As filed with the Securities and Exchange Commission on April 25, 2002
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE QUIGLEY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Nevada 23-2577138
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
Kells Building
631 Shady Retreat Road
Doylestown, PA 18901
(215) 345-0919
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(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
Guy J. Quigley
Chief Executive Officer
The Quigley Corporation
Kells Building
631 Shady Retreat Road
Doylestown, PA 18901
(215) 345-0919
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service of Process)
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Copies to:
Robert H. Friedman, Esq.
Olshan Grundman Frome Rosenzweig & Wolosky LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
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If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
Proposed
Maximum
Offering Proposed
Amount to Price Maximum Amount of
be Per Aggregate Registration
Title of Shares to be Registered Registered Share(1) Offering Price Fee
Common Stock, $.0005 par value 1,000,000 $7.84 $7,840,000 $721.28
Total............................................................................ $721.28
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended,
based on the average of the high and low prices of the Registrant's
common stock, on The Nasdaq National Market on April 19, 2002.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 25, 2002
PROSPECTUS
1,000,000 SHARES OF COMMON STOCK
The Quigley Corporation
The selling stockholders listed in this prospectus are offering and
selling up to 1,000,000 shares of our common stock. The shares are issuable upon
the exercise of warrants. We will not receive any of the proceeds from the sale
of the shares. However, if all the warrants are exercised, we will receive
aggregate gross proceeds of $8,250,000. These proceeds shall be used for general
working capital purposes, which may include the further development of
pharmaceutical products.
Our common stock is listed on The Nasdaq National Market under the
symbol "QGLY." The last reported price for the common stock on April 19, 2002
was $7.61 per share.
The selling stockholders may offer their shares of common stock on
one or more exchanges or in the over-the-counter market or otherwise, at prices
and at terms then prevailing or at prices related to the then current market
prices, or in negotiated transactions.
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This investment involves risk. See "Risk Factors" beginning on page 4.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined whether
this prospectus is truthful or complete. They have not made, nor will they make,
any determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
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The date of this prospectus is [ ], 2002.
PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus
and may not contain all the information that is important to you. In order to
fully understand this offering and our company, you should read this entire
document and the information we refer you to, including the financial statements
and the notes to the financial statements.
Overview
The Quigley Corporation (hereinafter referred to as "we", "us",
"Quigley" or the "Company") is a Nevada corporation which was organized on
August 24, 1989 and commenced business operations in October 1989.
Our current primary business is manufacturing and distributing
over-the-counter cold remedy products. Our key product, Cold-Eeze(R), is a zinc
gluconate glycine lozenge. In two double-blind clinical studies Cold-Eeze(R) has
been proven to reduce the duration and severity of common cold symptoms by
nearly half. Cold-Eeze(R) is now an established product in the health care and
cold remedy market.
In January 2000, we formed Darius International Inc., a wholly owned
subsidiary, which directly markets and distributes health and wellness products.
Accordingly, Darius provides us with a means of introducing new products to the
marketplace.
Effective July 1, 2000, we acquired 60% of Caribbean Pacific Natural
Products, Inc., which is based in Orlando, Florida. Caribbean is a developer and
marketer of sun-care and skincare products for luxury resorts, theme parks and
spas.
In January 2001, we formed an ethical pharmaceutical unit which is
now Quigley Pharma Inc. Quigley Pharma is a wholly-owned subsidiary of ours
which develops pharmaceutical products. We believe that Quigley Pharma will
enable us to diversify into the prescription drug market and will also enable us
to safely and effectively distribute important potential new products currently
under development. These potential new products are based on patent applications
we have acquired. We will be required to expend substantial resources to develop
these applications into commercial products.
The formation of Darius International Inc., Quigley Pharma and our
majority ownership of Caribbean Pacific Natural Products, Inc. provides us with
diversification in both the method of product distribution and the broader range
of products we can provide to the marketplace.
Our mailing address is: PO Box 1349, Doylestown, PA 18901. Our
telephone number is (215) 345-0919.
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This Offering
We are registering 1,000,000 shares of our common stock for resale
by certain selling stockholders. These shares are issuable upon the exercise of
warrants issued to Forrester Financial, LLC pursuant to a Consulting Agreement
dated March 7, 2002. The warrants are exercisable at any time beginning on March
7, 2002 and ending on March 6, 2003. 500,000 warrants are exercisable at a price
of $6.50 per share, 250,000 warrants are exercisable at a price of $8.50 per
share and the remaining 250,000 warrants are exercisable at a price of $11.50
per share. We are registering these shares pursuant to our consulting agreement
with Forrester.
FORWARD LOOKING INFORMATION
Some of the information in this prospectus, including the following
risk factors section, contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including, without limitation,
statements regarding our expectations, beliefs, intentions and other events of
our future strategies that are signified by the words "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," or "continue," or the negative of such terms and other comparable
terminology. Actual results could differ materially from those projected in the
forward-looking statements.
We believe it is important to communicate our expectations to our
investors. However, there may be events in the future that we are not able to
predict accurately or over which we have no control. The risk factors listed
below, as well as any cautionary language in this prospectus, provide examples
of risks, uncertainties and events that may cause our actual results to differ
materially from the expectations we described in our forward-looking statements.
Before you invest in our common stock, you should be aware that the occurrence
of the events described in these risk factors and elsewhere in this prospectus
could have a material adverse effect on our business, operating results, and
financial condition.
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RISK FACTORS
The purchase of our common stock involves a high degree of risk. You
should carefully consider the following risk factors, the other information set
forth in this prospectus and the information we refer you to before deciding to
invest in our common stock.
We Have A History of Losses and Limited Working Capital and We
Expect to Increase Our Spending. In the fiscal year ended December 31, 2001, we
earned a net income of $216,000, including net settled litigation payments paid
to us of approximately $700,000 relating to licensing fees. However, in recent
prior years we have not been profitable. For the fiscal years ended December 31,
2000 and 1999, we had net losses of $5,196,000 and $4,204,000, respectively. As
of December 31, 2001, we had working capital of approximately $18,626,000.
However, we expect to increase our spending on research and development in
connection with Quigley Pharma's product development. We are uncertain whether
we will generate sufficient revenues to meet expenses or to operate profitably
in the future.
We Have Acquired Patent Applications Which We May Not Be Able to
Develop Into Pharmaceutical Medications. Our success depends on Quigley Pharma's
ability to research and develop prescription medications based on our patent
applications which are:
o Method and Composition for the Topical Treatment of Diabetic
Neuropathy;
o Medicinal Composition and Method of Using it, which is
primarily for treating Sialorrhea and other disorders to
relieve Sialorrhea (drooling) in patients suffering from
Amyotrophic Lateral Sclerosis (ALS), otherwise known as Lou
Gehrig's Disease; and
o Composition and Method for Prevention, Reduction and Treatment
of Radiation Dermatitis.
These new products are in the development stage and we can not give
any assurances that we can develop commercially viable products from these
patent applications. Prior to any new product being ready for sale, we will have
to commit substantial resources for research, development, preclinical testing,
clinical trials, manufacturing scale-up and regulatory approval. We face
significant technological risks inherent in developing these products. We may
abandon some or all of our proposed new products before they become commercially
viable. Even if we develop and obtain approval of a new product, if we cannot
successfully commercialize it in a timely manner, our business and financial
condition may be materially adversely effected.
We Will Need To Obtain Additional Capital To Support Long-Term
Product Development And Commercialization Programs. Our ability to achieve and
sustain operating profitability depends in large part on our ability to
commence, execute and complete clinical programs for, and obtain additional
regulatory approvals for, prescription medications developed by Quigley Pharma,
particularly in the U.S. and Europe. We cannot assure you that we will ever
obtain such approvals or achieve significant levels of sales. Our current sales
levels of Cold-Eeze(R) products may not
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generate all the funds we anticipate will be needed to support our current plans
for product development. We may need to obtain additional financing to support
our long-term product development and commercialization programs. We may seek
additional funds through public and private stock offerings, arrangements with
corporate partners, borrowings under lines of credit or other sources.
The amount of capital we may need to complete product development of
Quigley Pharma's products will depend on many factors, including;
o the cost involved in applying for and obtaining United States
Food and Drug Administration ("FDA") and international
regulatory approvals;
o whether we elect to establish partnering arrangements for
development, sales, manufacturing and marketing of such
products;
o the level of future sales of our Cold-Eeze(R) and other
existing products, expense levels for our international sales
and marketing efforts;
o whether we can establish and maintain strategic arrangements
for development, sales, manufacturing and marketing of our
products; and
o whether any or all of our outstanding warrants are exercised
and the timing and amount of these exercises.
Many of the foregoing factors are not within our control. If we need
to raise additional funds and such funds are not available on reasonable terms,
we may have to reduce our capital expenditures, scale back our development of
new products, reduce our workforce and out-license to others products or
technologies that we otherwise would seek to commercialize ourselves. Any
additional equity financing will be dilutive to shareholders, and any debt
financing, if available, may include restrictive covenants.
Our Current Products and Potential New Products Are Subject to
Extensive Governmental Regulation. Our business is regulated by various agencies
of the states and localities where our products are sold. Governmental
regulations in foreign countries where we plan to commence or expand sales may
prevent or delay entry into a market or prevent or delay the introduction, or
require the reformulation, of certain of our products. In addition, we cannot
predict whether new domestic or foreign legislation regulating our activities
will be enacted. Any new legislation could have a material adverse effect on our
business, financial condition and operations. Noncompliance with any applicable
requirements may subject us or the manufacturers of our products to sanctions,
including warning letters, fines, product recalls and seizures.
Cold-Relief Products. The manufacturing, processing, formulation,
packaging, labeling and advertising of our cold-relief products are subject to
regulation by several federal agencies, including:
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o the FDA;
o the Federal Trade Commission ("FTC");
o the Consumer Product Safety Commission;
o the United States Department of Agriculture;
o the United States Postal Service;
o the United States Environmental Protection Agency; and
o the Occupational Safety and Health Administration.
In particular, the FDA regulates the safety, labeling and
distribution of dietary supplements, including vitamins, minerals and herbs,
food additives, food supplements, over-the-counter and prescription drugs and
cosmetics. In addition, the FTC has overlapping jurisdiction with the FDA to
regulate the promotion and advertising of vitamins, over-the-counter drugs,
cosmetics and foods. Since we do not engage in the manufacturing of our
cold-relief products, we are not subject to many of these regulations. In
addition, our cold-relief products are homeopathic remedies which are regulated
by the Homeopathic Pharmacopoeia of the United States ("HPUS"). HPUS sets the
standards for source, composition and preparation of homeopathic remedies which
are officially recognized in the Federal Food, Drug and Cosmetics Act of 1938.
Quigley Pharma. The preclinical development, clinical trials,
product manufacturing and marketing of Quigley Pharma's potential new products
are subject to federal and state regulation in the United States and other
countries. Clinical trials and product marketing and manufacturing are subject
to the rigorous review and approval processes of the FDA and foreign regulatory
authorities. Obtaining FDA and other required regulatory approvals is lengthy
and expensive. Typically, obtaining regulatory approval for pharmaceutical
products requires substantial resources and takes several years. The length of
this process depends on the type, complexity and novelty of the product and the
nature of the disease or other indication to be treated. Preclinical studies
must comply with FDA regulations. Clinical trials must also comply with FDA
regulations and may require large numbers of test subjects, complex protocols
and possibly lengthy follow-up periods. Consequently, satisfaction of government
regulations may take several years, may cause delays in introducing potential
new products for considerable periods of time and may require imposing costly
procedures upon our activities. If we cannot obtain regulatory approval of new
products in a timely manner or at all we could be materially adversely effected.
Even if we obtain regulatory approval of new products, such approval may impose
limitations on the indicated uses for which the products may be marketed which
could also materially adversely effect our business financial condition and
future operations.
Our Business is Very Competitive and Increased Competition Could
Have a Significant Impact on Our Earnings. Both the non-prescription healthcare
product and pharmaceutical industries are highly competitive. Many of our
competitors have substantially greater capital
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resources, research and development staffs, facilities and experience than we
do. These and other entities may have or may develop new technologies. These
technologies may be used to develop products that compete with ours.
We believe that our cold-relief product, Cold-Eeze(R), has a
competitive advantage over other cold remedy products because it has been
clinically proven to reduce the severity and duration of common cold symptoms.
We also believe that our sun-care and skincare products have an advantage over
our competitors' products because our products use only all-natural, eco-safe,
and organic ingredients and are marketed to luxury resorts, theme parks and
spas. Also, many of our competitors' products are made with petro-chemicals,
synthetic and chemical additives, synthetic preservatives, fillers and
softeners, all of which may have side-effects. Darius has an advantage over its
competitors because it directly sells its proprietary health and wellness
products through its extensive network of independent distributors. Competition
in Quigley Pharma's expected product areas from large pharmaceutical companies,
and other companies, universities and research institutions, is intense and
expected to increase.
The Company believes that its ability to compete depends on a number
of factors, including price, product quality, availability, reliability and name
recognition of its cold-relief, sun-care and skincare and health and wellness
products and Quigley Pharma's ability to successfully develop and market
prescription medications. There can be no assurance that we will be able to
compete successfully in the future. If we are unable to compete, our earnings
may be significantly impacted.
Our Future Success is Dependent on the Continued Services of Key
Personnel Including Our Chairman of the Board of Directors, President and Chief
Executive Officer. Our future success depends in large part on the continued
service of our key personnel. In particular, the loss of the services of Guy J.
Quigley, our Chairman of the Board, President and Chief Executive Officer could
have a material adverse effect on our operations. We have an employment
agreement with Mr. Quigley which expires on May 31, 2005. Our future success and
growth also depends on our ability to continue to attract, motivate and retain
highly qualified employees. If we are unable to attract, motivate and retain
qualified employees, our business and operations could be materially adversely
effected.
Our Future Success Depends on the Continued Employment of Richard A.
Rosenbloom, M.D., Ph.D., of Quigley Pharma. Quigley Pharma's potential new
products are being developed through the efforts of Dr. Rosenbloom. The loss of
his services could have a material adverse effect on our product development and
future operations.
Our Future Success is Dependent on the Continued Sales of Our
Principal Product. For the fiscal year ended December 31, 2001, our Cold-Eeze(R)
products represented 68.4% of our total sales. Until such time that significant
sales are generated by Darius, Caribbean or Quigley Pharma, our future
performance will depend, almost entirely, on the continued customer acceptance
of our Cold-Eeze(R) products. However, there can be no assurance that our
Cold-Eeze(R) products will continue to receive market acceptance. The inability
to successfully commercialize Cold-Eeze(R) in the future, for any reason, would
have a material adverse effect on our financial condition, prospects and ability
to continue operations.
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We Are Dependent on a Third-Party Manufacturer and Supplier for the
Production of Our Cold-Relief Products. We do not own or lease any manufacturing
facilities, do not manufacture the Cold-Eeze(R) product, nor do we manufacture
any of the ingredients in this product. We purchase all active ingredients in
connection with our Cold-Eeze(R) product from a single unaffiliated supplier. We
have entered into a contract with a single manufacturer to supply our zinc
gluconate lozenge products. Should this relationship terminate, we believe that
the contingency plans which we have formulated would prevent a termination from
materially affecting our operations. However, if this relationship is
terminated, there may be delays in production of our cold-relief products until
an acceptable replacement facility is located. In addition, the terms on which
suppliers and manufacturers will be available could have a material effect on
our success.
We are Uncertain as to Whether We Can Protect Our Proprietary
Rights. The strength of our patent position may be important to our long-term
success. We currently own no patents. However, in connection with products
expected to be developed by Quigley Pharma, we own three patent applications. In
addition, we have been granted an exclusive agreement for worldwide
representation, manufacturing, marketing and distribution rights to a
zinc/gluconate/glycine lozenge formulation. That formulation has been patented
in the United States, Germany, France, Italy, Sweden, Canada and Great Britain
and a patent is pending in Japan. We also had an exclusive license from George
Eby Research for a United States use patent for zinc gluconate. This license and
the U.S. patent expired in March, 2002. We do not anticipate any material impact
on our financial statements from the expiration of such license and patent.
There can be no assurance that these patents and patent applications
will effectively protect our products from duplication by others. In addition,
we may not be able to afford the expense of any litigation which may be
necessary to enforce our rights under any patent or patent application.
Moreover, although we believe that our current and future products do not and
will not infringe upon the patents or violate the proprietary rights of others,
if any of our current or future products do infringe upon the patents or
proprietary rights of others, we may have to modify our products or obtain an
additional license for the manufacture and/or sale of such products. We could
also be prohibited from selling the infringing products. If we are found to
infringe on the proprietary rights of others, we are uncertain whether we will
be able to take corrective actions in a timely manner, upon acceptable terms and
conditions, or at all, and the failure to do so could have a material adverse
effect upon our business, financial condition and operations.
We also use non-disclosure agreements with our employees, suppliers,
consultants and customers to establish and protect the ideas, concepts and
documentation of our confidential non-patented and non-copyright protected
proprietary technology and know-how. However, these methods may not afford
complete protection. There can be no assurance that third parties will not
obtain access to or independently develop our technologies, know-how, ideas,
concepts and documentation, which could have a material adverse effect on our
financial condition.
The Sales of Our Products Fluctuates by Season. A substantial
portion of our business is highly seasonal, which causes significant variations
in operating results from quarter to quarter. The third and fourth quarters
generally represent the largest sales volume for our cold remedy products and
the first and second quarters generally represent the largest sales volume for
our sun-care and
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skincare products. There can be no assurance that we will be able to manage our
working capital needs and our inventory to meet the fluctuating demand for our
products. Failure to accurately predict and respond to consumer demand may cause
us to produce excess inventory. Conversely, if products achieve greater success
than anticipated for any given quarter, we may not have sufficient inventory to
meet customer demand.
Our Existing Products and Our New Products Under Development Expose
Us to Potential Product Liability Claims. Our business exposes us to an inherent
risk of potential product liability claims, including claims for serious bodily
injury or death caused by the sales of our existing products and the clinical
trials of our products which are being developed. These claims could lead to
substantial damage awards. We currently maintain product liability insurance in
the amount of, and with a maximum payout of, $61 million. A successful claim
brought against us in excess of, or outside of, our insurance coverage could
have a material adverse effect on our results of operations and financial
condition. Claims against us, regardless of their merit or eventual outcome, may
also have a material adverse effect on the consumer demand for our products.
We Are Engaged in a Lawsuit Regarding Certain Forward and Reverse
Stock Splits. We have been involved in ongoing litigation since 1997 against two
individuals, Thomas Goldblum and Alan Wayne, who claim that they are entitled to
the monetary value of 1,000,000 shares of our common stock as if they had owned
those shares since May 1990 and sold them at historic highs. Their claim, with
respect to the number of shares which they purport to own, has been based on the
alleged invalidity of certain of our previously completed forward and reverse
stock splits.
We have vigorously defended this action on its merits. We have
further filed a declaratory judgment action in Nevada asking for ratification of
a series of corrective actions taken by our shareholders on October 15, 1999
ratifying the forward and reverse stock splits in question. On March 19, 2002, a
Nevada court made a decision declaring that the corrective actions were valid.
If appealed after judgment is entered, we believe that the decision will be
upheld. However, we cannot predict the final outcome in the Nevada case (as to
the validity of the stock splits) or the underlying case (as to the ownership of
shares).
We Are Involved in a Class Action Lawsuit Regarding Claims Relating
to Certain of Our Cold-Eeze(R) Products. In September, 2000, we were sued by two
individuals (Jason Tesauro and Elizabeth Eley, both residents of Georgia), on
behalf of a "nationwide class" of "similarly situated individuals," in the Court
of Common Pleas of Philadelphia County, Pennsylvania. The complaint alleges that
the plaintiffs purchased certain Cold-Eeze(R) products between August, 1996, and
November, 1999, based upon cable television, radio and Internet advertisements
which allegedly misrepresented the qualities and benefits of our Cold-Eeze(R)
products. The complaint requests an unspecified amount of damages. Causes of
action that have not been dismissed include breach of warranty and unjust
enrichment. We believe that the lawsuit lacks merit and are vigorously defending
it. If we are unsuccessful in our defense, the marketability of our Cold-Eeze(R)
products and our revenues could be materially adversely effected.
A Substantial Amount of Our Outstanding Common Stock is Owned by Our
Chairman of the Board and President and Our Executive Officers and Directors as
a Group Can Significantly
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Influence All Matters Voted on By Our Shareholders. Guy J. Quigley, our Chairman
of the Board, President and Chief Executive Officer, through his beneficial
ownership, has the power to vote approximately 34.4% of our common stock. Mr.
Quigley and our other executive officers and directors collectively beneficially
own approximately 52.9% of our stock. These individuals have significant
influence over the outcome of all matters submitted to shareholders for
approval, including election of directors. Consequently, they have control over
all of our major decisions which could prevent a change of control of the
Company.
Our Stock Price is Volatile. The market price of our common stock
has experienced significant volatility. From March 30, 2001 to March 29, 2002
per share bids ranged from a low of approximately $.81 to a high of
approximately $6.92. There are several factors which could effect the price of
our common stock, some of which are announcements of technological innovations
for new commercial products by us or our competitors, developments concerning
propriety rights, new or revised governmental regulation or general conditions
in the market for our products. Sales of a substantial number of shares by
existing security holders could also have an adverse effect on the market price
of our securities.
Future Sales of Our Common Stock Could Effect the Price Per Share of
Our Common Stock. There is a substantial amount of common stock which may be
sold into the public market pursuant to Rule 144 or otherwise. These sales could
adversely affect the market price of our common stock and could impair our
ability to raise additional capital through the sale of our equity securities.
We Do Not Intend to Pay Dividends in the Foreseeable Future. We have
not paid cash dividends on our common stock since our inception. We currently
intend to retain earnings, if any, for use in our business and do not anticipate
paying any dividends to our shareholders in the foreseeable future.
Barriers to Takeover. Our Articles of Incorporation and By-Laws
contain certain provisions which may deter, discourage, or make it difficult to
assume control of us by another corporation or person through a tender offer,
merger, proxy contest or similar transaction or series of transactions. These
provisions may deter a future tender offer or other takeover attempt. Some
shareholders may believe such an offer to be in their best interest because it
may include a premium over the market price of our capital stock at the time. In
addition, these provisions may assist our current management in retaining its
position and place it in a better position to resist changes which some
shareholders may want to make if dissatisfied with the conduct of our business.
We Have Agreed to Indemnify Our Officers and Directors From
Liability. Sections 78.7502 and 78.751 of the Nevada General Corporation Law
("NGCL") allow us to indemnify any person who is or was made a party to, or is
or was threatened to be made a party to, any pending, completed, or threatened
action, suit or proceeding because he or she is or was a director, officer,
employee or agent of ours or is or was serving at our request as a director,
officer, employee or agent of any corporation, partnership, joint venture, trust
or other enterprise. These provisions permit us to advance expenses to an
indemnified party in connection with defending any such proceeding, upon receipt
of an undertaking by the indemnified party to repay those amounts if it is later
determined that the party is not entitled to indemnification. These provisions
may also reduce the likelihood of
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derivative litigation against directors and officers and discourage or deter
shareholders from suing directors or officers for breaches of their duties to
us, even though such an action, if successful, might otherwise benefit Quigley
and its shareholders. In addition, to the extent that we expend funds to
indemnify directors and officers, funds will be unavailable for operational
purposes.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York or
Chicago, Illinois. You may obtain further information on the operation of the
public reference rooms by calling the SEC at 1-800-SEC-0330. Our SEC filings are
also available to the public over the Internet at the SEC's website at
http://www.sec.gov. You may also request copies of such documents, upon payment
of a duplicating fee, by writing to the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Reports and other information regarding our Nasdaq
listing may be inspected at the offices of Nasdaq at 1735 K Street, N.W.,
Washington, D.C. 20006 or over the Internet at Nasdaq's website at
http://www.nasdaq.com.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Quigley Corporation has filed with the SEC, a registration
statement on Form S-3 under the Securities Act, covering the securities offered
by this prospectus. This prospectus does not contain all of the information that
you can find in our registration statement and the exhibits to the registration
statement.
The SEC allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(a) Our Annual Report on Form 10-K, for the year ended December
31, 2001;
(b) Our Report on Form 8-K dated April 11, 2002; and
(c) The description of our common stock contained in our
registration statement on Form 8-A filed October 25, 1996,
including any amendments or reports filed for the purpose of
updating such descriptions.
You may request a copy of these filings, at no cost, by writing or
telephoning us at The Quigley Corporation, Kells Building, 631 Shady Retreat
Road, Doylestown, PA 18901, Attention: Chief Financial Officer, telephone (215)
345-0919.
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ABOUT QUIGLEY
The Quigley Corporation is a Nevada corporation which was organized
on August 24, 1989 and commenced business operations in October 1989.
Since our inception, we have continued to conduct research and
development into various types of health-related food supplements and
homeopathic cold remedies. Initially, we marketed and distributed a line of
nutritious health supplements known as "Nutri-Bars". During 1995, we reduced our
emphasis on marketing Nutri-Bars and commenced focusing our marketing and
research and development resources towards our patented Cold-Eeze(R) zinc
gluconate glycine cold relief products.
Since June 1996, we have concentrated our business operations on the
manufacturing, marketing and development of our proprietary Cold-Eeze(R) and
Cold-Eeze Plus cold-remedy lozenge products and on development of various
product extensions. In two double-blind clinical studies these products have
been shown to reduce the duration and severity of common cold symptoms. We
acquired worldwide manufacturing and distribution rights to this formulation in
1992 and commenced national marketing in 1996.
Prior to the fourth quarter 1996, we had minimal revenues and as a
result suffered continued losses due to ongoing research and development and
operating expenses. However, in 1997 we had significant revenue increases from
the sale of our Cold-Eeze(R) products. The increase was due in part to our
nationwide marketing campaign and the increased public awareness of our
Cold-Eeze(R) products through media public service announcements.
In January 2000, we formed Darius International Inc., a wholly owned
subsidiary, which directly markets and distributes health and wellness products.
Accordingly, Darius provides us with a means of introducing new products to the
marketplace.
Effective July 1, 2000, we acquired 60% of Caribbean Pacific Natural
Products, Inc., a leading developer and marketer of all-natural sun-care and
skincare products for luxury resorts, theme parks and spas. Caribbean Pacific
Natural Products, Inc. is headquartered in Orlando, Florida.
In January 2001, we formed an ethical pharmaceutical unit which is
now Quigley Pharma Inc. Quigley Pharma is a wholly-owned subsidiary of ours
which develops pharmaceutical products. We believe that Quigley Pharma will
enable us to diversify into the prescription drug market and will also enable us
to safely and effectively distribute important potential new products currently
under development. These potential new products are based on patent applications
we have acquired. We expect to expend substantial resources to develop these
applications into commercial products.
The formation of Darius International Inc., Quigley Pharma and our
majority ownership of Caribbean Pacific Natural Products, Inc., provides us with
diversification in both the method of product distribution and the broader range
of products we can provide to the marketplace.
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USE OF PROCEEDS
The shares of common stock offered hereby are issuable upon the
exercise of warrants and are being registered for the account of selling
stockholders. All net proceeds from the sale of the common stock will go to the
stockholders who offer and sell their shares. If all of the warrants are
exercised, we will receive $8,250,000 in proceeds. Any proceeds that we may
receive upon exercise of the warrants shall be used for general working capital
purposes which may include further development of pharmaceutical products.
SELLING STOCKHOLDERS
The selling stockholder has informed us that the name, address,
maximum number of shares of common stock to be sold and total number of shares
of common stock which such selling stockholder owns are as set forth in the
following table. The selling stockholder may sell all or part of its shares of
common stock registered pursuant to this prospectus.
Number of
Shares of
Common Maximum
Stock Number of
Beneficially Shares to be Shares Beneficially
Owned Prior Offered for Owned After
Name and Address to Offering(1) Resale Offering(2)
- ---------------- -------------- ------ -----------
Number Percent
------ -------
Forrester Financial, LLC (3)
5 Hoefleys Lane
Leonia, New Jersey 07605 1,000,000 1,000,000 0 0%
(1) The calculation of shares of common stock beneficially owned was
determined in accordance with Rule 13d-3 of the Exchange Act.
(2) Assumes that all common stock offered by the selling stockholder is
sold.
(3) Effective March 7, 2002, the Company and Forrester Financial, LLC
("Forrester") entered into a Financial Consulting Agreement. As
consideration for the services to be provided by Forrester, the Company
issued to it warrants to purchase up to 1,000,000 shares of common stock
which are exercisable beginning on March 7, 2002 and ending on March 6,
2003. 500,000 warrants are exercisable at a price of $6.50 per share,
250,000 warrants are exercisable at a price of $8.50 per share and the
remaining 250,000 warrants are exercisable at a price of $11.50 per
share.
Our registration of the shares included in this prospectus does not
necessarily mean that the selling stockholder will opt to sell any of the shares
offered hereby. The shares covered by this prospectus may be sold from time to
time by the selling stockholder so long as this prospectus remains in effect.
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TRANSFER AGENT
The transfer agent and registrar for our common stock is American
Stock Transfer & Trust Company, New York, New York.
PLAN OF DISTRIBUTION
We are registering 1,000,000 shares of our common stock on behalf of
the selling stockholder. As used herein, "selling stockholders" includes the
selling stockholder named in the table above and pledgees, donees, transferees
or other successors-in-interest selling shares received from a named selling
stockholder as a gift, partnership distribution or other non-sale-related
transfer after the date of this prospectus. The selling stockholders may sell
the shares from time to time and may also decide not to sell all the shares they
are allowed to sell under this prospectus. The selling stockholders will act
independently of us in making decisions with respect to the timing, manner and
size of each sale. The sales may be made on one or more exchanges or in the
over-the-counter market or otherwise, at prices and at terms then prevailing or
at prices related to the then current market prices, or in negotiated
transactions. The selling stockholders may effect such transactions by selling
the shares to or through broker-dealers. The shares may be sold by one or more
of, or a combination of, the following:
o a block trade in which the broker-dealer so engaged will
attempt to sell shares as agent but may position and resell a
portion of the block as principal to facilitate the
transaction;
o purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of such
exchange;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
o privately negotiated transactions.
To the extent required, this prospectus may be amended or
supplemented from time to time to describe a specific plan of distribution. In
effecting sales, broker-dealers engaged by the selling stockholders may arrange
for other broker-dealers to participate in the resales.
The selling stockholders may enter into hedging transactions with
broker-dealers in connection with distributions of shares or otherwise. In such
transactions, broker-dealers may engage in short sales of shares in the course
of hedging the positions they assume with selling stockholders. The selling
stockholders also may sell shares short and redeliver shares to close out such
short positions. The selling stockholders may enter into option or other
transactions with broker-dealers which require the delivery of shares to the
broker-dealer. The broker-dealer may then resell or otherwise transfer such
shares pursuant to this prospectus. The selling stockholders also may loan or
pledge shares to a broker-dealer. The broker-dealer may sell the shares so
loaned, or upon a default the broker-dealer may sell the shares so pledged,
pursuant to this prospectus.
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Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling stockholders. Broker-dealers
or agents may also receive compensation from the purchasers of shares for whom
they act as agents or to whom they sell as principals, or both. Compensation as
to a particular broker-dealer might be in excess of customary commissions and
will be in amounts to be negotiated in connection with transactions involving
shares. Broker-dealers or agents and any other participating broker-dealers or
the selling stockholders may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act in connection with sales of shares.
Accordingly, any such commission, discount or concession received by them and
any profit on the resale of shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. Because selling
stockholders may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, the selling stockholders will be subject to the
prospectus delivery requirements of the Securities Act. In addition, any shares
owned by a selling stockholder covered by this prospectus which qualify for sale
pursuant to Rule 144 promulgated under the Securities Act may be sold under Rule
144 rather than pursuant to this prospectus. The selling stockholders have
advised us that they have not entered into any agreements, understandings or
arrangements with any underwriters or broker-dealers regarding the sale of their
shares.
The shares may be sold by selling stockholders only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states the shares may not be sold
unless they have been registered or qualified for sale in the applicable state
or an exemption from the registration or qualification requirement is available
and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution. In addition, each
selling stockholder will be subject to applicable provisions of the Exchange Act
and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling stockholders. We will make copies of
this prospectus available to the selling stockholders and have informed them of
the need for delivery of copies of this prospectus to purchasers at or prior to
the time of any sale of the shares.
We will file a supplement to this prospectus, if required, pursuant
to Rule 424(b) under the Securities Act upon being notified by a selling
stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer. Such supplement will disclose:
o the name of each such selling stockholder and of the
participating broker-dealer(s);
o the number of shares involved;
o the price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable;
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o that such broker-dealer(s) did not conduct any investigation
to verify the information set out or incorporated by reference
in this prospectus; and
o other facts material to the transaction.
In addition, we will file a supplement to this prospectus upon being
notified by a selling stockholder that a donee or pledgee intends to sell more
than 500 shares.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act.
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon
for us by Olshan Grundman Frome Rosenzweig & Wolosky LLP, New York, New York.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
2001, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended ("Securities Act") may be permitted to our
directors, officers or persons controlling us, we have been advised that it is
the SEC's opinion that such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
-16-
We have not authorized any person to make a statement that differs from what is
in this prospectus. If any person does make a statement that differs from what
is in this prospectus, you should not rely on it. This prospectus is not an
offer to sell, nor is it seeking an offer to buy, these securities in any state
in which the offer or sale is not permitted. The information in this prospectus
is complete and accurate as of its date, but the information may change after
that date.
-----------------------------------
TABLE OF CONTENTS
Page
----
Prospectus Summary..........................................................2
Note About Forward-Looking Statements.......................................3
Risk Factors................................................................4
Where You Can Find More Information........................................11
Incorporation of Certain Documents
By Reference.............................................................11
About Quigley..............................................................12
Use of Proceeds............................................................13
Selling Stockholders.......................................................13
Transfer Agent.............................................................14
Plan of Distribution.......................................................14
Legal Matters..............................................................16
Experts....................................................................16
Disclosure of Commissions Position on
Indemnification of Officers and Directors
for Securities Act Violations............................................16
-----------------------------------
The Quigley Corporation
1,000,000
Shares of Common Stock
-----------------------------------
PROSPECTUS
-----------------------------------
[ ], 2002
-17-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
- ------- -------------------------------------------
The following table sets forth the various expenses which will be
paid by us in connection with the securities being registered. With the
exception of the SEC registration fee, all amounts shown are estimates.
SEC registration fee................................ $721.28
Legal fees and expenses (including Blue Sky)........ $15,000.00
Accounting Fees and Expenses........................ $6,000.00
Miscellaneous....................................... $5,000.00
Total................................... $26,721.28
ITEM 15. Indemnification of Directors and Officers.
- ------- -----------------------------------------
The Company's By-laws authorize indemnification of directors and
officers as follows:
ARTICLE V - INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS
Section 1. The corporation shall indemnify any person who was or is
a party or threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 2. No officer, director or shareholder may become surety on
behalf of the corporation for any of its obligations under any circumstances
whatsoever.
Under Nevada's General Corporation Law, the Company may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the
II-1
right of the Company (such as a shareholder derivative suit), by reason of the
fact that such person is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise. Such indemnification may extend to expenses,
including attorneys' fees, judgments, fines and amount paid in settlement
actually and reasonable incurred by such person in connection with the action,
suit or proceeding if he acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. Indemnification may not be made for any claim, issue
or matter as to which such a person has been adjudged by a court to be liable to
the Company or for amounts paid in settlement to the Company, unless the court
in which the action or suit was brought, or another court of competent
jurisdiction, determines that in view of all the circumstances, the person is
fairly and reasonably entitled to be indemnified for such expenses.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to any charter, provision, by-law, contract,
arrangement, statute or otherwise, the Company has been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable.
ITEM 16. Exhibits.
- ------- --------
*3.1 Articles of Incorporation of the Company (as amended).
*3.2 Certificate to Increase the Number of Authorized Shares of the
Company.
*3.3 Bylaws of the Company as currently in effect.
**5.0 Opinion of Olshan Grundman Frome & Rosenzweig LLP with respect to
legality of the Common Stock.
**23.1 Consent of Olshan Grundman Frome & Rosenzweig LLP, included in
Exhibit No. 5.
**23.2 Consent of PricewaterhouseCoopers LLP.
**24.0 Power of Attorney, included on the signature page to this
Registration Statement.
- -----------------------
* Previously filed.
** Filed herewith.
ITEM 17. Undertakings.
- ------- ------------
(a) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of an action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
II-2
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(c) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Doylestown, State of Pennsylvania on the 25th day of
April 2002.
The Quigley Corporation
By: /s/ Guy J. Quigley
---------------------------------
Guy J. Quigley
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Guy J. Quigley and Charles A. Phillips
his true and lawful attorney-in-fact with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments, including post-effective amendments,
to this registration statement, and to file the same, with exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact or
his substitute may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Guy J. Quigley
- -------------------------- Chairman of the Board, President, April 25, 2002
Guy J. Quigley Chief Executive Officer and Director
/s/ Charles A. Phillips
- ------------------------- Executive Vice President, Chief April 25, 2002
Charles A. Phillips Operating Officer and Director
/s/ George J. Longo
- ------------------------- Vice President, Chief Financial April 25, 2002
George J. Longo Officer and Director (Principal
Financial and Accounting Officer)
/s/ Eric H. Kaytes
- ------------------------- Vice President, Chief Information Officer, April 25, 2002
Eric H. Kaytes Secretary, Treasurer and Director
/s/ Jacqueline F. Lewis
- ------------------------- Director April 25, 2002
Jacqueline F. Lewis
/s/ Rounsevelle W. Schaum
- -------------------------- Director April 25, 2002
Rounsevelle W. Schaum
/s/ Charles A. Genuardi
- --------------------------- Director April 25, 2002
Charles A. Genuardi
II-4