Exhibit (a)(1)
Press Release issued by General Employment Enterprises, Inc. on August 6, 2002
FOR IMMEDIATE RELEASE
August 6, 2002
COMPANY: General Employment Enterprises, Inc.
CONTACTS: Herbert F. Imhoff, Jr.
Chairman of the Board & Chief Executive Officer
Phone (630) 954-0402 (630) 954-0595 fax
Doris A. Bernar
Communications Manager & Assistant Corporate Secretary
Phone (630) 954-0495 (630) 954-0592 fax
invest@genp.com e-mail
General Employment's Executive Management
Volunteer to Take Pay Cut
Company Will Expense Stock Options
and Adopt Stock Option Exchange Program
Following a board of directors meeting held on August 5, 2002,
General Employment Enterprises, Inc. (AMEX: JOB) announced
several actions designed to better align the Company's employees
and management with shareholder interests and thereby assist in
increasing shareholder value.
Compensation Reduction
The Company announced that Herbert F. Imhoff, Jr., Chief
Executive Officer, is voluntarily reducing his salary by 20%
effective August 1, 2002. Other members of the executive
management team volunteered to reduce their salaries by 10% each,
and the outside members of the board of directors volunteered to
reduce their fees by 50% each.
Commenting on the reductions, Herbert F. Imhoff, Jr. said, "The
past year or so has been a difficult period for the Company due
to the U.S. economic slowdown and the declining demand for the
Company's services. We have taken many steps to reduce the
Company's cost structure. Our executive management team and
board of directors felt that it would be in the best interests of
the Company and its shareholders to reduce their salaries and
fees to help contain costs until revenues improve. It is this
level of commitment, dedication and self-sacrificing that I
believe makes our management team and board very unique."
Company to Expense Stock Options
At its meeting, the audit committee of the Company's board of
directors approved the adoption of expensing the fair value of
stock options pursuant to SFAS No. 123, "Accounting for Stock-
Based Compensation," effective retroactively to October 1, 2001.
Mr. Imhoff commented, "In the past, we disclosed the effects of
stock options in our annual reports. For fiscal 2002 we will
begin recording them as compensation expense in our results of
operations. In making this decision, the Company considered that
investors today are looking for this type of information and that
it is considered to be a preferable method of accounting."
Stock Option Exchange Program
The Company's board of directors voted at its meeting yesterday
to offer a voluntary stock option exchange program for its
employees and directors. An offer will be made to all holders of
existing stock options having an option price of $3.00 per share
or higher. They will be able to exchange each eligible option
for a new option to be granted as of August 5, 2002, provided
that current options having an exercise price of $5.50 per share
or more will be required to tender two options to receive one new
option. The Company expects approximately 600,000 option shares
to be eligible for exchange. Because of the two-for-one feature
applicable to certain options, there could be a net reduction of
up to 155,000 in the number of outstanding stock options as a
result of the exchange. The Company estimates that the cost of
expensing stock options in fiscal 2002, under SFAS No. 123, will
increase its net loss for the year by approximately $70,000 (or
$0.01 per share).
Details of the option exchange program, including new vesting
schedules, will be contained in the offering documents. The
offering documents will be distributed to eligible option holders
upon the completion of all regulatory requirements, which is
expected to be within two weeks.
Option holders should carefully read the offering materials when
available from the company because they will contain important
information and additional details for the exchange offer.
Option holders may also obtain the exchange offer materials,
tender offer statement, and other filed documents for free at the
Securities and Exchange Commission's website, www.sec.gov. The
exchange offer materials will be available for free from the
company.
Mr. Imhoff remarked, "General Employment and its Board of
Directors view stock options as an essential part of the
Company's compensation program for its managers, designed to
attract and retain the best employees. The intent is to reward
individuals for their strong contributions to the Company and to
insure that their interests are aligned with shareholders."
Mr. Imhoff explained, "The senior officers and directors are
voluntarily agreeing to forgo a portion of their base salary to
help improve the cash flow of the corporation, and many other key
employees have had a reduction in their compensation due to
adverse business conditions. The board has chosen to offer this
exchange to benefit those who continue to make significant
contributions to the Company, in spite of the economic downturn
over which they have no direct control."
Conclusion
Concluding his remarks, Mr. Imhoff said, "We hope the economy
will rebound soon. However we, like many of our peer companies,
remain cautious about the outlook for remainder of the calendar
year. We will continue to do whatever we can do to increase
revenues and to minimize our expenses without impacting future
business once the economy improves."
This news release contains forward-looking statements that are
based on management's current expectations and are subject to
risks and uncertainties. Some of the factors that could affect
the Company's future performance include general business
conditions, the demand for the Company's services, the ability of
the Company to attract and retain qualified personnel for regular
full-time placement and contract project assignments, and the
ability to attract and retain qualified corporate and branch
management.
General Employment provides information technology and technical
staffing services, operating 33 branch offices in major
metropolitan and suburban business centers in 12 states. The
Company's shares are traded on the American Stock Exchange under
the trading symbol JOB.