SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934 (Amendment No. )
[X] Filed by the Registrant
[ ] 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 under Rule 14a-12
GENERAL EMPLOYMENT ENTERPRISES, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies: __________________________________________________
(2) Aggregate number of securities to which transaction applies:
____________________________________________________________
(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):
____________________________________________________________
(4) Proposed maximum aggregate value of transaction: ___________
(5) Total fee paid: ____________________________________________
[ ] 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: ______________________________________
(2) Form, Schedule or Registration Statement No.:_________________
(3) Filing Party:_________________________________________________
(4) Date Filed: __________________________________________________
GENERAL EMPLOYMENT ENTERPRISES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held Monday, February 24, 2003
To the Shareholders of
GENERAL EMPLOYMENT ENTERPRISES, INC.
You are cordially invited to attend the Annual Meeting of
Shareholders of General Employment Enterprises, Inc. which will
be held in the Lane Room of the Hilton Suites Hotel, 10 Drury
Lane, in Oakbrook Terrace, Illinois 60181, on Monday, February
24, 2003, at 9:00 a.m., local time, for the following purposes:
1.To elect six directors of the Company;
2.To act upon such other matters as may properly be brought
before the meeting.
Shareholders of record at the close of business on December 30,
2002 will be entitled to vote at the meeting.
By Order of the Board of Directors
Nancy C. Frohnmaier
Secretary
Oakbrook Terrace, Illinois
January 17, 2003
YOUR VOTE IS IMPORTANT
Even if you plan to attend the Annual Meeting, you are urged to
sign, date and promptly return your proxy in the postage paid
envelope that is enclosed, so that your shares may be voted in
accordance with your wishes. If you attend the meeting, you may
vote your shares in person, even though you have previously
signed and returned your proxy.
GENERAL EMPLOYMENT ENTERPRISES, INC.
Oakbrook Terrace Tower
One Tower Lane, Suite 2100
Oakbrook Terrace, IL 60181
PROXY STATEMENT
For Annual Meeting of Shareholders
This statement and the accompanying proxy card, which are first
being sent to shareholders on approximately January 17, 2003, are
being furnished in connection with a solicitation of proxies by
the Board of Directors of General Employment Enterprises, Inc.
(the "Company"), an Illinois corporation, to be voted at the
Annual Meeting of Shareholders to be held on Monday, February 24,
2003, at 9:00 a.m., local time, in the Lane Room of the Hilton
Suites Hotel, 10 Drury Lane, in Oakbrook Terrace, Illinois 60181.
The only voting securities of the Company entitled to be voted
at the Annual Meeting are the shares of Common Stock, of which
there were 5,120,776 outstanding on December 30, 2002, the record
date for the Annual Meeting. Shareholders are entitled to one
vote for each share held except that, in elections for directors,
each shareholder has cumulative voting rights. When voting
cumulatively, each shareholder has the number of votes equal to
the number of directors to be elected (six) multiplied by the
number of his or her shares. Such number of votes may be divided
equally among all nominees, may be cumulated for one nominee, or
may be distributed on any basis among as many nominees as is desired.
Each proxy that is properly signed and received before the
Annual Meeting will, unless such proxy has been revoked, be voted
in accordance with the instructions on such proxy. If no
instruction is indicated on the proxy card, the shares will be
voted for election of the six nominees for director listed in
this proxy statement. Proxies given may be revoked at any time
before the voting thereof by delivering to the Company a written
statement revoking the proxy or a subsequently dated proxy, or by
attending the meeting and voting in person.
A quorum of shareholders is necessary to take action at the
Annual Meeting. A majority of the total outstanding shares of
Common Stock of the Company, represented in person or by proxy,
will constitute a quorum for purposes of the meeting.
Abstentions or broker non-votes will be treated as shares of
Common Stock that are present for purposes of determining the
presence of a quorum. The six nominees for director receiving
the highest number of votes cast will be elected directors of the
Company; abstentions and broker non-votes will have no effect on
the vote for the election of directors. "Broker non-votes"
refers to a broker or other nominee holding shares for a
beneficial owner not voting on a proposal because the broker or
other nominee does not have discretionary voting power regarding
that item and has not received instructions from the beneficial owner.
ELECTION OF DIRECTORS
Six directors are to be elected at the Annual Meeting, to serve
until the 2004 Annual Meeting of Shareholders, or until their
successors are elected and qualified. Proxies will be voted,
unless otherwise indicated, for the election of the nominees
named below. If necessary to elect the nominees named below,
proxies will be voted cumulatively.
Nominees
The following information is furnished with respect to each
nominee for election as a director:
Name and Age of Director Nominees,
Their Primary Occupation and Other Information
HERBERT F. IMHOFF, JR., age 53 - Director of the Company since
1986; named Chairman of the Board and Chief Executive Officer in
July 2001; has been President and Chief Operating Officer since
February 1997 and had previously been Executive Vice President
since 1986; has served as the Company's general counsel since 1982.
KENT M. YAUCH, age 56 - Director of the Company since July 2001;
was named Vice President in 2001 and has served as Chief
Financial Officer and Treasurer of the Company since 1996; had
previously been Treasurer and Controller since 1991.
SHELDON BROTTMAN, age 68 - Director of the Company since 1991; is
an attorney, and for more than ten years, has operated a real
estate management and development business. Until December 1997,
he was President and CEO of Jemm Wholesale Meat Co. in Chicago, Illinois.
DELAIN G. DANEHEY, age 68 - Director of the Company since 1995;
formerly with the auditing firm of Ernst & Young LLP for 31
years, and was a partner when he retired from the firm in 1991.
DENNIS W. BAKER, age 56 - Treasurer of CF Industries, Long Grove,
Illinois, a chemical manufacturing company, where he has been
employed for more than twenty-five years in various financial
capacities. Mr. Baker joined the Company's Board in November 2000.
JOSEPH F. LIZZADRO, age 65 - Chairman Emeritus of L&H Company,
Oak Brook, Illinois, an electrical contracting firm, where he had
been employed since 1963. Mr. Lizzadro also serves as a director
of Harris Bank, Oakbrook Terrace, Illinois, and Florence
Corporation, Glendale Heights, Illinois. He joined the Company's
Board in November 2000.
All of the foregoing nominees are currently serving as
directors of the Company and all were elected by the shareholders
at the last Annual Meeting. Each of the above-named nominees has
agreed to serve, if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF EACH OF THE INDIVIDUALS NOMINATED FOR ELECTION AS A DIRECTOR.
Information Concerning the Board of Directors and its Committees
The Board of Directors meets on a regularly scheduled basis
to review significant developments affecting the Company and to
act on matters requiring Board approval. It also holds special
meetings when an important matter requires Board action between
scheduled meetings. The Board held six meetings during the last
fiscal year, and acted once by unanimous written consent. No
director of the Company attended fewer than 75% of the total
meetings of the Board and Committee meetings on which such
Board members served during this period, except for Mr. Baker,
who attended four of the six meetings of the Board.
2
Executive Committee
The Board of Directors has an Executive Committee consisting of
the Board of Directors as a whole, and meetings of the Committee
may be called or requested by the Chairman of the Board or a
majority of the directors. The Executive Committee is authorized
to act upon all matters requiring Board approval except the
declaration of dividends, corporate reorganization, and merger
and acquisition decisions. As provided in the By-Laws of the
Company, a majority of the directors constitutes a quorum for the
purpose of transacting Committee business. No Executive
Committee meetings were held in fiscal 2002.
Audit Committee
The Audit Committee is presently composed of Delain G. Danehey,
Chairman; Dennis W. Baker, Sheldon Brottman and Joseph F.
Lizzadro, all of whom are independent (as defined in the Charter
for the Audit Committee adopted by the Board of Directors May 15,
2000), non-employee directors of the Company. The Audit
Committee is primarily concerned with the effectiveness of the
Company's accounting policies and practices, its financial
reporting and its internal accounting controls. In addition, the
Audit Committee reviews and approves the scope of the annual
audit of the Company's books, reviews the findings and
recommendations of the independent auditors at the completion of
their audit, and approves annual audit fees and the selection of
an auditing firm. The Audit Committee met twice during fiscal 2002.
Compensation and Stock Option Committee
The Compensation and Stock Option Committee is presently
composed of Sheldon Brottman, Chairman; Dennis W. Baker, Delain
G. Danehey and Joseph F. Lizzadro. The Committee reviews and
establishes the Company's compensation policies and practices,
including salary and incentive compensation programs for senior
executives of the Company and also oversees the administration of
the Company's stock option plans. The Committee has the power to
determine from time to time the individuals to whom options shall
be granted, the number of shares to be covered by each option,
the time or times at which options shall be granted, and the
terms of such options. The Compensation and Stock Option
Committee met four times during fiscal 2002.
Nominating Committee
The Board of Directors does not have a standing Nominating Committee.
Nominations for Directors
The By-Laws of the Company establish procedures for the
nomination of candidates for election to the Board of Directors.
The By-Laws provide that the nominations may be made by the Board
of Directors or by a committee appointed by the Board of
Directors. Any shareholder entitled to vote in the election of
directors generally may make nominations for the election of
directors to be held at an annual meeting of shareholders,
provided that such shareholder has given actual written notice of
his intent to make such nomination or nominations to the Secretary of
the Company not later than sixty days before the anniversary date of the
immediately preceding annual meeting of shareholders. Each such
notice must set forth (a) the name and address of the shareholder
who intends to make the nomination and of the person or persons
to be nominated; (b) a representation that the shareholder is a
holder of record of stock of the Company entitled to vote at such
meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings
involving any two or more of the shareholders, each such nominee
and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by
the shareholder or relating to the Company or its securities or
to such nominee's service as a director if elected; (d) such
other information regarding such nominee proposed by such
shareholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and
Exchange Commission had the nominee been nominated, or intended
to be nominated, by the Board of Directors; and (e) the consent
of each nominee to serve as a director of the Company, if so elected.
3
EXECUTIVE OFFICERS OF THE COMPANY
All executive officers are elected annually by the Board of
Directors at the first meeting of the Board held following each
annual meeting of shareholders, and they hold office until their
successors are elected and qualified. The executive officers of
the Company are as follows:
Name and Age Position and Other Information
HERBERT F. IMHOFF, JR. (53) Chairman of the Board and
Chief Executive Officer, and President
and Chief Operating Officer.
MARILYN L. WHITE (52) Vice President. Elected Vice
President in 1996, she is responsible
for the Company's western division.
GREGORY CHRISOS (46) Vice President. Elected Vice
President of the Company in November
1999; he is responsible for the
Company's eastern division, and has
been Vice President of TRIAD Personnel
Services, Inc., the Company's contract
services subsidiary, since 1996.
KENT M. YAUCH (56) Vice President, Chief Financial
Officer and Treasurer.
NANCY C. FROHNMAIER (58) Vice President since 1995 and
Corporate Secretary since 1985.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Listed in the following table is information concerning persons
known to the Company to be beneficial owners of more than five
percent of the Company's outstanding Common Stock as of December 30, 2002:
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
Estate of Herbert F. Imhoff 1,254,746 (1) 24.50
Herbert F. Imhoff, Jr.,
Mark L. Imhoff and
Brad A. Imhoff,
Independent Co-Executors
One Tower Lane, Suite 2100
Oakbrook Terrace, IL 60181
Herbert F. Imhoff, Jr. 1,438,176 (2) 27.27
One Tower Lane, Suite 2100
Oakbrook Terrace, IL 60181
Mark L. Imhoff 1,276,661 (3) 24.93
23732 Red Eagle
San Antonio, TX 78258
Brad A. Imhoff 1,297,596 (3) 25.34
2315 Hazel Court
Naperville, IL 60565
(1) As independent co-executors of the Estate of Herbert F.
Imhoff, Mr. Imhoff, Jr., Mark L. Imhoff and Brad A. Imhoff, have
sole voting and dispositive power over the shares listed. Mark
L. Imhoff and Brad A. Imhoff are Mr. Imhoff, Jr.'s brothers.
(footnotes continued on next page)
4
(2) Includes 10,161 shares held by Mr. Imhoff, Jr.'s son and
152,193 option shares exercisable by Mr. Imhoff, Jr. within 60
days of record date. Also included in this amount are 1,254,746
shares held by the Estate of Herbert F. Imhoff, with Herbert F.
Imhoff, Jr., Mark L. Imhoff and Brad A. Imhoff as independent co-
executors with sole voting and dispositive power over these shares.
(3) Includes 1,254,746 shares held by the Estate of Herbert F.
Imhoff, with Herbert F. Imhoff, Jr., Mark L. Imhoff and Brad A.
Imhoff as independent co-executors with sole voting and
dispositive power.
The following information is furnished as of December 30, 2002,
to indicate the beneficial ownership of the Company's outstanding
Common Stock by each director and each "named executive officer,"
as defined below, individually, and all executive officers and
directors as a group:
Amount and Nature of
Name of Beneficial Ownership Percent
Beneficial Owner of Common Stock* of Class
Herbert F. Imhoff, Jr. 1,438,176(1) 27.27
Kent M. Yauch 42,444(2) **
Sheldon Brottman 61,851(3) 1.20
Delain G. Danehey 28,456(3) **
Dennis W. Baker 8,460(4) **
Joseph F. Lizzadro 17,000(4) **
Gregory Chrisos 2,373 **
Marilyn L. White - **
All directors and executive 1,676,128(5) 30.98
officers as a group
(nine persons)
* Unless noted otherwise, the named individuals have sole voting
and dispositive power over the shares listed.
** Represents less than 1%.
(1) Includes 10,161 shares held by Mr. Imhoff, Jr.'s son and
152,193 option shares exercisable by Mr. Imhoff, Jr. within 60
days of record date. Also included in this amount are 1,254,746
shares held by the Estate of Herbert F. Imhoff, with Herbert F.
Imhoff, Jr., Mark L. Imhoff and Brad A. Imhoff as independent co-
executors with sole voting and dispositive power over these shares.
(2) Includes 39,444 option shares exercisable within 60 days of record date.
(3) Includes 25,731 option shares exercisable within 60 days of record date.
(4) Includes 5,000 option shares exercisable within 60 days of record date.
(5) Includes 10,161 shares held by Mr. Imhoff, Jr.'s son, 1,254,746
shares held by the Estate of Herbert F. Imhoff, and 289,832 option
shares exercisable by members of the group within 60 days of record date.
Section 16(a) Beneficial Ownership Reporting Compliance
Directors and officers of the Company are required to report to
the Securities and Exchange Commission, by a specified date,
their transactions related to General Employment Enterprises,
Inc. Common Stock. Based solely on review of the copies of these
reports furnished to the Company and written representation that
no other reports were required, the Company believes that during
the 2002 fiscal year, all filing requirements applicable to its
officers, directors and greater than ten percent beneficial
owners were complied with, except that Mr. Lizzadro was late in
filing Form 5, and Jan V. Prieto-McCarthy, Assistant Treasurer,
was late with a Form 4 filing.
5
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table
The following table sets forth certain information regarding
compensation awarded, earned or paid during each of the Company's
last three fiscal years to the individual serving as the Company's Chief
Executive Officer during fiscal 2002 and the other three most highly-
compensated individuals serving as executive officers at the end of the
last completed fiscal year. These individuals are sometimes herein referred
to as the "named executive officers."
Summary Compensation Table
Long-Term
Compensation
Awards -
Name and Annual Securities All Other
Principal Fiscal Compensation Underlying Compen-
Position Year Salary Bonus Options* sation**
Herbert F. Imhoff, Jr. 2002 $435,000 $ - 102,193 $36,750
Chairman and Chief 2001 325,672 - 75,000 2,550
Executive Officer, and 2000 273,460 27,346 - 2,550
President and Chief
Operating Officer
Marilyn L. White 2002 $177,000 $ - 61,098 $ 9,255
Vice President 2001 180,000 - 10,000 2,663
2000 170,000 25,000 - 2,550
Gregory Chrisos 2002 $172,083 $ - 56,640 $ 9,069
Vice President 2001 175,000 - 10,000 2,663
2000 165,000 15,000 - 2,550
Kent M. Yauch 2002 $157,333 $ - 39,444 $ 8,356
Vice President, Chief 2001 155,833 - 7,500 2,488
Financial Officer and 2000 145,000 10,000 - 2,363
Treasurer
* The number of stock option awards for fiscal 2002 includes
options granted pursuant to the Company's 2002 tender offer to
exchange previously outstanding stock options. See "Report on
Repricing of Stock Options."
** Amounts represent the Company's contributions to the Company's
401(k) plan and deferred compensation plan.
6
Stock Option Grants
The following table shows all grants of stock options in
fiscal 2002 under the 1995, 1997 and 1999 Stock Option Plans, to
each named executive officer. The exercise price of all options
was equal to the fair market value of the Company's Common Stock
on the date of grant.
Option Grants in Last Fiscal Year
Individual Grants
Percent
of Total
Number of Options Exercise
Securities Granted to or Base Grant
Underlying Employees Price Date
Options in Fiscal (Per Expiration Present
Name Granted* Year Share) Date Value**
Herbert F. Imhoff, Jr. 102,193 21.0% $0.86 8/4/12 $31,680
Marilyn L. White 10,000 2.1 1.25 9/30/11 4,700
Marilyn L. White 51,098 10.5 0.86 8/4/12 15,840
Gregory Chrisos 10,000 2.1 1.25 9/30/11 4,700
Gregory Chrisos 46,640 9.6 0.86 8/4/12 14,458
Kent M. Yauch 10,000 2.1 1.25 9/30/11 4,700
Kent M. Yauch 29,444 6.1 0.86 8/4/12 9,128
* The number of stock option awards for fiscal 2002 includes
options granted pursuant to the Company's 2002 tender offer to
exchange previously outstanding stock options. See "Report on
Repricing of Stock Options." Options are immediately exercisable
except those granted to Ms. White and Mr. Chrisos, which are exercisable
two years after the date of grant.
** Present value calculations are based on the Black-Scholes
option pricing model. The assumptions used for this calculation
are an expected option life of 4 years, stock price volatility of
42%, a risk-free interest rate of 2.6% and a dividend yield of 0%.
Stock Option Exercises and Fiscal Year-End Stock Option Values
The following table shows information with respect to each
named executive officer concerning unexercised options held as of
September 30, 2002, none of which were in-the-money. No options
were exercised by any named executive officer during fiscal 2002.
Aggregated Fiscal Year-End Option Values
Number of Securities Underlying
Unexercised Options at F/Y End
Name Exercisable Unexercisable
Herbert F. Imhoff, Jr. 152,193 -
Marilyn L. White - 61,098
Gregory Chrisos - 56,640
Kent M. Yauch 39,444 -
7
Compensation of Directors
For the first ten months of the last fiscal year, directors,
who were not full-time employees of the Company, were compensated
at the rate of $2,000 per month. Effective August 1, 2002, monthly
compensation for directors was reduced to $1,000 per month. Compensation
for non-employee Executive Committee members is $1,000 per meeting;
however, no Executive Committee meetings were held in fiscal
2002. Since Audit Committee and Compensation and Stock Option
Committee meetings are held in conjunction with regular Board
meetings, Committee members receive no additional fee for serving
on these Committees.
Employment Agreements
Herbert F. Imhoff, Jr. has an employment agreement with the
Company, effective August 1, 2001, to serve as Chairman of the
Board and Chief Executive Officer, and President and Chief
Operating Officer. Mr. Imhoff, Jr.'s agreement provides for a
three-year term of employment, at a minimum annual base salary of
$450,000. Under the terms of the agreement, Mr. Imhoff, Jr. is
also eligible to earn an annual performance bonus and is entitled
to receive certain perquisites and benefits. In the event the
Company would terminate his employment for any reason other than
for cause, Mr. Imhoff, Jr. would be entitled to continue to
receive compensation and benefits for a period of three years.
Effective August 1, 2002, Mr. Imhoff, Jr.s' agreement was amended
to reflect his offer to waive 20% of his base salary for an
indefinite period of time.
The Company has employment agreements with Marilyn L. White,
Gregory Chrisos and Kent M. Yauch. Under the terms of their
agreements, these employees would be entitled to continuation of
base salary for a one-year period as well as continuation of
certain employee welfare benefits, if their employment were
terminated following a change in control of the Company.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation and Stock Option Committee during
fiscal 2002 was ever an officer or employee of the Company.
During fiscal 2002, no executive officer of the Company served as
a member of the board of directors or compensation committee of
any other entity that had any of its executive officers serving
on the Company's Board of Directors or Compensation and Stock
Option Committee.
Report on Repricing of Stock Options
The following table sets forth the stock options held by the
executive officers which were tendered during the last fiscal
year in accordance with a tender offer exchange program. Stock
options were exchanged on a one-for-one basis except those having
exercise prices above $5.50 per share, which were exchanged on a
two-for-one basis. The exercise price of the new options was
equal to the closing price of the Company's Common Stock on
August 5, 2002, the date of the offer.
8
Ten-Year Option Repricings
Length Of
Original
Number of Market Option
Securities Price of Exercise Term
Under- Stock at Price at Remaining
lying Time of Time of at Date of
Options Repric- Repric- New Repricing
Repriced ing or ing or Exer- or Amend-
or Amend- Amend- cise ment
Name Date Amended* ment ment Price (Years)
Herbert F. 8/5/02 47,437 $0.86 $5.60 $0.86 4.6
Imhoff, Jr. 8/5/02 18,975 0.86 5.14 0.86 6.2
Chairman and Chief 8/5/02 34,500 0.86 4.35 0.86 7.1
Executive Officer, 8/5/02 25,000 0.86 3.38 0.86 8.3
and President and
Chief Operating
Officer
Marilyn L. White 8/5/02 9,913 $0.86 $3.14 $0.86 3.2
Vice President 8/5/02 10,910 0.86 5.90 0.86 4.2
8/5/02 9,487 0.86 5.60 0.86 4.6
8/5/02 9,487 0.86 5.14 0.86 6.2
8/5/02 11,500 0.86 4.35 0.86 7.1
8/5/02 10,000 0.86 3.38 0.86 8.3
Gregory Chrisos 8/5/02 21,821 $0.86 $5.90 $0.86 4.2
Vice President 8/5/02 9,487 0.86 5.60 0.86 4.6
8/5/02 9,487 0.86 5.14 0.86 6.2
8/5/02 11,500 0.86 4.35 0.86 7.1
8/5/02 10,000 0.86 3.38 0.86 8.3
Kent M. Yauch 8/5/02 10,910 $0.86 $5.90 $0.86 4.2
Vice President, 8/5/02 10,095 0.86 5.60 0.86 4.6
Chief Financial 8/5/02 5,692 0.86 5.14 0.86 6.2
Officer and 8/5/02 5,750 0.86 4.35 0.86 7.1
Treasurer 8/5/02 7,500 0.86 3.38 0.86 8.3
Nancy C. 8/5/02 2,289 $0.86 $3.14 $0.86 3.2
Frohnmaier 8/5/02 10,910 0.86 5.90 0.86 4.2
Vice President 8/5/02 10,095 0.86 5.60 0.86 4.6
and Corporate 8/5/02 5,692 0.86 5.14 0.86 6.2
Secretary 8/5/02 5,750 0.86 4.35 0.86 7.1
8/5/02 7,500 0.86 3.38 0.86 8.3
* These previously issued options were surrendered to the
Company for cancellation, and in exchange, options were granted
to Mr. Imhoff, Jr., Ms. White, Mr. Chrisos, Mr. Yauch and Ms.
Frohnmaier for a total of 102,193 shares, 51,098 shares, 46,640
shares, 29,444 shares and 31,733 shares, respectively.
9
Performance Graph
The following graph compares the cumulative total return of the
Company's Common Stock with that of a Peer Group Index and the
Russell 2000 Index. The graph assumes an investment of $100 on
September 30, 1997 and that all dividends were reinvested.
The Peer Group consists of Alternative Resources Corporation,
Comforce Corporation, Headway Corporate Resources, Inc., K-force,
Inc. and SOS Staffing Services, Inc.
Total Return to Shareholders
(Assumes $100 Investment on 9/30/97)
(PERFORMANCE GRAPH APPEARS HERE)
Total Return Analysis
9/30/97 9/30/98 9/30/99 9/30/00 9/30/01 9/30/02
General Employment $100.00 $55.26 $45.92 $ 41.16 $23.46 $11.83
Peer Group $100.00 $86.95 $30.73 $ 13.95 $17.70 $11.22
Russell 2000 $100.00 $82.21 $92.93 $114.86 $89.20 $79.81
10
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation and Stock Option Committee is responsible for
reviewing and recommending to the Board for approval, the
compensation plans for the Company's Chief Executive Officer and
Chief Operating Officer. This compensation review and evaluation
considers the executive's performance and contributions, and in
doing so, compares the overall performance of the Company with
others in its industry, while also taking into account general
economic and competitive conditions. The Committee also
administers the Company's stock option plans and reviews and
approves stock option grants to executive officers and other
employees of the Company.
The Chief Executive Officer establishes compensation programs
covering the other executive officers of the Company, and the
Committee reviews these programs on an annual basis.
It is the goal of the Company's compensation programs to
establish compensation levels that will enable the Company to
retain talented individuals and motivate them to achieve stated
objectives while providing them with competitive compensation
opportunities based on their personal performance and
contributions to the Company's success. To achieve this, the
Company has compensation programs for its executive officers that
consist of three primary components: base salary, annual
performance bonus and long-term incentives.
Base Salary
Salaries for executive officers are reviewed on an annual
basis, and discretionary adjustments to each executive officer's
base salary are based upon the individual's performance and overall
performance of the Company as a whole. No quantifying surveys or
measurable statistics were utilized in determining executive
compensation for fiscal 2002. While it is believed that in fiscal
2002 the executive officers of the Company were compensated at levels
comparable to their peers in other service and staffing businesses
of similar size, in order to assist with cost containment efforts,
as of August 1, 2002 the executive officers of the Company voluntarily
reduced their salaries.
Annual Performance Bonus
An executive bonus plan which was established for the Chief
Executive Officer in October 2001 provided a bonus formula based
upon: 1) the achievement of certain profit goals for the Company
and, 2) the level of performance improvement. In addition, the
Company had similar bonus plans in effect during fiscal 2002
covering Ms. White and Mr. Chrisos, under which these executives
were eligible to receive a bonus based upon their respective
region's profits that exceeded specified levels. Under the
established bonus formulas, no bonuses were earned by any named
executive officer for 2002.
Long-Term Incentives
As of January 1, 2002, the Company adopted a deferred
compensation plan covering the executive officers. The Committee
determined that such a plan would be an important benefit to the
executive officers to supplement retirement income, inasmuch as
federal regulations impose limits on the amount that such
individuals may contribute to the Company's 401(k) plan that are
lower than for employees generally, and the Company does not
provide any other retirement benefits. Under the plan, the
Company contributes either 5% or 10% of the participant's base
salary to a trust under a defined contribution arrangement. The
participants direct the investments of the trust, and the Company
does not guarantee investment performance. Participant account
balances are payable upon retirement or termination from the
Company, subject to certain vesting requirements.
As an additional incentive to improve performance, executive
officers of the Company, including the Chief Executive Officer,
may be granted stock options from time to time. Stock options
are granted by the Committee and have an exercise price equal to
the fair market value of the Company's common stock on the date
of grant, and thus reward the recipient only if the Company's
stock price appreciates above the price on the date of grant.
11
Repricing of Stock Options
In September 2002, the Company completed a tender offer, in
which the executive officers participated, to exchange
outstanding stock options having an exercise price of $3.00 per
share or more for new options having an exercise price of $0.86
per share, which was equal to the fair market value of the
Company's Common Stock on the date of grant. This action was
taken because the Committee recognized that many of the Company's
employees held stock options that were significantly higher than
the trading price of the Company's stock, which was depressed due
to national business and economic conditions substantially beyond
the control of the Company and its management. The intent of the
exchange offer was to provide the employees, including the executive
officers, with an enhanced, long-term incentive.
Compensation of the Chairman of the Board and Chief Executive Officer
In determining the base salary for Herbert F. Imhoff, Jr., the
Company's Chairman of the Board and Chief Executive Officer, the
Committee considered the compensation levels for comparable
positions with other publicly-traded staffing companies.
Mr. Imhoff, Jr.'s base salary for fiscal 2002 was $450,000.
Effective August 1, 2002, he voluntarily reduced his base salary
by 20%. Mr. Imhoff, Jr. had a bonus plan for fiscal 2002 which
was based upon the Company achieving certain performance levels
for the year. Since the specific goals were not achieved, Mr.
Imhoff, Jr. received no bonus award during fiscal 2002. No new
stock options were awarded to Mr. Imhoff, Jr. during fiscal 2002
other than those granted under the terms of the stock option
exchange program.
Compensation and Stock Option Committee of the Board of Directors
Sheldon Brottman, Committee Chair
Dennis W. Baker
Delain G. Danehey
Joseph F. Lizzadro
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, have been auditors of
the Company since 1985 and have been selected by the Board of
Directors of the Company to serve as independent auditors for the
Company for the year ending September 30, 2003.
Representatives of Ernst & Young LLP are expected to be present
at the Annual Meeting of Shareholders to respond to appropriate
questions and to make a statement if they desire to do so.
The following table shows the fees billed for the 2002 fiscal year:
Audit fees $58,100
Financial information systems
design and implementation fees $ -
All other fees (Consists of retirement
plan audit and consultations on accounting
and tax matters.) $17,970
In making its recommendation to appoint Ernst & Young LLP as
the Company's independent auditors for the fiscal year ending
September 30, 2003, the Audit Committee considered whether the
provision of nonaudit services described above is compatible with
maintaining their independence.
12
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee has reviewed and discussed with the
Company's management the audited financial statements of General
Employment Enterprises, Inc. for the year ended September 30,
2002. In addition, the Audit Committee has discussed with Ernst
& Young LLP, the independent auditors of the Company, with and
without management present, the results of their examination of
the financial statements. These discussions included the
independent auditors' evaluations of the Company's internal
controls, accounting policies, accounting estimates and any
proposed adjustments arising from their audit of the financial
statements.
The Audit Committee has received and discussed a written
communication required by Independence Standards Board Standard
No. 1 from Ernst & Young LLP regarding their independence from
the Company.
Based upon the review and discussions referred to above, the
Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 2002,
for filing with the Securities and Exchange Commission.
The Audit Committee has also discussed with representatives of
Ernst & Young LLP their proposal to serve as independent auditors
of the Company for the year ending September 30, 2003, and based
on these discussions, the Committee recommended that the Board of
Directors approve the selection of Ernst & Young LLP.
Audit Committee of the Board of Directors
Delain G. Danehey, Committee Chair
Dennis W. Baker
Sheldon Brottman
Joseph F. Lizzadro
OTHER MATTERS
Proposals of Shareholders
In order to be considered for inclusion in the Proxy Statement
for the 2004 Annual Meeting of Shareholders, any shareholder
proposal to take action at that meeting must be received by the
Company at its address hereinabove, on or before September 19,
2003. Any such proposal will be subject to the requirements of
the proxy rules adopted under the Securities Exchange Act of
1934.
In addition, any shareholder wishing to bring business before
an annual meeting must comply with certain provisions in the
Company's By-Laws. The Company's By-Laws establish an advance
notice procedure with regard to certain matters to be brought
before an annual meeting of shareholders of the Company other
than by or at the direction of the Board of Directors of the
Company. Such notice generally must be delivered to or mailed to
and received by the Secretary of the principal executive offices
of the Company not less than 30 days nor more than 60 days before
the meeting. The shareholder must also comply with certain other
provisions set forth in the Company's By-Laws relating to the bringing
of business before an annual meeting. For a copy of the Company's
By-Laws, which includes the provisions relating to the bringing
of business before an annual meeting, an interested shareholder
should contact the Secretary of the Company, in writing, at
Oakbrook Terrace Tower, One Tower Lane, Suite 2100, Oakbrook
Terrace, Illinois 60181.
13
Manner and Costs of Solicitation
The cost of preparing, assembling and mailing the proxy
materials and of reimbursing brokers, nominees and fiduciaries
for the out-of-pocket expenses of transmitting copies of the
proxy materials to the beneficial owners of shares held of record
by such persons will be borne by the Company. The Company does
not intend to solicit proxies otherwise than by the use of mail,
but certain officers and regular employees of the Company or its
subsidiary, without additional compensation, may use their
personal efforts by telephone or otherwise, to obtain proxies.
Availability of Form 10-K
The Company will furnish, upon request and without charge to
each record or beneficial owner of its securities from whom it
solicits proxies, a copy of its current annual report on Form 10-
K including the financial statements and financial schedules
thereto, filed with the Securities and Exchange Commission.
Requests should be in writing and addressed to:
Investor Relations Department
General Employment Enterprises, Inc.
Oakbrook Terrace Tower
One Tower Lane, Suite 2100
Oakbrook Terrace, Illinois 60181
or E-mail to invest@genp.com
Other Business
At the date of this Proxy Statement, the Board of Directors is
not aware of any matters, other than those stated above, that may
be brought before the meeting. However, if any other matters
shall properly come before the meeting, it is the intention of
the persons named in the enclosed form of proxy to vote such
proxy in accordance with their best judgment on such matters.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS
WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING AND WISH THEIR
SHARES TO BE VOTED ARE URGED TO DATE, SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
Directions to the location of this year's Annual Meeting can be
obtained by contacting the Company's Investor Relations
Department at the above address or by calling (630) 954-0495.
By Order of the Board of Directors
Nancy C. Frohnmaier
Secretary
Oakbrook Terrace, Illinois
14
APPENDIX A
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
OF GENERAL EMPLOYMENT ENTERPRISES, INC.
One Tower Lane, Suite 2100, Oakbrook Terrace, IL 60181
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned shareholder of GENERAL EMPLOYMENT ENTERPRISES,
INC. hereby appoints HERBERT F. IMHOFF, JR. and SHELDON BROTTMAN,
and each of them, as the proxies (with full power of
substitution) to vote all shares which the undersigned would be
entitled to vote at the Annual Meeting of Shareholders to be held
on February 24, 2003 and any adjournment thereof. If a vote is
not specified, said proxies will vote FOR election of directors.
1. Election of Directors, Nominees:
D. W. Baker, S. Brottman, D. G. Danehey, H. F. Imhoff, Jr.,
J. F. Lizzadro, K. M. Yauch
For, except vote withheld
FOR ___ WITHHOLD ___ from the following nominee(s): ____________
2. In their discretion, in the transaction of such other
business as may properly come before the meeting.
You are encouraged to specify your choices by marking the
appropriate boxes with an "X" but you need not mark any boxes if
you wish to vote in accordance with the Board of Directors' recommendation.
Please sign and date on the reverse side, and mail this proxy in
the enclosed envelope as promptly as possible.
This proxy when properly executed will be voted as directed. If
no direction is made, this proxy will be voted FOR the election
of Directors. This proxy confers on the proxy holders the power
of cumulative voting and the power to vote cumulatively for less
than all of the nominees as described in the accompanying proxy statement.
The Board of Directors recommends a vote FOR the election of Directors.
The signer hereby revokes all proxies heretofore given by the
signer to vote at said meeting or any adjournments thereof.
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
__________________________________
__________________________________
SIGNATURE(S)
DATED:_______________________, 2003
(PLEASE INSERT DATE)