Exhibit 10.3

 

DIRECTOR AGREEMENT

 

 

This DIRECTOR AGREEMENT (“Agreement”) is made effective as of August 5, 2002  by
and between Alternative Resources Corporation, (the “Company”) and Robert
Stanojev (the “Director”).

 

In consideration of the mutual covenants contained in this Agreement, the
parties hereby agree as follows:

 

SECTION I

AGREEMENT TO SERVE AS DIRECTOR

AND CHAIRMAN OF THE BOARD

 

The Company’s Board of Directors has elected Director as an additional member of
the Board of Directors of the Company and further elected him as non-executive
Chairman of the Board, having the duties described in the bylaws of the Company
and the additional duties and responsibilities described in this Agreement. 
Director agrees to serve in these roles in accordance with the terms of this
Agreement until his resignation or removal as Chairman.

 

SECTION II

POSITION AND RESPONSIBILITIES

 

Director shall serve as consultant and counselor to the Board of Directors and
to the Chief Executive Officer of the Company.  In that capacity, he shall be
responsible to jointly develop with the Chief Executive Officer the Company
strategy (subject, where appropriate, to the approval of the Board of
Directors), facilitate the communication between the Chief Executive Officer and
the Board of Directors, and to fulfill a leading role in the Board of Directors’
direction and supervision of the Chief Executive Officer. Director shall
participate with and assist the Chief Executive Officer in the selection and
hiring of management who report directly to the Chief Executive Officer. 
Director shall also participate in outreach to prospective strategic partners
and customers of the Company, and shall travel as necessary. For the first
ninety (90) days of this Agreement, Director shall devote all of his business
time and attention to his duties hereunder. Thereafter, Director is expected to
devote from two to three days a month to his duties hereunder.

 

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SECTION III

DIRECTORS FEES AND OPTIONS

 

A.            Fees

 

While serving as Chairman of the Board, Director shall be paid director’s fees
at the rate of $100,000 per annum, payable in monthly installments.  These fees
are in lieu of all other directors fees to which other directors are entitled.

 

B.            Options

 

The Company has granted to Director stock options outside of the Company’s
option plans to purchase 400,000 shares of common stock of the Company with an
exercise price equal to fair market value per share on the date hereof, vesting,
so long as Director remains Chairman of the Board, in three annual installments
of 133,333, 133,333 and 133,334 shares on the first, second and third annual
anniversaries of the date hereof.

 

Notwithstanding the foregoing:

 

(i)            If  Director is removed by the Company from his position as
Chairman on or prior to the ninety (90) day anniversary of the date hereof, no
options shall vest, and they shall terminate.  If  Director is removed by the
Company from his position as Chairman without Cause after the ninety day
anniversary but prior to the first annual anniversary  of the date hereof ,
133,333 shares of  this option shall become fully vested and exercisable for the
30 day post-termination period specified in the option . If  Director is removed
by the Company from his position as Chairman without Cause after the first
annual anniversary of the date hereof but prior to the second annual anniversary
of the date hereof, 200,000 shares of this option (less the portion of this
option already vested) shall become fully vested and exercisable for the 30 day
post-termination period specified in the option. In the event that Director
disputes and has timely submitted the determination of Cause to arbitration in
accordance with this Agreement, then the period for exercise of his options
provided for in this Agreement shall be suspended until the Arbitrator submits a
written decision and, in the event of a determination in favor of Director,
shall then run for a period of thirty (30) days after such determination.

 

(ii)           If there is a change in control of the Company, all of these
options shall become fully vested and shall remain exercisable both during his
continued position as Chairman of the Board, and, if Director’s position as
Chairman of the Board is terminated or he resigns that position on or after the
change in control, for the designated post-termination period specified in those
options.  For purposes of this Agreement, a “change in control” of the Company
shall be deemed to occur at 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 of the Company immediately prior to such
merger or consolidation (other than the surviving or

 

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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 immediately prior to the
consummation of such transaction.  Solely for the purposes of this definition,
the Wynnchurch Capital entities shall always be deemed to hold the shares into
or for which any convertible securities and warrants held by them are
convertible or exercisable, and such shares shall be deemed outstanding.

 

iii)            In the event of a termination of Directors’ position as Chairman
for Cause at any time, the options which have not been exercised shall cancel
and be nonexercisable.

The options granted above are in lieu of all entitlement to annual option grants
to which nonemployee directors may be entitled under the Company’s option plans,
and Executive waives and declines all rights thereto, notwithstanding any
provisions in such plans to the contrary.

 

C.            No other Benefits/No Employment Status

 

Director understands that he is not an employee of the Company for any purpose
and shall not be entitled to participate in any retirement, health or other
benefits which are reserved to employees of the Company.  Director acknowledges
that he is responsible for payment of all taxes associated with the fees and
director stock options granted hereunder.

 

SECTION IV

BUSINESS EXPENSES

 

The Company will reimburse the Director for all reasonable travel and other
expenses incurred by the Director in connection with the performance of his
duties and

responsibilities under this Agreement.  Director must support all expenditures
with customary receipts and expense reports subject to review by the Company’s
Chief Financial Officer.

 

SECTION V

TERMINATION

 

 

A.            Termination by Company.

 

Director serves as Chairman at the pleasure of the Board of Directors and may be
removed from such position at any time by the Board of Directors with or without
Cause. “Cause” means and is limited to the good faith determination by the
Company’s Board of Directors that Director  (i) has breached his specific
performance duties assigned to him in this Agreement which Director has not
diligently commenced to cure and completed the cure of within ten days following
specific written notice of the breach or (ii) has breached his fiduciary duties
of loyalty to the Company

 

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B.            Arbitration Right.

 

If Director disputes (by giving written notice to the Company) any determination
of Cause by the Board of Directors within 15 days of being notified in writing
of such a determination, then Director may within 15 days after the giving of
his notice of dispute, submit the determination of whether there existed Cause
for removal to arbitration in accordance with Section VII hereof, and the burden
of proving Cause at such arbitration shall be on the Company or the Board of
Directors.

 

 C.           Resignation.

 

Director may also resign as Chairman at any time upon written notice. In any of
these events, Director shall also deliver his  resignation as director of the
Company and shall be entitled to receive his accrued directors fees prorated
through the date of his removal as Chairman.

 

SECTION VI

INDEMNIFICATION, LITIGATION

 

In addition to such bylaw provisions as may from time to time be in effect, the
Company will execute with Director the current form of Indemnification Agreement
granted to directors.  The foregoing indemnification shall continue to apply
following termination of his positions for actions or omissions during his
service as Chairman of the Board.

 

SECTION VII

ENTIRE AGREEMENTS

 

This Agreement contains the entire agreement between the Company and the
Director with respect to the subject matter and supersedes any negotiations or
prior understandings prior employment, or consulting agreements  or letters of
understanding between the Company and Director. 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.

 

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SECTION VIII

GOVERNING LAW AND ARBITRATION

 

A.            This Agreement and its validity, interpretation, performance and
enforcement shall be governed by the laws of the State of Delaware , without
giving effect to the choice of law provisions thereof.

 

B.            Arbitration of the existence of Cause shall be subject to the
following:

 

•                                            (i) Arbitration shall be conducted
by a single arbitrator (the Arbitrator”) in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, except as provide
herein, in Chicago, Illinois. The parties shall attempt to agree on the
selection of the Arbitrator for the arbitration proceeding.  If the parties
cannot reach such an agreement within three weeks from the filing of the initial
arbitration demand, the Arbitrator shall be selected according to the Rules of
the American Arbitration Association.

•                                            (ii)           The Arbitrator shall
not be allowed to issue punitive, exemplary, or treble damages against any
party, and the sole effect of the arbitration shall be whether or not the
director stock options provided for under this Agreement may be exercised after
termination of Director’s position as Chairman of the Board.

•                                            (iii)          Except as otherwise
agreed to by the parties, the arbitration proceeding shall begin no later than
thirty days after the filing of the initial arbitration demand. The arbitration
proceedings shall be held from 10:00 a.m. to 3:00 p.m. on consecutive business
days until the arbitration is completed. Each party shall be allowed four days
to present its case in chief.  The time for the opposing party’s
cross-examination of witnesses shall not be included as part of the time for the
presentment of a party’s case-in-chief. The Arbitrator shall not be bound by any
strict rules of evidence and may consider any evidence presented at the
arbitration hearing as he deem appropriate. A court reporter shall attend and
record all of the arbitration proceedings (including but not limited to the
argument and rulings on discovery motions).

•                                            (iv)          Any documents or
other information produced by a party or non-party in any arbitration proceeding
hereunder shall be treated by the parties as confidential and shall be used
solely for the purposes of such arbitration proceeding and for no other
purpose.  The parties shall not provide any such confidential information to any
person without the prior written consent of the producing party, except that the
parties may provide such confidential information to any retained expert who, in
advance of receiving any such confidential information, agrees in writing to
keep such information confidential as set forth herein. The arbitration
proceedings

 

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and the decision issued pursuant to such proceedings shall be confidential,
except for such public disclosure as is required by the Company in accordance
with law.

 

SECTION IX

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: Chief Executive Officer

 

or at such other address as may have been furnished to the Director by the
Company in writing, or

 

(b)           If to the Director, at the address he has furnished to the Company
in writing.

 

SECTION X

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.

 

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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 Director acknowledge that this Agreement was the result of
arm’s-length negotiations between sophisticated parties.   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.

 

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.

 

COMPANY                                                                                                    
DIRECTOR

 

 

 

ALTERNATIVE RESOURCES
CORPORATION

 

 

 

 

 

By:

 

 

 

Its:

Chief Executive Officer

 

Robert Stanojev

 

 

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