SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
[X] Filed by the Registrant
[ ] Filed by a party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
GENERAL EMPLOYMENT ENTERPRISES, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:_________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_________________________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
_________________________________________________________________
(4) Proposed maximum aggregate value of transaction:_________________
(5) Total Fee paid:__________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a) (2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ________________________________________
(2) Form, Schedule or Registration Statement: ______________________
(3) Filing Party: __________________________________________________
(4) Date Filed: ____________________________________________________
GENERAL EMPLOYMENT ENTERPRISES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
GENERAL EMPLOYMENT ENTERPRISES, INC.:
You are cordially invited to attend the Annual Meeting of
Shareholders of General Employment Enterprises, Inc. which will
be held at The Lodge at McDonald's Campus, Forestview Room,
Ronald Lane, in Oak Brook, Illinois 60521, on Monday, February
24, 1997, at 10:00 a.m., local time, for the following purposes:
1. To elect seven directors of the Company;
2. To consider and vote upon a proposal to approve the Company's
1997 Stock Option Plan; and
3. To act upon such other matters as may properly be
brought before the meeting.
Shareholders of record at the close of business on December 30,
1996 will be entitled to vote at the meeting.
By Order of the Board of Directors
Nancy C. Frohnmaier
Secretary
Oakbrook Terrace, Illinois
January 24, 1997
YOUR VOTE IS IMPORTANT
Even if you plan to attend the annual meeting, you are urged to
sign, date and promptly return your proxy in the postage paid
envelope that is enclosed, so that your shares may be voted in
accordance with your wishes. If you attend the meeting, you may
vote your shares in person, even though you have previously
signed and returned your proxy.
GENERAL EMPLOYMENT ENTERPRISES, INC.
Oakbrook Terrace Tower
One Tower Lane, Suite 2100
Oakbrook Terrace, Illinois 60181
PROXY STATEMENT
For Annual Meeting of Shareholders
This statement and the accompanying proxy card, which are first
being sent to shareholders on approximately January 24, 1997, are
being furnished in connection with a solicitation of proxies by
the Board of Directors of General Employment Enterprises, Inc.
(the "Company"), an Illinois corporation, to be voted at the
Annual Meeting of Shareholders to be held on Monday, February 24,
1997, at 10:00 a.m., local time, at The Lodge at McDonald's
Campus, Forestview Room, Ronald Lane, in Oak Brook, Illinois
60521.
The only voting securities of the Company entitled to be voted
at the Annual Meeting are the shares of Common Stock, of which
there were 2,651,796 outstanding on December 30, 1996, the record
date for the Annual Meeting. Shareholders are entitled to one
vote for each share held except that, in elections for directors,
each shareholder has cumulative voting rights. When voting
cumulatively, each shareholder has the number of votes equal to
the number of directors to be elected (seven) multiplied by the
number of his or her shares. Such number of votes may be divided
equally among all nominees, may be cumulated for one nominee, or
may be distributed on any basis among as many nominees as is
desired.
Each proxy that is properly signed and received prior to the
annual meeting will, unless such proxy has been revoked, be voted
in accordance with the instructions on such proxy. If no
instruction is indicated, the shares will be voted for election
of the seven nominees for director listed in this proxy statement
and for approval of the Company's 1997 Stock Option Plan.
Proxies given may be revoked at any time prior to the voting
thereof by delivering to the Company a written statement revoking
the proxy or a subsequently dated proxy, or by attending the
meeting and voting in person.
A quorum of shareholders is necessary to take action at the
annual meeting. A majority of the total outstanding shares of
Common Stock of the corporation, represented in person or by
proxy, will constitute a quorum for purposes of the meeting.
Abstentions will be treated as shares of Common Stock that are
present and entitled to vote for purposes of determining the
presence of a quorum. If a proxy submitted by a broker for
shares beneficially owned by other persons indicates that all or
a portion of the shares represented by such proxy are not being
voted (because the broker does not have discretionary authority
to vote shares with respect to a particular matter in the absence
of instructions from the beneficial owner of such shares), those
shares will not be counted in determining whether a quorum is
present and will not be considered present and entitled to vote
with respect to that matter.
The nominees for director who receive a plurality vote shall be
elected directors of the Company. The vote required for the
approval of the Company's 1997 Stock Option Plan is the
affirmative vote of a majority of the outstanding Common Stock of
the corporation, present in person or represented by proxy at the
annual meeting. For purposes of determining the approval of the
matters submitted to the shareholders for a vote, abstentions
will have no effect on the vote for the election of directors and
will be treated as voted against approval of the Company's 1997
Stock Option Plan.
Proposal 1 - ELECTION OF DIRECTORS
Seven directors are to be elected at the annual meeting, to
serve until the 1998 annual meeting of shareholders, or until
their successors are elected and qualified. Proxies will be
voted, unless otherwise indicated, for the election of the
nominees named below. If necessary to elect the nominees named
below, proxies will be voted cumulatively.
Nominees
The following information is furnished with respect to each
nominee for election as a director:
HERBERT F. IMHOFF, age 70, has been Chairman of the Board since
1968 and President of the Company since 1964.
HOWARD S. WILCOX, age 76, is a management consultant. Mr.
Wilcox was formerly owner of Howard S. Wilcox, Inc., a public
relations firm, from 1966 to 1986. Mr. Wilcox was elected to the
Board in 1974.
WALTER T. KERWIN, JR., age 79, is a former Vice Chief of Staff
of the U.S. Army. He has served as a consultant to the Army, the
Department of Defense and private industry since 1978. He joined
the Board in 1984.
HERBERT F. IMHOFF, JR., age 47, has been Executive Vice
President since February 1986 and General Counsel since January
1982. Mr. Imhoff, Jr. has been a member of the Board since 1986.
LEONARD CHAVIN*, age 65, has operated a real estate management
and development business for more than 10 years. He was elected
to the Board in 1991.
SHELDON BROTTMAN, age 62, has been President and CEO of Jemm
Wholesale Meat Co., a food processing business, since May 1989.
For more than 10 years prior to that he was, and continues to be,
an attorney and real estate developer. Mr. Brottman was elected
to the Board in 1991.
DELAIN G. DANEHEY, age 62, was with the auditing firm of Ernst
& Young LLP for 31 years, and was a partner when he retired from
the firm in 1991. Mr. Danehey joined the Company's Board in May
of 1995.
All of the foregoing nominees are currently serving as
directors of the Company and were elected by the shareholders at
the last Annual Meeting. Each of the above-named nominees has
agreed to serve if elected.
*On December 30, 1994, in the United States Bankruptcy Court,
Northern District of Illinois, an Involuntary Petition for
Bankruptcy under Chapter 7 was filed against Mr. Chavin by three
creditors. On December 31, 1993, LC & CP Corporation of
Wisconsin, and LP & CC Corporation of Illinois, were adjudicated
bankrupt. Mr. Chavin was an executive officer and major
shareholder of these corporations.
Information Concerning the Board of Directors and its Committees
The Board of Directors meets on a regularly scheduled basis
during its fiscal year to review significant developments
affecting the Company and to act on matters requiring Board
approval. It also holds special meetings when an important
matter requires Board action between scheduled meetings. The
Board held five regularly scheduled meetings during the last
fiscal year.
Executive Committee
The Board of Directors has an Executive Committee consisting of
Committee Chairman Herbert F. Imhoff, Herbert F. Imhoff, Jr.,
Howard S. Wilcox and Walter T. Kerwin, Jr. The committee is
empowered to act upon all matters requiring the approval of the
Board of Directors except for corporate reorganizations,
decisions regarding mergers and acquisitions and those matters
reserved to the full Board by the Illinois Business Corporation
Act, such as the declaration of dividends. No Executive
Committee Meetings were held in fiscal 1996.
Audit Committee
The Audit Committee, which is comprised of all Members of the
Board, meeting as a committee of the whole, is primarily
concerned with the effectiveness of the Company's accounting
policies and practices, its financial reporting and with the
review of internal policies and practices. Specifically, the
Audit Committee reviews and approves the scope of the annual
audit of the Company's books, reviews the findings and
recommendations of the independent auditors at the completion of
their audit, and approves annual audit fees and the selection of
an auditing firm. The Audit Committee met once during fiscal
1996.
Stock Option Committee
The Board has a Stock Option Committee which is comprised of
all non-employee Directors. The function of this committee is to
oversee the administration of the Company's stock option plans.
The Stock Option Committee has the power to determine from time
to time the individuals to whom options shall be granted, the
number of shares to be covered by each option, the time or times
at which options shall be granted, and the terms of such options.
The Stock Option Committee met once during fiscal 1996.
The Board of Directors does not have a standing Nominating
Committee.
Nominations
The By-Laws of the Company establish procedures for the
nomination of candidates for election to the Board of Directors.
The By-Laws provide that nominations may be made by the Board of
Directors or by a committee appointed by the Board of Directors.
Any shareholder entitled to vote in the election of directors
generally may make nominations for the election of directors to
be held at an annual meeting of shareholders, provided that such
shareholder has given actual written notice of his intent to make
such nomination or nominations to the secretary of the Company
not later than sixty days prior to the anniversary date of the
immediately preceding annual meeting of shareholders. Each such
notice must set forth (a) the name and address of the shareholder
who intends to make the nomination and of the person or persons
to be nominated; (b) a representation that the shareholder is a
holder of record of stock of the Company entitled to vote at such
meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings
involving any two or more of the shareholders, each such nominee
and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by
the shareholder or relating to the 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 Company, if so
elected.
Security Ownership of Certain Beneficial Owners and Management
Listed in the following table is information concerning persons
known to the Company to be beneficial owners of more than five
percent of the Company's outstanding Common Stock as of December
30, 1996:
Title of Name and Address Amount and Nature of Percent
Class of Beneficial Owner Beneficial Ownership* of Class
Common Herbert F. Imhoff 742,124 27.99
One Tower Lane, Suite 2100
Oakbrook Terrace, IL 60181
Common Marlene Chavin 142,025 5.36
c/o S. Vass
810 Highland Place
Highland Park, IL 60035
*Unless noted otherwise, the named individuals have sole voting
and dispositive power over the shares listed.
The following information is furnished as of December 30, 1996,
to indicate beneficial ownership by each director and each named
executive officer, individually, and all executive officers and
directors as a group:
Title of Name of Amount and Nature of Percent
Class Beneficial Owner Beneficial Ownership* of Class
Common Herbert F. Imhoff 742,124(1) 27.99
Common Herbert F. Imhoff, Jr. 4,415(2) **
Common Leonard Chavin 0 -
Common Sheldon Brottman 17,982(3) **
Common Howard S. Wilcox 8,751 **
Common Walter T. Kerwin, Jr. 2,006 **
Common Delain G. Danehey 1,437 **
Common Kent M. Yauch 12,362(3) **
Common Marilyn L. White 0 -
Common John J. Derby 0 -
All directors and executive 800,638(4) 29.77
officers as a group
(eleven in number)
* Unless noted otherwise, the named individuals have sole voting
and dispositive power over the shares listed.
** Owns less than 1%.
(1) Mr. Imhoff is the father of Mr. Herbert F. Imhoff, Jr.
(2) Includes 165 shares held in a custodial account for the
benefit of Mr. Imhoff, Jr.'s son. Mr. Imhoff, Jr. is the son of
Mr. Herbert F. Imhoff.
(3) Represents options to purchase shares within 60 days of
record date.
(4) Includes 165 shares held in a custodial account for the
benefit of Mr. Imhoff, Jr.'s son and 37,301 option shares
exercisable by members of the group within 60 days of record
date.
Settlement Agreement
On September 27, 1991 the Company and Leonard Chavin entered
into a Settlement Agreement to resolve certain litigation and
other issues. Insofar as it is still in effect, Mr. Chavin (and,
subsequently, in certain respects, his former wife, Marlene
Chavin) (a) agreed not to sue the Company or its agents based on
facts existing or occurring prior to September 27, 1991, (b)
agreed not to acquire additional securities of the Company during
the term of the Agreement or to encourage others to do so, (c)
granted the Company a right of first refusal to purchase his
common shares of the Company and (d) agreed not to solicit
proxies in opposition to the recommendation of the Company's
Board of Directors and agreed to vote his shares in accordance
with the Board's recommendation for so long as Mr. Chavin and one
other person designated by him are included in the slate of
nominees for directors recommended by the Board to shareholders
for election as directors.
In the Settlement Agreement, the Company agreed (a) to notify
Mr. Chavin in advance of an annual meeting of shareholders if Mr.
Chavin and his designee are not to be included on the Board's
recommended slate of nominees, and (b) to include Mr. Chavin and
his designee on the slate of nominees for directors under certain
circumstances in the event the Company reincorporates in Delaware
and Mr. Chavin and his nominee are members of the Company's Board
on the date such reincorporation is approved. The covenants and
agreements of the Settlement Agreement will continue in full
force and effect for so long as Mr. Chavin remains a member of
the Company's Board of Directors.
In connection with the 1997 Annual Meeting, Mr. Chavin has
designated himself and Mr. Brottman for inclusion in the slate of
nominees pursuant to the Settlement Agreement.
Compensation of Executive Officers
Summary Compensation Table
The following table sets forth certain information regarding
compensation awarded, earned or paid during each of the Company's
last three fiscal years to the Company's Chief Executive Officer
and the other four most highly-compensated executive officers.
Summary Compensation Table
Long-Term
Compensation
Awards
Name and Annual Securities All Other
Principal Compensation Underlying Compensa-
Position Year Salary($) Bonus($) Options (#) tion($)(1)
Herbert F. Imhoff 1996 $275,000 $360,638 0 $1,875
Chairman and 1995 225,061 195,349 0 1,875
President 1994 204,601 81,412 0 2,514
Herbert F. Imhoff, Jr. 1996 $160,000 $209,826 0 $2,182
Executive Vice 1995 127,250 110,451 0 1,983
President 1994 115,682 45,994 0 1,446
Kent M. Yauch 1996 $ 88,000 $ 25,000 6,612 $1,288
Chief Financial 1995 80,300 15,000 0 1,129
Officer 1994 73,000 10,000 0 912
and Treasurer
Marilyn L. White(2) 1996 $ 60,000 $ 75,129 13,225 $ 875
Vice President
John J. Derby(3) 1996 $135,000 $ - 0 -
Vice President 1995 50,625 5,000 11,500 -
Triad Personnel
Services
(1) Amounts represent the Company's contribution to the Company's
401(k) Incentive Savings Plan
(2) Ms. White became an executive officer in August of 1996
(3) Mr. Derby joined the Company in May of 1995 and resigned
September 30, 1996
Stock Option Grants
The following table shows all grants of stock options in 1996
under the 1995 Stock Option Plan, to the officers named in the
Summary Compensation Table above. The exercise price of all
options was the fair market value on the date of grant. In
accordance with the stock option plan, the number of shares and
exercise price of options granted were adjusted to reflect the
15% stock dividend paid in November 1996.
Option Grants in Last Fiscal Year
Individual Grants
% of Total
Options
Granted to Exercise
Options Employees in or Base Expiration
Name Granted(#) Fiscal Year Price Date
Herbert F. Imhoff 0 0 0 -
Herbert F. Imhoff, Jr. 0 0 0 -
Kent M. Yauch 6,612 23.00% $5.96 10/1/2005
Marilyn L. White 13,225 45.45% $5.96 10/1/2005
John J. Derby 0 0 0 -
Stock Option Exercises and Fiscal Year End Stock Option Values
The following table shows stock options exercised during fiscal
1996 by each of the executive officers named in the Summary
Compensation Table and the value of unexercised options held as
of the end of that year.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options at Options
Acquired F/Y End (#) at FY End
On Value Exer- Unexer- Exer- Unexer-
Name Exercise(#) Realized cisable cisable cisable cisable
Herbert F. Imhoff 39,675 $391,295 0 0 0 0
Herbert F.
Imhoff, Jr. 26,450 260,863 0 0 0 0
Kent M. Yauch 4,312 34,152 6,612(1) 0 $35,308(2) 0
Marilyn L. White 0 0 0 13,225(1) 0 $70,622(2)
John J. Derby 11,500 67,095 0 0 0 0
(1) Number of shares adjusted to reflect 15% stock dividend paid
in November 1996.
(2) Represents the spread between $11.30, the closing price of
the Company's Common Stock on the American Stock Exchange on
September 30, 1996 (adjusted for a 15% stock dividend) and the
option price per share of $5.96 multiplied by the number of
unexercised options.
Compensation of Directors
During the last fiscal year directors who are not full-time
employees of the Company were compensated at the rate of $1,500
per month. Compensation for non-employee Executive Committee
Members is $1,000 per meeting; however, no Executive Committee
Meetings were held in fiscal 1996. Since Audit Committee and
Stock Option Committee meetings are held in conjunction with
regular Board Meetings, Committee Members receive no additional
fee for serving on the Audit Committee or the Stock Option
Committee.
Supplemental Executive Retirement Plan
The Company has agreed to provide Herbert F. Imhoff with a
retirement benefit of $400,000 subsequent to his retirement.
Under the terms of the agreement, the retirement benefit is to be
paid in a number of equal monthly installments equal to the
number of months between the first day of the month following his
termination date and the first day of the month in which Mr.
Imhoff attains age 75. The retirement benefit is also to be paid
in the event of a termination without cause or a constructive
termination within 12 months following a change in control. In
the event of Mr. Imhoff's death, the retirement benefit is to be
paid to his designated beneficiary. Mr. Herbert F. Imhoff also
has an employment contract with the Company dated October 1,
1962, providing for exclusive continuous employment during a
period of time mutually agreeable to the parties.
Senior Employment Contracts
Herbert F. Imhoff and Herbert F. Imhoff, Jr. each have
employment security agreements with the Company which, in
general, provide for payments in the amount of twice their
respective annual compensation, plus continued participation in
any employee benefit plan maintained by the Company in which the
executive participates at the date of termination, in the event
that the employment of the executive is terminated by the Company
for any reason other than good cause within twenty-four months
following change of control of the Company.
A change of control shall be deemed to take place on the
occurrence of any of the following events on or after May 14,
1990, without the prior written approval of a majority of the
entire Board of Directors of the Company as it exists immediately
prior to such event:
(1) The acquisition by an entity, person or group of beneficial
ownership of capital stock of the Company if after such
acquisition such entity, person or group is entitled to exercise
more than 30% of the outstanding voting power of all capital
stock of the Company entitled to vote in elections of directors
("Voting Power");
(2) The effective time of (I) a merger or consolidation of the
Company with one or more other corporations as a result of which
the holders of the outstanding Voting Power of the Company
immediately prior to such merger or consolidation hold less than
50% of the Voting Power of the surviving or resulting
corporation, or (II) a transfer of 30% of the Voting Power, or a
substantial portion of the property, of the Company other than to
an entity of which the Company owns at least 50% of the Voting
Power; or
(3) The election to the Board of Directors of the Company of
candidates who were not recommended for election by the Board of
Directors of the Company in office immediately prior to the
election, if such candidates constitute a majority of those
elected in that particular election.
Proposal 2 - GENERAL EMPLOYMENT ENTERPRISES, INC. 1997 STOCK OPTION PLAN
The Board of Directors has established, effective upon receipt
of shareholder approval, the General Employment Enterprises, Inc.
1997 Stock Option Plan. The Stock Option Plan is intended to
promote stock ownership by selected officers and employees of the
Company and its subsidiaries to increase their proprietary
interest in the Company and to encourage them to remain in the
employ of the Company. In addition, the Plan is intended as an
additional incentive to members of the Board of Directors of the
Company who are not employees of the Company to serve on the
Board of Directors of the Company and to devote themselves to the
future success of the Company. Five non-employee directors and
approximately fifty employees are eligible to participate in the
Plan.
The Stock Option Plan is to be administered by the Stock Option
Committee (the "Committee") of the Board of Directors of the
Company. The Committee will be comprised of two or more members
of the Board who are "non-employee" directors within the meaning
of Rule 16b-3 under the Securities Exchange Act of 1934. The
Committee will have the authority, among other things, to select
the employees to whom options may be granted, to determine the
terms of each option, to interpret the provisions of the Stock
Option Plan and to make all other determinations that it may deem
necessary or advisable for the administration of the Stock Option
Plan. Each determination or other action made or taken pursuant
to the Stock Option Plan by the Committee, including
interpretation of the Stock Option Plan and the specific terms
and conditions of the options granted thereunder, will be final
and conclusive for all purposes and upon all persons.
The Stock Option Plan provides for the grant of "incentive
stock options" within the meaning of Section 422 of the Internal
Revenue Code, and for options that do not constitute incentive
stock options (referred to herein as "nonstatutory options"), as
determined in each individual case by the Committee. The Plan
provides that the number of shares of Common Stock for which
options may be granted under the Plan shall be 250,000. Upon
receipt of stockholder approval to establish the Stock Option
Plan, the Board of Directors intends to reserve 250,000 shares of
Common Stock for issuance under the Stock Option Plan. In
general, any shares of Common Stock subject to issuance upon
exercise of options but which are not issued because of a
surrender, forfeiture, expiration, termination or cancellation of
any such option will once again be available for issuance
pursuant to subsequent options.
Grants of Options to Non-Employee Directors will be automatic
and non-discretionary. Initially each individual who is a Non-
Employee Director on the effective date of the Plan, will
automatically be granted a nonstatutory option to purchase 15,000
shares of Common Stock on the effective date of the Plan. Each
individual who becomes a Non-Employee Director after the
effective date of the Plan shall be granted automatically an
option to purchase 15,000 shares of Common Stock on the date he
or she becomes a Non-Employee Director. Options to be granted
under the Stock Option Plan during 1997 to employees of the
Company are not determinable at this time. Reference is made to
the table entitled "Option Grants in Last Fiscal Year" under the
heading "Compensation of Executive Officers" included in this
proxy statement, which sets forth the options granted to
executive officers of the Company under the 1995 Stock Option
Plan during 1996. The Committee will, from time to time, select
those officers and other key employees of the Company or any of
its subsidiaries to participate in the Stock Option Plan on the
basis of the special importance of their services in the
management, development and operations of the Company or its
subsidiaries. Options granted under the Stock Option Plan will
vest and become exercisable over such time period as the
Committee may determine or upon a change of control as defined
under the Stock Option Plan. Options granted under the Stock
Option Plan may be exercisable for up to ten years.
The exercise price of nonstatutory options granted under the
Stock Option Plan will be determined by the Committee and
specified in each option grant, and may be less than the fair
market value of the Common Stock on the date the option is
granted. The exercise price of incentive stock options granted
under the Stock Option Plan must at least equal the fair market
value of the Common Stock on the date the option is granted. On
December 30, 1996, the closing price of the Common Stock on the
American Stock Exchange was $ 8.25 per share.
An incentive stock option granted under the Stock Option Plan
to an employee owning more than 10% of the Company (i) must have
an exercise price of at least 110% of the fair market value of
the shares issuable (determined as of the date the options
granted) and (ii) will expire no later than the fifth anniversary
of the date the incentive stock option was granted. An incentive
stock option is subject to the further restriction that the
aggregate fair market value (determined as of the date of grant)
of stock as to which any such incentive stock option first
becomes exercisable in any calendar year is limited to $100,000.
Options in excess of this limit would be nonstatutory options.
The full exercise price for all shares purchased on exercise of
options granted under the Stock Option Plan may be paid in cash,
in cash received from a broker-dealer to whom the optionee has
submitted an exercise notice, by delivering shares of Common
Stock having an aggregate fair market value on the date of
exercise equal to the option exercise price, by directing the
Company to withhold such number of shares of Common Stock
otherwise issuable upon exercise of such option having an
aggregate fair market value on the date of exercise equal to the
option exercise price, by such other medium of payment as the
Committee, in its discretion, shall authorize at the time of
grant, or by any combination of the above. Except in instances
of retirement, disability or death as provided in the Stock
Option Plan or in the Committee's sole discretion, any option
will terminate on the date of the optionee's termination of
employment with the Company and its subsidiaries.
Incentive stock options granted under the Stock Option Plan
have certain advantageous tax attributes under federal income tax
laws. No taxable income is recognized by the option holder for
federal income tax purposes at the time of the grant or exercise
of an incentive stock option. Any gain or loss recognized by an
option holder on the later disposition of shares acquired
pursuant to the exercise of an incentive stock option generally
will be treated as long-term capital gain or loss if such
disposition does not occur prior to one year after the date of
exercise of the option, or two years after the date the option
was granted. No federal income tax deduction is available to the
Company as a result of the grant or exercise of an incentive
stock option.
As in the case of incentive stock options, the grant of a
nonstatutory stock option will not result in taxable income to
the option holder for federal income tax purposes nor will the
Company be entitled to an income tax deduction. Upon exercise of
a nonstatutory stock option, however, the option holder will
generally recognize ordinary income for federal and state income
tax purposes equal to the difference between the exercise price
and the fair market value of the shares acquired on the date of
exercise, and the Company or the subsidiary of the Company which
is the employer of the option holder, will be entitled to federal
and state income tax deductions in the amount of the ordinary
income recognized by the option holder. In general, any further
gain or loss realized by the option holder on the subsequent
disposition of such shares will be long-term or short-term
capital gain or loss, depending on the length of time the shares
are held after the option is exercised.
The Board of Directors or the Committee has authority to
terminate, suspend or amend the Stock Option Plan, in whole or in
part, from time to time without the approval of the shareholders
of the Company to the extent allowed by law. The Stock Option
Plan provides for appropriate adjustment in the number and kind
of shares subject to the Stock Option Plan, and the number, kind
and per share exercise price of shares subject to unexercised
options, in the event of any change in the outstanding Common
Stock by reason of a stock split, stock dividend, combination or
reclassification of shares, recapitalization, merger or similar
event.
Upon a change in control (as defined in the Stock Option Plan)
of the Company, all outstanding options will become fully
exercisable and all restrictions thereon will terminate in order
that optionees may fully realize the benefits thereunder. Also,
the Committee, as constituted before such change in control, is
authorized, and has sole discretion, as to any option, either at
the time such option is granted or any time thereafter, to take
any one or more of the following actions: (i) provide for the
purchase of any such option, upon the option holder's request,
for an amount of cash equal to the difference between the
exercise price and the then fair market value of the Common Stock
covered thereby had such option been currently exercisable; (ii)
make such adjustment to any such option then outstanding as the
Committee deems appropriate to reflect such change in control;
and (iii) cause any such option then outstanding to be assumed,
by the acquiring or surviving corporation, after such change in
control. The right to exercise an option in the event of a
change in control may tend to discourage such a change in
control, even if the change in control would be beneficial to
shareholders.
The number of shares available for issuance under this Stock
Option Plan represents approximately 9.43% of the total currently
outstanding shares. The total number of shares available for
issuance under the Stock Option and all other stock related plans
of the Company represents approximately 9.92% of the total
currently outstanding shares. Because the shares utilized to
fund the option awards will come from authorized but unissued
shares, the exercise of options awarded under the Stock Option
Plan would have a dilutive effect on the percentage interest of
shareholders.
The Stock Option Plan is subject to approval by the holders of
a majority of the outstanding shares of Common Stock of the
Company within twelve months after the date of its adoption by
the Board of Directors. The Plan will be null and void if such
approval is not obtained.
Vote Required
The affirmative vote of the holders of a majority of the
outstanding Common Shares is required to approve this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE OPTION PLAN.
OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers, and persons who
beneficially own more than ten percent of the Company's stock, to
file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission and the
American Stock Exchange. Executive officers, directors and
greater than ten-percent shareholders are required by SEC
regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on review of the copies of these reports furnished
to the Company and written representations from the executive
officers and directors that no other reports were required during
the fiscal year ended September 1996, the Company believes that
all Section 16(a) filing requirements applicable to its executive
officers, directors and greater than ten-percent owners were
complied with.
Proposals of Shareholders
In order to be considered for inclusion in the Proxy Statement
for the 1998 Annual Meeting of Shareholders, shareholder
proposals must be received by the Company at its address
hereinabove, on or before September 1, 1997.
Independent Public Auditors
Ernst & Young LLP, independent certified public auditors, have
been auditors of the financial statements of the Company since
1985 and have been selected by the Board of Directors of the
Company to serve as independent auditors for the Company for the
year ending September 30, 1997.
Representatives of Ernst & Young LLP are expected to be present
at the Annual Meeting of Shareholders to respond to appropriate
questions and to make a statement if they desire to do so.
Manner and Costs of Solicitation
The cost of preparing, assembling and mailing the proxy
materials and of reimbursing brokers, nominees and fiduciaries
for the out-of-pocket expenses of transmitting copies of the
proxy materials to the beneficial owners of shares held of record
by such persons will be borne by the Company. The Company does
not intend to solicit proxies otherwise than by the use of mail,
but certain officers and regular employees of the Company or its
subsidiary, without additional compensation, may use their
personal efforts by telephone or otherwise, to obtain proxies.
Availability of Form 10-KSB
The Company will furnish upon request and without charge to
each record or beneficial owner of its securities from whom it
solicits proxies, a copy of its current annual report on Form 10-
KSB including the financial statements and financial schedules
thereto, filed with the Securities and Exchange Commission.
Requests should be in writing and addressed to
Investor Relations Department
General Employment Enterprises, Inc.
Oakbrook Terrace Tower
One Tower Lane, Suite 2100
Oakbrook Terrace, Illinois 60181
Other Matters
At the date of this Proxy Statement, the Board of Directors is
not informed of any matters, other than those stated above, that
may be brought before the meeting. However, if any other matters
shall properly come before the meeting, it is the intention of
the persons named in the enclosed form of proxy to vote such
proxy in accordance with their best judgment on such matters.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE URGED TO
SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED, WHICH REQUIRES NO ADDITIONAL POSTAGE, IF MAILED IN THE
UNITED STATES.
By Order of the Board of Directors
Nancy C. Frohnmaier
Secretary
Oakbrook Terrace, Illinois
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
OF GENERAL EMPLOYMENT ENTERPRISES, INC.
One Tower Lane, Suite 2100, Oakbrook Terrace, IL 60181
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned shareholder of GENERAL EMPLOYMENT ENTERPRISES,
INC. hereby appoints HERBERT F. IMHOFF, HOWARD S. WILCOX and
WALTER T. KERWIN, JR., and each of them, as the proxies (with
full power of substitution) to vote all shares which the
undersigned would be entitled to vote at the Annual Meeting of
Shareholders to be held on February 24, 1997 and any adjournment
thereof. If a vote is not specified, said proxies will vote FOR
election of directors and FOR proposal 2.
1. Election of Directors, Nominees:
S. Brottman, L. Chavin, D. G. Danehey, H. F. Imhoff, H. F. Imhoff, Jr.,
W. T. Kerwin, Jr., H. S. Wilcox
For, except vote withheld
FOR ___ AGAINST ___ from the following nominee(s) ________________
2. Approval of the Company's 1997 Stock Option Plan.
FOR ___ AGAINST ___ ABSTAIN ___
3. In their discretion, in the transaction of such other business as may
properly come before the meeting.
You are encouraged to specify your choices by marking the
appropriate boxes with an "X" but you need not mark any boxes if
you wish to vote in accordance with the Board of Directors'
recommendations.
Please sign and date on the reverse side, and mail this proxy in
the enclosed envelope as promptly as possible.
This proxy when properly executed will be voted as directed. If
no direction is made, this proxy will be voted FOR the election
of Directors and FOR proposal 2. This proxy confers on the proxy
holders the power of cumulative voting and the power to vote
cumulatively for less than all of the nominees as described in
the accompanying proxy statement.
The Board of Directors recommends a vote FOR Proposals 1 and 2.
The signer hereby revokes all proxies heretofore given by the
signer to vote at said meeting or any adjournments thereof.
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such.
____________________________________
____________________________________
SIGNATURE(S) DATE
