UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant | |
Check the appropriate box:
| | Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)2))
|X| Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Pursuant to 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):
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| | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
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or the Form or Schedule and the date of its filing.
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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 MAY 22, 2007
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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, May 22, 2007, 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, 2007.
(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 March 30, 2007 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
CHARLES A. PHILLIPS, Secretary
Doylestown, PA
April 20, 2007
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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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 2007
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TABLE OF CONTENTS
Page
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Proxy Statement 1
Solicitation 1
Voting Information 1
Proposal 1 -- Election of Directors 2
Corporate Governance 3
Meetings and Committees of the Board 4
Executive Compensation 6
Defined Contribution Plan 8
Compensation Committee Report 9
Summary Compensation Table 9
Outstanding Equity Awards at Fiscal Year-End 11
Option Exercises and Stock Vested 12
Director Compensation 12
Security Ownership 13
Section 16(a) Beneficial Ownership Reporting Compliance 14
Audit Committee Disclosure 15
Proposal 2 -- To ratify the appointment of Amper,
Politziner & Mattia, P.C. as independent auditors
for the year ending December 31, 2007. 16
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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MAY 22, 2007
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, May 22, 2007,
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 April 20, 2007.
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, 2007.
(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 March 30, 2007 (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 12,684,633 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, 2007, 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.
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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, 2006 are being mailed together with
this Proxy Statement to all stockholders entitled to vote at the Meeting.
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.
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
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Guy J. Quigley Chairman of the Board, 65 1989
President, CEO
Charles A. Phillips Executive Vice President, COO 59 1989
and Director
George J. Longo Vice President, CFO and Director 60 1997
Jacqueline F. Lewis* Director 61 1997
Rounsevelle W. Schaum* Director 75 2000
Stephen W. Wouch* Director 52 2003
Terrence O. Tormey Director 52 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., where
he was responsible for full marketing and production of a prototype electrical
device.
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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, in Corporate Accounting Management with the
predecessor pharmaceutical company to Aventis S.A., and 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) and Camelot Entertainment Group, Inc. (OTCBB: CMEG).
STEPHEN W. WOUCH was appointed to the Board of Directors in January 2003.
Since 1988, Mr. Wouch has been Managing Partner of Wouch, Maloney & Co., LLP,
Certified Public Accountants, a regional public accounting firm with offices
in Pennsylvania and Florida. This firm has a diverse client base that
encompasses various industries such as health care, manufacturing,
construction and service providers. Prior to 1988, Mr. Wouch held senior
management positions with other Certified Public Accounting firms. Mr. Wouch
is an author, lecturer and a licensed Certified Public Accountant in
Pennsylvania, New Jersey and Florida.
TERRENCE O. TORMEY was appointed to the Board of Directors in April 2004. Mr.
Tormey is currently the President and founder of 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.
CORPORATE GOVERNANCE
The Company's corporate governance serves to ensure that members of the Board of
Directors ("Board") are independent from management and that the Board
adequately performs its function to ensure that the interests of the Board and
management are in alignment with the interests of the stockholders.
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On an annual basis, each Director and named executive officer is required to
complete a Director and Officer Questionnaire. Within this questionnaire are
requirements for disclosure of any transactions with the Company in which the
Director or named executive officer, or any member of his or her immediate
family, have a direct or indirect material conflict of interest in which the
Board is responsible for resolving any such conflict.
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 2003, the Company also initiated a Code of Ethics,
and in 2004, it initiated an Insider Trading Policy for all employees of the
Company.
CODE OF ETHICS
The Company's Code of Ethics was instituted in January 2003 and is applicable to
all Directors, officers and employees. Each person, whether an employee, officer
or director, has an individual responsibility to deal ethically in all aspects
of the Company's business and to comply fully with all laws, regulations, and
Company policies. In complying with the Company's Code of Ethics, individuals
are expected to exercise high standards of integrity and good judgment and among
other items, to apply principles of: honesty; avoid conflicts of interest,
illegal or unethical conduct; advancement for legitimate interests to the
Company's when the opportunity to do so arises; protecting the Company's assets
and ensure their efficient use and to comply with all laws, rules, regulations,
policies and guidelines applicable to the operation of the Company.
DIRECTOR INDEPENDENCE
In accordance with Nasdaq Global Market rules ("Nasdaq"), the Board
affirmatively determines the independence of each Director and any nominee for
election as a Director in accordance with required guidelines as set forth in
the Nasdaq listing standards.
Based on these standards, at its meeting held on December 14, 2006, the Board
determined that each of its non-employee Directors is independent and has no
relationship with the Company, except as a Director and/or stockholder of the
Company.
NOMINATIONS FOR 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 senior level 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. Additionally, each
proposed director must have the highest personal and professional ethics,
integrity and values including the ability and fortitude to advance constructive
opinion on issues affecting the Company and to be able to function appropriately
in an atmosphere by and between other members of the Board of Directors.
Stockholders wishing to recommend candidates for consideration by the Board of
Directors may do so by writing to the Secretary of the Company and providing the
candidate's name, biographical data and qualifications. Such candidates
recommended by stockholders will be evaluated on the same basis as all other
candidates.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
For the fiscal year ended December 31, 2006, 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 2006. During 2006, the Board of Directors
also acted by unanimous written consent in lieu of a meeting on one occasion.
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The independent members that serve on committees of the Board of Directors met
in executive session on five occasions during 2006. 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 2006 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 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 registered public
accountants, and reviews filings containing financial information of the Company
to be made with the Securities and Exchange Commission. The Audit Committee met
five times during 2006.
The members of the Executive Operating Committee are Messrs. Quigley, Phillips
and Longo. The Executive Operating Committee possesses and exercises all the
power and authority of the Board of Directors in the management and direction of
the business and affairs of the Company except as limited by law and except for
the power to change the membership or to fill vacancies on the Board of
Directors or the Executive Operating Committee. The Executive Operating
Committee met three times during 2006.
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 one time during 2006.
PROCEDURES FOR CONTACTING DIRECTORS
The Company has adopted a procedure by which stockholders may send
communications 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.
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,
2006. None of the Compensation Committee members were officers or employees of
the Company at any time prior to December 31, 2006 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 "Compensation Discussion and Analysis." 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 and the report of the Compensation Committee
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.
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EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
OVERVIEW
The Compensation Committee ("Committee" within this report) does not have a
specific charter and has the responsibility for establishing, implementing,
monitoring and reviewing the Company's compensation philosophy and along with
the other outside director, approves the salary and other compensation of
officers and key employees of the Company. The 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.
Individuals who served as the Company's Chief Executive Officer and Chief
Financial Officer during fiscal 2006, as well as the other individuals included
in the Summary Compensation Table on page 9, are referred to as the named
"executive(s)" officers within this report.
COMPENSATION PHILOSOPHY
In reaching decisions regarding executive compensation, the 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 and that compensation provided to executives
remains competitive relative to the compensation paid to comparable executives
of similar companies. The 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.
ROLE OF EXECUTIVE OFFICERS IN COMPENSATION DECISIONS
The Committee makes all compensation decisions based upon recommendations made
by the Chief Executive Officer and Chief Financial Officer regarding equity
awards to participating executives and employees of the Company.
The Committee annually reviews the performance of the executives including
salary adjustments and equity awards whereby the Committee can exercise its
discretion in modifying any recommended adjustments or awards to executives.
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. 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.
Additionally, as the Company must compete with other healthcare companies for
executive employees, the Committee sets overall compensation paid to these
executives to attract and subsequently retain such employees. This objective may
vary, but generally is dictated by the experience level of the individual,
specific employment requirements of the Company and current market factors
occurring in the healthcare industry. The Committee recognizes that closely
monitoring these expectations over the long term, will continue to be in the
best interest for the enhancement of stockholder value.
The fixed aspect is intended to meet the requirements of compensating the
executive for meeting essential goals in performance and are in place to insure
the Company of consistency of leadership and the retention of qualified
executives to foster a spirit of employment security, which thereby encourages
decisions that will benefit long-term stockholders. Variable compensation is
based upon the Committee annually adopting and approving sales, profit and stock
price performance goals to be attained for the ensuing year.
-6-
Prior to January 1, 2006 and currently, there is no pre-established policy for
the allocation between cash and non-cash or short-term and long-term incentive
compensation. The Committee reviews information provided to determine the
appropriate level and mix for compensation. Income from such incentive
compensation is realized as a result of the performance of the Company and the
individual, depending on the type of the incentive, compared to established
goals. Historically, the Committee has granted a majority of total compensation
to executives in the form of cash incentive compensation.
Equity-based compensation is through options periodically granted, usually in
October or December and occasionally in July, 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.
During 2006 the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 123R, "Accounting for Stock-Based Compensation," which requires that
stock option grants be determined under the fair value method and be included in
the financial statements as compensation expense.
The market price of the Company's common stock, which is a factor in determining
fair value, has experienced significant volatility as the holding period of
options may in some cases be as much as five years, can significantly effect the
pricing model. During this five year period for valuation purposes from January
1, 2002 to December 31, 2006, the per share bid price has ranged from a low of
approximately $2.03 to a high of approximately $16.94.
There are several factors which could affect the price of the common stock, some
of which are announcements of technological innovations for new commercial
products by us or competitors, developments concerning propriety rights, new or
revised governmental regulation or general conditions in the market for the
Company's products. Sales of a substantial number of shares by existing
stockholders could also have an adverse effect on the market price of the common
stock.
These factors have a significant impact in calculating the fair value for any
option grants under the Black-Scholes pricing model during any period of grant
during 2006 or in subsequent years. Since any grants during 2006 or in
subsequent years would result in significant compensation expense in the
financial statements, the granting of options has been suspended for all
executives and employees. Furthermore, the requirements of (SFAS) No. 123R,
"Accounting for Stock-Based Compensation," could have a significant impact on
attracting and retaining desired executives and employees.
BASE SALARY
The Company provides executives with a base salary to compensate them for
services rendered during the fiscal year. Base salary for executives are
determined for each executive based on their position and responsibility by
using comparative market data within the health-care industry. Base salary
determinations are designed to recognize the contributions made or expected to
be made in the future by the executive.
Base salary levels are reviewed annually as part of the Company's performance
review process as well as upon a promotion or other change in position
responsibility. The Committee will consider current market data individually
relative to the position and responsibilities and to other executives, including
the individual performance of the executive during its review of base salaries
for executives.
PERFORMANCE-BASED INCENTIVE COMPENSATION
Variable or performance-based incentive compensation is based upon the Committee
annually adopting and approving sales, profit and stock price performance goals
to be attained for the ensuing year.
This cash incentive portion of executive compensation gives the Committee the
latitude to design incentive compensation programs to promote a team approach
for high performance and achievement of corporate goals by directors, executives
and employees, encourage the growth of stockholder value and allows all
employees to participate in the successes of the Company.
-7-
At the end of the fiscal year in order to set performance-based incentive
compensation, the Committee assesses the performance of the Company and
executives for objectives achieved, including estimated results for the next
fiscal year. In order to pre-determine minimum and maximum levels for each
objective, an overall percentage and cash payouts for the corporate financial
objectives are calculated in order to balance such payouts relative to the
overall success of the Company.
In making the annual determination of the minimum, target and maximum levels,
the Committee may consider the specific circumstances facing the Company during
the coming year. Sales volume, necessary research and development expenditures
for its ethical pharmaceutical subsidiary and return to shareholders for
improved stock price targets are set in alignment with the Company's strategic
plan, expectations and performance.
LONG-TERM INCENTIVE COMPENSATION
STOCK OPTION PLAN
Equity-based compensation is through options to purchase shares of the Company's
Common Stock, which assists the Company to provide competitive levels of total
compensation and increases the link between the creation of stockholder value.
Additionally, the plan encourages participants to focus on long-term Company
performance and provides an opportunity for executives and certain employees to
increase their ownership in the Company through grants of the Company's Common
Stock. These grants are periodically recommended by the Committee and granted by
all directors to participants' base upon their respective level of contribution
and responsibility for the success of the Company. In granting these options,
the Committee may establish any conditions or restrictions it deems appropriate
and are granted at the Nasdaq Global Market's closing price on the day of the
grant approval by the entire Board of Directors.
As previously discussed, certain factors of volatility would have a significant
impact in calculating the fair value for any option grants under the
Black-Scholes pricing model during any period of grant during 2006 or in
subsequent years. Therefore, any grants during 2006 or in subsequent years would
result in significant compensation expense in the financial statements, thereby
the granting of options has been suspended for all executives and employees,
which could have a significant impact on attracting and retaining desired
executives and employees.
DEFINED CONTRIBUTION PLAN
During 1999, the Company implemented a 401(k) defined contribution plan for its
employees. The Company's contribution to the plan is based on the amount of the
employee plan contributions and compensation. The Company's contribution to the
plan in 2006 for its executives was approximately $60,000.
PERQUISITES AND OTHER PERSONAL BENEFITS
The Company provides executives with limited personal benefits that the Company
and the Committee believe are reasonable and consistent with its overall
compensation program to better enable the Company to attract and retain desired
employees for key positions. The Committee reviews annually the levels of these
limited personal benefits provided to the executives, which includes the use of
Company vehicles and subsequently, the ability of the executive to purchase such
asset at a later date. Additionally, life and disability insurance is provided
at no cost to the executive and medical insurance is provided to each executive
after each executive contributes to such costs for health and dental insurance
as is also available to other employees. The effects of such benefits are
included in the Summary Compensation Table on page 9 as Other Compensation.
EXECUTIVE COMPENSATION
The Summary Compensation table provides summary information concerning cash and
certain other compensation for the year ended December 31, 2006 paid or accrued
by the Company to the Company's Chief Executive Officer and Chief Financial
Officer and each highly compensated executive officer of the Company whose
compensation exceeded $100,000 (the "Named Executive Officers") during 2006.
Additionally, the Company has not entered into any new employment agreements
since the expiration of existing agreements on December 31, 2005 with any of the
named executive officers. In reviewing compensation for each of the named
executive officers, the Committee reviews summaries which show the executive's
current and previous compensation, including equity and non-equity based
compensation.
-8-
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company has reviewed and discussed the
Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K
with management and, based on such review and discussions, the Compensation
Committee recommended to the Board that the Compensation Discussion and Analysis
be included in this Proxy Statement.
Compensation Committee
Rounsevelle W. Schaum, Chairman
Jacqueline F. Lewis
Stephen W. Wouch
SUMMARY COMPENSATION TABLE
Option All Other
Bonus Awards Compensation
Salary (1) (2) (3) Total
Name and Principal Position Year ($) ($) ($) ($) ($)
- --------------------------- ---- ------- ------ ------ ------------ -------
Guy J. Quigley 2006 838,000 73,325 -- 45,735 957,060
Chairman of the Board,
President, Chief Executive
Officer
Charles A. Phillips 2006 617,800 52,763 -- 45,646 716,209
Executive Vice President,
Chief Operating Officer
George J. Longo 2006 414,000 36,225 -- 41,345 491,570
Vice President, Chief
Financial Officer
(1) Bonuses paid pursuant to the Company attaining specified sales and
net income goals.
(2) There were no option awards during 2006.
(3) The value of attributable personal benefits for each Named Executive
Officers of the Company such as; insurances for life, health, dental
and disability; vehicles and matching contributions in the Company's
401(k) Plan. Additionally, there was no additional compensation from
Stock Awards; Change in Pension Value and Nonqualified Deferred
Compensation Earnings or Non-Equity Incentive Plan Compensation.
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, which expired 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, which expired 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.
-9-
George J. Longo is employed as the Chief Financial Officer of the Company
pursuant to an employment agreement, dated November 5, 1996, which expired on
December 31, 2005. The agreement provided for a base salary of $150,000, or such
greater amount as the Board of Directors may from time to time determine, with
annual increases over the prior year's base salary. In the event of his
disability, Mr. Longo was to receive the full amount of his base salary for
eighteen months. Upon a change of control of the Company, Mr. Longo was entitled
to receive compensation for the remaining term of the agreement until December
31, 2005. Upon early termination by the Company without cause (as defined in the
agreement), the Company was required to pay Mr. Longo the remainder of the
salary owed him through December 31, 2005.
COMPENSATION PURSUANT TO PLANS
An incentive stock option plan was instituted in 1997 (the "1997 Stock Option
Plan") and approved by the stockholders in 1998 and subsequently amended in 2000
and approved by the stockholders in 2001 and amended and approved by the
stockholders in 2005. Pursuant to the 1997 Stock Option Plan, no options have
been granted to directors, executive officers, and employees during 2006. In
early 1999, the Company implemented a defined contribution plan for its
employees with the Company's contribution to the plan based on the amount of the
employee plan contribution.
-10-
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Equity
Incentive
Plan
Awards
Number of Number of Number of
Securities Securities Securities
Underlying Underlying Underlying Option or
Unexercised Unexercised Unexercised Warrant Option or
Option or Option or Unearned Exercise Warrant
Warrants Warrants Option or Price Exercise Stock
Name of Officer and Director Exercisable Unexercisable Warrants ($) Date Awards (1)
- --------------------------------- ------------- ---------------- ------------- -------------- --------------- ----------
Guy J. Quigley 140,000 -- -- 10.00 5/5/2007 --
Chairman of the Board, 100,000 9.68 12/1/2007
President, 85,000 5.12 4/6/2009
Chief Executive Officer 70,000 0.81 12/20/2010
70,000 1.26 12/10/2011
45,000 5.19 7/30/2012
50,000 8.11 10/29/2013
50,000 9.50 10/26/2014
100,000 13.80 12/11/2015
Charles A. Phillips 85,000 -- -- 10.00 5/5/2007 --
Executive Vice President, 100,000 9.68 12/1/2007
Chief Operating Officer 85,000 5.12 4/6/2009
70,000 0.81 12/20/2010
60,000 1.26 12/10/2011
42,000 5.19 7/30/2012
45,000 8.11 10/29/2013
45,000 9.50 10/26/2014
80,000 13.80 12/11/2015
George J. Longo 75,000 -- -- 10.00 5/5/2007 --
Vice President, 125,000 9.68 12/1/2007
Chief Financial Officer 100,000 5.12 4/6/2009
70,000 0.81 12/20/2010
55,000 1.26 12/10/2011
40,000 5.19 7/30/2012
40,000 8.11 10/29/2013
40,000 9.50 10/26/2014
40,000 13.80 12/11/2015
Rounsevelle W. Schaum 15,000 -- -- 5.19 7/30/2012 --
Chairman of the Audit and 10,000 8.11 10/29/2013
Compensation Committees 20,000 9.50 10/26/2014
20,000 13.80 12/11/2015
Jacqueline F. Lewis 10,000 -- -- 9.68 12/1/2007 --
Member of the Audit and 10,000 5.12 4/6/2009
Compensation Committees 20,000 0.81 12/20/2010
15,000 1.26 12/10/2011
15,000 5.19 7/30/2012
10,000 8.11 10/29/2013
20,000 9.50 10/26/2014
20,000 13.80 12/11/2015
Stephen W. Wouch 10,000 -- -- 8.11 10/29/2013 --
Member of the Audit and 20,000 9.50 10/26/2014
Compensation Committees 20,000 13.80 12/11/2015
Terrence O. Tormey 20,000 -- -- 9.50 10/26/2014 --
20,000 13.80 12/11/2015
(1) The Company does not have any stock awards
-11-
OPTION / WARRANT EXERCISES AND VESTING DURING 2006
The following table sets forth certain information concerning stock options or
warrants exercised during 2006 with respect to the Named Executive Officers:
Option / Warrant Awards Stock Awards
----------------------------- ----------------------------
Number of Number of
Shares Exercise Shares Value
Acquired on Value Realized Acquired on Realized
on Exercise Exercise Exercise on Exercise
Name (#) ($) (1) (2) (#) ($) (3)
- ------------------- ---------- -------------- ----------- ------------
Guy J. Quigley 575,000 3,731,892 -- --
Charles A. Phillips 375,000 2,383,859 -- --
George J. Longo 50,000 172,500 -- --
(1) Represents the total gain realized, which was determined by multiplying
the number of shares exercised by the difference between the per share
option / warrant exercise price and the net selling price per share.
(2) Includes $1,348,033 realized by Mr. Quigley's wife.
(3) The Company does not have any stock awards.
COMPENSATION OF DIRECTORS
Option All Other
Director Bonus Awards Compensation
Fees (1) (2) (3) Total
Name of Independent Director Year ($) ($) ($) ($) ($)
- ------------------------------------- -------- ------------ ----------- ------------- ---------------- ----------------
Rounsevelle W. Schaum 2006 38,600 -- -- -- 38,600
Chairman of the Audit and
Compensation Committees
Jacqueline F. Lewis 2006 35,300 -- -- -- 35,300
Member of the Audit and
Compensation Committees
Stephen W. Wouch 2006 35,300 -- -- -- 35,300
Member of the Audit and
Compensation Committees
Terrence O. Tormey 2006 25,100 -- -- -- 25,100
(1) There were no Bonuses paid pursuant to the Company attaining
specified stock performance goals.
(2) There were no option awards during 2006.
(3) There was no other compensation attributable for each Named Director
of the Company.
(4) See Outstanding Equity Awards at Fiscal Year End for each director's
option awards outstanding at fiscal year end on page 11.
The Company compensates its independent directors with a combination of cash,
both fixed and variable, and equity-based compensation to attract and retain
qualified candidates to serve on the Board of Directors. In setting Director
compensation, the Company considers the significant amount of time that
Directors expend in fulfilling their duties to the Company as well as the
skill-level required by the Company for its members.
CASH COMPENSATION PAID TO BOARD MEMBERS
Independent outside directors receive annualized compensation of $25,100. Each
outside director that serves on the Audit and Compensation Committees received a
total annualized compensation of $35,300 and the Chairman of the Audit and
Compensation Committees received annualized compensation of $38,600.
-12-
Variable or performance-based incentive compensation is based upon the Board of
Directors annually adopting and approving stock price performance goals to be
attained for the ensuing year. This cash incentive portion of Director
compensation gives the entire Board the latitude to design incentive
compensation programs to promote a team approach with management for high
performance and achievement of corporate goals by Directors, executives and
employees, encourage the growth of stockholder value and allows all Directors to
participate in the successes of the Company.
STOCK OPTION PLAN
As indicated in the Compensation Committee Report, certain factors of volatility
would have a significant impact in calculating the fair value for any option
grants under the Black-Scholes pricing model during any period of grant during
2006 or in subsequent years. Therefore, any grants during 2006 or in subsequent
years would result in significant compensation expense in the financial
statements, thereby the granting of options has also been suspended for all
Directors, which could have a significant impact on attracting and retaining
desired Directors. Directors who are employees of the Company receive no
compensation for their service as directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain individuals related to the Company's Chief Executive Officer that earned
at least $120,000 are also employees of the Company. Their aggregate
compensation for 2006 was $411,205, and no option awards were granted to
purchase shares of the Company's Common Stock.
The Company is in the process of acquiring licenses in certain countries through
a related party entity, ScandaSystems Ltd. (UK), whose officer and major
stockholder is Mr. Gary Quigley, a relative of the Company's Chief Executive
Officer. Approximately $153,000 was paid or payable by the Company to such firm
during 2006 to obtain such licenses. The Company believes that the services
performed by this firm and employees are on terms no more favorable than could
have otherwise been obtained from an unaffiliated third party.
The Company does not have a formal policy for related party transactions. The
outside independent directors must approve any related transactions for
executive officers. In the event that there would be a related party transaction
with one of the outside independent directors, then such director would abstain
from any voting on such related party transaction.
SECURITY OWNERSHIP
The following table sets forth information concerning ownership of the Company's
Common Stock as of March 30, 2007 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, Common Stock Percent
and all Executive Beneficially of
Officers and Directors as a Group Owned (1) Class
-------------------------------------- ------------ --------
GUY J. QUIGLEY (2) (3) (4) 3,633,764 27.0
CHARLES A. PHILLIPS (2) (3) (5) 1,625,377 12.2
GEORGE J. LONGO (2) (3) (6) 625,000 4.7
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) 6,159,641 41.2
(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 March 30, 2007.
(2) Director of the Company.
-13-
(3) Executive Officer of the Company.
(4) Mr. Quigley's beneficial ownership includes options and warrants
exercisable within sixty (60) days from March 30, 2007 to purchase 710,000
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.
(5) Mr. Phillips' beneficial ownership includes options and warrants
exercisable within sixty (60) days from March 30, 2007 to purchase 612,000
shares of Common Stock and 1,671 shares of Common Stock beneficially owned
by Mr. Phillips' wife.
(6) Mr. Longo's beneficial ownership includes options and warrants exercisable
within sixty (60) days from March 30, 2007 to purchase 585,000 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 March 30, 2007 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 March 30, 2007 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 March 30, 2007 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 March 30, 2007 to purchase 40,000 shares of Common
Stock.
(11) Includes an aggregate of 2,264,500 shares of Common Stock underlying
options and warrants that are exercisable within sixty (60) days from
March 30, 2007.
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, 2006, all
reports of ownership and changes in ownership applicable to its executive
officers, directors, and greater than ten-percent beneficial owners were filed
on a timely basis, except that each of our directors each failed to timely file
one report for one transaction.
-14-
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.
Management is responsible for the financial reporting process, including its
systems of internal and disclosure controls, and for the preparation of
consolidated financial statements in accordance with generally accepted
accounting principles. The Company's independent registered public accountants,
who are appointed by the Committee, are responsible for auditing those financial
statements. Our responsibility is to monitor and review these processes. We have
relied, without independent verification, on management's representation that
the financial statements have been prepared with integrity and objectivity and
in conformity with accounting principles generally accepted in the United States
of America and on the representations of the independent registered public
accountants included in their report of the Company's financial statements.
We have reviewed and discussed with management the Company's audited financial
statements as of and for the year ended December 31, 2006.
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 2006 2005 2005*
------------------ --------- -------- --------
Audit fees $603,118 $152,600 $ 13,500
Audit related fees 12,600 31,500 --
Tax fees 32,290 23,600 --
All other fees -- -- 2,000
-------- -------- --------
Total $648,008 $207,700 $ 15,500
======== ======== ========
*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, 2006 for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
Rounsevelle W. Schaum, Chairman
Jacqueline F. Lewis
Stephen W. Wouch
-15-
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,
2007. 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, 2007.
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 December 21, 2007. If the Company is not notified of a stockholder proposal
by March 6, 2008, then its Board of Directors will have discretionary authority
to vote on the stockholder proposal, even though the stockholder proposal is not
discussed in the proxy statement.
EXPENSES AND SOLICITATION
All expenses in connection with this solicitation will be borne by the Company.
In addition to the use of the mail, proxy solicitation may be made by telephone,
telegraph and personal interview by officers, directors and employees of the
Company. The Company will, upon request, reimburse brokerage houses and persons
holding shares in the names of their nominees for their reasonable expenses in
sending soliciting material to their principals.
OTHER BUSINESS
The Board of Directors knows of no business that will be presented for
consideration at the Meeting other than those items stated above. If any other
business should come before the Meeting, votes may be cast, pursuant to proxies,
in respect to any such business in the best judgment of the person or persons
acting under the proxies.
Dated: April 20, 2007 THE QUIGLEY CORPORATION
By: /s/ Charles A. Phillips
--------------------------------
CHARLES A. PHILLIPS, Secretary
-16-
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE QUIGLEY CORPORATION
PROXY -- ANNUAL MEETING OF STOCKHOLDERS
MAY 22, 2007
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, May 22, 2007,
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 0 GUY J. QUIGLEY
0 CHARLES A. PHILLIPS
| | WITHHOLD AUTHORITY FOR 0 GEORGE J. LONGO
ALL NOMINEES 0 JACQUELINE F. LEWIS
0 ROUNSEVELLE W. SCHAUM
| | FOR ALL EXCEPT 0 STEPHEN W. WOUCH
(SEE INSTRUCTION BELOW) 0 TERRENCE O. TORMEY
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), MARK
"FOR ALL EXCEPT" AND FILL IN THE CIRCLE NEXT TO EACH NOMINEE YOU WISH TO
WITHHOLD, AS SHOWN HERE. •
2. RATIFICATION OF APPOINTMENT OF AMPER,
POLITZINER & MATTIA, P.C. AS THE COMPANY'S FOR AGAINST ABSTAIN
INDEPENDENT PUBLIC AUDITORS FOR THE YEAR | | | | | |
ENDING DECEMBER 31, 2007.
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 April 20, 2007, and a copy of the Company's Annual Report
to stockholders for the fiscal year ended December 31, 2006.
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:
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NOTE: Please sign exactly as your name or names appears on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full titles as such.
If the signer is a corporation, please sign full corporate name by duly
authorized officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
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