-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V9Oen+bLE0iz5ge6waU3bwHH+TLEBFWanhwnlX+9VD4jTxQHpAtzP3sXLPKesecT UqY9quWfXW3rXkThYJupVQ== 0000868278-00-000002.txt : 20000403 0000868278-00-000002.hdr.sgml : 20000403 ACCESSION NUMBER: 0000868278-00-000002 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUIGLEY CORP CENTRAL INDEX KEY: 0000868278 STANDARD INDUSTRIAL CLASSIFICATION: SUGAR & CONFECTIONERY PRODUCTS [2060] IRS NUMBER: 232577138 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-21617 FILM NUMBER: 590583 BUSINESS ADDRESS: STREET 1: KELLS BUILDING STREET 2: 621 SHADY RETREAT RD CITY: DOYLESTOWN STATE: PA ZIP: 18901 BUSINESS PHONE: 2153450919 MAIL ADDRESS: STREET 1: PO BOX 1349 STREET 2: LANDMARK BLDG, 10 S CLINTON ST CITY: DOYLESTOWN STATE: PA ZIP: 18901 DEF 14A 1 PROXY STATEMENT THE QUIGLEY CORPORATION Kells Building 621 Shady Retreat Road P.O. Box 1349 Doylestown, PA 18901 ------------------------------ NOTICE OF ANNUAL MEETING OF STOCKHOLDERS to be held May 5, 2000 ------------------------------ 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 5, 2000, 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, 2000. (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 20, 2000 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 4, 2000 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 Building 621 Shady Retreat Road P. O. Box 1349 Doylestown, PA 18901 -------------------- PROXY STATEMENT ------------------ April 4, 2000 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 5, 2000 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 April 4, 2000. 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, 2000. (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 20, 2000 will be entitled to notice of and to vote at the Meeting. At the close of business on such record date, the Company had 10,349,731 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, 2000, 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 Annual 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, 1999, 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 20, 2000 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, Common Stock and all Executive Officers Beneficially Percent of and Directors as a Group Owned (1) Class - -------------------------------------------------------------------------------- GUY J. QUIGLEY (2) (3) (4) 4,016,854 34.4 CHARLES A. PHILLIPS (2) (3) (5) 1,665,206 15.1 GEORGE J. LONGO (2) (3) (6) 355,000 3.3 ERIC H. KAYTES (2) (3) (7) 552,992 5.2 JACQUELINE F. LEWIS (2) (8) 20,000 - ROUNSEVELLE W. SCHAUM (2) (9) - - ALL DIRECTORS AND OFFICERS (10) 6,610,052 50.7 (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 20, 2000. (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 20, 2000, to purchase 900,000 shares of Common Stock, options and warrants to purchase 430,000 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 20, 2000, to purchase 645,000 shares of Common Stock, and options to purchase 12,500 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 20, 2000, to purchase 350,000 shares of Common Stock. (7) Mr. Kaytes' beneficial ownership includes options and warrants exercisable within sixty (60) days from March 20, 2000, to purchase 320,000 shares of Common Stock. (8) Ms. Lewis' address is 3805 Old Easton Road, Doylestown, PA 18901. Ms. Lewis' beneficial ownership includes options exercisable within sixty (60) days from March 20, 2000, to purchase 20,000 shares of Common Stock. (9) Mr. Schaum's address is One Bannister's Warf, Newport, RI 02840. (10) Includes an aggregate of 2,677,500 shares of Common Stock underlying options and warrants that are exercisable within sixty (60) days from March 20, 2000. -2- 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, 1999, 1998 and 1997 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 $100,000 during 1999:
SUMMARY COMPENSATION TABLE -------------------------- Annual Compensation Long-Term Compensation ------------------------------- --------------------------- Other Annual Securities All Other Name and Principal Position Year Salary Bonus Compensation Underlying Compensation (1) (2) (3) (5) Options (4) ($) ($) ($) (#) ($) - ----------------------------------------------------------------------------- ---------------------------- Guy J. Quigley 1999 420,000 814,701 85,000 65,903 Chairman of the 1998 350,000 262,500 1,289,963 55,903 Board, President, 1997 250,000 437,500 2,546,262 240,000 Chief Executive Officer Charles A. Phillips 1999 294,000 271,567 85,000 51,601 Executive Vice President, 1998 245,000 183,750 430,923 42,959 Chief Operating Officer 1997 175,000 306,250 847,990 185,000 George J. Longo 1999 252,000 100,000 27,820 Vice President, 1998 210,000 157,500 17,820 Chief Financial Officer 1997 150,000 262,500 200,000 Eric H. Kaytes 1999 192,000 50,000 27,039 Vice President, MIS, 1998 160,000 120,000 17,039 Secretary-Treasurer, 1997 100,000 175,000 135,000 Chief Information Officer
(1) Compensation paid pursuant to employment 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. Also, included are matching contributions attributable to each officer in the Company's 401-K Plan. (5) 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, cannot be specifically or precisely determined; however, it would not exceed the lesser of $50,000 or 10% of the total annual salary and bonus reported for any individual named above. Compensation Pursuant to Plans - ------------------------------ An incentive stock option plan was instituted in 1997, (the "1997 Stock Option Plan") and approved by the stockholders in 1998. Options pursuant to the 1997 Stock Option Plan have been granted to directors, executive officers, and employees during 1999 and 1997. In early 1999, the Company implemented a defined contribution plan for its employees with the Company's contribution to the plan being based on the amount of the employee plan contribution. -3- Option Grants Table - ------------------- The following table sets forth certain information regarding stock option grants made to each of the executive officers during 1999:
OPTION GRANTS IN LAST FISCAL YEAR --------------------------------- Percent of Potential Realizable Total Value at Assumed Rates Number of Options of Annual Rates of Stock Securities Granted to Exercise Price Appreciation for Underlying Employees or Base Option ($) (1) Options in Fiscal Price Expiration Name Granted Year (%) ($/sh) Date 5% 10% - -------------------------------------------------------------------------------------------------------- Guy J. Quigley 85,000 20.8 5.125 4/07/09 273,700 694,450 Charles A. Phillips 85,000 20.8 5.125 4/07/09 273,700 694,450 George J. Longo 100,000 24.4 5.125 4/07/09 322,000 817,000 Eric H. Kaytes 50,000 12.2 5.125 4/07/09 161,000 408,500
(1) The potential realizable portion of the foregoing table illustrates value that might be realized upon exercise of options immediately prior to the expiration of their term, assuming (for illustrative purposes only) the specified compounded rates of appreciation on the Company's Common Stock over the term of the option. These numbers do not take into account provisions providing for termination of the option following termination of employment, non-transferability or difference in vesting periods. Aggregated Option Exercises and Year-End Option Values Table - ------------------------------------------------------------ The following table sets forth certain information concerning stock options exercised during 1999 and stock options, which were unexercised at the end of 1999 with respect to the executive officers: AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES ------------------------------------------------------- Number of Value of Shares Securities Unexercised Acquired on Value Underlying In-the Money Exercise Realized Unexercised Options at Name (#) ($) Options Year End ($) (1) - -------------------------------------------------------------------------------- Guy J. Quigley - - 900,000 218,800 Charles A. Phillips 150,000 660,975 645,000 - George J. Longo - - 350,000 - Eric H. Kaytes - - 320,000 65,640 (1) Represents the total gain that would be realized if all in-the-money options held at December 31, 1999 were exercised, determined by multiplying the number of shares underlying the options by the difference between the per share option exercise price and $1.594 per share, which was the closing bid price per share of the Company's Common Stock on December 31, 1999. An option is in-the-money if the fair market value of the underlying shares exceeds the exercise price of the option. 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 $9.68 per share, with all other terms and conditions remaining unchanged. The following table sets forth certain information regarding the re-pricing of stock options for executive officers of the Company in May 1998 and within the ten previous years: -4-
Ten-Year Option Re-pricing -------------------------- Number of Securities Market Price Exercise Length of Underlying of Stock at Price at New Original Term Re-pricing Options Time of Time of Exercise Remaining at Name Date Re-priced Re-pricing Re-pricing Price Date of (#) ($) ($) ($) Re-pricing - ---------------------- ------------- ------------------ ---------------- ------------- ----------- --------------- 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.
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. 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. -5- 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 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. Each of Messrs. Quigley, Phillips, Longo, Kaytes, Sloan and Ms. Lewis filed on a timely basis statements of changes in beneficial ownership of securities for 1999 as required by Section 16(a). CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ---------------------------------------------- For the year ended December 31, 1999, $1,086,268 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) products. In the ordinary course of business, the Company has sales brokerage arrangements with ScandaSystems Ltd., whose President and major stockholder is Mr. Gary Quigley, a relative of the Company's Chief Executive Officer. Approximately $248,517 was paid or payable by the Company to such firm during 1999. Also, the Company has consulting arrangements with the Kay Group, Inc. whose President and major stockholder is Mr. David Kaytes, a relative to the Company's Chief Information Officer. Approximately $112,074 was paid or payable by the Company to such firm during 1999. The Company believes that the services performed by these firms are on terms no more favorable than could have otherwise been obtained from an unaffiliated third party. The Company is in the process of acquiring licenses in certain countries through related party entities. During 1999, fees amounting to $110,000 have been paid to a related entity to obtain such licenses. 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 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. -6- 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: Year First Name Position Age Elected - -------------------------------------------------------------------------------- Guy J. Quigley (1) Chairman of the Board, President, CEO 58 1989 Charles A. Phillips* (1) Executive Vice President, COO and Director 52 1989 George J. Longo Vice President, CFO and Director 53 1997 Eric H. Kaytes Vice President, CIO and Director 45 1989 Jacqueline F. Lewis* Director 54 1997 Rounsevelle W. Schaum* Director 67 2000 * Member of the audit committee (1) Member of the compensation committee 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. Mr. Phillips also serves as a director of Businessnet Holdings Corp. 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 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. 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. 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. ROUNSEVELLE W. SCHAUM, was appointed to the Board of Directors in March 2000. Since 1993, Mr. Shaum 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 has 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 multi-national high technology companies and government agencies, including NASA and the Department of Defense. -7- 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, 1999, there were six 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 Committees on which they served in 1999. During 1999, the Board of Directors also acted by unanimous written consent in lieu of a meeting on one occasion. 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. 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. Phillips, Schaum and Ms. Lewis. Mr. Schaum, elected to the Board of Directors in March 2000, replaced Mr. Sloan as a member of the Audit Committee after his resignation from the Board of Directors on March 1, 2000. 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 1999. 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 1999. 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 1999. 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 1999 the Board of Directors approved the grant of Options to purchase 10,000 shares of Common Stock to each of the outside directors, at the time of grant, 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 -8- 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. 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. -9- 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 ("MG Group Index"). 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]
-------------------------------FISCAL YEAR ENDING --------------------- COMPANY/INDEX/MARKET 12/30/1994 12/29/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999 Quigley Corporation, The 100.00 87.50 1743.74 2888.00 1106.00 318.00 Drug Related Products 100.00 101.96 152.73 212.47 142.25 122.15 NASDAQ Market Index 100.00 129.71 161.18 197.16 278.08 490.46
-10- 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, 2000. 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, 2000. 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 5, 2000. 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 19, 2001. 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: April 4, 2000 THE QUIGLEY CORPORATION By: /s/ Eric H. Kaytes ------------------ ERIC H. KAYTES, Secretary -11- -----END PRIVACY-ENHANCED MESSAGE-----