8
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended December 31, 1995
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from __________ to __________
Commission File Number: 1-5707
GENERAL EMPLOYMENT ENTERPRISES, INC.
(Exact name of small business issuer as specified in its charter)
Illinois 36-6097429
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification
Number)
One Tower Lane, Oakbrook Terrace, Illinois 60181
(Address of principal executive offices)
(708) 954-0400
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No __
As of January 31, 1996, there were 2,195,985 shares of
common stock outstanding.
PART I. FINANCIAL INFORMATION
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
December 31 September 30
1995 1995
(Dollars in Thousands) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,582 $ 3,225
Accounts receivable, less allowances
(Dec. 1995--$312; Sept. 1995--$290) 2,261 1,803
Other current assets 51 57
Total current assets 4,894 5,085
Property and equipment:
Property and equipment, at cost 2,505 2,473
Accumulated depreciation and amortization (2,167) (2,141)
Net property and equipment 338 332
Other assets 385 408
Total assets $ 5,617 $ 5,825
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued compensation and payroll taxes $ 1,765 $ 2,169
Other current liabilities 683 670
Total current liabilities 2,448 2,839
Long-term obligations 422 443
Shareholders' equity:
Common stock, no-par value; authorized --
5,000,000 shares; issued and outstanding --
2,195,985 shares 22 22
Capital in excess of stated value of shares 3,494 3,494
Accumulated deficit (769) (973)
Total shareholders' equity 2,747 2,543
Total liabilities and shareholders' equity$ 5,617 $ 5,825
See notes to consolidated financial statements.
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Three Months
Ended December 31
(In Thousands, Except Per Share) 1995 1994
Net revenues:
Permanent placement services $ 3,478 $ 2,735
Contract services 1,519 1,043
Net revenues 4,997 3,778
Costs and expenses:
Cost of services 3,635 2,896
General and administrative 848 656
Income before income taxes 514 226
Provision for income taxes 200 10
Net income $ 314 $ 216
Net income per share $ .14 $ .10
See notes to consolidated financial statements.
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
Three Months
Ended December 31
(In Thousands) 1995 1994
Operating activities:
Net income $ 314 $ 216
Noncash costs and expenses 33 (60)
Changes in current assets and current liabilities -
Accounts receivable (458) (1)
Accrued compensation and payroll taxes (404) (542)
Other, net 19 33
Net cash used by operating activities (496) (354)
Investing activities (37) (27)
Financing activities:
Cash dividends declared (110) --
Exercises of stock options -- 126
Net cash provided (used) by financing activities(110) 126
Decrease in cash and cash equivalents (643) (255)
Cash and cash equivalents at beginning of period 3,225 1,843
Cash and cash equivalents at end of period $2,582 $1,588
Supplementary information:
Income tax payments $ 218 $ 14
See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Interim Financial Statements
The accompanying financial information for interim periods is
unaudited but includes all adjustments (consisting only of normal
recurring adjustments) which the Company considers necessary for
a fair presentation of the results for the periods. This
financial information should be read in conjunction with the
financial statements included in the Company's annual report on
Form 10-KSB for the year ended September 30, 1995. Operating
results for interim periods are not necessarily indicative of the
results that may be expected for the entire year.
Income Taxes
The effective income tax rate for the 1994 quarter differs from
the "expected" rate because of the reversal of a previously-
recorded deferred income tax valuation allowance.
Net Income Per Share
Net income per share is based on the average number of common
shares outstanding and dilutive stock option shares -- 2,261,865
shares in the December 1995 quarter and 2,234,847 shares in the
December 1994 quarter. The number of shares and per-share
amounts for the 1994 quarter have been adjusted to reflect a 15%
stock dividend paid on November 3, 1995.
Dividends Declared
In November 1995, the Company's board of directors declared a
cash dividend of $.05 per common share, payable on January 17,
1996.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Economic Factors and Corporate Strategies
The Company is engaged in providing employment services in major
metropolitan business centers throughout the United States.
During the 1995 quarter the Company opened one new office,
bringing the total number of offices to 25 as of December 31,
1995. The Company has announced its intention to open six
additional offices during the remainder of the fiscal year, and
this is expected to have a positive effect on net revenues for
the future.
One of the Company's corporate strategies since October 1992 has
been to market both permanent placement and contract services
through all of its offices, thereby providing the Company's
customers with a choice of staffing alternatives. This strategy
has been a major factor in the Company's revenue growth over the
last two years.
The Company's business is strongly affected by the U.S. economy
and national hiring levels. During the last two years, the
national economy has experienced a period of relatively stable
growth and historically low levels of unemployment. The Gross
Domestic Product increased at an estimated rate of 3.3% in 1995
and at an average rate of 4.1% in 1994, and the national
unemployment rate was 5.6% in December 1995. These economic
conditions have been favorable for the Company's business.
Results of Operations
For the three months ended December 31, 1995, consolidated
revenues were $4,997,000, up $1,219,000 (32%) from last year's
$3,778,000. Permanent placement revenues increased $743,000
(27%), on 8% more placements and an 18% higher average placement
fee. Contract service revenues increased $476,000 (46%), due to
a 26% increase in billable hours and a 9% higher average hourly
billing rate.
The consolidated cost of services for the three months ended
December 31, 1995 was $3,635,000, up $739,000 (26%) from 1994.
Agency manager and consultant compensation increased 24%, and
salaries of contract service workers increased 35%, as a result
of the higher volume of business this year. Payroll taxes and
benefits increased 31%; advertising expenses increased 36%; and
all other operating costs increased by 7%. As a result, the cost
of services as a percent of service revenues decreased 4.0
points, from 76.7% last year to 72.7% this year.
General and administrative expenses for the three months ended
December 31, 1995 were $848,000, a $192,000 (29%) increase from
1994. Administrative salaries and benefits increased 35%, while
all other general and administrative expenses were up 18% for the
period.
There was a $200,000 provision for income taxes in the 1995
period, compared with a $10,000 provision last year. The
effective income tax rate for the 1994 quarter differs from the
statutory rate because of the reversal of a previously-recorded
deferred income tax valuation allowance.
Net income was $314,000, or $.14 per share, in the three months
ended December 31, 1995, a $98,000 improvement compared with net
income of $216,000, or $ .10 per share, last year.
Financial Condition
During the three months ended December 31, 1995, the Company's
cash and cash equivalents decreased by $643,000 to a balance of
$2,582,000. Net income provided $314,000 during the period.
However, an increase in accounts receivable required $458,000,
and a seasonal reduction of accrued payroll liabilities required
$404,000. The Company's net working capital was $2,446,000 as of
December 31, 1995, compared with $2,246,000 at September 30,
1995, and shareholders' equity was $2,747,000 at December 31,
1995, compared with $2,543,000 last September.
As of December 31, 1995, the Company had no debt outstanding, and
it had a $1,000,000 line of credit available for working capital
purposes. Management believes that existing resources are
adequate to meet the Company's current operating needs.
As of December 31, 1995, the Company had no commitments for the
acquisition of property and equipment. All of its facilities are
leased, and information about future minimum lease payments is
presented in the notes to consolidated financial statements
contained in the Company's annual report on Form 10-KSB for the
year ended September 30, 1995. The cost of opening new offices
during fiscal 1996 is expected to be minor because the facilities
will be leased.
PART II - OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
The following exhibits are filed as part of this report:
No. Description of Exhibit
3 By-Laws, as amended November 21, 1995.
10 Resolution of the Board of Directors, adopted November 21, 1995,
establishing a Senior Executive Bonus Pool for fiscal 1996.
27 Financial Data Schedule for the three months ended December 31, 1995.
There were no reports on Form 8-K filed during the quarter.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
GENERAL EMPLOYMENT ENTERPRISES, INC.
(Registrant)
Date: February 13, 1996 By: /s/ Herbert F. Imhoff
Herbert F. Imhoff
Chairman of the Board
and President
Date: February 13, 1996 By: /s/ Kent M. Yauch
Kent M. Yauch
Treasurer and Controller
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<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 2,582
<SECURITIES> 0
<RECEIVABLES> 2,573
<ALLOWANCES> 312
<INVENTORY> 0
<CURRENT-ASSETS> 4,894
<PP&E> 2,505
<DEPRECIATION> 2,167
<TOTAL-ASSETS> 5,617
<CURRENT-LIABILITIES> 2,448
<BONDS> 0
<COMMON> 22
0
0
<OTHER-SE> 2,725
<TOTAL-LIABILITY-AND-EQUITY> 5,617
<SALES> 0
<TOTAL-REVENUES> 4,997
<CGS> 0
<TOTAL-COSTS> 3,635
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 514
<INCOME-TAX> 200
<INCOME-CONTINUING> 314
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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</TABLE>
Exhibit 3
BY LAWS
OF
GENERAL EMPLOYMENT ENTERPRISES, INC.
ARTICLE I
OFFICES
The principal office of the corporation in the State of
Illinois shall be located in Oakbrook Terrace and County of
DuPage. The corporation may have such other offices, either
within or without the State of Illinois, as the business of the
corporation may require from time to time.
The registered office of the corporation required by The
Business Corporation Act to be maintained in the State of
Illinois may be, but need not be, identical with the principal
office in the State of Illinois, and the address of the
registered office may be changed from time to time by the board
of directors.
ARTICLE II
SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the
shareholders shall be held each year at such time and date as the
Board of Directors may prescribe, for the purpose of electing
directors and for the transaction of such other business as may
come before the meeting. If the day fixed for the annual meeting
shall be a legal holiday, such meeting shall be held on the next
succeeding business day.
SECTION 2. SPECIAL MEETINGS. Special meetings of the
shareholders may be called by the president, by the board of
directors or by the holders of not less than one-fifth of all the
outstanding shares of the corporation.
SECTION 3. PLACE OF MEETING. The board of directors may
designate any place, either within or without the State of
Illinois, as the place of meeting for any annual meeting or for
any special meeting called by the board of directors. A waiver
of notice signed by all shareholders may designate any place,
either within or without the State of Illinois, as the place for
the holding of such meeting. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall
be the registered office of the corporation in the State of
Illinois, except as otherwise provided in Section 5 of this
article.
SECTION 4. NOTICE OF MEETINGS. Written or printed notice
stating the place, day and hour of the meeting, and in the case
of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten nor more
than sixty days before the date of the meeting, or in the case of
a merger or consolidation, not less than twenty nor more than
sixty days before the meeting, either personally or by mail, by
or at the direction of the president, or the secretary, or the
officer or persons calling the meeting, to each shareholder of
record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United
States mail, addressed to the shareholder at his address as it
appears on the records of the corporation, with postage thereon
prepaid.
SECTION 5. MEETING OF ALL SHAREHOLDERS. If all of the
shareholders shall meet at any time and place, either within or
without the State of Illinois, and consent to the holding of a
meeting at such time and place, such meeting shall be valid
without call or notice, and at such meeting any corporate action
may be taken.
SECTION 6. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD
DATE. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders, or
shareholders entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other
proper purpose, the board of directors of the corporation shall
fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not
more than sixty days and, for a meeting of shareholders, not less
than ten days, or in the case of a merger or consolidation, not
less than twenty days, immediately preceding such meeting. If no
record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the date
on which notice of the meeting is mailed or the date on which
the resolution of the board of directors declaring such dividend
is adopted, as the case may be, shall be the record date for such
determination of shareholders.
SECTION 7. VOTING LISTS. The officer or agent having
charge of the transfer books for shares of the corporation shall
make, at least ten days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at such
meeting, arranged in alphabetical order, with the address of and
the number of shares held by each, which list, for a period of
ten days prior to such meeting, shall be kept on file at the
registered office of the corporation and shall be subject to
inspection by any shareholder at any time during usual business
hours. Such list shall also be produced and kept open at the
time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the
meeting. The original share ledger or transfer book, or a
duplicate thereof kept in this State, shall be prima facie
evidence as to who are the shareholders entitled to examine such
list or share ledger or transfer book or to vote at any meeting
of shareholders.
SECTION 8. QUORUM. A majority of the outstanding shares
of the corporation, represented in person or by proxy, shall
constitute a quorum at any meeting of shareholders; provided,
that if less than a majority of the outstanding shares are
represented at said meeting, a majority of the shares so
represented may adjourn the meeting from time to time without
further notice. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting shall be
the act of the shareholders, unless the vote of a greater number
or voting by classes is required by The Business Corporation Act,
the articles of incorporation or these by-laws.
SECTION 9. PROXIES. At all meetings of shareholders, a
shareholder may vote by proxy executed in writing by the
shareholder or by his duly authorized attorney-in-fact. Such
proxy shall be filed with the secretary of the corporation before
or at the time of the meeting. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise
provided in the proxy.
SECTION 10. VOTING OF SHARES. Subject to the provisions
of Section 12 of this article, each outstanding share, regardless
of class, shall be entitled to one vote upon each matter
submitted to vote at a meeting of shareholders.
SECTION 11. VOTING OF SHARES BY CERTAIN HOLDERS. Shares
standing in the name of another corporation, domestic or foreign,
may be voted by such officer, agency, or proxy as the by-laws of
such corporation may prescribe, or, in the absence of such
provision, as the board of directors of such corporation may
determine.
Shares standing in the name of a deceased person may be
voted by his administrator or executor, either in person or by
proxy. Shares standing in the name of a guardian, conservator,
or trustee may be voted by such fiduciary, either in person or by
proxy, but no guardian, conservator, or trustee shall be
entitled, as such fiduciary, to vote shares held by him without a
transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name if authority so to do be contained in an
appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee shall be entitled
to vote the shares so transferred.
Shares of its own stock belonging to this corporation shall
not be voted, directly or indirectly, at any meeting and shall
not be counted in determining the total number of outstanding
shares at any given time, but shares of its own stock held by it
in a fiduciary capacity may be voted and shall be counted in
determining the total number of outstanding shares at any given
time.
SECTION 12. CUMULATIVE VOTING. In all elections for
directors, every shareholder shall have the right to vote, in
person or by proxy, the number of shares owned by him, for as
many persons as there are directors to be elected, or to cumulate
said shares, and give one candidate as many votes as the number
of directors multiplied by the number of his shares shall equal,
or to distribute them on the same principle among as many
candidates as he shall see fit.
SECTION 13. INSPECTORS. At any meeting of shareholders,
the chairman of the meeting may, or upon the request of any
shareholder shall, appoint one or more persons as inspectors for
such meeting.
Such inspectors shall ascertain and report the number of
shares represented at the meeting, based upon their determination
of the validity and effect of proxies; count all votes and report
the results; and to do such other acts as are proper to conduct
the election and voting with impartiality and fairness to all the
shareholders.
Each report of an inspector shall be in writing and signed
by him or by a majority of them if there be more than one
inspector acting at such meeting. If there is more than one
inspector, the report of a majority shall be the report of the
inspectors. The report of the inspector or inspectors on the
number of shares represented at the meeting and the results of
the voting shall be prima facie evidence thereof.
SECTION 14. INFORMAL ACTION BY SHAREHOLDERS. Any action
required to be taken at a meeting of the shareholders, or any
other action which may be taken at a meeting of the shareholders,
may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter
thereof.
In order that the corporation may determine the
shareholders entitled to consent to corporate action in writing
without a meeting, the board of directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of
directors, and which date shall not be more than twenty (20) days
after the date upon which the resolution fixing the record date
is adopted by the board of directors. Any shareholder of record
seeking to have the shareholders authorize or take corporate
action by written consent shall, by written notice to the
Secretary, request the board of directors to fix a record date.
The board of directors shall promptly, but in all events within
twenty (20) days after the date on which such request is
received, adopt a resolution fixing the record date. If no
record date has been fixed by the board of directors within
twenty (20) days of the date on which such request has been
received, the record date for determining the shareholders
entitled to consent to corporate action in writing without a
meeting, when no prior action by the board of directors is
required by applicable law, shall be the first date on which a
signed written consent setting forth the action taken or proposed
to be taken is delivered to the corporation by delivery to its
registered office in the State of Illinois, its principal place
of business, or any officer or agent of the corporation having
custody of the book in which proceedings of shareholders meetings
are recorded, to the attention of the Secretary of the
corporation. Delivery shall be by hand or by certified or
registered mail, return receipt requested. If no record date has
been fixed by the board of directors and prior action by the
board of directors is required by applicable law, the record date
for determining shareholders entitled to consent to corporate
action in writing without a meeting shall be at the close of
business on the date on which the board of directors adopts the
resolution taking such prior action.
SECTION 15. VOTING BY BALLOT. Voting on any question or
in any election may be viva voce unless the presiding officer
shall order or any shareholder shall demand that voting be by
ballot.
SECTION 16. NOTICE OF NOMINATIONS OF DIRECTORS.
Nominations for the election of directors may be made by the
Board of Directors or by a committee appointed by the Board of
Directors, or by any shareholder entitled to vote in the election
of directors generally provided that such shareholder has given
actual written notice of such shareholder's intent to make such
nomination or nominations to the Secretary of the corporation not
later than (a) with respect to an election to be held at an
annual meeting of shareholders, 60 days prior to the anniversary
date of the immediately preceding annual meeting of shareholders,
and (b) with respect to an election to be held at a special
meeting of shareholders for the election of directors, the close
of business on the seventh day following (i) the date on which
notice of such meeting is first given to shareholders or (ii) the
date on which public disclosure of such meeting is made,
whichever is earlier.
Each such notice shall 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 corporation
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
corporation 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 corporation if so elected. The chairman of the
meeting may refuse to acknowledge the nomination of any person
not made in compliance with the foregoing procedure.
Notwithstanding the foregoing, such written notice of
intent to nominate must be received by the secretary of the
corporation not later than December 20, 1991 with respect to
nominations for the 1992 annual meeting.
SECTION 17. NOTICE OF SHAREHOLDER BUSINESS. At an annual
meeting of the shareholders, only such business shall be
conducted as shall have been brought before the meeting (a) by or
at the direction of the Board of Directors or (b) by any
shareholder of the corporation who complies with the notice
procedures set forth in this Section 17. For business to be
properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to
the Secretary of the corporation. To be timely, a shareholder's
notice must be delivered to or mailed and received at the
principal executive offices of the corporation, not less than 30
days nor more than 60 days prior to the meeting; provided,
however, that in the event that less than 40 days' notice or
prior public disclosure of the date of the meeting is given or
made to shareholders, notice by the shareholder to be timely must
be received not later than the close of business on the 10th day
following the day on which such notice of the date of the annual
meeting was mailed or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to each
matter the shareholder proposes to bring before the annual
meeting (a) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (b) the name and address, as
they appear on the corporation's books, of the shareholder
proposing such business, (c) the class and number of shares of
the corporation which are beneficially owned by the shareholder
and (d) any material interest of the shareholder in such
business. Notwithstanding anything in the By-Laws to the
contrary, no business shall be conducted at an annual meeting
except in accordance with the procedures set forth in this
Section 17. The Chairman of an annual meeting shall, if the
facts warrant, determine and declare to the meeting that business
was not properly brought before the meeting and in accordance
with the provisions of this Section 17, and if he should so
determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be
transacted.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of
the corporation shall be managed by its board of directors.
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number
of directors of the corporation shall be seven. Each director
shall hold office until the next annual meeting of shareholders
or until his successor shall have been elected and qualified.
Directors need not be residents of Illinois or shareholders of
the corporation.
SECTION 3. REGULAR MEETINGS. A regular meeting of the
board of directors shall be held without other notice than this
by-law, immediately after, and at the same place as, the annual
meeting of shareholders. The board of directors may provide, by
resolution, the time and place, either within or without the
State of Illinois, for the holding of additional regular meetings
without other notice than such resolution. The time and place
for a regular meeting set forth in any such resolution may be
changed by written or telephone notice from the chairman of the
board or his designee to the directors at least three days prior
to the date upon which the meeting is to take place.
SECTION 4. SPECIAL MEETINGS. Special meetings of the
board of directors may be called by or at the request of the
president or a majority of the directors. The person or persons
authorized to call special meetings of the board of directors may
fix any place, either within or without the State of Illinois, as
the place for holding any special meeting of the board of
directors called by them.
SECTION 5. NOTICE. Notice of any special meeting shall be
given at least 3 days previous thereto by written notice
delivered personally or mailed to each director at his business
address, or by telegram. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail so
addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any director may
waive notice of any meeting. The attendance of a director at any
meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose
of objection to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any regular or special
meeting of the board of directors need be specified in the notice
or waiver of notice of such meeting.
SECTION 6. QUORUM. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for transaction
of business at any meeting of the board of directors, provided,
that if less than a majority of such number of directors are
present at said meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
SECTION 7. MANNER OF ACTING. The act of the majority of
the directors present at the meeting at which a quorum is present
shall be the act of the board of directors.
SECTION 8. VACANCIES. Any vacancy occurring in the board
of directors and any directorship to be filled by reason of an
increase in the number of directors may be filled by election at
an annual meeting or special meeting of shareholders called for
that purpose or a majority of directors may properly fill one or
more vacancies arising between meetings of shareholders by reason
of an increase in the number of directors or otherwise, but at no
time may the number of directors selected to fill vacancies in
this manner during an interim period between meetings of
shareholders exceed 33 1/3% of the total membership of the Board
of Directors. A director elected to fill a vacancy shall serve
until the next Annual Meeting of Shareholders.
SECTION 9. INFORMAL ACTION BY DIRECTORS. Any action
required to be taken at a meeting of the board of directors, or
any other action which may be taken at a meeting of the board of
directors, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by
all of the directors entitled to vote with respect to the subject
matter thereof.
SECTION 10. COMPENSATION. The board of directors, by the
affirmative vote of a majority of directors then in office, and
irrespective of any personal interest of any of its members,
shall have authority to establish reasonable compensation of all
directors for services to the corporation as directors, officers,
or otherwise. By resolution of the board of directors the
directors may be paid their expenses, if any, of attendance at
each meeting of the board.
SECTION 11. PRESUMPTION OF ASSENT. A director of the
corporation who is present at a meeting of the board of directors
at which action on any corporate matter is taken shall be
conclusively presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered
mail to the secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not
apply to a director who voted in favor of such action.
SECTION 12. EXECUTIVE COMMITTEE. The executive committee
of the board of directors shall consist of three (3) members plus
one alternate member, to serve in the absence of the committee
chairman, to be appointed by the chairman of the board, and said
committee shall be authorized to act upon all matters requiring
board approval except the declaration of dividends, corporate
reorganization, and merger and acquisition decisions.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER. The officers of the corporation shall
be a president, an executive vice president, one or more vice-
presidents (the number thereof to be determined by the board of
directors), a treasurer, and a secretary, and such assistant
treasurers, assistant secretaries or other officers as may be
elected or appointed by the board of directors. Any two or more
offices may be held by the same person, except the offices of
president and secretary.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of
the corporation shall be elected annually by the board of
directors at the first meeting of the board of directors held
after each annual meeting of shareholders. If the election of
officers shall not be held at such meeting, such election shall
be held as soon thereafter as conveniently may be. Vacancies may
be filled or new offices filled at any meeting of the board of
directors. Each officer shall hold office until his successor
shall have been duly elected and shall have qualified or until
his death or until he shall resign or shall have been removed in
the manner hereinafter provided. Election or appointment of an
officer or agent shall not of itself create contract rights.
SECTION 3. REMOVAL. Any officer or agent elected or
appointed by the board of directors may be removed by the board
of directors whenever in its judgment the best interests of the
corporation would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person
so removed.
SECTION 4. VACANCIES. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may
be filled by the board of directors for the unexpired portion of
the term.
SECTION 5. CHAIRMAN OF THE BOARD. The board of directors
shall elect one of its members chairman of the board. The
chairman of the board shall preside at all meetings of the board
of directors and shall perform such other duties as may be
prescribed by the board of directors.
SECTION 6. PRESIDENT. The president shall be the
principal executive officer of the corporation and shall in
general supervise and control all of the business and affairs of
the corporation. He shall preside at all meetings of the
shareholders. He may sign, with the secretary or any other
proper officer of the corporation thereunto authorized by the
board of directors, certificates for shares of the corporation,
any deeds, mortgages, bonds, contracts, or other instruments
which the board of directors has authorized to be executed,
except in cases where the signing and execution thereof shall be
expressly delegated by the board of directors or by these by-laws
to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed; and in
general shall perform all duties incident to the office of
president and such other duties as may be prescribed by the board
of directors from time to time.
SECTION 7. THE EXECUTIVE VICE PRESIDENT. In the absence
of the president or in the event of his inability or refusal to
act, the executive vice president shall perform the duties of the
president, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the president. The
executive vice president may sign, with the secretary or an
assistant secretary, certificates for shares of the corporation;
and shall perform such other duties as from time to time may be
assigned to him by the president or by the board of directors.
SECTION 8. THE VICE-PRESIDENTS. In the absence of the
president or executive vice president or their inability or
refusal to act, the vice-president (in the event there be more
than one vice-president, the vice-presidents in the order
designated, or in the absence of any designation, then in the
order of their election) shall perform the duties of the
president, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the president. Any vice-
president may sign, with the secretary or an assistant secretary,
certificates for shares of the corporation; and shall perform
such other duties as from time to time may be assigned to him by
the president or by the board of directors.
SECTION 9. UNIT VICE PRESIDENTS. From time to time the
president may appoint unit vice-presidents who, as such, shall
not be corporate officers, for such terms of office as the
president may determine. Such unit vice-presidents shall have
such duties and receive such salaries as the president may from
time to time authorize. In addition, the president shall have
the right to set forth areas of responsibility and vary the exact
titles, such as divisional vice-president, regional vice-
president, area vice-president or group vice-president.
SECTION 10. THE TREASURER. If required by the board of
directors, the treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such surety or
sureties as the board of directors shall determine. He shall:
(a) have charge and custody of and be responsible for all funds
and securities of the corporation; receive and give receipts for
moneys in the name of the corporation in such banks, trust
companies or other depositaries as shall be selected in
accordance with the provisions of Article V of these by-laws; (b)
in general, perform all the duties incident to the office of
treasurer and such other duties as from time to time may be
assigned to him by the president, the executive vice president or
by the board of directors.
SECTION 11. THE SECRETARY. The secretary shall: (a) keep
minutes of the shareholders' and of the board of directors'
meetings in one or more books provided for that purpose; (b) see
that all notices are duly given in accordance with the provisions
of these by-laws or as required by law: (c) be custodian of the
corporate records and of the seal of the corporation and see that
the seal of the corporation is affixed to all certificates for
shares prior to the issue thereof and to all documents, the
execution of which on behalf of the corporation under its seal is
duly authorized in accordance with the provision of these by-
laws; (d) keep a register of the post-office address of each
shareholder which shall be furnished to the secretary by such
shareholder; (e) sign with the president, or a vice-president,
certificates for shares of the corporation, the issue of which
shall have been authorized by resolution of the board of
directors;(f) have general charge of the stock transfer books of
the corporation; (g) in general perform all duties incident to
the office of secretary and such other duties as from time to
time may be assigned to him by the president or by the board of
directors.
SECTION 12. ASSISTANT TREASURERS AND ASSISTANT
SECRETARIES. The assistant treasurers shall respectively, if
required by the board of directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as
the board of directors shall determine. The assistant
secretaries as thereunto authorized by the board of directors may
sign with the president or a vice-president certificates for
shares of the corporation, the issue of which shall have been
authorized by a resolution of the board of directors. The
assistant treasurers and assistant secretaries, in general, shall
perform such duties as shall be assigned to them by the treasurer
or the secretary, respectively, or by the president or the board
of directors.
SECTION 13. SALARIES. The salaries of the officers shall
be fixed from time to time by the board of directors and no
officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The board of directors may
authorize any officer or officers, agent or agents, to enter into
any contract or execute and deliver any instrument in the name of
and on behalf of the corporation, and such authority may be
general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf
of the corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the board
of directors. Such authority may be general or confined to
specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the corporation, shall be
signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be
determined by resolution of the board of directors.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. Certificates
representing shares of the corporation shall be in such form as
may be determined by the board of directors. Such certificates
shall be signed by the president or a vice-president and by the
secretary or an assistant secretary and shall be sealed with the
seal of the corporation. In lieu of the actual signature of any
of said officers, a facsimile signature may be used. All
certificates for shares shall be consecutively numbered or
otherwise identified. The name of the person to whom the shares
represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the corporation.
All certificates surrendered to the corporation for transfer
shall be cancelled and no new certificate shall be issued until
the former certificate for a like number of shares shall have
been surrendered and cancelled, except that in case of a lost,
destroyed or mutilated certificate a new one may be issued
therefor upon such terms and indemnity to the corporation as the
board of directors may prescribe.
SECTION 2. TRANSFER OF SHARES. Transfers of shares of the
corporation shall be made only on the books of the corporation by
the holder of record thereof or by his legal representative, who
shall furnish proper evidence of authority to transfer, or by his
attorney thereunto authorized by power of attorney duly executed
and filed with the secretary of the corporation, and on surrender
for cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the corporation shall
be deemed an owner thereof for all purposes as regards the
corporation.
ARTICLE VII
INDEMNIFICATION
SECTION 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
corporation shall, to the fullest extent to which it is empowered
to do so by The Illinois Business Corporation Act of 1983 or any
other applicable laws as may from time to time be in effect,
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a
director or officer of the corporation, or that he or she is or
was serving at the request of the corporation as a director or
officer of another corporation, partnership, joint venture, trust
or other enterprise, against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by such person in connection with such
action, suit or proceeding.
SECTION 2. CONTRACT WITH THE CORPORATION. The provisions
of this Article VII shall be deemed to be a contract between the
corporation and each director or officer who serves in any such
capacity at any time while this Article is in effect, and any
repeal or modification of this Article VII shall not affect any
rights or obligations hereunder with respect to any state of
facts then or theretofore existing or any action, suit or
proceeding theretofore or thereafter brought or threatened based
in whole or in part upon any such state of facts.
SECTION 3. INDEMNIFICATION OF EMPLOYEES AND AGENTS.
Persons who are not covered by the foregoing provisions of this
Article VII and who are or were employees or agents of the
corporation, or who are or were serving at the request of the
corporation as employees or agents of another corporation,
partnership, joint venture, trust or other enterprise, may be
indemnified to the extent authorized at any time or from time to
time by the board of directors; provided, however, that to the
extent that such employee or agent has been successful, on the
merits or otherwise, in the defense of any action, suit or
proceeding to which he or she was made a party by reason of the
fact that he or she is or was an employee or agent acting in the
above-described capacity, or in defense of any claim, issue or
matter therein, the corporation shall indemnify such employee or
agent against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
SECTION 4. OTHER RIGHTS OF INDEMNIFICATION. The
indemnification provided or permitted by this Article VII shall
not be deemed exclusive of any other rights to which those
indemnified may be entitled by law or otherwise, and shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the corporation shall begin on the first
day of October in each year and end on the last day of September
of each year.
ARTICLE IX
DIVIDENDS
The board of directors may from time to time, declare, and
the corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and conditions provided by law and
its articles of incorporation.
ARTICLE X
SEAL
The board of directors shall provide a corporate seal which
shall be in the form of a circle and shall have inscribed thereon
the name of the corporation and the words, "Corporate Seal,
Illinois."
ARTICLE XI
WAIVER OF NOTICE
Whenever any notice whatever is required to be given under
the provisions of these by-laws or under the provisions of the
articles of incorporation or under the provisions of The Business
Corporation Act of the State of Illinois, a waiver thereof in
writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE XII
AMENDMENTS
These By-Laws may be altered, amended or repealed and new By-Laws
may be adopted at any meeting of the board of directors of the
corporation by a vote of 66 2/3% of the directors present at the
meeting or at any meeting of the shareholders of the corporation
by the affirmative vote of the holders of at least 66 2/3% of the
outstanding shares of the corporation.
As amended November 21, 1995
Exhibit 10
RESOLUTION OF THE BOARD OF DIRECTORS
ADOPTED NOVEMBER 21, 1995
RESOLVED, that the Company establish a Senior Executive
Bonus Pool for fiscal 1996 payable to Herbert F. Imhoff, the
Company's Chairman of the Board and CEO, and to Herbert F.
Imhoff, Jr., the Company's Executive Vice President, with the
total sum of the pool to be divided between the two
executives, in proportion to each executive's salary.
The Executive Bonus Pool will be equal to an aggregate amount
based upon the following contingency formula:
No executive bonus will be earned unless the Company's consolidated
pretax earnings exceed $1,000,000.
If consolidated pretax earnings exceed $1,000,000 but are less than
$1,500,000, a bonus equal to 20% of the Company's pretax earnings
which exceed $1,000,000 will be added to the Executive Bonus Pool.
If consolidated pretax earnings exceed $1,500,000, a bonus equal to
25% the Company's pretax earnings which exceed $1,000,000 will be
added to the Executive Bonus Pool.
The contingency terms of this Executive Bonus Pool formula
merely establish the year-end bonus percentage rate and are
not cumulative.
