9
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 March 31, 1997
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, Suite 2100, Oakbrook Terrace, Illinois 60181
(Address of principal executive offices)
(630) 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 April 30, 1997, there were 2,651,796 shares of common
stock outstanding.
PART I. FINANCIAL INFORMATION
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
March 31 September 30
(In thousands) 1997 1996
ASSETS
Current assets:
Cash and cash equivalents $ 5,559 $ 6,064
Accounts receivable, less allowances
(Mar. 1997--$386; Sept. 1996--$341) 3,345 2,746
Total current assets 8,904 8,810
Property and equipment:
Furniture, fixtures and equipment 2,669 2,588
Accumulated depreciation (2,243) (2,227)
Net property and equipment 426 361
Other assets 488 410
Total assets $ 9,818 $ 9,581
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued compensation and payroll taxes $ 3,102 $ 3,510
Other current liabilities 549 890
Total current liabilities 3,651 4,400
Long-term obligations 421 375
Shareholders' equity:
Common stock, no-par value;
authorized -- 20,000 shares;
issued and outstanding -- 2,652 shares 27 27
Capital in excess of stated value of shares 4,228 4,228
Retained earnings 1,491 551
Total shareholders' equity 5,746 4,806
Total liabilities and shareholders' equity$ 9,818 $ 9,581
See notes to condensed consolidated financial statements.
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited)
Three Months Six Months
Ended March 31 Ended March 31
(In Thousands, Except Per Share) 1997 1996 1997 1996
Net revenues:
Permanent placement services $ 5,134 $ 4,088 $ 9,393 $ 7,566
Contract services 2,192 1,716 3,837 3,235
Net revenues 7,326 5,804 13,230 10,801
Costs and expenses:
Cost of services 5,202 4,116 9,484 7,751
General and administrative 999 1,022 1,917 1,870
Income before income taxes 1,125 666 1,829 1,180
Provision for income taxes 450 265 730 465
Net income $ 675 $ 401 $ 1,099 $ 715
Net income per share $ .25 $ .15 $ .41 $ .27
Average number of shares 2,675 2,623 2,676 2,623
See notes to condensed consolidated financial statements.
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
Six Months
Ended March 31
(In Thousands) 1997 1996
Operating activities:
Net income $ 1,099 $ 715
Noncash costs and expenses 109 55
Changes in current assets and
current liabilities -
Accounts receivable (599) (708)
Accrued compensation and payroll taxes (408) 514
Other current liabilities (341) (9)
Net cash provided (used) by
operating activities (140) 567
Net cash used by investing activities (206) (97)
Net cash used by financing activities (159) (102)
Increase (decrease) in cash and cash equivalents (505) 368
Cash and cash equivalents at beginning of period 6,064 3,225
Cash and cash equivalents at end of period $5,559 $3,593
See notes to condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Interim Financial Statements
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB. Accordingly, they do
not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. 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, 1996. Operating results for
interim periods are not necessarily indicative of the results
that may be expected for the entire year.
Lease Obligations
In February 1996, the Company entered into a new, 10-year lease
agreement covering its corporate headquarters office space. The
previous lease was scheduled to expire in November 1997. As a
result, the Company wrote off a deferred rent liability
associated with the previous lease and recorded a $144,000 credit
to rent expense.
Common Stock
The Company declared a 15% stock dividend in September 1996,
payable on November 1, 1996. All per share amounts have been
adjusted to reflect the dividend.
The Company declared a special cash dividend on its common stock
of $ .06 per share in the December 1996 quarter and $ .04 per
share in the December 1995 quarter.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Corporate Strategies and Economic Factors
The Company provides permanent placement and contract temporary
staffing services for business and industry, specializing in the
placement of information technology, engineering, technical and
accounting personnel. For the fiscal year ended September 30,
1996, the Company derived 70% of its revenues from permanent
placements and 30% of its revenues from contract services. As of
March 31, 1997, the Company operated 33 branch offices located in
major metropolitan and business centers in 13 states.
The demand for the Company's services has been strong in recent
years. For the three fiscal years ended September 30, 1996, the
Company's annual rate of revenue growth was 43% for contract
services and 24% for permanent placement services. Management
believes that this growth is attributable to three factors.
First, the Company specializes in the fast-growing information
technology field. Second, it fills a growing need in the
workplace for contract temporary help. And third, the Company
offers its clients the alternative of either temporary or full-
time staffing assistance.
The Company's business is affected by the U.S. economy and
national hiring levels. The last two years were characterized by
relatively low, but stable, economic growth and historically low
levels of unemployment. These economic conditions have
contributed to the growing demand for the Company's services.
Management expects that the Company's growth trend will continue
in the future. To help generate this growth, the Company opened
six new branch offices during fiscal 1996 and four new branch
offices during the first six months of fiscal 1997. The Company
plans to open a total of eight new offices during fiscal 1997,
another 12 offices during fiscal 1998 and 16 new branches during
fiscal 1999. Generally, the Company enters into short-term leases
for new locations, initially using shared office facilities
whenever possible; this approach minimizes costs during the start-
up period.
Second Quarter Results of Operations
For the three months ended March 31, 1997, consolidated revenues
were $7,326,000, up $1,522,000 (26%) from last year's $5,804,000.
Permanent placement revenues increased $1,046,000 (26%), on a 26%
higher average placement fee. Contract service revenues
increased $476,000 (28%), due to a 7% increase in billable hours
and an 18% higher average hourly billing rate.
The consolidated cost of services for the three months ended
March 31, 1997 was $5,202,000, up $1,086,000 (26%) from 1996.
Branch manager and consultant compensation increased 25%, and the
payroll for contract service workers increased 29%, as a result
of the higher volume of business this year. Occupancy costs
increased 65%, primarily because the 1996 period reflected a
nonrecurring gain of $144,000 resulting from the negotiation of a
new corporate headquarters office lease. Advertising expenses
increased 13%, and all other operating costs increased 7%. The
cost of services as a percent of revenues was 71.0% in fiscal
1997, about the same as last year.
General and administrative expenses for the three months ended
March 31, 1997 were $999,000, which was a $23,000 (2%) decrease
from 1996.
The Company had pretax income of $1,125,000 for the three months
ended March 31, 1997, which was a $459,000 (69%) increase over
pretax income of $666,000 last year. After a provision for
income taxes, net income was $675,000, or $.25 per share, in the
three months ended March 31, 1997, a $274,000 (68%) improvement
compared with net income of $401,000, or $ .15 per share, last
year.
Six Months Results of Operations
For the six months ended March 31, 1997, consolidated revenues
were $13,230,000, up $2,429,000 (22%) from last year's
$10,801,000. Permanent placement revenues increased $1,827,000
(24%), on 4% more placements and a 19% higher average placement
fee. Contract service revenues increased $602,000 (19%), due to
an 18% higher average hourly billing rate.
The consolidated cost of services for the six months ended March
31, 1997 was $9,484,000, up $1,733,000 (22%) from 1996. Branch
manager and consultant compensation increased 25%, and the
payroll for contract service workers increased 20%, as a result
of the higher volume of business this year. Occupancy costs
increased 31%, primarily because the 1996 period reflected a
nonrecurring gain of $144,000 resulting from the negotiation of a
new corporate headquarters office lease. Advertising expenses
increased 22%, and all other operating costs increased 10%. The
cost of services as a percent of revenues was 71.7% in fiscal
1997, about the same as last year.
General and administrative expenses for the six months ended
March 31, 1997 were $1,917,000, which was a $47,000 (3%) increase
from 1996.
The Company had pretax income of $1,829,000 for the six months
ended March 31, 1997, which was a $649,000 (55%) increase over
pretax income of $1,180,000 last year. After a provision for
income taxes, net income was $1,099,000, or $ .41 per share, in
the six months ended March 31, 1997, a $384,000 (52%) improvement
compared with net income of $715,000, or $ .27 per share, last
year.
Financial Condition
During the six months ended March 31, 1997, the Company's cash
and cash equivalents decreased by $505,000 to a balance of
$5,559,000. Net income provided $1,099,000 during the period.
However, $599,000 was used for an increase in accounts
receivable, $408,000 was used to reduce accrued compensation and
payroll tax liabilities, and $237,000 was used for other
operating activities. In addition, the Company used $201,000 for
the acquisition of property and equipment and $159,000 for the
payment of a cash dividend.
The Company's net working capital was $5,254,000 as of March 31,
1997, compared with $4,410,000 at September 30, 1996, and
shareholders' equity was $5,746,000 at March 31, 1997, compared
with $4,806,000 last September.
As of March 31, 1997, 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 March 31, 1997, 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, 1996. The cost of opening new offices
during fiscal 1997 is expected to be minor because the facilities
will be leased.
PART II - OTHER INFORMATION
Item 4 Submission of Matters to a Vote of Security Holders
At the annual meeting of shareholders on February 24, 1997, the
shareholders approved the Company's 1997 Stock Option Plan.
There were 1,493,144 shares voted for the adoption, and there
were 1,158,652 shares withheld. In addition, the shareholders
elected all of the nominees for election as directors. The name
of each director elected, together with the number of votes cast
for election and the number of votes withheld, are presented
below:
Nominee Votes For Votes Withheld
Sheldon Brottman 2,447,425 30,126
Leonard Chavin 2,440,483 37,068
Delain G. Danehey 2,451,161 26,390
Herbert F. Imhoff 2,451,717 25,834
Herbert F. Imhoff, Jr. 2,453,083 24,468
Walter T. Kerwin, Jr. 2,447,860 29,691
Howard S. Wilcox 2,448,461 29,090
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 February 24, 1997.
27 Financial Data Schedule for the six months ended March 31, 1997.
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: May 2, 1997 By: /s/ Herbert F. Imhoff
Herbert F. Imhoff
Chairman of the Board
and Chief Executive Officer
Date: May 2, 1997 By: /s/ Kent M. Yauch
Kent M. Yauch
Chief Financial Officer
and Treasurer
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<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,559
<SECURITIES> 0
<RECEIVABLES> 3,731
<ALLOWANCES> 386
<INVENTORY> 0
<CURRENT-ASSETS> 8,904
<PP&E> 2,669
<DEPRECIATION> 2,243
<TOTAL-ASSETS> 9,818
<CURRENT-LIABILITIES> 3,651
<BONDS> 0
0
0
<COMMON> 27
<OTHER-SE> 5,719
<TOTAL-LIABILITY-AND-EQUITY> 9,818
<SALES> 0
<TOTAL-REVENUES> 13,230
<CGS> 0
<TOTAL-COSTS> 9,484
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,829
<INCOME-TAX> 730
<INCOME-CONTINUING> 1,099
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,099
<EPS-PRIMARY> 0.41
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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 chairman of the board, 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 chairman of the board, 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.
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
chairman of the board, 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, for attendance at
each meeting of the board. Regular, full-time employees who also
serve on the board of directors are not to receive additional
compensation for serving as members of the board of directors.
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
shall consist of the board of directors, as a whole, and meetings
of the committee may be called or requested by the chairman of
the board, the president, or a majority of the directors. The
executive committee shall be authorized to act upon all matters
requiring board approval except the declaration of dividends,
corporate reorganization, and merger and acquisition decisions.
A majority of the number of directors fixed by these By-Laws
shall constitute a quorum for transaction of committee business.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER. The officers of the corporation shall
be a chairman of the board, the chief executive officer; a
president, the chief operating officer; a treasurer, the chief
financial officer; a vice president and corporate secretary; one
or more vice presidents (the number to be determined by the board
of directors), and such assistant treasurers, assistant
secretaries as may be elected 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 be the chief executive officer of
General Employment Enterprises, Inc. and shall have general and
active executive powers as well as specific powers conferred by
these By-Laws. The chairman of the board shall preside at all
meetings of the shareholders, board of directors and executive
committee, and shall be an ex-officio member of all committees of
the board of directors. Additionally, the chairman of the board
shall specifically possess the power to execute all bonds,
mortgages, certificates, contracts and other corporate
instruments and to perform all other duties properly assigned by
the board of directors.
SECTION 6. PRESIDENT. The board of directors shall elect
the president of the corporation who may or may not be one of its
own members. The president shall be the chief operating officer
of General Employment Enterprises, Inc. and shall have general
and active executive powers as well as specific powers conferred
by these By-Laws. The president shall have general authority in
the affairs of the corporation, accountable only to the chairman
of the board and the board of directors. He shall make such
reports to the chairman of the board, the board of directors and
the shareholders as may be required. In the absence of the
chairman of the board, the president shall preside at all
meetings of the board of directors, the executive committee and
shareholders and shall also be responsible for performing such
other duties as the chairman of the board or the board of
directors may assign and if required, may sign with the secretary
or assistant secretary, certificates for shares of the
corporation.
SECTION 7. THE VICE-PRESIDENTS. In the absence of the
president and the chairman of the board, 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, the chairman of the board or by the board of
directors.
SECTION 8. THE TREASURER. The treasurer shall be the
chief financial officer of General Employment Enterprises, Inc.
It will be the specific duty and responsibility for the treasurer
to maintain, control, and secure custody of all of the funds and
securities of General Employment Enterprises, Inc. and to invest
excess corporate funds in minimal risk financial instruments as
prescribed by the investment policy approved by the board of
directors, maintaining necessary liquidity of working capital
necessary for general operating needs. Additionally, the
treasurer shall be responsible for maintaining strong internal
accounting controls, policies, procedures and timely financial
reporting required by federal, state and local governmental
statutes and regulations governing a public company whose shares
are publicly traded. Additionally, the treasurer shall be
responsible for filing all federal, state and local taxes and
notwithstanding all specific duties and responsibilities detailed
in the By-Laws, the treasurer will also be required to perform
such additional duties and functions which may be properly
assigned by the chairman of the board, the president and the
board of directors.
SECTION 9 THE VICE PRESIDENT AND CORPORATE SECRETARY. The
vice president and corporate 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 chairman of the board, 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 by the chairman of the board, president or
by the board of directors.
SECTION 10. 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 11. OFFICER COMPENSATION. Salaries and bonus
plans for the chairman of the board and president will be
reviewed and approved annually by the board of directors. All
other officer compensation will be reviewed by the chairman of
the board and the president on an annual basis.
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 chairman of the board and chief executive
officer or the president and chief operating officer 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 canceled and no new certificate shall be issued until
the former certificate for a like number of shares shall have
been surrendered and canceled, 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.
