SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
GENERAL EMPLOYMENT ENTERPRISES, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (4)
and 0-11.
(1) Title of each class of securities to which transaction
applies: _____________________________________________________
(2) Aggregate number of securities to which transaction applies:
______________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
______________________________________________________________
(4) Proposed maximum aggregate value of transaction: _____________
(5) Total fee paid: ______________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a) (2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
(1) Amount Previously Paid: ______________________________________
(2) Form, Schedule or Registration Statement No.:_________________
(3) Filing Party: ________________________________________________
(4) Date Filed: __________________________________________________
GENERAL EMPLOYMENT ENTERPRISES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held Monday, February 25, 2008
To the Shareholders of
GENERAL EMPLOYMENT ENTERPRISES, INC.
You are cordially invited to attend the Annual Meeting of Shareholders of
General Employment Enterprises, Inc. which will be held in the Conference
Center of the Oakbrook Terrace Tower, First Floor, One Tower Lane, in
Oakbrook Terrace, Illinois 60181, on Monday, February 25, 2008, at 9:00 a.m.,
local time. Directions to the meeting can be obtained by contacting the
Company's Investor Relations Department at One Tower Lane, Suite 2200,
Oakbrook Terrace, Illinois 60181, or by calling (630) 954-0495.
The purpose of the meeting is:
1. To elect six directors of the Company; and
2. To act upon such other matters as may properly be brought before
the meeting.
Shareholders of record at the close of business on January 2, 2008 will be
entitled to vote at the meeting. Whether or not you are able to attend the
meeting in person, please vote as soon as possible. You may vote by signing
the enclosed proxy card and mailing it in the envelope provided.
By Order of the Board of Directors
Nancy C. Frohnmaier
Vice President and Secretary
Oakbrook Terrace, Illinois
January 16, 2008
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 enclosed postage paid envelope so that your
shares can 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. If your shares are held in the name of a bank
or brokerage firm, you should check the voting instructions of that firm.
GENERAL EMPLOYMENT ENTERPRISES, INC.
Oakbrook Terrace Tower
One Tower Lane, Suite 2200
Oakbrook Terrace, Illinois 60181
PROXY STATEMENT
FOR 2008 ANNUAL MEETING OF SHAREHOLDERS
This statement and the accompanying proxy card, which are first being sent to
shareholders on approximately January 16, 2008, 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 25, 2008, at 9:00 a.m., local time, in the Conference Center of the
Oakbrook Terrace Tower, First Floor, One Tower Lane, Oakbrook Terrace,
Illinois 60181.
VOTING RIGHTS AND SOLICITATION
The voting securities of the Company entitled to be voted at the Annual
Meeting are the shares of Common Stock, of which there were 5,165,265
outstanding on January 2, 2008, the record date for the Annual Meeting.
Shareholders are entitled to one vote for each share held except that, in
elections for directors, each shareholder has cumulative voting rights. When
voting cumulatively, each shareholder has the number of votes equal to the
number of directors to be elected (six) multiplied by the number of his or
her shares. Such number of votes may be divided equally among all nominees,
may be cumulated for one nominee, or may be distributed on any basis among as
many nominees as is desired.
Each proxy that is properly signed and received before the Annual Meeting
will, unless such proxy has been revoked, be voted in accordance with the
instructions on such proxy. If no instruction is indicated on the proxy card,
the shares will be voted for election of the six nominees for director listed
in this proxy statement. The persons authorized to vote shares represented by
executed proxies in the enclosed form (if authority to vote for the election
of directors is not withheld) will have full discretion and authority to vote
cumulatively and to allocate votes among any or all of the listed nominees for
director as they may determine or, if authority to vote for a specified
candidate or candidates has been withheld, among those nominees for whom
authority to vote has not been withheld. In any case, and notwithstanding the
foregoing, the proxies may be voted for less than the entire number of
nominees if any situation arises which, in the opinion of the proxy holders,
makes such action necessary or desirable.
Quorum and Vote Required
A quorum of shareholders is necessary to take action at the Annual Meeting. A
majority of the total outstanding shares of Common Stock of the Company,
represented in person or by proxy, will constitute a quorum for purposes of
the meeting. Abstentions or broker non-votes will be treated as shares of
Common Stock that are present for purposes of determining the presence of a
quorum. "Broker non-votes" refers to a broker or other nominee not voting on
a proposal because the broker or other nominee does not have discretionary
voting power regarding that item and has not received instructions from the
beneficial owner.
Directors are elected by the affirmative vote of a majority of the shares
represented at the meeting, in person or by proxy, and entitled to vote.
Withheld votes will have the effect of votes against the directors. Broker
non-votes will not affect the outcome of the vote.
Voting Procedure, Revoking Proxies
Shareholders whose shares are registered in their own names may vote by
mailing a completed proxy card as an alternative to voting in person at
the Annual Meeting. To vote by mailing a proxy card, shareholders should
sign and return the enclosed proxy card in the enclosed prepaid and
addressed envelope.
If shares are registered in the name of a bank or brokerage firm (record
holder), shareholders will receive instructions from their record holder that
must be followed in order for the record holder to vote the shares in
accordance with the shareholder's instructions. If shares are held through a
bank or brokerage firm and the shareholder wishes to be able to vote in person
at the Annual Meeting, the shareholder must obtain a legal proxy from the
brokerage firm, bank or other holder of record and present it to the inspector
of election with the shareholder's ballot.
Registered shareholders may revoke or change a previously delivered proxy at
any time before the Annual Meeting by delivering another proxy with a later
date or by delivering written notice of revocation of their proxy to the
Secretary of the Company at its principal executive offices before the
beginning of the Annual Meeting. Shareholders may also revoke their proxy by
attending the Annual Meeting and voting in person, although attendance at the
Annual Meeting will not, in and of itself, revoke a valid proxy that was
previously delivered. If shares are held through a bank or brokerage firm,
shareholders must contact that bank or brokerage firm to revoke any prior
voting instructions. Shareholders may also vote in person at the Annual
Meeting if a legal proxy is obtained, as described in the preceding
paragraph.
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 intends to solicit proxies 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. The Company also reserves the right to retain and compensate
a professional solicitor to assist in the solicitation of proxies.
ELECTION OF DIRECTORS
Six directors are to be elected at the Annual Meeting, to serve until the 2009
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. The persons authorized to vote shares
represented by executed proxies in the enclosed form (if authority to vote for
the election of directors is not withheld) will have full discretion and
authority to vote cumulatively and to allocate votes among any or all of the
listed nominees for director as they may determine or, if authority to vote
for a specified candidate or candidates has been withheld, among those
nominees for whom authority to vote has not been withheld. In any case, and
notwithstanding the foregoing, the proxies may be voted for less than the
entire number of nominees if any situation arises which, in the opinion of the
proxy holders, makes such action necessary or desirable.
2
Directors and Nominees
The following nominees are currently serving as directors of the Company and
all were elected by the shareholders at the last Annual Meeting. Each nominee
for director has agreed to serve, if elected. The following information is
furnished with respect to each nominee for election as a director:
DENNIS W. BAKER, age 61 - Director of the Company since 2000. Formerly with
CF Industries Holdings, Inc., Long Grove, Illinois, where he had been employed
for more than 30 years in various financial capacities, and was Treasurer when
he retired in April of 2007.
SHELDON BROTTMAN, age 73 - Director of the Company since 1991; is an attorney,
and for more than ten years, has operated a real estate management and
development business.
ANDREW DAILEY, age 38 - Managing Director of Headlands Advisors, a strategic
advisory and consulting firm since 2004; has been a partner of Stenmark
Capital, an investment management firm, since 2007; was a partner at Jetstream
Group, a technology management consulting firm from 2002 to 2004, and from
2001 to 2002, was head of U.S. research for Hagstromer & Qviberg, a
Scandinavian investment bank.
DELAIN G. DANEHEY, age 73 - Director of the Company since 1995; formerly with
the auditing firm of Ernst & Young LLP for 31 years, and was a partner when he
retired from the firm in 1991.
HERBERT F. IMHOFF, JR., age 58 - Director of the Company since 1986; named
Chairman of the Board and Chief Executive Officer in 2001; has been President
and Chief Operating Officer since 1997 and had previously been Executive Vice
President since 1986; has served as the Company's General Counsel since 1982.
KENT M. YAUCH, age 61 - Director of the Company since 2001; was named
Vice President in 2001 and has served as Chief Financial Officer and Treasurer
of the Company since 1996; had previously been Treasurer and Controller
since 1991.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF EACH OF THE INDIVIDUALS NOMINATED FOR ELECTION AS A DIRECTOR.
The following information is furnished with respect to a current director who
will not stand for re-election at the Annual Meeting:
JOSEPH F. LIZZADRO, age 70 -- Chairman Emeritus of L&H Company, Oak Brook,
Illinois. Served as a director of Auth-Florence, Inc., Naperville, Illinois
until August 2007. He has been a member of the Company's Board since 2000 and
will serve until the expiration of his term on February 24, 2008.
3
CORPORATE GOVERNANCE
Director Independence
The Board of Directors has determined that each nominee for director, other
than Mr. Imhoff, Jr. and Mr. Yauch, is an independent director under the
listing standards of the American Stock Exchange. In addition, the Board of
Directors has determined that each current member of the Audit Committee meets
the additional independence criteria required for audit committee membership
under the listing standards of the American Stock Exchange and Rule 10A-3 of
the Securities Exchange Act of 1934.
Board and Committee Meetings
The Board of Directors meets on a regularly scheduled basis to review
significant developments affecting the Company and to act on matters requiring
Board approval. It also holds special meetings when an important matter
requires Board action between scheduled meetings. The Board held eight
meetings during the last fiscal year. No director of the Company attended
fewer than 75% of the total meetings of the Board and Committee meetings on
which such Board members served during this period.
The members of the Board of Directors are expected to attend the Company's
Annual Meeting of Shareholders. All of the current directors were present at
the prior year's Annual Meeting, which was held on February 26, 2007.
There are three standing committees of the Board of Directors, which are the
Nominating Committee, the Audit Committee and the Compensation Committee.
Nominating Committee
The Nominating Committee is presently composed of five non-employee
directors: Dennis W. Baker (Chairman), Sheldon Brottman, Andrew Dailey,
Delain G. Danehey, and Joseph F. Lizzadro. The Board of Directors has adopted
a written charter for the Nominating Committee, a copy of which is attached as
an appendix to this proxy statement.
The functions of the Nominating Committee are to assist the Board of Directors
in identifying, interviewing and recommending to the Board of Directors
qualified candidates to fill positions on the Board. The Nominating
Committee met once during fiscal 2007.
In evaluating candidates to serve on the Company's Board of Directors,
consideration is given to the level of experience, financial literacy and
business acumen of the candidate. In addition, qualified candidates for
director are those who, in the judgment of the committee, have significant
decision-making responsibility, with business, legal or academic experience.
The Nominating Committee will consider recommendations for board candidates
that are received from various sources, including directors and officers of
the Company, other business associates and shareholders, and all candidates
will be considered on an equal basis, regardless of source.
Shareholders may contact the Nominating Committee to make such recommendations
by writing in care of the Secretary of the Company, at One Tower Lane, Suite
2200, Oakbrook Terrace, Illinois 60181. For a candidate to be considered for
next year's Annual Meeting, a shareholder's recommendation must be received by
the Secretary at least ninety days prior to the anniversary date of the
mailing of the prior year's proxy statement. Submissions must include: (a) a
statement that the writer is a shareholder and is proposing a candidate for
consideration by the Nominating Committee; (b) the name, address and number of
shares beneficially owned by the shareholder; (c) the name, address and
contact information of the candidate being recommended; (d) a description of
the qualifications and business experience of the candidate; (e) a statement
detailing any relationships between the candidate and the Company and any
relationships or understandings between the candidate and the proposing
shareholder; and (f) the written consent of the candidate that the candidate
is willing to serve as a director if nominated and elected.
4
Audit Committee
The Audit Committee is presently composed of five non-employee directors:
Delain G. Danehey (Chairman), Dennis W. Baker, Sheldon Brottman, Andrew
Dailey, and Joseph F. Lizzadro. The Board of Directors has determined that
Messrs. Dailey, Danehey and Baker are each an "audit committee financial
expert" as defined by rules of the Securities and Exchange Commission. The
Board of Directors has adopted a written charter for the Audit Committee, a
copy of which is attached as an appendix to this proxy statement.
The Audit Committee is primarily concerned with the effectiveness of the
Company's accounting policies and practices, its financial reporting and its
internal accounting controls. In addition, the Audit Committee reviews and
approves the scope of the annual audit of the Company's books, reviews the
findings and recommendations of the independent registered public accounting
firm at the completion of their audit, and approves annual audit fees and the
selection of an auditing firm. The Audit Committee met four times during
fiscal 2007. In addition, the Chairman of the Audit Committee participated in
three quarterly meetings in fiscal 2007, to review earnings press releases and
the Company's filings on Form 10-QSB with members of management and the
Company's independent registered public accounting firm.
Compensation Committee
The Compensation Committee is presently composed of five non-employee
directors: Sheldon Brottman (Chairman), Dennis W. Baker, Andrew Dailey,
Delain G. Danehey, and Joseph F. Lizzadro. The Board of Directors has adopted
a written charter for the Compensation Committee, which is attached as an
appendix to this proxy statement. The Compensation Committee has the sole
responsibility for approving and evaluating the officer compensation plans,
policies and programs. It may not delegate this authority. It meets as often
as necessary to carry out its responsibilities. The committee has the
authority to retain compensation consultants, but has not done so. The
Compensation Committee met four times during fiscal 2007.
In the past, the committee has met each September to consider the compensation
of the Company's executive officers, including the establishment of base
salaries and performance targets for the succeeding year, and the
consideration of stock option awards. Management provides the committee with
such information as may be requested by the committee, which in the past has
included historical compensation information of the executive officers, tally
sheets, internal pay equity statistics, and market survey data. Under the
guidelines of the American Stock Exchange, the chief executive officer may not
be present during the committee's deliberations regarding his compensation.
If requested by the committee, the chief executive officer may provide
recommendations regarding the compensation of the other officers.
The Compensation Committee also has the responsibility to make recommendations
to the Board of Directors regarding the compensation of directors.
Shareholder Communications
The Board of Directors has established a procedure by which shareholders of
the Company can communicate with the Board of Directors. Shareholders
interested in communicating with the Board as a group or with individual
directors may do so, in writing. Correspondence to the directors should be
sent by regular mail c/o the Secretary, General Employment Enterprises, Inc.,
One Tower Lane, Suite 2200, Oakbrook Terrace, Illinois 60181. Any such
correspondence will be reviewed by the Secretary, who will then forward it to
the appropriate parties. Communications that are solicitations or deemed to
be irrelevant to the Board's responsibilities may be discarded, at the
discretion of the Secretary.
5
Nominations for Directors
The By-Laws of the Company establish procedures for the nomination of
candidates for election to the Board of Directors. The By-Laws provide that
the nominations may be made by the Board of Directors or by a committee
appointed by the Board of Directors. Any shareholder entitled to vote in the
election of directors generally may make nominations for the election of
directors to be held at an Annual Meeting of Shareholders, provided that such
shareholder has given actual written notice of his intent to make such
nomination or nominations to the Secretary of the Company not less than ninety
days nor more than one hundred twenty 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 Company or
its securities or to such nominee's service as a director if elected; (d) such
other information regarding such nominee proposed by such shareholder as would
be required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had the nominee been
nominated, or intended to be nominated, by the Board of Directors; and (e) the
consent of each nominee to serve as a director of the Company, if so elected.
DIRECTORS AND EXECUTIVE OFFICERS
Executive Officers
The executive officers of the Company are as follows:
Name Age Position
Herbert F. Imhoff, Jr. 58 Chairman of the Board and Chief Executive
Officer, and President and Chief Operating
Officer
Marilyn L. White 57 Vice President
Kent M. Yauch 61 Vice President, Chief Financial Officer
and Treasurer
Ms. White was elected Vice President in 1996, and is responsible for the
Company's branch operations.
All executive officers are elected annually by the Board of Directors at the
first meeting of the board held following each Annual Meeting of Shareholders,
and they hold office until their successors are elected and qualified.
Compliance with Section 16(a) of the Exchange Act
Directors and officers of the Company are required to report to the Securities
and Exchange Commission, by a specified date, their transactions related to
General Employment Enterprises, Inc. Common Stock. Based solely on a review
of the copies of these reports furnished to the Company and written
representation that no other reports were required, the Company believes that
during the 2007 fiscal year, all filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with.
6
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. Unless noted otherwise, the named persons have sole
voting and dispositive power over the shares listed. Except as noted
otherwise, the information is as of January 2, 2008.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
Herbert F. Imhoff, Jr. 621,678 (1) 11.65%
One Tower Lane, Suite 2200
Oakbrook Terrace, IL 60181
Daniel Zeff 513,580 (2) 9.94
50 California Street, Suite 1500
San Francisco, CA 94111
Spectrum Galaxy Fund Ltd. 303,246 (3) 5.87
50 California Street, Suite 1500
San Francisco, CA 94111
(1) Includes 10,161 shares held by Mr. Imhoff, Jr.'s son and 172,193 option
shares exercisable by Mr. Imhoff, Jr. within 60 days of record date.
(2) Based on Schedule 13G/A filed by Daniel Zeff with the Securities and
Exchange Commission on February 13, 2007. According to the Schedule
13G/A, Mr. Zeff beneficially owns 513,580 shares, which includes 303,246
shares held by Spectrum Galaxy Fund Ltd.
(3) Based on Schedule 13G/A filed by Daniel Zeff with the Securities and
Exchange Commission on February 13, 2007.
The following information is furnished as of January 2, 2008, to indicate
the beneficial ownership of the Company's outstanding Common Stock by each
director and named executive officer, as defined below, individually, and
all directors and executive officers as a group. Unless noted otherwise,
the named individuals have sole voting and dispositive power over the
shares listed.
Name of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
Dennis W. Baker 11,000 *%
Sheldon Brottman 61,851(1) 1.19
Andrew Dailey -- *
Delain G. Danehey 28,456(2) *
Herbert F. Imhoff, Jr. 621,678(3) 11.65
Joseph F. Lizzadro 24,000 *
Marilyn L. White 71,098(4) 1.36
Kent M. Yauch 53,444(5) 1.02
All directors and executive
officers as a group 871,527(6) 16.45
(eight persons)
*Represents less than 1%.
(1) Includes 25,731 option shares exercisable within 60 days of record date.
(2) Includes 13,731 option shares exercisable within 60 days of record date.
(3) Includes 10,161 shares held by Mr. Imhoff, Jr.'s son and 172,193 option
shares exercisable by Mr. Imhoff, Jr. within 60 days of record date.
(4) Represents option shares exercisable within 60 days of record date.
(5) Includes 49,444 option shares exercisable within 60 days of record date.
(6) Includes 10,161 shares held by Mr. Imhoff, Jr.'s son, and 332,197
option shares exercisable by members of the group within 60 days of
record date.
7
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes all compensation awarded to, earned by or paid
to the Company's chief executive officer and the next two most highly
compensated executive officers, for all services rendered to the Company
during the 2007 fiscal year. These individuals are referred to throughout
this proxy statement as the "named executive officers."
Summary Compensation Table
Non-
Equity
Incen-
tive All
Plan Other
Name and Option Compen- Compen-
Principal Salary Bonus Awards sation sation Total
Position Year ($) ($) ($) ($) ($) ($)
Herbert F. 2007 450,000 -- 22,500 6,103 64,438 543,041
Imhoff, Jr.
Chairman of the
Board and Chief
Executive Officer,
and President and
Chief Operating
Officer
Marilyn L. White 2007 190,000 -- 11,250 12,180 22,624 236,054
Vice President
Kent M. Yauch 2007 180,000 10,000 11,250 -- 21,888 223,138
Vice President,
Chief Financial
Officer and
Treasurer
Employment Agreements
The Company has an employment agreement with Mr. Imhoff, Jr. to serve as
Chairman of the Board and Chief Executive Officer, and President and Chief
Operating Officer. It provides for a continuous three-year term of
employment, at a minimum annual base salary of $450,000. Under the terms of
the agreement, Mr. Imhoff, Jr. is also eligible to earn an annual performance
bonus and is entitled to receive certain perquisites and benefits.
Option Awards
The option awards column represents the amount of compensation expense
recognized in fiscal 2007 under FASB Statement of Financial Accounting
Standards No. 123 (revised 2004), "Share-Based Payment," with respect to
options granted in fiscal 2007 and prior years. Compensation expense is
measured as the fair value of the stock options on the date of grant and is
amortized over the vesting periods. The methods and assumptions used to
determine the fair value of stock options granted are disclosed in "Stock
Option Plans" in the notes to consolidated financial statements in the
Company's Annual Report for fiscal 2007 accompanying this proxy statement.
All stock options awarded to the named executive officers during fiscal 2007
were at option prices that were equal to the market price on the date of
grant, had vesting dates two years after the date of grant, and had expiration
dates ten years after the date of grant.
Non-Equity Incentive Plan Compensation
The Company has two incentive compensation plans designed to provide annual
performance-based incentives to certain named executive officers. The non-
equity incentive plan compensation column represents cash awards earned by the
named executive officers for performance during fiscal 2007 under the Chief
Executive Officer Bonus Plan and the Operational Vice President Bonus Plan.
8
During fiscal 2007, Mr. Imhoff, Jr. participated in the Company's Chief
Executive Officer Bonus Plan. Under the plan, the executive is eligible to
receive an annual cash bonus equal to a percentage of his base salary in
effect during the year. The percentage is determined by reference to a
combination of two factors: (1) the Company's consolidated income before
income taxes for the fiscal year, to the extent that it exceeds an annual
threshold amount, and (2) the amount of improvement in such income compared
with the preceding fiscal year. The annual threshold amount is determined by
the Compensation Committee prior to the beginning of each fiscal year. The
cash bonus is required to be paid to the executive within 2.5 months of the
close of the Company's fiscal year.
During fiscal 2007, Ms. White participated in the Company's Operational Vice
President Bonus Plan. Under the plan, the executive is eligible to receive an
annual cash bonus equal to a percentage of her base salary in effect during
the year. The percentage is determined by reference to a combination of two
factors: (1) the income before income taxes of the operating divisions
supervised by the executive for the fiscal year, to the extent that it exceeds
an annual threshold amount, and (2) the amount of improvement in such income
compared with the preceding fiscal year. The annual threshold amount is
determined by the Compensation Committee prior to the beginning of each fiscal
year. The cash bonus is required to be paid to the executive within 2.5
months of the close of the Company's fiscal year.
All Other Compensation
The all other compensation column includes contributions to the Executive
Retirement Plan during fiscal 2007 in the following amounts: $45,000 for Mr.
Imhoff, Jr.; $19,000 for Ms. White; and $18,000 for Mr. Yauch.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information concerning outstanding stock
options held by each of the named executive officers as of September 30, 2007.
The Company has not made stock awards to any of the named executive officers.
Outstanding Equity Awards at Fiscal Year-End - Option Awards
Number of
Securities
Underlying
Unexercised
Options (#) Option Option
Exer- Unexer- Exercise Expiration
Name cisable cisable Price ($) Date
Herbert F. Imhoff, Jr. 50,000 -- 2.45 7/29/11
102,193 -- 0.86 8/4/12
20,000 20,000(1) 1.63 9/24/16
Marilyn L. White 10,000 -- 1.25 9/30/11
51,098 -- 0.86 8/4/12
10,000 10,000(1) 1.63 9/24/16
-- 15,000(2) 1.61 9/23/17
Kent M. Yauch 10,000 -- 1.25 9/30/11
29,444 -- 0.86 8/4/12
10,000 10,000(1) 1.63 9/24/16
-- 15,000(2) 1.61 9/23/17
(1) The option vesting date is September 25, 2008.
(2) The option vesting date is September 24, 2009.
9
Retirement Benefits
The Company has a 401(k) retirement plan in which all full-time employees may
participate after one year of service. In addition, the Company has an
Executive Retirement Plan, which is a nonqualified deferred compensation plan
in which all of the named executive officers participate. Under the plan, the
Company contributes a percentage of each participant's earnings to a rabbi
trust under a defined contribution arrangement. The participants direct the
investments of the trust, and the Company does not guarantee investment
performance. Participant account balances are payable upon retirement or
termination from the Company, subject to certain vesting requirements. The
Company does not maintain a tax-qualified defined benefit retirement plan for
any of its executive officers or employees.
Potential Payments upon Termination of Employment or Change in Control
Under the terms of the employment agreement with Mr. Imhoff, Jr., in the event
the Company would terminate his employment for any reason other than for
"cause," the executive would be entitled to receive outplacement assistance; a
lump sum cash payment equal to the sum of his base salary and average annual
performance bonus that would have been payable for the remainder of the term
of the employment agreement; a severance bonus based on a fraction of his
average annual performance bonus; and continuation of certain perquisites and
fringe benefits for the remainder of the term of the employment agreement. In
the event that any payment, benefit or distribution under the terms of his
agreement is determined to be an "excess parachute payment" pursuant to
section 280G of the Internal Revenue Code, with the effect that he would
become liable for the payment of an excise tax, Mr. Imhoff, Jr. would be
entitled to receive an additional gross-up payment.
The Company has individual employment agreements with Ms. White and Mr. Yauch.
Each executive's agreement contains a covenant not to compete that extends for
two years following their termination of employment with the Company. In the
event of a change in control of the Company, if the executive's employment
were to be terminated by the Company for any reason other than "cause," the
executive would be entitled to receive a lump sum cash payment equal to two
times the executive's base salary and average annual bonus; accelerated
vesting of all previous cash or stock awards; a severance bonus based on a
fraction of his average annual bonus; and continuation of certain fringe
benefits for a period of two years.
Compensation of Directors
Under the Company's standard compensation arrangements that were in effect
during fiscal 2007, each non-employee director received a monthly retainer of
$2,000, and the chairman of the Audit Committee received an additional monthly
retainer of $500. Directors did not receive any additional compensation for
attendance at meetings of the board or its committees. Employees of the
Company did not receive any additional compensation for service on the Board
of Directors.
The following table sets forth information concerning the compensation paid to
each of the non-employee directors during fiscal 2007:
Director Compensation
Fees Earned
or Paid Option
in Cash Awards* Total
Name ($) ($) ($)
Dennis W. Baker 24,000 4,638 28,638
Sheldon Brottman 24,000 4,638 28,638
Andrew Dailey 14,000 4,638 18,638
Delain G. Danehey 30,000 4,638 34,638
Joseph F. Lizzadro 24,000 4,638 28,638
*The aggregate number of outstanding option awards at the end of fiscal 2007
were as follows for each of the non-employee directors: Mr. Baker - 15,000;
Mr. Brottman - 40,731; Mr. Dailey - 15,000; Mr. Danehey - 40,731;
Mr. Lizzadro - 15,000.
10
Option Awards
The option awards column represents the amount of compensation expense
recognized in fiscal 2007 under FASB Statement of Financial Accounting
Standards No. 123 (revised 2004), "Share-Based Payment," with respect to
options granted in fiscal 2007 and prior years. Compensation expense is
measured as the fair value of the stock options on the date of grant and is
amortized over the vesting periods. The methods and assumptions used to
determine the fair value of stock options granted are disclosed in "Stock
Option Plans" in the notes to consolidated financial statements in the
Company's Annual Report for fiscal 2007 accompanying this proxy statement.
All stock options awarded to the non-employee directors during fiscal 2007
were at option prices that were equal to the market price on the date of
grant, had vesting dates two years after the date of grant, and had expiration
dates ten years after the date of grant.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. The Company's management has the primary
responsibility for the financial statements, for maintaining effective
internal control over financial reporting, and for assessing the effectiveness
of internal control over financial reporting. In fulfilling its oversight
responsibilities, the Committee reviewed and discussed the audited
consolidated financial statements in the Annual Report with Company
management, including a discussion of the quality, not just the acceptability,
of the accounting principles; the reasonableness of significant judgments; and
the clarity of disclosures in the financial statements.
The Committee reviewed with the independent registered public accounting
firm, which is responsible for expressing an opinion on the conformity of
those audited consolidated financial statements with U.S. generally accepted
accounting principles, its judgments as to the quality, not just the
acceptability, of the Company's accounting principles and such other matters
as are required to be discussed with the Committee by Statement on Auditing
Standards No. 61, Communication With Audit Committees (as amended), other
standards of the Public Company Accounting Oversight Board (United States),
rules of the Securities and Exchange Commission, and other applicable
regulations. In addition, the Committee has discussed with the independent
registered public accounting firm the firm's independence from Company
management and the Company, including the matters in the letter from the
firm required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees, and considered the compatibility of
non-audit services with the independent registered public accounting
firm's independence.
The Committee discussed with the Company's independent registered public
accounting firm the overall scope and plans for their audit. The Committee
met with the independent registered public accounting firm, with and without
management present, to discuss the results of their examinations; their
evaluations of the Company's internal control; and the overall quality of the
Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors, and the Board has approved, that the
audited consolidated financial statements be included in the Annual Report on
Form 10-KSB for the year ended September 30, 2007, filed by the Company with
the Securities and Exchange Commission. The Committee selected the Company's
independent registered public accounting firm for the year ending
September 30, 2008.
The Committee is governed by a charter. The Committee held four meetings
during fiscal year 2007. The Committee is comprised solely of independent
directors as defined by the American Stock Exchange listing standards and Rule
10A-3 of the Securities Exchange Act of 1934.
Audit Committee of the Board of Directors
Delain G. Danehey, Committee Chair
Dennis W. Baker
Sheldon Brottman
Andrew Dailey
Joseph F. Lizzadro
11
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Company's Board of Directors has selected BDO
Seidman, LLP to serve as the Company's independent registered public
accounting firm and to audit the Company's consolidated financial statements
for the fiscal year ending September 30, 2008. BDO Seidman, LLP has served as
the Company's independent registered public accounting firm since fiscal
2004.
A representative of BDO Seidman, LLP is expected to be present at the Annual
Meeting of Shareholders to respond to appropriate questions and to make a
statement if desired.
Principal Accountant Fees
The following table presents fees billed or expected to be billed by BDO
Seidman, LLP for professional services rendered for the audit of the
Company's financial statements for the fiscal years ended September 30, 2007
and 2006, and fees billed by BDO Seidman, LLP during those years for other
professional services:
2007 2006
Audit fees $81,000 $76,000
Audit-related fees 7,000 7,000
Tax fees 14,000 5,000
All other fees -- --
"Audit fees" relate to services rendered for the audit of the Company's
consolidated financial statements for the fiscal year and for reviews of the
interim consolidated financial statements included in the Company's quarterly
reports filed with the Securities and Exchange Commission.
"Audit-related fees" relate to services rendered that are reasonably related
to the audit of the Company's consolidated financial statements and are not
included in "audit fees." These services include audits of the Company's
401(k) retirement plan.
"Tax fees" relate to services rendered for tax compliance, tax advice and
tax planning.
The Audit Committee's policy is to pre-approve all audit and non-audit
services provided by the independent registered public accounting firm, and to
not engage them to perform the specific non-audit services proscribed by law
or regulation. At the beginning of each fiscal year, the Audit Committee
meets with the independent registered public accounting firm and approves the
fees and services to be performed for the ensuing year. On a quarterly basis,
the Audit Committee reviews the fees billed for all services provided for the
year to date, and it pre-approves additional services if necessary. The
committee's pre-approval policies allow management to engage the independent
registered public accounting firm for consultations on tax or accounting
matters up to an aggregate of $10,000 annually. All fees listed in the table
above were approved in accordance with the Audit Committee's policies.
12
OTHER MATTERS
Proposals of Shareholders
In order to be considered for inclusion in the Proxy Statement for the 2009
Annual Meeting of Shareholders, any shareholder proposal to take action at
that meeting must be received by the Company at its address hereinabove, on or
before September 16, 2008. Any such proposal will be subject to the
requirements of the proxy rules adopted under the Securities Exchange
Act of 1934.
In addition, any shareholder wishing to bring business before an annual
meeting must comply with certain provisions in the Company's By-Laws. The
Company's By-Laws establish an advance notice procedure with regard to certain
matters to be brought before an annual meeting of shareholders of the Company
other than by or at the direction of the Board of Directors of the Company.
Such notice generally must be delivered to or mailed to and received at the
principal executive offices of the Company not less than ninety days nor more
than one hundred twenty days prior to the anniversary date of the immediately
preceding annual meeting of shareholders. The shareholder must also comply
with certain other provisions set forth in the Company's By-Laws relating to
the bringing of business before an annual meeting. For a copy of the
Company's By-Laws, which includes the provisions relating to the bringing of
business before an annual meeting, an interested shareholder should contact
the Secretary of the Company, in writing, at Oakbrook Terrace Tower, One
Tower Lane, Suite 2200, Oakbrook Terrace, Illinois 60181.
Availability of Form 10-KSB
The Company will furnish, upon request and without charge to each shareholder
from whom it solicits proxies, a copy of its current annual report on Form
10-KSB, without exhibits, 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 2200
Oakbrook Terrace, Illinois 60181
or e-mail to invest@genp.com
Other Business
At the date of this Proxy Statement, the Board of Directors is not aware
of any matters, other than those stated above, that may be brought before
the meeting. However, if any other matters shall properly come before
the meeting, it is the intention of the persons named in the enclosed form
of proxy to vote such proxy in accordance with their best judgment on
such matters.
13
APPENDIX A
GENERAL EMPLOYMENT ENTERPRISES, INC.
NOMINATING COMMITTEE CHARTER
Adopted May 10, 2004
Organization
This charter governs the operations of the Nominating Committee of the
Board of Directors. The Nominating Committee shall be members of, and
appointed by, the Board of Directors and shall comprise at least three
directors, each of whom are independent of management and the Company.
Members of the Nominating Committee shall be considered independent as long
as they do not accept any consulting, advisory, or other compensatory fee
from the Company and are not an affiliated person of the Company or its
subsidiary, and meet the independence requirements of the American Stock
Exchange listing standards.
The By-Laws of the Company establish procedures for the nomination of
candidates for election to the Board of Directors, including procedures for
shareholders to make nominations.
Purpose
The Nominating Committee shall provide assistance to the Board of Directors
in fulfilling their oversight responsibility to shareholders, with regard to
identifying, interviewing, and recommending to the Board of Directors
qualified candidates to fill positions on the Board of Directors.
Duties and Responsibilities
The responsibility of the Nominating Committee is to oversee the process of
identifying appropriate individuals to fill positions on the Company's Board
of Directors. While the Nominating Committee has the responsibilities and
powers set forth in this Charter, the Board of Directors will approve
nominees for election by the shareholders.
The Nominating Committee, in carrying out its responsibilities, believes its
policies and procedures should remain flexible, in order to best react to
changing needs and circumstances of the Company.
At least annually the Nominating Committee will perform a self evaluation of
the effectiveness of its performance and a review of its Charter.
Minimum Qualifications
In evaluating candidates to serve on the Company's Board of Directors,
consideration will be given to the level of experience, financial literacy
and business acumen of the candidate and their willingness and ability to
attend meetings of the Board of Directors. Furthermore, consideration will
be given to the overall attributes of potential nominees in relation to
current members of the Board of Directors, with the objective of maintaining
a balance of skills and experiences. Generally, the Nominating Committee
will seek candidates with significant decision making responsibility with
business, legal, or academic experience.
Directors need not be residents of Illinois or shareholders of the Company.
Processes for Identifying Candidates
Each year the Nominating Committee will determine the willingness of the
current members of the Board of Directors to stand for reelection and
evaluate whether the size of the Board of Directors is appropriate. If
necessary, additional candidates for director will be identified by
recommendations from directors and officers of the Company, other business
associates, shareholders, and other sources. All candidates will be
considered on an equal basis regardless of source.
The Nominating Committee is authorized to engage third parties to identify
potential nominees if necessary and appropriate.
14
APPENDIX B
GENERAL EMPLOYMENT ENTERPRISES, INC.
AUDIT COMMITTEE CHARTER
November 19, 2007
Organization
This charter governs the operations of the Audit Committee. The Board of
Directors (the "Board") shall appoint an Audit Committee (the "Committee") of
at least three members, consisting entirely of independent directors of the
Board, and shall designate one member as chairperson, or delegate the
authority to designate a chairperson to the Committee. For purposes hereof,
members shall be considered independent as long as they satisfy all of the
independence requirements for board members as set forth in the American Stock
Exchange listing standards and Rule 10A-3 of the Securities Exchange
Act of 1934.
Each member of the Committee shall be financially literate, or become
financially literate within a reasonable period of time, and at least one
member shall be an "audit committee financial expert," as defined by rules of
the Securities and Exchange Commission (the "SEC").
Members shall not serve on more than three public company audit committees
simultaneously.
The Committee shall meet at least quarterly. The Committee shall meet
separately and periodically with management and the independent registered
public accountants. The Committee shall report regularly to the Board with
respect to its activities.
Purpose
The purpose of the Committee shall be to:
o Provide assistance to the Board in fulfilling its oversight responsibility
to the shareholders, potential shareholders, the investment community, and
others relating to: (i) the integrity of the Company's financial
statements; (ii) the effectiveness of the Company's internal control over
financial reporting; (iii) the Company's compliance with legal and
regulatory requirements; (iv) the independent registered public accounting
firm's qualifications and independence; (v) and the performance of the
Company's independent registered public accountants.
o Prepare the Audit Committee report that SEC rules require to be included
in the Company's annual proxy statement.
In fulfilling its purpose, it is the responsibility of the Committee to
maintain free and open communication between the Committee, independent
registered public accountants, and management of the Company, and to determine
that all parties are aware of their responsibilities.
Duties and Responsibilities
The Committee has the responsibilities and powers set forth in this Charter.
Management is responsible for the preparation, presentation, and integrity of
the Company's financial statements, for the appropriateness of the accounting
principles and reporting policies that are used by the Company and for
establishing and maintaining internal control over financial reporting. The
independent registered public accountants are responsible for auditing the
Company's financial statements and for reviewing the Company's unaudited
interim financial statements.
The Committee, in carrying out its responsibilities, believes its policies and
procedures should remain flexible, in order to best react to changing
conditions and circumstances. The Committee will take appropriate actions to
monitor the overall corporate "tone" for quality financial reporting, sound
business risk practices, and ethical behavior.
15
The following shall be the principal duties and responsibilities of the
Committee. These are set forth as a guide with the understanding that the
Committee may supplement them as appropriate.
1. The Committee shall be directly responsible for the appointment,
compensation, retention, and oversight of the work of the independent
registered public accountants (including resolution of disagreements
between management and the auditor regarding financial reporting and
internal control-related matters) for the purpose of preparing or issuing
an audit report or performing other audit, review, or attest services for
the Company, and the independent registered public accountants must
report directly to the Committee.
2. At least annually, the Committee shall obtain and review a report by the
independent registered public accountants describing: (i) the firm's
internal quality control procedures; (ii) any material issues raised by
the most recent internal quality control review, or peer review, of the
firm, or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more
independent audits carried out by the firm, and any steps taken to deal
with any such issues; and (iii) all relationships between the
independent registered public accountants and the Company (to assess
the auditors' independence).
3. After reviewing the foregoing report and the independent registered
public accountants' work throughout the year, the Committee shall
evaluate the auditors' qualifications, performance and independence.
Such evaluation should include the review and evaluation of the lead
audit partner and take into account the opinions of management.
4. The Committee shall determine that the independent registered public
accounting firm has a process in place to address the rotation of the
lead audit partner and other audit partners serving the account as
required under the SEC independence rules.
5. The Committee shall pre-approve all audit and non-audit services provided
by the independent registered public accountants, including specific pre-
approval of internal control-related services, and shall receive certain
disclosure, documentation, and discussion of non-prohibited tax services
by the independent registered public accountant. The Committee shall not
engage the independent registered public accountants to perform non-audit
services proscribed by law or regulation. The Committee may delegate
pre-approval authority to a member of the Audit Committee. The decisions
of any Committee member to whom pre-approval authority is delegated must
be presented to the full Committee at its next scheduled meeting.
6. The Committee shall discuss with the independent registered public
accountants the overall scope and plans for their audits, including the
adequacy of staffing and budget or compensation.
7. The Committee shall regularly review with the independent registered
public accountants any audit problems or difficulties encountered during
the course of the audit work, including any restrictions on the scope of
the independent registered public accountants' activities or access to
requested information, and management's response. The Committee should
review any accounting adjustments that were noted or proposed by the
auditors but were "passed" (as immaterial or otherwise); any significant
consultations between the audit team and the audit firm's national office
on matters that are required to be disclosed to the Committee; and any
"management" or "internal control" letter issued, or proposed to be
issued, by the audit firm to the Company.
8. The Committee shall meet to review and discuss the quarterly financial
statements with management and the independent registered public
accountants prior to the release of earnings to the public and prior to
the filing of the Company's Quarterly Report on Form 10-QSB. Also, the
Committee shall discuss the results of the quarterly review and any other
matters required to be communicated to the Committee by the independent
registered public accountants under the standards of the Public Company
Accounting Oversight Board (United States) (the "PCAOB"). The
chairperson of the Committee may represent the entire Committee for the
purposes of these reviews.
16
9. The Committee shall meet to review and discuss the annual audited
financial statements, including Management's Discussion and Analysis of
Financial Condition and Results of Operations, with management and the
independent registered public accountants prior to the release of
earnings to the public and prior to the filing of the Company's Annual
Report on Form 10-KSB (or the annual report to shareholders if
distributed prior to the filing of Form 10-KSB). Also, the Committee
shall discuss the results of the annual audit and any matters required
to be communicated to the Committee by the independent registered public
accountants under the standards of the PCAOB.
10. The Committee's review of the financial statements shall include: (i)
major issues regarding accounting principles and financial statement
presentations, including any significant changes in the Company's
selection or application of accounting principles, and significant
matters regarding internal control over financial reporting that have
come to the attention of the independent registered public accountants
during the conduct of their audits; (ii) discussions with management and
the independent registered public accountants regarding significant
financial reporting issues and judgments made in connection with the
preparation of the financial statements and the reasonableness of those
judgments, including consideration of the effects of alternative GAAP
methods on the financial statements; (iii) consideration of the effect of
regulatory and accounting initiatives, as well as off-balance sheet
structures, on the financial statements; (iv) consideration of the
judgment of both management and the independent registered public
accountants about the quality, not just the acceptability of
accounting principles; and (v) the clarity of the disclosures in the
financial statements.
11. The Committee shall receive and review a report from the independent
registered public accountants, prior to the filing of the Company's
Annual Report on Form 10-KSB (or the annual report to shareholders if
distributed prior to the filing of Form 10-KSB), on all critical
accounting policies and practices of the Company; all material
alternative treatments of financial information within generally accepted
accounting principles that have been discussed with management, including
the ramifications of the use of such alternative treatments and
disclosures and the treatment preferred by the independent registered
public accountants; and other material written communications between the
independent registered public accountants and management.
12. The Committee shall review and approve all related party transactions
required to be disclosed pursuant to SEC Regulation S-B, Item 404, and
discuss with management the business rationale for the transactions and
whether appropriate disclosures have been made.
13. The Committee shall review management's report on its assessment of the
effectiveness of internal control over financial reporting as of the end
of each fiscal year and the independent registered public accountants'
report on the effectiveness of internal control over financial reporting.
14. The Committee shall discuss with management and the independent
registered public accountants management's process for assessing the
effectiveness of internal control over financial reporting under Section
404 of the Sarbanes-Oxley Act.
15. The Committee shall discuss with the independent registered public
accountants the characterization of deficiencies in internal control over
financial reporting and any differences between management's assessment
of the deficiencies and the independent registered public accountants'.
The Committee shall also discuss with management its remediation plan to
address internal control deficiencies. The Committee shall determine
that the disclosures describing any identified material weaknesses and
management's remediation plans are clear and complete.
16. The Committee shall discuss with management its process for performing
its required quarterly certifications under Section 302 of the Sarbanes-
Oxley Act.
17
17. The Committee shall discuss with management and the independent
registered public accountants any (i) changes in internal control over
financial reporting that have materially affected or are reasonably
likely to materially affect the Company's internal control over financial
reporting that are required to be disclosed and (ii) any other changes in
internal control over financial reporting that were considered for
disclosure in the Company's periodic filings with the SEC.
18. The Committee shall review with management the Company's overall
internal control programs.
19. The Committee shall review the Company's compliance and ethics programs,
including consideration of legal and regulatory requirements, and shall
review with management its periodic evaluation of the effectiveness of
such programs. The Committee shall review the Company's code of conduct
and programs that management has established to monitor compliance with
such code. The Committee shall receive any corporate attorneys' reports
of evidence of a material violation of securities laws or breaches of
fiduciary duty by the Company.
20. The Committee shall discuss the Company's policies with respect to risk
assessment and risk management, including the risk of fraud. The
Committee shall also discuss the Company's major financial risk exposures
and the steps management has taken to monitor and control such exposures.
21. The Committee shall establish procedures for the receipt, retention, and
treatment of complaints received by the Company regarding accounting,
internal accounting controls, or auditing matters, and the confidential,
anonymous submission by employees of the Company of concerns regarding
questionable accounting or auditing matters.
22. The Committee shall set clear hiring policies for employees or former
employees of the independent registered public accountants that meet the
SEC regulations and stock exchange listing standards.
23. The Committee shall retain such outside legal, accounting, or other
advisers as it considers necessary in discharging its oversight role.
The Committee shall approve, and the Company shall pay, the fees and
expenses for: (i) compensation to the independent registered public
accounting firm engaged for the purpose of preparing or issuing audit
reports or performing other audit, review, or attest services for the
Company; (ii) compensation to any advisers employed by the Committee;
and (iii) ordinary administrative expenses of the Committee that are
necessary or appropriate in carrying out its duties.
24. The Committee shall perform an evaluation of its performance at least
annually to determine whether it is functioning effectively. The
Committee also shall discuss with the independent registered public
accountants the accountants' observations related to the effectiveness
of the Committee.
25. The Committee shall review and reassess the charter at least annually
and obtain the approval of the Board.
18
APPENDIX C
GENERAL EMPLOYMENT ENTERPRISES, INC.
COMPENSATION COMMITTEE CHARTER
August 6, 2007
Committee's Purpose
The Compensation Committee (the "Committee") is appointed by the Board of
Directors (the "Board") to discharge the Board's responsibilities relating to
compensation of the Company's directors and officers. The Committee has
overall responsibility for approving and evaluating the director and officer
compensation plans, policies and programs of the Company.
Committee Membership and Meetings
The Committee shall consist of no fewer than three members. The members of the
Committee shall meet the independence requirements of the American Stock
Exchange and the Securities and Exchange Commission and shall be outside
directors within the meaning of section 162(m) of the Internal Revenue Code.
The members of the Committee shall be directors of the Company and shall be
elected by the Board. The Board shall also designate a Committee Chairperson.
Committee members shall serve for a period of one year unless a member resigns
or is replaced by the Board. Committee members may be removed by a majority
vote of the Board.
The Committee shall meet as often as necessary to carry out its
responsibilities. Meetings shall be called by the Chairperson of the
Committee. A majority of the members shall constitute a quorum, and a
majority of the members present shall be required to act on Committee
business. The Committee may take action in the absence of a meeting by
unanimous written consent of all members.
The Chairperson of the Committee shall be responsible for scheduling
meetings, establishing agendas and conducting the meetings of the Committee.
Minutes for all meetings shall be prepared to document the Committee's
discharge of its responsibilities, and the minutes shall be approved by the
Committee members.
The Committee shall determine which officers of the Company or other visitors
to invite to the Committee's meetings. In the sole discretion of the
Committee, the Committee may meet in executive session at any time.
Committee Authority and Responsibilities
1. Compensation Philosophy. In consultation with senior management, the
Committee shall establish the Company's general compensation philosophy,
and it shall oversee the development of executive compensation programs.
The Committee shall periodically review the Company's executive
compensation programs and make any modifications that it deems advisable.
2. Chief Executive Officer. The Committee shall set corporate goals and
objectives relevant to the Chief Executive Officer's compensation. In
determining the incentive component of the Chief Executive Officer's
compensation, the Committee should consider the Company's performance and
relative stockholder return, the value of similar incentive awards to the
chief executive officers at comparable companies, and the awards given to
the Company's Chief Executive Officer in past years. The Committee shall
annually review and evaluate the Chief Executive Officer's performance in
light of those goals and objectives. The Committee shall have the sole
authority to approve, amend or terminate these goals and objectives and
to determine all compensation levels based on this evaluation, including
the following: (a) annual base salary level, (b) annual incentive
opportunity level, (c) long-term incentive opportunity level, (d)
employment agreements or severance arrangements, and (e) any special
or supplemental benefits.
19
3. Other Officers. The Committee shall annually review and have the sole
authority to approve, amend or terminate for the officers of the Company
(other than the Chief Executive Officer) all compensation, including the
following: (a) annual base salary level, (b) annual incentive
opportunity level, (c) long-term incentive opportunity level, (d)
employment agreements or severance arrangements, and (e) any special
or supplemental benefits.
4. Directors. The Committee shall present to the Board their recommendations
to approve, amend or terminate for directors (a) the annual compensation,
and (b) any additional compensation for service on committees of the
Board, service as a committee chairperson, meeting fees or any other
benefit payable by virtue of the director's position as a member of
the Board.
5. Compensation and Benefit Plans. The Committee shall have the sole
authority to approve, amend or terminate incentive-compensation plans,
retirement plans, deferred compensation plans and any equity-based plans,
including the approval, amendment or termination of any tax-qualified
plan or section 125 plan, except as provided in Paragraph 6 of this
Charter. With respect to any funded employee benefit plan covering
employees of the Company, the Committee shall have the sole authority to
appoint and remove various plan trustees, members of administrative
committees and plan administrators. The Committee shall have the sole
authority to administer any equity-based compensation plans, including
determining awards to be granted under such plans.
6. Ratification Required by the Board. The Committee shall present as
a recommendation to the Board any action that is required by law
or regulation to be submitted to the stockholders of the Company
for approval.
7. Proxy Statement. The Committee shall prepare or review any reports on
director and officer compensation to be included in the Company's proxy
statements, as required by applicable regulations of the Securities and
Exchange Commission.
8. Competitive Compensation Position. The Committee shall annually assess
the Company's competitive position for each component of officer
compensation by reviewing market data for appropriate peer companies.
9. Cash Effect. The Committee shall monitor the cumulative cash effect on
the Company caused by bonus and other cash-based incentive plans of the
Company, especially in relation to the Company's net income for the
applicable year(s).
10. Report to the Board. Following each action by the Committee, the
Committee shall make a report to the Board at the next regularly
scheduled meeting of the Board.
11. Charter Review. The Committee shall review and assess the adequacy of
this Charter annually and recommend any proposed changes to the Board
for approval.
12. Committee Performance Evaluation. The Committee shall annually review
its own performance. The results of such self-assessment shall be
presented to the Board at the next regularly scheduled meeting of
the Board.
13. Access to Consultants. The Committee shall have the authority to retain
and terminate any compensation or other consultant to be used to assist
in the evaluation of director or executive compensation and shall have
authority to approve the consultant's fees and other retention terms. The
Committee shall also have authority to obtain advice and assistance from
internal or external legal, accounting or other advisors and the
authority to approve the payment of the advisor's fees and other
retention items. All fees and other retention items for compensation
consultants, legal, accounting or other advisors shall be paid by
the Company.
14. Additional Activities. The Committee shall perform any other activities
consistent with this Charter, the Company's By-laws and applicable law,
as the Committee deems appropriate to carry out its assigned duties or as
requested by the Board.
20
APPENDIX D
PROXY FOR 2008 ANNUAL MEETING OF SHAREHOLDERS
OF
GENERAL EMPLOYMENT ENTERPRISES, INC.
One Tower Lane, Suite 2200, Oakbrook Terrace, IL 60181
^FOLD AND DETACH HERE AND READ THE REVERSE SIDE^
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned shareholder of GENERAL EMPLOYMENT ENTERPRISES, INC. hereby
appoints HERBERT F. IMHOFF, JR. and SHELDON BROTTMAN, and each of them, as the
proxies (with full power of substitution) to vote all shares which the
undersigned would be entitled to vote at the Annual Meeting of Shareholders to
be held on February 25, 2008 and any adjournment thereof.
If no direction is made, said proxies will vote FOR election of directors.
Continued, and to be marked, dated and signed on the reverse side.
Please mail this proxy in the enclosed envelope as promptly as possible.
^FOLD AND DETACH HERE AND READ THE REVERSE SIDE^
Please mark
your votes [X]
like this
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. THE PROXY
HOLDERS WILL HAVE FULL DISCRETION AND AUTHORITY TO VOTE CUMULATIVELY AND TO
ALLOCATE VOTES AMONG ANY OR ALL OF THE NOMINEES FOR DIRECTOR AS THE PROXY
HOLDERS MAY DETERMINE. IN ANY CASE, AND NOTWITHSTANDING THE FOREGOING, THE
PROXY HOLDERS MAY VOTE THE SHARES REPRESETED HEREBY FOR LESS THAN THE ENTIRE
NUMBER OF NOMINEES IF ANY SITUATION ARISES WHICH, IN THE OPINION OF THE PROXY
HOLDERS, MAKES SUCH ACTION NECESSARY OR DESIRABLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
1. ELECTION OF DIRECTORS, NOMINEES: FOR WITHHOLD
D. W. Baker, S. Brottman, [ ] [ ]
A. Dailey, D. G. Danehey,
H. F. Imhoff, Jr., K. M. Yauch
For, except vote withheld from the following
nominee(s): ________________________________.
2. In their discretion, in the transaction of such other
business as may properly come before the meeting.
You are encouraged to specify your choice by marking the appropriate
box with an "X" but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendation.
COMPANY ID:
PROXY NUMBER:
ACCOUNT NUMBER:
Signature: _________________ Signature: ___________________ Date: _______2008
NOTE: The signer hereby revokes all proxies heretofore given by the signer to
vote at said meeting or any adjournments thereof. 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.