<Page>
EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") made effective as of July 16, 2001 by
and between Alternative Resources Corporation (the "Company") and Miner Smith
(the "Executive").
In consideration of the mutual covenants contained in this Agreement, the
parties hereby agree as follows:
SECTION I
EMPLOYMENT
The Company agrees to the continued employment of the Executive, and the
Executive agrees to be employed by the Company for the Period of Employment as
provided in Section III A. below upon the terms and conditions provided in the
Agreement.
SECTION II
POSITION AND RESPONSIBILITIES
During the Period of Employment, the Executive agrees to serve as
President--Field Operations, and to be responsible for the typical
responsibilities expected of an executive holding such positions and such other
responsibilities consistent with such positions as may be assigned to the
Executive from time to time by the Chief Executive Officer of the Company.
SECTION III
TERMS AND DUTIES
A. PERIOD OF EMPLOYMENT
The term of Executive's employment under this Agreement will commence as of
July 16, 2001, and shall continue through December 31, 2001, subject to
extension or termination as provided in this Agreement (the "Period of
Employment"). The term shall be extended for an additional one-year period
as of December 31, 2001 and as of each December 31 thereafter, unless
either party gives ninety (90) days prior notice of its intent not to
extend.
B. DUTIES
During the Period of Employment, the Executive shall devote all of his
business time, attention and skill to the business and affairs of the
Company and its subsidiaries. The Executive may (i) participate in the
affairs of any governmental, educational or other charitable institution,
or engage in professional speaking and writing activities, so long as the
Chief Executive Officer does not determine, in good faith, that such
activities unreasonably interfere with the business of the Company or
diminish the Executive's obligations under the Agreement; or (ii) serve as
a member of the board of directors of other corporations, so long as the
Board of Directors of the Company, in its discretion, specifically approves
such service, and in any such case, the Executive shall be entitled to
retain all fees, royalties and other compensation derived from such
activities in addition to the compensation and other benefits payable to
him under the Agreement; and provided further, that the Executive may
invest his personal or family funds in any form or manner he may choose
that will not require any services on his part in the operation of or the
affairs of the companies in which such investments are made. The Executive
will perform faithfully the duties consistent with his position as
President--Field Operations, which may be assigned to him from time to time
by the Chief Executive Officer.
1
<Page>
SECTION IV
COMPENSATION AND BENEFITS
A. BASE SALARY
During the Period of Employment, the Company agrees to pay the Executive a
base salary ("Base Salary") of no less than Two Hundred and Fifty Thousand
Dollars ($250,000). Such Base Salary shall be payable according to the
customary payroll practices of the Company but in no event less frequently
than bi-weekly installments. The Executive may be eligible for base salary
increases as indicated by performance and/or market justification, solely
at the discretion of the Chief Executive Officer and as approved by the
Board of Directors.
B. ANNUAL INCENTIVE AWARDS
The Executive will be eligible for annual incentive compensation awards
during the Period of Employment. Executive incentive plans and individual
eligibility for participation are specifically approved by the Board of
Directors of the Company according to and defined by the Company's normal
executive compensation programs.
Without limiting the foregoing, the Executive shall receive a guaranteed
minimum annual incentive compensation award of $125,000 for each of (i) the
balance of 2001 and (ii) fiscal year 2002. The Executive shall be eligible
to receive an additional incentive compensation award of $50,000-$75,000
for fiscal year 2002, based solely upon satisfaction of certain performance
goals established by the Board following the effective date of this
Agreement, and paid in semi-annual increments over the course of 2002.
C. OPTIONS
Options that may be granted to the Executive before or during this period
of employment shall be governed by the terms and provisions comparable to
those applicable to options granted under the Company's Stock Option Plan.
Notwithstanding the foregoing, if (i) the Period of Employment ends because
the Company ends the automatic extension thereof under Section III A. of
this Agreement; (ii) the Company terminates the employment of the Executive
Without Cause as defined in Section VIII; (iii) the Executive's employment
hereunder terminates because of his death or disability (as defined in
Section VI); or (iv) there is a change in control of the Company, such
options shall become fully exercisable and shall remain exercisable for the
remainder of their term.
For purposes of this Agreement, a "change in control" of the Company shall
be deemed to occur in connection with any of the following events with
respect to the Company;
(i) The acquisition by an entity, person or group (including all
affiliates of such entity, person or group) of beneficial
ownership, as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934 (which definition shall apply
even if the Company is not then subject to such Act), of capital
stock of the Company entitled to exercise more than 30% of the
outstanding voting power of all capital stock of the Company
("Voting Stock");
(ii) The effective time of (i) a merger or consolidation of the
Company with one or more other corporations as a result of which
the holders of the outstanding Voting Stock immediately prior to
such merger or consolidation (other than the surviving or
resulting corporation or any affiliate thereof) hold less than
50% of the Voting Stock of the surviving or resulting
corporation, or (ii) a transfer of more than 50% (in value) of
the assets of the Company other than to a transferee in which the
Company owns at least 50% of the Voting Stock; or
2
<Page>
(iii) The election to the Board of Directors of the Company of the
lesser of (i) three directors or (ii) directors constituting a
majority of the number of directors of the Company then in
office, without the recommendation of the existing Board of
Directors.
D. OFFICE AND RELOCATION
For fourteen months following the effective date of this Agreement, or
such shorter time as the Executive shall determine, in his sole
discretion, Executive shall be based at an office in the Alpharetta,
Georgia area.
The Company shall reimburse the Executive for (i) all reasonable
expenses incurred in packing and moving Executive's personal and
professional property from Alpharetta, Georgia to the Barrington,
Illinois area, and (ii) all reasonable real closing costs paid by
Executive in connection with the sale of his residence in Georgia and
the purchase of his residence in Illinois (such as real estate
commissions, recording taxes, attorney's fees, other title examination
fees, lender's title insurance, appraisal fees, inspection fees,
survey fees, and out-of-pocket costs with respect to obtaining a first
mortgage, such as underwriting, application, and origination fees);
provided, that the Company shall not reimburse Executive for any such
costs which represent down-payment, pre-payment, pro-ration, escrow,
or reimbursement for prior payment by others of regular and ongoing
expenses associated with owning a home, including, but not limited to,
mortgage principal, mortgage interest (including loan discounts),
homeowner's insurance, mortgage insurance, property taxes, property
management fees, and dues or fees for homeowners' or other related
associations.
The Company shall pay, or shall reimburse Executive for, all
reasonable expenses incurred by Executive and Executive's spouse for
travel between Alpharetta, Georgia, and Barrington, Illinois, for up
to two house-hunting trips during such period (which reimbursement
shall be separate from expenses for Executive's business travel during
such period, as provided in Section V).
The amounts paid or reimbursed pursuant to this subsection shall be
"grossed-up" to include federal, state, and local income taxes payable
by Executive with respect to such payment or reimbursement.
E. ADDITIONAL BENEFITS
The Executive will be entitled to participate in all compensation or
employee benefit plans or programs and receive all benefits and
perquisites for which any salaried executive employees are eligible
under any existing or future plan or program established by the
Company for salaried executive employees. The Executive will
participate to the extent permissible under the terms and provisions
of such plans or programs in accordance with plan or program
provisions. These may include group hospitalization, health, dental
care, life or other insurance, tax qualified pension, savings, thrift
and profit sharing plans, termination pay programs, sick leave plans,
travel or accident insurance, short and long term disability insurance
and contingent compensation plans including capital accumulation
programs, restricted stock programs, stock purchase programs and stock
options plans. Nothing in this Agreement will preclude the Company
from amending or terminating any of the plans or programs applicable
to salaried executive employees of the Company. Notwithstanding the
foregoing sentence, no such amendment or termination shall reduce or
otherwise adversely affect Executive's rights under Section IV C. of
this Agreement. In addition to the foregoing benefits, Executive shall
be entitled to a paid vacation of four (4) weeks during each twelve
(12) month period during the Period of Employment.
3
<Page>
SECTION V
BUSINESS EXPENSES
The Company will reimburse the Executive for all reasonable travel and
other expenses incurred by the Executive in connection with the performance of
his duties and responsibilities under this Agreement which shall specifically
include such expenses incurred by Executive for business travel between
Alpharetta, Georgia, and Barrington, Illinois, during the period that the
Executive is based in Alpharetta, Georgia pursuant to Section IV E.
Executive must support all expenditures with customary receipts and expense
reports subject to review by the Company.
SECTION VI
DISABILITY
A. PAYMENTS
Executive's employment hereunder may be terminated by the Company if (i)
Executive becomes physically or mentally incapacitated, (ii) is unable for
a period of one hundred eighty (180) consecutive days to perform his
material duties and responsibilities and (iii) a determination is made
regarding Executive's continued incapacity by a physician appointed by the
Company (such continued incapacity is hereinafter referred to as
"disability"). Upon any such termination for disability, Executive shall be
entitled to receive (i) his Base Salary, as well as the annual incentive
award, prorated in each case through the date on which the Executive is
first eligible to receive payment of long term disability benefits in lieu
of Base Salary under the Company's long term disability benefit plan as
then in effect covering the Executive, and (ii) his accrued benefits under
the terms of the plans, policies and procedures of the Company.
B. ASSISTANCE TO THE COMPANY
During the period the Executive is receiving payments of either regular
compensation or disability insurance benefits described in this Agreement
and as long as he is physically and mentally able to do so, the Executive
will furnish information and assistance to the Company and from time to
time will make himself available to the Company with respect to area and
matters in which he was involved during his employment with the Company.
SECTION VII
DEATH
In the event of the death of the Executive during the Period of Employment,
(i) Executive's estate shall be entitled to receive his Base Salary, as well as
the annual incentive award, prorated in each case through that date of
Executive's death, and (ii) Executive's designated beneficiary or estate, as the
case may be, shall be entitled to his accrued benefits, including, but not limit
to, life insurance proceeds, under the terms of the plans, policies and
procedures of the Company.
SECTION VIII
EFFECT OF TERMINATION OF EMPLOYMENT
A. TERMINATION WITHOUT CAUSE
If the Company terminates Executive's employment Without Cause during the
Period of Employment, as defined in this Agreement, or the Period of
Employment ends because the Company ends the automatic extension thereof
under Section III A. of this Agreement, the Company will pay to the
Executive in a lump sum, his Base Salary for a period of twelve (12)
months. Earned but unpaid Base
4
<Page>
Salary will be paid in a lump sum at the time of such termination. The
Company also will pay the Executive in a lump sum upon such termination an
amount equal to the prorated portion of the annual incentive award for the
year in which the termination occurred. The benefits and perquisites
described in this Agreement as in effect at the date of termination of
employment will be continued for the then remaining Period of Employment.
B. TERMINATION WITH CAUSE
If the Company terminates Executive With Cause, (i) Executive shall be
entitled to receive his Base Salary prorated through the date of the
Executive's termination, and (ii) Executive shall be entitled to his
accrued benefits under the terms of the plans, policies and procedures of
the Company.
C. EFFECT OF CERTAIN TERMINATIONS
Upon termination of the Executive's employment for reasons other than due
to death, disability or pursuant to Paragraph A of this Section, or upon
Executive's resignation, the Period of Employment and the Company's
obligation to make payments under this Agreement will cease as of the date
of termination except as expressly defined in this Agreement. Executive
shall have the right to voluntarily terminate this Agreement, other than
for Good Reason or in conjunction with a Change in Control, upon two weeks'
prior notice to the Company. If Executive voluntarily terminates his
employment with the Company, (i) Executive shall be entitled to receive his
Base Salary prorated through the date of Executive's voluntary termination,
and (ii) Executive shall be entitled to his accrued benefits under the
terms of the plans, policies and procedures of the Company.
D. DEFINITIONS
For this Agreement, the following terms have the following meanings:
(1) Company's Chief Executive Officer acting in good faith by written
notice by the Company to the Executive specifying the event
relied upon for such termination, due to the Executive's serious,
willful misconduct with respect to his duties under this
Agreement, including, but not limited to, conviction for a felony
or perpetration of a common law fraud, which has resulted or is
likely to result in material economic damage to the Company.
(2) Termination "Without Cause" means termination by the Company of
the Executive's employment other than due to death, disability,
or termination With Cause.
SECTION IX
OTHER DUTIES OF THE EXECUTIVE DURING AND AFTER THE PERIOD OF EMPLOYMENT
A. COOPERATION DURING AND AFTER EMPLOYMENT
The Executive will, with reasonable notice during or after the Period of
Employment, furnish information as may be in his possession and cooperate
with the Company as may reasonably be requested in connection with any
claims or legal actions in which the Company is or may become a party.
B. CONFIDENTIAL INFORMATION
The Executive recognizes and acknowledges that all information pertaining
to the affairs, business, clients, customers or other relationships of the
Company, as hereinafter defined, is confidential and is a unique and
valuable asset of the Company Access to and knowledge of this information
are essential to the performance of the Executive's duties under this
Agreement. The Executive will not during the Period of Employment or after,
except to the extent reasonably necessary in performance of the duties
under this
5
<Page>
Agreement, give to any person, firm, association, corporation or
governmental agency any information concerning the affairs, business,
clients, customers or other relationships of the Company, except as
required by law. The Executive will not make use of this type of
information for his own purposes or for the benefit of any person or
organization other than the Company. The Executive will also use his best
efforts to prevent the disclosure of this information by others. All
records, memoranda, etc. relating to the business of the Company, whether
made by the Executive or otherwise coming into his possession are
confidential and will remain the property of the Company.
C. CERTAIN RESTRICTED ACTIVITIES
During the Period of Employment and for a one (1) year period thereafter,
the Executive will not use his status with the Company to obtain goods or
services from another organization other than in the ordinary course of
business. During the Period of Employment and for a one (1) year period
following termination of the Period of Employment: the Executive will not
make any statements or perform any acts intended to advance the interest of
any existing or prospective competitors of the Company in any way that will
injure the interest of the Company; the Executive, without prior express
written approval by the Board of Directors of the Company, will not
directly or indirectly own or hold any proprietary interest in or be
employed by or receive compensation from any party engaged in the same or
any similar business in the same geographic areas the Company does
business; and the Executive, without express prior written approval from
the Board of Directors, will not solicit any members of the then current
customers, clients or suppliers of the Company or discuss with any employee
of the Company information or operation of any business intended to compete
with the Company. For the purposes of the Agreement, proprietary interest
means legal or equitable ownership, whether through stock holdings or
otherwise of a debt or equity interest (including options, warrants, rights
and convertible interest) in a business firm or entity, or ownership of
more than 2% of any class of equity interest in a publicly-held company.
The Executive acknowledges that the covenants contained herein are
reasonable as to geographic and temporal scope. For a twelve (12) month
period after termination of the Period of Employment for any reason, the
Executive will not hire any employee of the Company or solicit, other than
by means of a general solicitation to the public such as a newspaper
advertisement, or encourage any such employee to leave the employ of the
Company.
D. REMEDIES
The Executive acknowledges that his breach or threatened or attempted
breach of any provision of Section IX would cause irreparable harm to the
Company not compensable in monetary damages and that the Company shall be
entitled, in addition to all other applicable remedies, to a temporary and
permanent injunction and a decree for specific performance of the terms of
Section IX without being required to prove damages or furnish any bond or
other security. The Executive hereby acknowledges the necessity of
protection against the competition of, and certain other possible adverse
actions by, the Executive and that the nature and scope of such protection
has been carefully considered by the parties. The period provided and the
area covered are expressly represented and agreed to be fair, reasonable
and necessary. If, however, any court or arbitrator determines that the
restrictions described herein are not reasonable, the court or arbitration
panel may modify, rewrite or interpret such restrictions to include as much
of their nature and scope as will render them enforceable.
SECTION X
INDEMNIFICATION, LITIGATION
A. CORPORATE INDEMNIFICATION AND INSURANCE
The Company will indemnify the Executive to the fullest extent permitted by
the laws of the Company whichever affords the greater protection to the
Executive. The Company will use its best efforts to obtain and maintain
customary directors and officer liability insurance, covering Executive.
The foregoing
6
<Page>
indemnification shall continue to apply following termination of the Period
of Employment for actions or omissions during the Period of Employment.
B. LIMITED INDEMNIFICATION FOR BREACH OF COVENANTS
During the Period of Employment, the Company will indemnify the Executive
against any and all obligations to pay a judgment, settlement, penalty,
fine, or reasonable expenses (including, without limitation, counsel fees
and retainers, court or arbitration costs, transcript costs, fees of
experts or witnesses, travel expenses, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, being prepared to be a witness
in, or otherwise participating in a proceeding (as defined below),
including any appeals), actually incurred with respect to any threatened,
pending, or completed action, suit, or other proceeding, whether civil,
criminal, adminstrative, arbitrative, or investigative (a "proceeding"), to
which the Executive is a party by reason of any alleged breach of
restrictive covenant or violation of the terms or conditions of employment,
written or oral, between Executive and his former employer, alleged to
arise from Executive's execution of this Agreement or performance of his
obligations hereunder. Notwithstanding the foregoing, in no event shall the
Company's aggregate indemnification obligation pursuant to this Section X B
exceed twenty five thousand dollars ($25,000.00).
SECTION XI
WITHHOLDING TAXES
The Company may directly or indirectly withhold from any payments under
this Agreement all federal, state, city or other taxes that shall be required
pursuant to any law or governmental regulation.
SECTION XII
EFFECT OF PRIOR AGREEMENTS
This Agreement contains the entire understanding between the Company and
the Executive with respect to the subject matter and supersedes any prior
employment, severance, or other similar agreements between the Company, its
predecessors and its affiliates, and the Executive.
SECTION XIII
MODIFICATION
Subject to Section IV G., this Agreement may not be modified or amended
except in writing signed by the parties. No term or condition of this Agreement
will be deemed to have been waived, except in writing by the party charged with
waiver. A waiver shall operate only as to the specific term or condition waived
and will not constitute a waiver for the future or act on anything other than
that which is specifically waived.
SECTION XIV
GOVERNING LAW; ARBITRATION
This Agreement and its validity, interpretation, performance and
enforcement shall be governed by the laws of the State of Illinois, without
giving effect to the choice of law provisions thereof. Any dispute among the
parties hereto shall be settled by arbitration in accordance with the then
applicable rules of the American Arbitration Association and judgment upon the
award rendered may be entered in any court having jurisdiction thereof.
7
<Page>
SECTION XV
NOTICES
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been made when delivered or mailed
first-class postage prepaid by registered mail, return receipt requested, or
when delivered if by hand, overnight delivery services or confirmed facsimile
transmission to the following:
(a) If to the Company, at:
Alternative Resources Corporation 600 Hart Road, Suite 300
Barrington,Illinois 60010
Attention: Chairperson, Governance Committee of Board of
Directors
Or at such other address as may have been furnished to the
Executive by the Company in writing, or
(b) If to the Executive, at:
215 Beacon Knoll Drive Alpharetta, GA 30022
Or such other address as may have been furnished to the Company by the
Executive in writing.
SECTION XVI
BINDING AGREEMENT
This Agreement shall be binding on the parties' successors, heirs and assigns.
SECTION XVII
MISCELLANEOUS
A. MULTIPLE COUNTERPARTS
This Agreement may be executed simultaneously in multiple counterparts each
of the same force and effect.
B. SEVERABILITY
If any phrase, clause or provision of this Agreement is declared invalid or
unenforceable by an arbitrator or court of competent jurisdiction, such
phrase, clause or provision shall be deemed severed from this Agreement,
but will not affect any other provisions of this Agreement, which shall
otherwise remain in full force and effect. In addition, there will be
automatically substituted herein for such severed phrase clause or
provision a phrase, clause or provision as similar as possible, which is
valid and enforceable.
C. HEADINGS
The headings and subheadings of this Agreement are inserted for convenience
of reference only and are not to be considered in construction of the
provisions hereof.
D. CONSTRUCTION
The Company and the Executive acknowledge that this Agreement was the
result of arm's-length negotiations between sophisticated parties each with
full opportunity to consult with and be represented by legal counsel. Each
and every provision of this Agreement shall be construed as though both
parties participated equally in the drafting of same, and any rule of
construction that a document shall be construed against the drafting party
shall not be applicable to this Agreement.
8
<Page>
E. SURVIVORSHIP
The provisions of Sections IV-XVII shall survive the termination or
expiration of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
COMPANY
ALTERNATIVE RESOUCES CORPORATION
BY:--------------------------------------
Raymond R. Hipp, Chief Executive Officer
and
EXECUTIVE
BY:--------------------------------------
Miner Smith
9