention with full access to all books, records, facilities and
personnel of the Company and the power to retain and determine funding for
outside counsel or other experts for this purpose.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of its
activities to the Board. Management is responsible for preparing the Company's
financial statements and the independent auditors are responsible for auditing
those financial statements. The Audit Committee in carrying out its
responsibilities believes its policies and procedures should remain flexible in
order to best react to changing conditions and circumstances. The Audit
Committee should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business risk practices and
ethical behavior.
The following shall be the principal recurring responsibilities of the Audit
Committee. The responsibilities are set forth as a guide with the understanding
that the Audit Committee may supplement them as appropriate including any
changes required by them to carry out its duties, including those required by
changes in the policies of the Nasdaq National Market.
The responsibilities of the Audit Committee shall include:
1. Directly overseeing and compensating the independent auditors.
2. Reviewing this charter on an annual basis and updating it as conditions
dictate.
3. Providing oversight and monitoring of Company management and the
independent auditors and their activities with respect to the Company's
financial reporting process.
4. Selecting, on an annual basis, the Company's independent auditors, subject
to stockholder approval.
5. Under its ultimate authority, evaluating and, where appropriate, replacing
the independent auditors.
6. Discussing with the independent auditors the overall scope and plans for
their audit, including their approach and independence, and discussing
with the Company's accounting department the adequacy of staffing.
7. Discussing with management the Company's accounting department and the
independent auditors the adequacy and effectiveness of the accounting and
financial controls, including the Company's system to monitor and manage
business risk, and legal and ethical compliance programs.
8. Reviewing the performance of the independent auditors with the
understanding of both management and the independent auditors that the
independent auditors are ultimately accountable to the Board and the Audit
Committee as representatives of the Company's stockholders.
9. Requesting from the independent auditors a formal written statement
delineating all relationships between the auditor and the Company,
consistent with Independent Standards Board Standard No. 1, and engaging
in a dialogue with the auditors with respect to any disclosed
relationships or services that may impact the objectivity and independence
of the auditors.
10. Reviewing the interim financial statements with management and the
independent auditors prior to the filing of the Company's Quarterly Report
on Form 10-Q.
11. Discussing with the Company's independent auditors the matters required to
be discussed by Statement on Accounting Standard No. 61, as it may be
modified or supplemented.
12. Reviewing with management and the independent auditors the financial
statements to be included in the Company's Annual Report on Form 10-K,
including their judgment about the quality, not just acceptability, of
accounting principles, the reasonableness of significant judgments and the
clarity of the disclosures in the financial statements.
13. Providing a report in the Company's proxy statement in accordance with the
requirements of Item 306 of Regulation S-K and Item 7(d)(3) of Schedule
14A.
14. Discussing the results of the quarterly review and any other matters
required to be communicated to the Audit Committee by the independent
auditors under generally accepted auditing standards.
15. Discussing the results of the annual audit and any other matters required
to be communicated to the Audit Committee by the independent auditors
under generally accepted auditing standards.
16. Reviewing the Audit Committee's own structure, processes and membership
requirements.
17. Establishing procedures for the receipt, retention and treatment, on a
confidential basis, of complaints (from employees and others) regarding
the Company's accounting, internal accounting controls and accounting
matters.
18. Having the authority to approve, in advance, all non-audit services to be
provided to the Company by the independent auditors.
19. Having the authority to consult with, retain and determine funding for
legal, accounting and other experts in connection with the performance of
its duties and responsibilities.
20. Performing such other duties as may be requested by the Board of Directors
or as the Audit Committee shall deem appropriate.
21. Reviewing and approving related party transactions.
MEETINGS
The Audit Committee will meet once each fiscal year, or more frequently as
circumstances dictate, in order to completely discharge its responsibilities as
outlined in this charter. The Audit Committee may establish its own agenda,
which it will provide to the Board of Directors in advance.
The Audit Committee will meet separately with the independent auditors as well
as members of the Company's management, and legal counsel as it deems
appropriate in order to review the financial controls of the Company.
MINUTES
The Audit Committee will maintain written minutes of its meetings, which minutes
will be filed with the minutes of the meetings of the Board of Directors.
REPORTS
Apart from the report prepared pursuant to Item 306 of Regulation S-K and Item
7(d)(3) of Schedule 14A, the Audit Committee will summarize its examinations and
recommendations to the Board from time to time as may be appropriate, consistent
with the Audit Committee's charter.
Exhibit II
Code of Ethics
of
The Quigley Corporation
January 14, 2003
Employment by The Quigley Corporation or its subsidiaries (collectively, the
"Company") carries with it the duty and responsibility to be constantly aware of
the importance of ethical conduct when dealing with competitors, suppliers,
customers and other employees. Each of us, whether an employee, officer or
director, has an individual responsibility to deal ethically in all aspects of
the Company's business and to comply fully with all laws, regulations, and
Company policies. Each individual is expected to assume the responsibility for
applying these standards of ethical conduct and for acquainting himself or
herself with the various laws, regulations and policies applicable to his or her
assigned duties. This Code of Ethics is applicable not only to the conduct of
each employee of the Company, but also to the conduct of any associate or
relative of such employee in regard to the Company and to competitors,
suppliers, customers and employees of the Company. For the purposes of this Code
of Ethics, a relative is any person who is related by blood, marriage or
adoption or whose relationship with the employee is similar to that of persons
who are related by blood, marriage or adoption. For the purposes of this Code of
Ethics, an associate of an employee is (1) a corporation or other entity of
which such employee is an officer or partner, or is, directly or indirectly, the
beneficial owner of 10 percent or more of any class of equity securities; and
(2) any trust or other estate in which such employee has a substantial
beneficial interest or as to which such employee serves as trustee or in a
similar capacity. In complying with the Company's Code of Ethics, you are
expected to exercise high standards of integrity and good judgment and to apply
the following guiding principles:
- to conduct yourself in an honest manner in dealing with others and to
accept responsibility for your actions, including actions that may be unethical
or improper.
- to refrain from taking part or exercising influence in any transaction
in which your personal interest may conflict with the best interests of the
Company, including (i) taking for yourself personally opportunities that are
discovered through the use of corporate property, information or position, (ii)
using corporate property, information or position for personal gain, and (iii)
competing with the Company. You owe a duty to the Company to advance the
Company's legitimate interests when the opportunity to do so arises.
- never to induce or encourage co-employees to engage in illegal or
unethical conduct.
- to protect the company's assets and ensure their efficient use. Theft,
carelessness and waste have a direct impact on the Company's profitability. All
Company assets should be used for legitimate business purposes. The personal use
of Company assets without proper approval is prohibited.
- to exercise good judgment in the use of information you may acquire in
the course of doing Company business including, but not limited to, methods of
operation, sales, products, profits, costs, markets, key personnel, licenses,
trade secrets and other know-how of the Company and to maintain the
confidentiality of all such information (except when disclosure is authorized or
legally mandated).
- to make commercial decisions that are in the best interests of the
Company.
- to endeavor to deal fairly with the Company's customers, suppliers,
competitors and employees by not taking advantage of anyone through
manipulation, concealment, abuse of privileged information, misrepresentation of
material facts, or any other unfair-dealing practice.
- to provide fair and equal opportunity to all employees regardless of
race, color, sex, sexual orientation, religion, age, national origin, veteran's
status or disability and to avoid harassment or unequal treatment of
co-employees.
- to establish and maintain a work environment that is free from
intimidation, threats or violent acts and the effects of alcohol and drug abuse.
- never to make a payment, contribution, gift or provide services or
facilities to a public official on behalf of the Company. (You are free to
contribute personal time or funds to any political candidate or party without
expectation of reimbursement or time off from work to conduct political
activities.)
- to act as a responsible and useful corporate citizen to enhance the
communities within which you work and live and to support selected civic,
charitable, educational and other activities as appropriate.
- to comply with all laws, rules, regulations, policies and guidelines
applicable to the operation of the Company.
- to fully and fairly disclose the financial condition and results of
operations of the Company in accordance with applicable accounting principles,
laws, rules and regulations, and in such connection, to keep the books and
records of the Company so as to fully and fairly reflect all Company
transactions.
- to provide full, fair, accurate, timely and understandable disclosure
in reports and documents that the Company files with or submits to regulatory
authorities, as well as in financial, stockholder and other internal or external
reports, documentation or audits.
- to promptly report knowledge of any illegal or improper activity or
violations of laws, rules, regulations or this Code of Ethics to the Chief
Operating Officer of the Company, with the assurance that the Company will not
allow retaliation for reports made in good faith.
- to implement necessary changes in programs, systems, practices or
procedures to avoid future ethical problems.
Failure to comply with this Code of Ethics may result in disciplinary action,
including warnings, suspensions, termination of employment or such other actions
as may be appropriate under the circumstances.
Any questions pertaining to the Code of Ethics are to be directed to the Chief
Operating Officer of the Company.
CERTIFICATION
I hereby state that I have read The Quigley Corporation Code of Ethics dated
January 14, 2003 and that I understand my responsibilities thereunder. I agree
to abide by the Code of Ethics to the best of my ability. I am not aware of any
violation, or any possible violation, of the Code of Ethics or any applicable
law or regulation.
Signature:________________________ Date:_____________________, 20____
Name (please print):______________
PERFORMANCE GRAPH (Data Points)
1997 1998 1999 2000 2001 2002
THE QUIGLEY CORPORATION 100.00 38.31 11.04 5.63 15.93 38.10
MG GROUP INDEX 100.00 66.95 57.49 49.67 72.61 72.75
NASDAQ MARKET INDEX 100.00 141.04 248.76 156.35 124.64 86.94-13-
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE QUIGLEY CORPORATION
ProxyPROXY -- Annual Meeting of Stockholders
April 30, 2003ANNUAL MEETING OF STOCKHOLDERS
JUNE 23, 2004
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 Doyelstown Country Club, Green St.
P.O. Box 417, Doyelstown,the Aldie Mansion, 85 Old Dublin Pike,
Doylestown, Pennsylvania 18901, on Wednesday, April 30, 2003,June 23, 2004, at 4:00 P.M., local
time, or at any adjournment thereof.
THE UNDERSIGNED HEREBY INSTRUCTS SAID PROXIES OR THEIR SUBSTITUTES:
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
BOTEVOTE IN BLUE OR BLACK INK AS SHOWN HERE /X/.
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:
/ / FOR ALL NOMINEES 0 GuyO GUY J. Quigley
0 CharlesQUIGLEY
O CHARLES A. PhilipsPHILIPS
/ / WITHHOLD O GEORGE J. LONGO
AUTHORITY FOR ALL 0 George J. LongoJACQUELINE F. LEWIS
NOMINEES 0 Jacqueline F. Lewis
0 RounsevelleO ROUNSEVELLE W. SchaumSCHAUM
/ / FOR ALL ACCEPT 0 StephenEXCEPT O STEPHEN W. Wouch
(see instruction below)WOUCH
(SEE INSTRUCTION BELOW) O TERRENCE O. TORMEY
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold, as shown here. 0O
2. RATIFICATION OF APPOINTMENT OF FOR AGAINST ABSTAIN
PRICEWATERHOUSECOOPERS LLP AS / / / / / /
THE FOR AGAINST ABSTAIN COMPANY'S INDEPENDENT PUBLIC
AUDITORS.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE GIVEN.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE DIRECTORS AND
TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S
INDEPENDENT PUBLIC AUDITORS AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXY
OR PROXIES WITH RESPECT TO ANY OTHER BUSINESS TRANSACTED AT THE MEETING.
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 March 31, 2003,May 21, 2004, and a copy of the Company's Annual Report to
Shareholdersstockholders for the fiscal year ended December 31, 2002.2003.
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TO CHANGE YOUR ADDRESS ON YOUR ACCOUNT,
PLEASE CHECK THE BOX AT RIGHT AND
INDICATE YOUR NEW ADDRESS IN THE ADDRESS / /
SPACE ABOVE. PLEASE NOTE THAT CHANGES TO
THE REGISTERED NAME(S) ON THE ACCOUNT
MAY NOT BE SUBMITTED VIA THIS METHOD.
Signature:________________ Date:________ Signature:______________ Date:______
----------------- -------------- ------------ ------------
NOTE: Please sign exactly as your name or names appears on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full titles as such.
If the signer is a corporation, please sign full corporate name by duly
authorized officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
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