UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant /_/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to ss.240.14a-12
THE QUIGLEY CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/_/ Fee paid previously with preliminary materials.
/_/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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THE QUIGLEY CORPORATION
KELLS BUILDING
621 SHADY RETREAT ROAD
P. O. BOX 1349
DOYLESTOWN, PA 18901
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 27, 2006
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TO THE STOCKHOLDERS OF THE QUIGLEY CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of THE QUIGLEY CORPORATION, a Nevada Corporation (the "Company"), will be held
at the Doylestown Country Club, Green Street, P.O. Box 417, Doylestown, PA 18901
on Tuesday, June 27, 2006, 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 Amper, Politziner & Mattia, P.C. as
independent auditors for the year ending December 31, 2006.
(iii) To transact such other business as may properly come before the
Meeting and any adjournments or postponements thereof.
Only stockholders of record at the close of business on April 28, 2006 will be
entitled to notice of and to vote at the Meeting or any adjournments or
postponements 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 BROKER'S STATEMENT EVIDENCING YOUR BENEFICIAL OWNERSHIP OF
THE QUIGLEY CORPORATION STOCK TO THE MEETING.
By Order of the Board of Directors
/s/ Charles A. Phillips
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CHARLES A. PHILLIPS, Secretary
Doylestown, PA
May 26, 2006
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
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PROXY STATEMENT
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JUNE 27, 2006
This proxy statement (the "Proxy Statement") is being furnished in connection
with the solicitation of proxies ("Proxies," or if one, a "Proxy") 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 the Doylestown Country
Club, Green Street, P.O. Box 417, Doylestown, PA 18901 on Tuesday, June 27,
2006, at 4:00 P.M., local time, and any adjournments or postponements 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 May 26, 2006.
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 Amper, Politziner & Mattia, P.C. as
independent auditors for the year ending December 31, 2006.
(iii) To transact such other business as may properly come before the
Meeting and any adjournments or postponements 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 BROKER'S 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 April 28, 2006 (the
"Record Date") will be entitled to notice of and to vote at the Meeting. At the
close of business on such record date, the Company had 12,480,478 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 the election as directors
the persons who have been nominated by the Board of Directors, (ii), for the
ratification of the appointment of Amper, Politziner & Mattia, P.C. as the
Company's independent auditors for the year ending December 31, 2006, and (iii)
upon any other matter that may properly be brought before the Meeting in
accordance with the judgment of the person or persons voting the Proxy. The
execution of a Proxy will in no way affect a stockholder's right to attend the
Meeting and to vote in person. Any Proxy executed and returned by a stockholder
may be revoked at any time thereafter by written notice of revocation given to
the Secretary of the Company prior to the vote to be taken at the Meeting by
execution of a subsequent Proxy that is presented at the Meeting or by voting in
person at the Meeting in any such case, except as to any matter or matters upon
which a vote shall have been cast pursuant to the authority conferred by such
Proxy prior to such revocation.
Broker "non-votes" and the shares of Common Stock as to which a stockholder
abstains are included for purposes of determining the presence or absence of a
quorum for the transaction of business at the Meeting. A broker "non-vote"
occurs when a nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting power
with respect to that item and has not received instructions from the beneficial
owner.
ANNUAL REPORT PROVIDED WITH PROXY STATEMENT
Copies of the Company's Annual Report containing audited financial statements of
the Company for the year ended December 31, 2005 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 April 28, 2006 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 all directors and executive officers of the Company as
a group. Unless otherwise indicated, the address of each person or entity listed
below is the Company's principal executive office.
Five Percent Stockholders, Directors, and all Executive Common Stock Beneficially Percent of
Officers and Directors as a Group Owned (1) Class
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GUY J. QUIGLEY (2) (3) (4) 3,708,764 27.8
CHARLES A. PHILLIPS (2) (3) (5) 1,700,377 12.9
GEORGE J. LONGO (2) (3) (6) 675,000 5.2
JACQUELINE F. LEWIS (2) (7) 120,000 1.0
ROUNSEVELLE W. SCHAUM (2) (8) 65,000 -
STEPHEN W. WOUCH (2) (9) 50,500 -
TERRENCE O. TORMEY (2) (10) 40,000 -
ALL DIRECTORS AND OFFICERS (11) (Seven Persons) 6,359,641 42.6
(1) Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934, as amended ("Rule 13d-3"), and
unless otherwise indicated, represents shares for which the beneficial
owner has sole voting and investment power. The percentage of class is
calculated in accordance with Rule 13d-3 and includes options or other
rights to subscribe for shares of common stock which are exercisable within
sixty (60) days of April 28, 2006.
(2) Director of the Company.
(3) Executive Officer of the Company.
(4) Mr. Quigley's beneficial ownership includes options and warrants
exercisable within sixty (60) days from April 28, 2006 to purchase 785,000
shares of Common Stock, options and warrants to purchase 82,500 shares of
Common Stock beneficially owned by Mr. Quigley's wife and an aggregate of
394,705 shares beneficially owned by members of Mr. Quigley's immediate
family and no longer includes 120,000 shares held by Mr. Quigley's adult
children.
(5) Mr. Phillips' beneficial ownership includes options and warrants
exercisable within sixty (60) days from April 28, 2006 to purchase 687,000
shares of Common Stock and 1,671 shares of Common Stock beneficially owned
by Mr. Phillips' wife.
(6) Mr. Longo's beneficial ownership includes options and warrants exercisable
within sixty (60) days from April 28, 2006 to purchase 635,000 shares of
Common Stock.
(7) Ms. Lewis' address is P. O. Box 581, Lahaska, PA 18931. Ms. Lewis'
beneficial ownership includes options exercisable within sixty (60) days
from April 28, 2006 to purchase 120,000 shares of Common Stock.
(8) Mr. Schaum's address is 157 Harrison Ave, #17, Newport, RI 02840. Mr.
Schaum's beneficial ownership includes options exercisable within sixty
(60) days from April 28, 2006 to purchase 65,000 shares of Common Stock.
(9) Mr. Wouch's address is 415 Sargon Way, Suite J, Horsham, PA 19044. Mr.
Wouch's beneficial ownership includes options exercisable within sixty (60)
days from April 28, 2006 to purchase 50,000 shares of Common Stock.
(10) Mr. Tormey's address is 4842 Mountain Top Road West, New Hope, PA 18938.
Mr. Tormey's beneficial ownership includes options exercisable within sixty
(60) days from April 28, 2006 to purchase 40,000 shares of Common Stock.
(11) Includes an aggregate of 2,464,500 shares of Common Stock underlying
options and warrants that are exercisable within sixty (60) days from April
28, 2006.
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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, 2005, 2004 and 2003 paid or
accrued by the Company to the Company's Chief Executive Officer and each highly
compensated executive officer of the Company whose compensation exceeded
$100,000 (the "Named Executive Officers") during 2005:
SUMMARY COMPENSATION TABLE
Long-Term All Other
Annual Compensation Compensation Compensation
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Other Annual Securities
Salary Bonus Compensation Underlying
Name and Principal Position Year (1) (2) (3) (4) Options (5)
($) ($) ($) (#) ($)
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Guy J. Quigley 2005 775,513 631,635 275,091 100,000 18,396
Chairman of the Board, 2004 725,800 244,958 782,509 50,000 16,396
President, Chief 2003 604,800 226,800 667,006 50,000 14,396
Executive Officer
Charles A. Phillips 2005 571,813 453,360 91,697 80,000 18,258
Executive Vice President, 2004 508,100 171,484 260,836 45,000 16,258
Chief Operating Officer 2003 423.400 158,775 222,334 45,000 14,258
George J. Longo 2005 383,460 287,595 - 40,000 18,258
Vice President, 2004 365,200 123,255 - 40,000 16,258
Chief Financial Officer 2003 347,800 130,425 - 40,000 14,258
(1) Compensation paid pursuant to employment agreements.
(2) Bonuses paid pursuant to the Company attaining specified sales and net
income goals and contract extension.
(3) Additional compensation, until May 31, 2005, includes founder's
commission of 3.75% of sales collected, less certain deductions, for
Mr. Quigley, and founder's commission of 1.25% of sales collected,
less certain deductions, for Mr. Phillips.
(4) The value of personal benefits for the Named 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 $50,000 or 10%
of the total annual salary and bonus reported for any individual named
above.
(5) Includes amounts attributable to matching contributions attributable
to each officer in the Company's 401(k) Plan and term insurance.
COMPENSATION PURSUANT TO PLANS
An incentive stock option plan was instituted in 1997 (the "1997 Stock Option
Plan") and approved by the stockholders in 1998 and subsequently amended in 2000
and approved by the stockholders in 2001 and amended and approved by the
stockholders in 2005. Pursuant to the 1997 Stock Option Plan, options have been
granted to directors, executive officers, and employees during 2005, 2004 and
2003. In early 1999, the Company implemented a defined contribution plan for its
employees with the Company's contribution to the plan based on the amount of the
employee plan contribution.
-3-
OPTION GRANTS TABLE
The following table sets forth certain information regarding stock option grants
made to each of the Named Executive Officers during 2005:
OPTION GRANTS DURING 2005 FISCAL YEAR
Potential Realizable
Percent of Value at Assumed
Number of Total Options Annual Rates of Stock
Securities Granted to Exercise Price Appreciation for
Underlying Employees in or Base Option Term ($) (1)
Options Fiscal Year Price Expiration
Name Granted (%) ($/sh) Date 5% 10%
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Guy J. Quigley 100,000 19.2 13.80 12/11/15 868,000 2,199,000
Charles A. Phillips 80,000 15.4 13.80 12/11/15 694,400 1,759,000
George J. Longo 40,000 7.7 13.80 12/11/15 347,200 879,600
(1) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of options immediately prior to
the expiration of their term, assuming (for illustrative purposes only) the
specified compounded rates of appreciation on the Company's Common Stock
over the term of the option. These numbers do not take into account
provisions providing for termination of the option following termination of
employment or non-transferability.
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES TABLE
The following table sets forth certain information concerning stock options
exercised during 2005 and unexercised stock options at the end of 2005 with
respect to the Named Executive Officers:
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY
COMPLETED FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Shares Number of Securities Value of Unexercised
Acquired on Value Underlying Unexercised In-the Money Options at
Exercise Realized Options at Fiscal Year End Fiscal Year End ($) (1)
Name (#) ($) Exercisable / Unexercisable Exercisable/Unexercisable
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Guy J. Quigley - - 1,085,000 / 0 8,839,450 / 0
Charles A. Phillips - - 987,000 / 0 8,427,310 / 0
George J. Longo - - 635,000 / 0 4,588,025 / 0
(1) Represents the total gain that would be realized if all in-the-money
options held at December 30, 2005 were exercised, determined by multiplying
the number of shares underlying the options by the difference between the
per share option exercise price and $13.82 per share, which was the closing
price per share of the Company's Common Stock on December 30, 2005. An
option is in-the-money if the fair market value of the underlying shares
exceeds the exercise price of the option.
EMPLOYMENT AGREEMENTS
An employment agreement between the Company and Guy J. Quigley was entered into
on June 1, 1995, whereby Guy J. Quigley is employed as the Chief Executive
Officer of the Company for a term ending on December 31, 2005. In addition to
compensation for services as an officer of the Company, Mr. Quigley was 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 expired on May
31, 2005 and was shared with Charles A. Phillips at a ratio of 75% and 25%,
respectively. Upon the termination of the contract for any reason, Mr. Quigley
was entitled to the remainder of the compensation owed him through December 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
December 31, 2005. In addition to compensation for services as an officer of the
Company, Mr. Phillips was 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 until its expiration on May
31, 2005. 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 was entitled to the
remainder of the compensation owed him through December 31, 2005.
-4-
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, 2005. The agreement provided 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 was to receive the full amount of his base salary for
eighteen months. Upon a change of control of the Company, Mr. Longo was entitled
to receive compensation for the remaining term of the agreement until December
31, 2005. Upon early termination by the Company without cause (as defined in the
agreement), the Company was required to pay Mr. Longo the remainder of the
salary owed him through December 31, 2005.
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, directors and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the
"Commission"). Officers, directors and greater than ten-percent stockholders are
required by the Commission's regulations to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, the
Company believes that during the fiscal year ended December 31, 2005, all
reports of ownership and changes in ownership applicable to its executive
officers, directors, and greater than ten-percent beneficial owners were not
filed on a timely basis, as each such person inadvertently filed a Form 4 late
on one occasion for one transaction.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For the year ended December 31, 2005, $366,788 was paid or payable pursuant to
the founder's commission agreements between the Company and Guy J. Quigley and
Charles A. Phillips, who share a commission of 5% on sales collected, less
certain deductions, of the Company's Cold-Eeze(R) lozenge and gum products.
Certain individuals related to the Company's Chief Executive Officer are also
employees of the Company. Their aggregate compensation for 2005 was $519,455,
and they received option grants to purchase an aggregate of 29,500 shares of the
Company's Common Stock.
The Company is in the process of acquiring licenses in certain countries through
related party entities, including arrangements with ScandaSystems Ltd. (UK) and
ScandaSystems Ltd. (USA) whose officer and major stockholder, respectively, is
Mr. Gary Quigley, a relative of the Company's Chief Executive Officer.
Approximately $40,000 was paid or payable by the Company to such firms during
2005 and fees amounting to $226,882 have been paid to another related entity to
obtain such licenses. The Company believes that the services performed by these
firms and employees are on terms no more favorable than could have otherwise
been obtained from an unaffiliated third party.
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 seven.
No proxy may be voted for more people than the number of nominees listed below.
Shares represented by all proxies received by the Board of Directors and not so
marked as to withhold authority to vote for any individual director (by writing
that individual director's name where indicated on the proxy) or for all
directors will be voted "FOR" the election of all the nominees named below
(unless one or more nominees are unable or unwilling to serve). The Board of
Directors knows of no reason why any such nominee would be unable or unwilling
to serve, but if such should be the case, proxies may be voted for the election
of substitute nominees selected by the Board of Directors.
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The following table and the paragraphs following the table set forth information
regarding the current ages, terms of office and business experience of the
current directors and executive officers of the Company, all of whom are being
nominated for re-election to the Board of Directors:
Year First
Name Position Age Elected
---------------------------------- ------------------------------------------------ --------- --------------
Guy J. Quigley Chairman of the Board, President, CEO 64 1989
Charles A. Phillips Executive Vice President, COO and Director 58 1989
George J. Longo Vice President, CFO and Director 59 1997
Jacqueline F. Lewis* Director 61 1997
Rounsevelle W. Schaum* Director 74 2000
Stephen W. Wouch* Director 51 2003
Terrence O. Tormey Director 51 2004
* Current member of the Audit & Compensation Committees.
GUY J. QUIGLEY is the founder and has been Chairman of the Board, President and
Chief Executive Officer of the Company since September 1989. Prior to such date,
Mr. Quigley, an accomplished author, established and operated various
manufacturing, sales, marketing, cattle ranching, pedigree cattle breeding and
real estate companies in the United States, Europe and Africa.
CHARLES A. PHILLIPS has been Executive Vice President, Chief Operating Officer
and a Director of the Company since September 1989. Before his employment with
the Company, Mr. Phillips founded and operated KPB Enterprises, a gold and
diamond mining operation that was based in Sierra Leone, West Africa. In
addition, Mr. Phillips served as a technical consultant for Re-Tech, Inc.,
Horsham, Pennsylvania, where he was responsible for full marketing and
production of a prototype electrical device.
GEORGE J. LONGO currently serves as Vice President, Chief Financial Officer and
a Director of the Company. Mr. Longo assumed his duties as Vice President and
Chief Financial Officer for the Company in January 1997. Mr. Longo was also
appointed 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 in Corporate Accounting Management with the predecessor
pharmaceutical company to Aventis S.A. Prior to that, Mr. Longo was with KPMG
LLP.
JACQUELINE F. LEWIS was appointed to the Board of Directors in December 1997.
From 2003 until March 2005, she was the President and Director of CPC, a list
management and marketing company. Prior to 2003, she co-founded and managed D.
A. Lewis, Inc., a direct mail advertising company, for 27 years. Ms. Lewis was a
founding director of Suburban Community Bank and served on its Board of
Directors until Univest Corporation of Pennsylvania (Nasdaq: UVSP) acquired
Suburban Community Bank. In April 2005, Ms. Lewis was appointed to the Board of
Directors of Univest Foundation.
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 held senior management positions with international
manufacturing companies. He also served as the Chairman of the California Small
Business Development Corporation, a private venture capital syndicate, and was
the founder of the Center of Management Sciences, a management-consulting firm
that services multinational high technology companies and government agencies,
including NASA and the Department of Defense. Mr. Schaum also serves on the
Board of Directors of Gales Industries, Inc. (OTCBB: GLDS), Camelot
Entertainment Group, Inc. (OTCBB: CMEG); Magic Web, Inc. (OTCPK: MGWB) and
Turboworx, Inc.
STEPHEN W. WOUCH was appointed to the Board of Directors in January 2003. Since
1988, Mr. Wouch has been Managing Partner of Wouch, Maloney & Co., LLP,
Certified Public Accountants, a regional public accounting firm with offices in
Pennsylvania and Florida. This firm has a diverse client base that encompasses
various industries such as health care, manufacturing, construction and service
providers. Prior to 1988, Mr. Wouch held senior management positions with other
Certified Public Accounting firms. Mr. Wouch is an author, lecturer and a
licensed Certified Public Accountant in Pennsylvania, New Jersey and Florida.
-6-
TERRENCE O. TORMEY was appointed to the Board of Directors in April 2004. Mr.
Tormey is currently the President and founder of The Tormey Consulting Group,
which was founded in 2003, a sales and marketing consulting firm whose services
include film and video productions for a variety of industries including the
healthcare industry. During the years 2000 to 2003, Mr. Tormey was the President
and Chief Operating Officer of Nelson Professional Sales, a division of Publicis
SA, Paris. From 1994 to 2000, Mr. Tormey was the President and co-owner of The
Medical Phone Company(R), a firm that eventually grew to the largest healthcare
telesales company in the country, whose clients included virtually every major
pharmaceutical company in the United States. Additionally, his experience
includes holding various senior sales, sales training and sales management
positions with various US pharmaceutical companies including Johnson & Johnson
Inc. (NYSE-JNJ) and American Home Products Corporation (Wyeth - NYSE-WYE). Mr.
Tormey also serves on the Board of Directors of The Foundation for Ichthyosis &
Related Skin Types, Inc. (F.I.R.S.T.), a non-profit organization, dedicated to
medical research of rare skin diseases.
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, 2005, there were five meetings of the
Board of Directors. Each of the directors attended (or participated by telephone
in) more than 75% of such meetings of the Board of Directors and meetings of
committees on which they served in 2005. During 2005, the Board of Directors
also acted by unanimous written consent in lieu of a meeting on two occasions.
The independent members that serve on committees of the Board of Directors met
in executive session on seven occasions during 2005. Messrs. Schaum, Wouch and
Tormey and Ms. Lewis are deemed to be independent under NASD Rule 4200 and as
such, the Board of Directors contains a majority of independent directors as
required by NASD Rule 4350.
Each director is expected to make reasonable efforts to attend Board of
Directors meetings, meetings of committees of which such director is a member
and the Annual Meeting of Stockholders. All seven members of the Board of
Directors attended the 2005 Annual Meeting of Stockholders.
The Company has three standing committees: the Audit Committee, the Executive
Operating Committee and the Compensation Committee. Prior to establishing these
Committees, the customary functions of such committees had been performed by the
entire Board of Directors. The Company does not have a designated nominating
committee.
Since December 18, 2003, decisions concerning nominees for the Board of
Directors have been made by Messrs. Schaum and Wouch and Ms. Lewis, who are
independent directors as defined under NASD Rule 4200(a)(15). The Board of
Directors does not consider a nominating committee necessary in that its
independent directors perform the same role as a nominating committee. The
Company has not adopted a formal policy with respect to minimum qualifications
for members of its Board of Directors. However, in making its nominations,
Messrs. Schaum and Wouch and Ms. Lewis consider, among other things, an
individual's business experience, industry experience, financial background,
breadth of knowledge about issues affecting the Company, time available for
meetings and consultation regarding Company matters and other particular skills
and experience possessed by the individual. Stockholders wishing to recommend
candidates for consideration by the Board of Directors may do so by writing to
the Secretary of the Company and providing the candidate's name, biographical
data and qualifications. Such candidates recommended by stockholders will be
evaluated on the same basis as all other candidates.
The members of the Audit Committee are Messrs. Schaum and Wouch and Ms. Lewis.
Mr. Schaum serves as Chairman of the Audit Committee. The Audit Committee
reviews, analyzes and makes recommendations to the Board of Directors with
respect to the Company's accounting policies, internal controls and financial
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 four times
during 2005.
-7-
The members of the Executive Operating Committee are Messrs. Quigley, Phillips
and Longo. The Executive Operating Committee possesses and exercises all the
power and authority of the Board of Directors in the management and direction of
the business and affairs of the Company except as limited by law and except for
the power to change the membership or to fill vacancies on the Board of
Directors or the Executive Operating Committee. The Executive Operating did not
meet during 2005.
The members of the Compensation Committee are Messrs. Schaum and Wouch and Ms.
Lewis. The Compensation Committee reviews and approves the salary and other
compensation of officers and key employees of the Company, including non-cash
benefits, and designates the employees entitled to participate in the Company's
benefits plans and other arrangements, as from time to time constituted. The
Compensation Committee also administers the Company's 1997 Stock Option Plan and
recommends the terms of grants of stock options and the persons to whom such
options shall be granted in accordance with such plan. These recommendations are
then subject to approval by the full Board of Directors. The Compensation
Committee met three times during 2005.
COMPENSATION OF DIRECTORS
Outside directors receive annualized compensation of $18,900. Each outside
director that serves on the Audit Committee received a total annualized
compensation of $28,350 and the Chairman of the Audit Committee received
annualized compensation of $28,350. In addition, in December 2005, the Board of
Directors approved the grant of options to purchase 20,000 shares of Common
Stock to each of the then-current outside directors under the Company's 1997
Stock Option Plan. Officers of the Company receive no compensation for their
service on the Board of Directors or on any Committee thereof.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee provides overall guidance and approval of the
Company's executive compensation program. Messrs. Schaum and Wouch and Ms. Lewis
served on the Compensation Committee during the fiscal year ended December 31,
2005. None of the Compensation Committee members were officers or employees of
the Company at any time prior to December 31, 2005 or had any relationship
requiring disclosure under the caption "Certain Relationships and Related
Transactions." All independent members of the Board of Directors participate in
the approval of each of the Company's executive compensation programs described
in the "Report on Executive Compensation." No executive officer of the Company
served on any other entity's compensation committee or other committee
performing similar functions during the fiscal year. There are certain related
parties of Mr. Quigley that receive compensation from the Company. See "Certain
Relationships and Related Transactions."
The report of the Audit Committee, the report of the Compensation Committee and
the performance graph that follow shall not be deemed incorporated by reference
by any general statement incorporating by reference this proxy statement or
future filings into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates the information by reference, and shall not otherwise
be deemed filed under such Acts.
OTHER CORPORATE GOVERNANCE
During 2002, the Company formed a Disclosure Committee in response to Management
Certification Responsibilities under Sections 302 and 404 of the Sarbanes-Oxley
Act of 2002. The Disclosure Committee assists the Chief Executive Officer, the
Chief Financial Officer and the Audit Committee in monitoring (1) the integrity
of the financial statements, policies, procedures and the internal financial and
disclosure controls and risks of the Company, (2) the compliance by the Company
with legal and regulatory requirements, to the extent that these policies,
procedures and controls may generate either financial or non-financial
disclosures in the Company's filings with the Securities and Exchange
Commission. Additionally, in 2002, the Company also initiated a Code of Ethics,
and in 2004, it initiated an Insider Trading Policy for all employees of the
Company.
PROCEDURES FOR CONTACTING DIRECTORS
The Company has adopted a procedure by which stockholders may send
communications as defined within Item 7(h) of Schedule 14A under the Exchange
Act to one or more members of the Board of Directors by writing to such
director(s) at their respective address listed in the Security Ownership section
of this Proxy Statement or to the whole Board of Directors care of the Corporate
Secretary, The Quigley Corporation, Kells Building, 621 Shady Retreat Road, P.O.
Box 1349, Doylestown, PA 18901. Any such communications addressed to the whole
Board of Directors will be promptly distributed by the Secretary to each
director.
-8-
REPORT OF THE AUDIT COMMITTEE
The members of the Audit Committee are Messrs. Schaum and Wouch and Ms. Lewis,
who are independent directors as defined under NASD Rule 4200(a)(15). All of the
members of the Audit Committee are financially literate under current listing
standards of Nasdaq. The Board of Directors has determined that Messrs. Schaum
and Wouch are financial experts, as defined under SEC rules, serving on the
Audit Committee. The Audit Committee operates under a written charter adopted by
the Board of Directors in 2000 and amended in 2002.
We have reviewed and discussed with management the Company's audited financial
statements as of and for the year ended December 31, 2005.
We have discussed with the independent auditors, Amper, Politziner & Mattia,
P.C., the matters required to be discussed by Statement on Auditing Standards
No. 61, Communication with Audit Committees, as amended, by the Auditing
Standards Board of the American Institute of Certified Public Accountants.
Additionally, audit fees, audit related fees, tax fees and all other service
fees that were paid or payable to Amper, Politziner & Mattia, P.C. and
PricewaterhouseCoopers LLP, which reflect additional costs due to the change in
the Company's independent registered public accounting firm in 2004 were
discussed and amounted to:
Description 2005 2005* 2004 2004*
------------------------------ ------------ ------------ ------------ -----------
Audit fees $152,600 $13,500 $99,000 $52,500
Audit related fees 31,500 - 41,837 -
Tax fees 23,600 - 23,785 -
All other fees - 2,000 4,996 67,200
------------ ------------ ------------ -----------
Total $207,700 $15,500 $169,618 $119,700
------------ ------------ ------------ -----------
*PricewaterhouseCoopers LLP
The Company's Audit Committee shall review and pre-approve all audit and
non-audit services to be provided by the independent auditor (other than with
respect to the de minimis exceptions permitted by the Act). This duty may be
delegated to one or more designated members of the Audit Committee with any such
pre-approval reported to the Audit Committee at its next regularly scheduled
meeting.
We have received and reviewed written disclosures and the letter from Amper,
Politziner & Mattia, P.C., required by Independent Standards No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with the auditors, the auditor's independence.
Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2005 for filing with the Securities and Exchange Commission.
On July 8, 2004, the Company dismissed PricewaterhouseCoopers LLP ("PwC") as its
independent registered public accounting firm. On the same date, the Company
engaged Amper, Politziner & Mattia, P.C. ("APM") as independent accountants. The
dismissal of PwC and engagement of APM were approved by the Audit Committee of
the Company.
The reports of PwC on the Company's financial statements for the 2003 fiscal
year did not contain an adverse opinion or a disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principle and
there were no reportable events (as defined in Item 304(a)(1)(v) of Regulation
S-K).
AUDIT COMMITTEE
Rounsevelle W. Schaum, Chairman
Jacqueline F. Lewis
Stephen W. Wouch
-9-
REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee reviews and, along with other outside directors,
approves the salary and other compensation of officers and key employees of the
Company. The Compensation Committee also administers the Company's 1997 Stock
Option Plan and recommends the terms of grants of stock options and the persons
to whom such options shall be granted in accordance with such plan, which are
subject to approval by the full Board of Directors.
COMPENSATION PHILOSOPHY
In reaching decisions regarding executive compensation, the Compensation
Committee balances the total compensation package for each executive 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 Compensation Committee also
believes that the potential for equity ownership by management is beneficial in
aligning management's and stockholders' interests in the enhancement of
stockholder value. Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), places a limit of $1,000,000 on the amount of compensation
that may be deducted by the Company in any year with respect to certain of the
Company's highest paid executives. Certain performance-based compensation that
has been approved by stockholders is not subject to the deduction limit. If
necessary, the Company may attempt to qualify certain compensation paid to
executive officers for deductibility under the Code, including Section 162(m).
However, the Company may from time to time pay compensation to its executive
officers that may not be deductible.
COMPENSATION PROGRAM
The Company has a comprehensive compensation program, which consists of cash
compensation, both fixed and variable, and equity-based compensation. Overall
compensation is predicated on industry and peer group comparisons and on
performance judgments as to past and expected future contributions of the
individual executive officer. Specific compensation for each executive is
designed to fairly remunerate that employee of the Company for the effective
exercise of their responsibilities, their management of the business functions
for which they are responsible, their extended period of service to the Company
and their dedication and diligence in carrying out their responsibilities for
the Company.
The fixed aspect is intended to meet the requirements of the employment
contracts in effect for all of the Company's officers. See "Executive
Compensation - Employment Agreements." Employment agreements are in place to
insure the Company of consistency of leadership and the retention of qualified
executives and to foster a spirit of employment security, which thereby
encourages decisions that will benefit long-term stockholders. Variable
compensation is based upon the Compensation Committee adopting and approving
sales and profit goals annualy to be attained for the ensuing year.
Equity-based compensation is through options periodically granted under the 1997
Stock Option Plan. These grants are designed to directly reward and create a
proprietary interest, among the executive officers and other employees, in the
Company, which will be an incentive for these employees to work to maximize the
long-term total return to stockholders.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Quigley's compensation was $1,682,239 in 2005. Mr. Quigley's compensation is
based upon the factors described in the compensation program section paragraphs
above and as set forth in his employment contract.
COMPENSATION COMMITTEE
Rounsevelle W. Schaum, Chairman
Jacqueline F. Lewis
Stephen W. Wouch
-10-
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, a "peer group" index classified as drug related products by
CoreData, Inc. ("Coredata Group Index") and the NASDAQ Market Index. The
comparisons utilize an investment of $100 on December 31, 2000 for the Company
and the comparative indices, which then measure the values for each group at
December 31 of each year presented. There can be no assurance that the Company's
stock performance will continue with the same or similar trends depicted in the
following performance graph.
[OBJECT OMITTED]]
COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
------------------------ FISCAL YEAR ENDING ---------------------
COMPANY/INDEX/MARKET 12/29/2000 12/31/2001 12/31/2002 12/31/2003 12/31/2004 12/30/2005
Quigley Corporation, The 100.00 282.90 676.51 1,308.73 1,036.65 1,699.88
Drug Related Products 100.00 146.19 146.46 270.71 298.32 238.19
Nasdaq Market Index 100.00 79.71 55.60 83.60 90.63 92.62
-11-
PROPOSAL 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Amper, Politziner & Mattia, P.C. as the
Company's independent public auditor for the fiscal year ending December 31,
2006. Although the selection of auditors does not require ratification, the
Board of Directors has directed that the appointment of Amper, Politziner &
Mattia, P.C. be submitted to stockholders for ratification due to the
significance of their appointment to the Company. A representative of Amper,
Politziner & Mattia, P.C. 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 Amper, Politziner & Mattia, P.C. as independent auditors of the Company.
Abstentions will have the effect of a vote against this proposal, while broker
non-votes will have no effect on the outcome of this proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors of the Company recommends a vote "FOR" the ratification
of the appointment of Amper, Politziner & Mattia, P.C. as the Company's
independent auditors for the year ending December 31, 2006.
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 submitted by Certified Mail - Return Receipt
Requested and be received at the Company's principal executive offices not later
than January 26, 2007.
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: May 26, 2006 THE QUIGLEY CORPORATION
By:/s/ Charles A. Phillips
--------------------------------
CHARLES A. PHILLIPS, Secretary
-12-
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE QUIGLEY CORPORATION
PROXY -- ANNUAL MEETING OF STOCKHOLDERS
JUNE 27, 2006
The undersigned, a stockholder of The Quigley Corporation, a Nevada
corporation (the "Company"), does hereby appoint Guy J. Quigley and Charles A.
Phillips and each of them, the true and lawful attorneys and proxies with full
power of substitution, for and in the name, place and stead of the undersigned,
to vote all of the shares of Common Stock of the Company which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Stockholders of the Company to be held at the Doylestown Country Club, Green
Street, P.O. Box 417, Doylestown, Pennsylvania 18901, on Tuesday, June 27, 2006,
at 4:00 P.M., local time, or at any adjournment thereof.
THE UNDERSIGNED HEREBY INSTRUCTS SAID PROXIES OR THEIR SUBSTITUTES:
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE /X/.
1. ELECTION OF DIRECTORS. The Election of the following directors to serve
until the next annual meeting of stockholders and until their successors
have been duly elected and qualified.
NOMINEES:
/_/ FOR ALL NOMINEES O GUY J. QUIGLEY
O CHARLES A. PHILIPS
/_/ WITHHOLD O GEORGE J. LONGO
AUTHORITY FOR ALL O JACQUELINE F. LEWIS
NOMINEES O ROUNSEVELLE W. SCHAUM
O STEPHEN W. WOUCH
/_/ FOR ALL EXCEPT O TERRENCE O. TORMEY
(SEE INSTRUCTION BELOW)
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), MARK
"FOR ALL EXCEPT" AND FILL IN THE CIRCLE NEXT TO EACH NOMINEE YOU WISH TO
WITHHOLD, AS SHOWN HERE /X/.
2. RATIFICATION OF APPOINTMENT OF FOR AGAINST ABSTAIN
AMPER, POLITZINER & MATTIA, P.C. AS /_/ /_/ /_/
THE COMPANY'S INDEPENDENT PUBLIC
AUDITORS FOR THE YEAR ENDING
DECEMBER 31, 2006.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE GIVEN.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE DIRECTORS AND
TO RATIFY THE APPOINTMENT OF AMPER, POLITZINER & MATTIA, P.C. AS THE COMPANY'S
INDEPENDENT PUBLIC AUDITORS AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXY
OR PROXIES WITH RESPECT TO ANY OTHER BUSINESS TRANSACTED AT THE MEETING.
The undersigned hereby revokes any proxy or proxies heretofore given and
acknowledges receipt of a copy of the Notice of Annual Meeting and Proxy
Statement, both dated May 26, 2006, and a copy of the Company's Annual Report to
stockholders for the fiscal year ended December 31, 2005.
1
TO CHANGE YOUR ADDRESS ON YOUR ACCOUNT,
PLEASE CHECK THE BOX AT RIGHT AND INDICATE
YOUR NEW ADDRESS IN THE ADDRESS SPACE ABOVE. /_/
PLEASE NOTE THAT CHANGES TO THE REGISTERED
NAME(S) ON THE ACCOUNT MAY NOT BE SUBMITTED
VIA THIS METHOD.
Signature: ______________ Date: __________ Signature:___________ Date: _______
NOTE: Please sign exactly as your name or names appears on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full titles as such.
If the signer is a corporation, please sign full corporate name by duly
authorized officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.