SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934 (Amendment No. )
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
GENERAL EMPLOYMENT ENTERPRISES, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[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 28, 2005
To the Shareholders of
GENERAL EMPLOYMENT ENTERPRISES, INC.
You are cordially invited to attend the Annual Meeting of
Shareholders of General Employment Enterprises, Inc. which will
be held in the Lane Room of the Hilton Suites Hotel, 10 Drury
Lane, in Oakbrook Terrace, Illinois 60181, on Monday, February
28, 2005, 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 2100, Oakbrook Terrace, IL
60181, or by calling (630) 954-0495.
The purpose of the meeting is:
1.To elect six directors of the Company;
2.To act upon such other matters as may properly be brought
before the meeting.
Shareholders of record at the close of business on December 31,
2004 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
Secretary
Oakbrook Terrace, Illinois
January 14, 2005
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.
GENERAL EMPLOYMENT ENTERPRISES, INC.
Oakbrook Terrace Tower
One Tower Lane, Suite 2100
Oakbrook Terrace, IL 60181
PROXY STATEMENT
For Annual Meeting of Shareholders
This statement and the accompanying proxy card, which are first
being sent to shareholders on approximately January 14, 2005, 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 28,
2005, at 9:00 a.m., local time, in the Lane Room of the Hilton
Suites Hotel, 10 Drury Lane, in 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 5,140,894 outstanding on December 31, 2004, the record date
for the Annual Meeting. Shareholders are entitled to one vote
for each share held except that, in elections for directors, each
shareholder has cumulative voting rights. When voting
cumulatively, each shareholder has the number of votes equal to
the number of directors to be elected (six) multiplied by the
number of his or her shares. Such number of votes may be divided
equally among all nominees, may be cumulated for one nominee, or
may be distributed on any basis among as many nominees as is
desired.
Each proxy that is properly signed and received before the
Annual Meeting will, unless such proxy has been revoked, be voted
in accordance with the instructions on such proxy. If no
instruction is indicated on the proxy card, the shares will be
voted for election of the six nominees for director listed in
this proxy statement. Proxies given may be revoked at any time
before the voting thereof by delivering to the Company a written
statement revoking the proxy or a subsequently dated proxy, or by
attending the meeting and voting in person.
A quorum of shareholders is necessary to take action at the
Annual Meeting. A majority of the total outstanding shares of
Common Stock of the Company, represented in person or by proxy,
will constitute a quorum for purposes of the meeting.
Abstentions or broker non-votes will be treated as shares of
Common Stock that are present for purposes of determining the
presence of a quorum. The six nominees for director receiving
the highest number of votes cast will be elected directors of the
Company; abstentions and broker non-votes will have no effect on
the vote for the election of directors. "Broker non-votes"
refers to a broker or other nominee holding shares for a
beneficial owner not voting on a proposal because the broker or
other nominee does not have discretionary voting power regarding
that item and has not received instructions from the beneficial
owner.
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.
ELECTION OF DIRECTORS
Six directors are to be elected at the Annual Meeting, to serve
until the 2006 Annual Meeting of Shareholders, or until their
successors are elected and qualified. Proxies will be voted,
unless otherwise indicated, for the election of the nominees
named below. If necessary to elect the nominees named below,
proxies will be voted cumulatively.
Nominees
The following information is furnished with respect to each
nominee for election as a director:
Name and Age of Director Nominees,
Their Primary Occupation and Other Information
HERBERT F. IMHOFF, JR., age 55 - Director of the Company since
1986; named Chairman of the Board and Chief Executive Officer in
July 2001; has been President and Chief Operating Officer since
February 1997 and had previously been Executive Vice President
since 1986; has served as the Company's general counsel since
1982.
KENT M. YAUCH, age 58 - 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.
SHELDON BROTTMAN, age 70 - Director of the Company since 1991; is
an attorney, and for more than ten years, has operated a real
estate management and development business. Until 1997, he was
President and CEO of Jemm Wholesale Meat Co. in Chicago,
Illinois.
DELAIN G. DANEHEY, age 70 - Director of the Company since 1995;
formerly with the auditing firm of Ernst & Young LLP for 31
years, and was a partner when he retired from the firm in 1991.
DENNIS W. BAKER, age 58 - Treasurer of CF Industries, Long Grove,
Illinois, a chemical manufacturing company, where he has been
employed for more than twenty-five years in various financial
capacities. Mr. Baker joined the Company's Board in 2000.
JOSEPH F. LIZZADRO, age 67 - Chairman Emeritus of L&H Company,
Oak Brook, Illinois, an electrical contracting firm, where he had
been employed since 1963. Mr. Lizzadro also serves as a director
of Harris Bank, Oakbrook Terrace, Illinois, and Florence
Corporation, Glendale Heights, Illinois. He joined the Company's
Board in 2000.
All of the foregoing nominees are currently serving as
directors of the Company and all were elected by the shareholders
at the last Annual Meeting. Each of the above-named nominees has
agreed to serve, if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF EACH OF THE INDIVIDUALS NOMINATED FOR ELECTION AS A DIRECTOR.
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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. Except as
noted otherwise, the information is as of December 31, 2004:
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership* of Class
Herbert F. Imhoff, Jr. 601,678 (1) 11.37%
One Tower Lane, Suite 2100
Oakbrook Terrace, IL 60181
Mark L. Imhoff 451,864 (2) 8.79
Clear Channel Worldwide
20880 Stone Oak Parkway
San Antonio, TX 78258
Brad A. Imhoff 407,349 (3) 7.92
Spry Group, Inc.
1111 W. 22nd Street
Oak Brook, IL 60523
Daniel Zeff 259,300 (4) 5.04
c/o Zeff Holding Company, LLC
50 California Street, Suite 1500
San Francisco, CA 94111
*Unless noted otherwise, the named individuals have sole voting
and dispositive power over the shares listed.
(1) Includes 10,161 shares held by Mr. Imhoff, Jr.'s son and
152,193 option shares exercisable by Mr. Imhoff, Jr. within 60
days of record date.
(2) Includes 26,400 shares held by the spouse and children of
Mark L. Imhoff.
(3) Includes 24,100 shares held by the spouse and children of
Brad A. Imhoff.
(4) This information is based on a Schedule 13G dated October
15, 2004.
The following information is furnished as of December 31, 2004,
to indicate the beneficial ownership of the Company's outstanding
Common Stock by each director and each "named executive officer,"
as defined below, individually, and all directors and executive
officers as a group:
Name of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership* of Class
Herbert F. Imhoff, Jr. 601,678(1) 11.37%
Kent M. Yauch 43,444(2) **
Sheldon Brottman 61,851(3) 1.20
Delain G. Danehey 28,456(3) **
Dennis W. Baker 8,460(4) **
Joseph F. Lizzadro 18,000(4) **
Marilyn L. White 61,098(5) 1.17
All directors and executive 900,355(6) 16.39
officers as a group
(eight persons)
*Unless noted otherwise, the named individuals have sole voting
and dispositive power over the shares listed.
** Represents less than 1%.
3
(1) Includes 10,161 shares held by Mr. Imhoff, Jr.'s son and
152,193 option shares exercisable by Mr. Imhoff, Jr. within 60
days of record date.
(2) Includes 39,444 option shares exercisable within 60 days of
record date.
(3) Includes 25,731 option shares exercisable within 60 days of
record date.
(4) Includes 5,000 option shares exercisable within 60 days of
record date.
(5) Represents option shares exercisable within 60 days of
record date.
(6) Includes 10,161 shares held by Mr. Imhoff, Jr.'s son, and
350,930 shares exercisable by members of the group within 60 days
of record date.
DIRECTORS AND EXECUTIVE OFFICERS
Information Concerning the Board of Directors and Its Committees
The Board of Directors meets on a regularly scheduled basis to
review significant developments affecting the Company and to act
on matters requiring Board approval. It also holds special
meetings when an important matter requires Board action between
scheduled meetings. The Board held seven 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
directors were present at the prior year's annual meeting, which
was held on February 23, 2004.
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 of Corporate Secretary, General Employment
Enterprises, Inc., One Tower Lane, Suite 2100, Oakbrook Terrace,
IL 60181. Any such correspondence will be reviewed by the
Corporate 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 Corporate Secretary.
There are four standing committees of the Board of Directors,
which are the Executive Committee, the Audit Committee, the
Compensation and Stock Option Committee, and the Nominating
Committee.
Executive Committee
The Board of Directors has an Executive Committee consisting of
the Board of Directors as a whole, and meetings of the Committee
may be called or requested by the Chairman of the Board or a
majority of the directors. The Executive Committee is authorized
to act upon all matters requiring Board approval except the
declaration of dividends, corporate reorganization, and merger
and acquisition decisions. As provided in the By-Laws of the
Company, a majority of the directors constitutes a quorum for the
purpose of transacting Committee business. No Executive
Committee meetings were held in fiscal 2004.
Audit Committee
The Audit Committee is presently composed of four non-employee
directors: Delain G. Danehey (Chairman), Dennis W. Baker,
Sheldon Brottman and Joseph F. Lizzadro. The Board of Directors
has determined that each of the members of this Committee is an
"independent director" as defined by the rules of the American
Stock Exchange. The Board of Directors has also determined that
Mr. Danehey and Mr. 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 was attached as an
exhibit to the proxy statement prepared in connection with the
February 23, 2004 Annual Meeting of Shareholders.
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
4
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 five
times during fiscal 2004. In addition, the Chairman of the Audit
Committee participated in three quarterly meetings in fiscal
2004, to review earnings press releases and the Company's filings
on Form 10-QSB with members of management and the Company's
independent auditors.
Compensation and Stock Option Committee
The Compensation and Stock Option Committee is presently
composed of four non-employee directors: Sheldon Brottman
(Chairman), Dennis W. Baker, Delain G. Danehey and Joseph F.
Lizzadro. The Board of Directors has determined that each of the
members of this Committee is an "independent director" as defined
by the rules of the American Stock Exchange. The Committee
reviews and establishes the Company's compensation policies and
practices, including salary and incentive compensation programs
for the executive officers of the Company and also oversees the
administration of the Company's stock option plans. The
Committee has the power to determine from time to time the
individuals to whom options shall be granted, the number of
shares to be covered by each option, the time or times at which
options shall be granted, and the terms of such options. The
Compensation and Stock Option Committee met four times during
fiscal 2004.
Nominating Committee
The Nominating Committee is composed of four non-employee
directors: Dennis W. Baker (Chairman), Sheldon Brottman, Delain
G. Danehey, and Joseph F. Lizzadro. Each member of the
Nominating Committee is an "independent director" as defined by
the rules of the American Stock Exchange. 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.
In accordance with its Charter, 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 2004.
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. To be considered by the
Committee, nominations from shareholders must be submitted
according to the procedures described below. There were no
nominations received from shareholders for consideration at the
Annual Meeting.
Nominations for Directors
The By-Laws of the Company establish procedures for the
nomination of candidates for election to the Board of Directors.
The By-Laws provide that the nominations may be made by the Board
of Directors or by a committee appointed by the Board of
Directors. Any shareholder entitled to vote in the election of
directors generally may make nominations for the election of
directors to be held at an annual meeting of shareholders,
provided that such shareholder has given actual written notice of
his intent to make such nomination or nominations to the
Secretary of the Company not later than sixty days before the
anniversary date of the immediately preceding annual meeting of
shareholders. Each such notice must set forth (a) the name and
address of the shareholder who intends to make the nomination and
of the person or persons to be nominated; (b) a representation
that the shareholder is a holder of record of stock of the
Company entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or
persons specified in the notice; (c) a description of all
arrangements or understandings involving any two or more of the
shareholders, each such nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination
or nominations are to be made by the shareholder or relating to
the Company or its securities or to such nominee's service as a
director if elected; (d) such other information regarding such
nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had the nominee been
nominated, or intended to be nominated, by the Board of
Directors; and (e) the consent of each nominee to serve as a
director of the Company, if so elected.
5
Executive Officers of the Company
All executive officers are elected annually by the Board of
Directors at the first meeting of the Board held following each
annual meeting of shareholders, and they hold office until their
successors are elected and qualified. The executive officers of
the Company are as follows:
Name and Age Position and Other Information
HERBERT F. IMHOFF, JR. (55) Chairman of the Board and Chief
Executive Officer, and President
and Chief Operating Officer.
MARILYN L. WHITE (54) Vice President. Elected Vice
President in 1996, she is responsible
for the Company's branch operations.
KENT M. YAUCH (58) Vice President, Chief Financial
Officer and Treasurer.
NANCY C. FROHNMAIER (60) Vice President since 1995 and
Corporate Secretary since 1985.
Code of Ethics
The Company has adopted a code of ethics that applies to all
of its directors and employees, including its principal executive
officer, principal financial officer and principal accounting
officer. A copy of the Code of Ethics was filed as an exhibit to
the Company's most recent annual report to the Securities and
Exchange Commission on Form 10-KSB.
Section 16(a) Beneficial Ownership Reporting Compliance
Directors and officers of the Company are required to report to
the Securities and Exchange Commission, by a specified date,
their transactions related to General Employment Enterprises,
Inc. Common Stock. Based solely on review of the copies of these
reports furnished to the Company and written representation that
no other reports were required, the Company believes that during
the 2004 fiscal year, all filing requirements applicable to its
officers, directors and greater than ten percent beneficial
owners were complied with.
6
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table
The following table sets forth certain information regarding
compensation awarded, earned or paid during each of the Company's
last three fiscal years to the individual serving as the
Company's Chief Executive Officer during fiscal 2004 and the
other two most highly-compensated individuals serving as
executive officers at the end of the 2004 fiscal year. These
individuals are sometimes herein referred to as the "named
executive officers."
Summary Compensation Table
Long-Term
Compensation
Awards -
Name and Annual Securities All Other
Principal Fiscal Compensation Underlying Compen-
Position Year Salary Bonus Options* sation**
Herbert F. Imhoff, Jr. 2004 $360,000 $ -- -- $ 3,075
Chairman and Chief 2003 360,000 -- -- 33,000
Executive Officer, 2002 435,000 -- 102,193 36,750
and President and
Chief Operating Officer
Marilyn L. White 2004 $162,000 $ -- -- $ 2,430
Vice President 2003 162,000 -- -- 8,430
2002 177,000 -- 61,098 9,255
Kent M. Yauch 2004 $144,000 $ -- -- $ 2,160
Vice President, Chief 2003 144,000 -- -- 7,493
Financial Officer and 2002 157,333 -- 39,444 8,356
Treasurer
* The number of stock option awards for fiscal 2002 includes
options granted pursuant to the Company's 2002 tender offer to
exchange previously outstanding stock options.
**Amounts represent the Company's contributions to the Company's
401(k) plan and deferred compensation plan.
Stock Option Exercises and Fiscal Year-End Stock Option Values
No stock options were exercised by any named executive officer
during fiscal 2004. The following table shows information with
respect to each named executive officer concerning unexercised
options held as of September 30, 2004.
Aggregated Fiscal Year-End Option Values
Value of
Number of Securities Unexercised
Underlying Unexercised In-the-Money
Options at F/Y End Options at F/Y End (1)
Exer- Unexer- Exer- Unexer-
Name cisable cisable cisable cisable
Herbert F. Imhoff, Jr. 152,193 -- $125,697$ --
Marilyn L. White 61,098 -- 71,251 --
Kent M. Yauch 39,444 -- 44,616 --
(1) Represents the spread between $2.09, the closing price of the
Company's Common Stock on the American Stock Exchange on
September 30, 2004, and the option price per share multiplied by
the number of unexercised options.
7
Compensation of Directors
During the last fiscal year, directors, who were not full-time
employees of the Company, were compensated at the rate of $1,000
per month. Compensation for non-employee Executive Committee
members is $1,000 per meeting; however, no Executive Committee
meetings were held in fiscal 2004. Since Audit Committee,
Compensation and Stock Option Committee and Nominating Committee
meetings are held in conjunction with regular Board meetings,
Committee members receive no additional fee for serving on these
Committees.
Employment Agreements
Herbert F. Imhoff, Jr. has an employment agreement with the
Company to serve as Chairman of the Board and Chief Executive
Officer, and President and Chief Operating Officer. Mr. Imhoff,
Jr.'s agreement provides for a 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. In the event the Company would
terminate his employment for any reason other than for cause, Mr.
Imhoff, Jr. would be entitled to continue to receive compensation
and benefits for a period of three years. Effective August 1,
2002, Mr. Imhoff, Jr.'s agreement was amended to reflect his
offer to waive 20% of his base salary for an indefinite period of
time.
The Company has employment agreements with Marilyn L. White and
Kent M. Yauch. Under the terms of their agreements, these
employees would be entitled to continuation of base salary for a
one-year period as well as continuation of certain employee
welfare benefits, if their employment were terminated following a
change in control of the Company.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Audit Committee of the Company's Board of Directors has
engaged BDO Seidman, LLP to serve as the Company's independent
auditors and to audit the Company's consolidated financial
statements for the fiscal year ending September 30, 2005. BDO
Seidman, LLP has served as the Company's independent auditors
since December 23, 2003. The change of independent auditors was
recommended and approved by the Audit Committee.
During the two fiscal years ended September 30, 2003, and
subsequently to the effective date of their appointment, the
Company did not consult with BDO Seidman, LLP regarding the
application of accounting principles to a specific transaction or
regarding the type of opinion that might be rendered on the
Company's financial statements.
Ernst & Young LLP served as the Company's independent auditors
for the year ended September 30, 2003, and had served in that
capacity since 1985. Ernst & Young LLP was dismissed as the
Company's independent auditors effective as of December 23, 2003.
During the two fiscal years ended September 30, 2003, and
subsequently to the effective date of their dismissal, there were
no disagreements with Ernst & Young LLP on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.
The audit report of Ernst & Young LLP for the Company's two
fiscal years ended September 30, 2003 did not contain an adverse
opinion, a disclaimer of opinion, or an opinion that was
qualified or modified as to uncertainty, audit scope or
accounting principles.
Representatives of BDO Seidman, 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.
8
The following is a summary of the fees billed to the Company by
its independent auditors for professional services rendered for
the two most recent fiscal years:
2004 2003
BDO Seidman, LLP:
Audit fees $69,000 --
Audit-related fees 8,700 --
Tax fees -- --
All other fees -- --
Ernst & Young LLP:
Audit fees $ 5,000 $63,000
Audit-related fees -- 8,000
Tax fees -- 2,230
All other fees -- --
"Audit fees" consist of fees billed for 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" consist of fees billed for 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
retirement plan and consultations regarding financial accounting
and reporting standards.
"Tax fees" consist of fees billed for services rendered for tax
consulting.
The Audit Committee's policy is to pre-approve all audit and
non-audit services provided by the independent auditors, and to
not engage the independent auditors to perform the specific non-
audit services proscribed by law or regulation. The Audit
Committee determined that providing the above nonaudit services
was compatible with maintaining the auditor's independence.
9
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee oversees the Company's financial reporting
process on behalf of the Board of Directors. Management has the
primary responsibility for the financial statements and the
reporting process, including the system of internal control. In
fulfilling its oversight responsibilities, the Committee reviewed
the audited financial statements in the Annual Report on Form 10-
KSB with 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 auditors, who are
responsible for expressing an opinion on the conformity of those
audited financial statements with accounting principles generally
accepted in the United States of America, their 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 under auditing standards of the
Public Company Accounting Oversight Board (United States). In
addition, the Committee has discussed with the independent
auditors the auditors' independence from management and the
Company, including the matters in the written disclosures
required by the Independence Standards Board, and considered the
compatibility of non-audit services with the auditors'
independence.
The Committee discussed with the Company's independent auditors
the overall scope and plans for their audit. The Committee meets
with the independent auditors, 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. The Committee held
five meetings during fiscal year 2004.
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 financial statements be
included in the Annual Report on Form 10-KSB for the year ended
September 30, 2004 for filing with the Securities and Exchange
Commission.
The Audit Committee has also discussed with representatives of
BDO Seidman, LLP their proposal to serve as independent auditors
of the Company for the year ending September 30, 2005, and based
on these discussions, the Committee approved the selection of BDO
Seidman, LLP.
Audit Committee of the Board of Directors
Delain G. Danehey, Committee Chair
Dennis W. Baker
Sheldon Brottman
Joseph F. Lizzadro
10
OTHER MATTERS
Proposals of Shareholders
In order to be considered for inclusion in the Proxy Statement
for the 2006 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,
2005. Any such proposal will be subject to the requirements of
the proxy rules adopted under the Securities Exchange Act of
1934.
In addition, any shareholder wishing to bring business before
an annual meeting must comply with certain provisions in the
Company's By-Laws. The Company's By-Laws establish an advance
notice procedure with regard to certain matters to be brought
before an annual meeting of shareholders of the Company other
than by or at the direction of the Board of Directors of the
Company. Such notice generally must be delivered to or mailed to
and received by the Secretary at the principal executive offices
of the Company not less than 30 days nor more than 60 days before
the meeting. The shareholder must also comply with certain other
provisions set forth in the Company's By-Laws relating to the
bringing of business before an annual meeting. For a copy of the
Company's By-Laws, which includes the provisions relating to the
bringing of business before an annual meeting, an interested
shareholder should contact the Secretary of the Company, in
writing, at Oakbrook Terrace Tower, One Tower Lane, Suite 2100,
Oakbrook Terrace, Illinois 60181.
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
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.
11
APPENDIX A
NOMINATING COMMITTEE CHARTER
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.
12
APPENDIX B
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
OF
GENERAL EMPLOYMENT ENTERPRISES, INC.
One Tower Lane, Suite 2100, 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 28, 2005 and any adjournment thereof.
If a vote is not specified, 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. THIS PROXY CONFERS ON THE PROXY HOLDERS THE POWER
OF CUMULATIVE VOTING AND THE POWER TO VOTE CUMULATIVELY FOR LESS
THAN ALL OF THE NOMINEES AS DESCRIBED IN THE ACCOMPANYING PROXY
STATEMENT.
The Board of Directors recommends a vote FOR the election of
Directors.
1. ELECTION OF DIRECTORS, NOMINEES: FOR WITHHOLD
D. W. Baker, S. Brottman, D. G. Danehey, [ ] [ ]
H. F. Imhoff, Jr., J. F. Lizzadro, 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 choices by marking the
appropriate boxes with an "X" but you need not mark any boxes if you wish to
vote in accordance with the Board of Directors' recommendation.
COMPANY ID:
PROXY NUMBER:
ACCOUNT NUMBER:
Signature: ______________ Signature: ________________ Date: __________
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.