**EXHIBIT 10.5**

 

 

February 9, 2006

 

**VIA HANDDELIVERYPERSONAL AND CONFIDENTIAL**

 

EricArcher80 Dexterdale DriveWarwick, Rhode Island 02886

Dear Eric:

 

Thepurpose of this letter agreement and general release (the “Agreement”) is toacknowledge, and set forth the terms of, our agreement with regard to your resignationof employment with Spherion Corporation, its subsidiaries, affiliates,successors, and assigns (the “Company”).

 

# 1.     Resignation.  a)  Youhereby confirm your voluntary resignation from employment with the Companyeffective as of February 28, 2006 (the “Resignation Date”) and, effectiveas of the Resignation Date, you hereby confirm your resignation from yourposition as a Senior Vice President and President, Professional Services Group andthat you will not be eligible for any benefits or compensation after the ResignationDate, other than as specifically provided herein.  In addition, effective as of the ResignationDate, you are hereby terminated from all offices, trusteeships, committee membershipsand fiduciary capacities held with, or on behalf of, the Company or any benefitplans of the Company.  These resignationswill become irrevocable on the Effective Date of this Agreement, as defined in Section 15below.  You further acknowledge and agreethat, after the Resignation Date, you will not represent yourself as being adirector, employee, officer, trustee, agent or representative of the Companyfor any purpose and will not make any public statements relating to the Companywithout the Company’s prior written consent, other than general statementsrelating to your position, title or experience with the Company, subject to theconfidentiality provision under Section 5 of this Agreement and thenon-disparagement provision under Section 7 of this Agreement and in noevent shall you make any statements as an agent or representative of theCompany.

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## b)    You acknowledge and agree that the Companywill not have an obligation to rehire you or to consider you for reemploymentafter the Resignation Date and that your employment with the Company ispermanently and irrevocably severed.

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## c)     You acknowledge and agree that theeffective date of your resignation will be announced on February 9, 2006 (“ResignationAnnouncement Date”).  Following theResignation Announcement Date, you will be expected to make yourself reasonablyavailable to

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Spherion and to transition your projects, accounts, candidates, orother responsibilities to individuals identified by the Company; introduce keyaccount contacts to individuals identified by the Company through personalintroductions; answer questions and provide guidance and information asrequested by the Company; use your best efforts to facilitate and effect asmooth transition of all of your accounts, candidates, and duties to theCompany.  After the ResignationAnnouncement Date and prior to the Resignation Date, the extent to which youwill still be expected to come into Spherion’s offices will be determined by RoyKrause.

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# 2.     Severance Payments and Benefits; Other Deliveries.  a) Subject to the remainder of this Section 2 and Sections 3, 5, 6, 7,8, 9, 10 and 11 and your compliance with the terms of this Agreement, you willbe entitled to receive:

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### i)      Yourregular salary and unused accrued and earned vacation through the ResignationDate.

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### ii)     Cash severancepay totaling five hundred thirty-one thousand three hundred ninety-three dollarsand no cents ($531,393.00), reduced by any applicable payroll or other taxesrequired to be withheld, payable in a lump sum within thirty (30) days afterthe Resignation Date.

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### iii)    Paymentof an amount, if any, to be determined in the sole discretion of theCompensation Committee of the Company’s Board of Directors and reduced by anyapplicable payroll or other taxes required to be withheld, payable March 3,2006, as payment under your 2005 incentive plan.

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### iv)   Theemployee stock options and deferred stock units granted to you shall terminateand expire in accordance with the terms of their respective grant documents,are only exercisable to the extent provided therein, and shall not be subjectto accelerated vesting.  All stockoptions vested on or prior to the Resignation Date will terminate and expire at12:01 a.m. on May 31, 2006 and will only be exercisable prior to suchdate.

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### v)    Reimbursementfor expenses incurred by you in accordance with the Company’s policy but notreimbursed prior to the Resignation Date.

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## b)    The Company may withhold from any amountspayable under this Agreement such federal, state and local taxes as are requiredto be withheld (with respect to amounts payable hereunder or under any benefitplan or arrangement maintained by the Company) pursuant to any applicable lawor regulation.

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## c)     These payments will be issued in accordancewith applicable law and are subject to all applicable deductions.  Future payments, if any, will also be paid bycheck, mailed to the address shown above, or by direct deposit if you haveauthorized direct deposit of pay.   Accordingly, other than the compensation identified above, you are noteligible, nor entitled to receive any other bonuses or compensation from theCompany.  The amount specified in this Section describesall compensation, or other amounts to be paid to you pursuant to any contract,understanding or term or condition of your employment, including any agreementsor representations made by or between you and the Company.

 

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## d)    Notwithstanding anything contained herein tothe contrary, to the extent you are deemed a “key employee” for purposes of Section 409Aof the Internal Revenue Code of 1986, as amended, and notwithstanding anycontrary provision which exists in any of the Company’s deferred compensationplans, any distribution of deferred compensation to you will be delayed for aperiod of 6 months after the Resignation Date as required by Section 409Aof the Internal Revenue Code of 1986, as amended.

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## 3.     Transition Services.  On and after the Resignation Date, you shallmake yourself reasonably available to the Company: a) to facilitate the Company’stransition of any of your duties, projects, or other responsibilities and toanswer questions and provide guidance as reasonably requested by the Companyfrom time to time; and b) to cooperate with the Company and provide informationas to matters which you were personally involved, or have information on, whileyou were an officer or employee of the Company and which become the subject ofan action, investigation, proceeding, litigation or otherwise, upon reasonablenotice, including, that you will testify as a witness in connection with suchmatters if requested by the Company to do so. All reasonable expenses associated with such transition services shallbe paid in accordance with the guidelines set forth in the Company’s businessexpense reimbursement policy.

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## 4.     Full Discharge.  You agree and acknowledge that the paymentsand benefits provided in Section 2 above and the other entitlementshereunder:  a) are in full discharge ofany and all liabilities and obligations of the Company to you, monetarily orwith respect to employee benefits or otherwise, including, without limitation,any and all obligations arising under any alleged written or oral employmentagreement, change in control agreement, policy, plan or procedure of theCompany and/or any alleged understanding or arrangement between you and theCompany or any of its officers; and b) exceed any payment, benefit, or otherthing of value to which you might otherwise be entitled but for this Agreementunder any policy, plan or procedure of the Company or any prior agreementbetween you and the Company.

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## 5.     Confidentiality.  (a)  You will not at any time (whetherduring or after your employment with the Company) disclose or use for your ownbenefit or purposes, or for the benefit or purpose of any other person, firm,partnership, joint venture, association, corporation or other businessorganization, entity or enterprise, any trade secrets, information, data, orother confidential information relating to customers, employees, jobapplicants, services, development programs, prices, costs, marketing, trading,investment, sales activities, promotion, processes, systems, credit andfinancial data, financing methods, plans, proprietary computer software,request for proposal documents, or the business and affairs of the Companygenerally, or of any affiliate of the Company; provided, however, that theforegoing shall not apply to information which is generally known to theindustry or the public other than as a result of your breach of this covenant.  You expressly warrant that you have returnedto the Company all memoranda, books, papers, plans, information, letters andother data, and all copies thereof or therefrom (whether in written, printed,electronic or other form), in any way relating to the business of the Company andits affiliates.  In the event that youlearn of any property of the Company to be in your custody, you will promptlyreturn such property to the Company.

 

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# 6.     Covenant Not To Compete.  (a) In General.  You agree that for a period of one (1) yearafter the Resignation Date (the “Non-Compete Period”), you shall not,anywhere in the United States:

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### i)              act as an employee, director,consultant, partner, principal, agent, representative, owner or stockholder(other than as a stockholder of less than a one percent (1%) equity interest)for (1) any public company that derives any revenue from any business linein which the Company derives $25 million or more in annualized revenues as ofthe Resignation Date or from the principal business line in which you weredirectly involved immediately prior to the Resignation Date (collectively, the “BusinessLines”) or (2) any private company that derives $25 million or more inannualized revenues from any combination of one or more of the Business Lines;

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### ii)             solicit business from, or performservices for, or induce others to perform services for, any company or otherbusiness entity which at any time during the one (1) year periodimmediately preceding the Resignation Date was a client of the Company or itsaffiliates; or

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### iii)            offer, or cause to be offered,employment with any business, whether in corporate, proprietorship, orpartnership form or otherwise, either on a full-time, part-time or consultingbasis, to any person who was employed by the Company or its affiliates or forwhom the Company or its affiliates performed outplacement services, in eithercase at any time during the one (1) year period immediately preceding theResignation Date.

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### iv)           For purposes of this Agreement,affiliates of the Company include subsidiaries 50% or more owned by the Companyand the Company’s franchisees and licensees.

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b)  ExtendedNo-Hire provision.  In addition tothe restrictions provided above, you represent and agree that you have not, andwill not for a period of two (2) years following the Resignation Date(i.e, March 1, 2006 through February 29, 2008), either directly orindirectly, on your own behalf or in the service of or on behalf of others,without prior written consent of the General Counsel of the Company, solicitthe employment of, interview, induce or attempt to induce to leave the employof the Company, offer or cause to be offered employment with any business, orhire for any business (whether as an employee, independent contractor,consultant or in any other capacity), any of the persons listed on Exhibit “A”attached hereto.

 

# 7.     Non-Disparagement.  a)  Youshall not act to damage the Company or the Company’s reputation or disparagethe Company or its past or present officers, directors or employees(collectively, the “Protected Group”), provided that the foregoing shall notapply to truthful statements made in compliance with legal process orgovernmental inquiry.

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# b)  Neitherthe Company nor any then senior-level executive of the Company shall act todamage you or your reputation or disparage you, provided that the foregoingshall not apply to truthful statements made in compliance with legal process orgovernmental inquiry, or protected by privilege or as required by legal filingor disclosure requirements.

 

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# 8.     Equitable Relief and Other Remedies;Reformation; Consideration.  a) Youacknowledge and agree that the Company’s remedies at law for a breach orthreatened breach of any of the provisions of Sections 5, 6, and 7 would beinadequate and, in recognition of this fact, you agree that, in the event ofsuch a breach or threatened breach, in addition to any remedies at law, theCompany, after the posting of a reasonable bond under Florida law, shall beentitled to obtain equitable relief in the form of specific performance,temporary restraining order, a temporary or permanent injunction or any otherequitable remedy which may then be available.

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## b)    If the provisions of Sections 5, 6 and 7would otherwise be determined invalid or unenforceable by a court of competentjurisdiction, such court shall exercise its discretion in reforming theprovisions of such Sections to the end that you be subject to such restrictivecovenant, reasonable under the circumstances, enforceable by the Company.

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## c)     The consideration for this Agreement,including without limitation the release and the covenants contained inSections 5, 6 and 7, the sufficiency of which is hereby acknowledged, was theCompany’s agreement to employ you, provide compensation and benefits, and theCompany’s agreement herein to provide you with the consideration provided bythis Agreement.

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# 9.     Executive’s Release.  a)  Forand in consideration of the payments to be made and the promises set forth inthis Agreement, you, for yourself and for your heirs, dependents, executors,administrators, trustees, legal representatives and assigns (collectivelyreferred to as “Releasors”), hereby forever release, waive and discharge theCompany, employee benefit and/or pension plans or funds, insurers, successorsand assigns, and all of its or their past, present and/or future officers,trustees, agents, attorneys, employees, fiduciaries, trustees, administratorsand assigns, whether acting as agents for the Company or in their individualcapacities (collectively referred to as “Releasees”), from any and all claims,demands, causes of action, fees and liabilities of any kind whatsoever, whetherknown or unknown, which Releasors ever had, now have, or hereafter may haveagainst Releasees by reason of any actual or alleged act, omission,transaction, practice, policy, procedure, conduct, occurrence, or other matterup to and including the date of your execution of this Agreement, includingwithout limitation, those in connection with, or in any way related to orarising out of, your employment, service as a director, service as a trustee,service as a fiduciary or termination of any of the foregoing with the Companyor any other agreement, understanding, relationship, arrangement, act, omissionor occurrence, with the Company or other claims.

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## b)    Without limiting the generality of theforegoing, this Agreement is intended and shall release the Releasees from anyand all claims, whether known or unknown, which Releasors ever had, now have,or may hereafter have against the Releasees including, but not limited to,  (i) any claim of discrimination orretaliation under the Age Discrimination in Employment Act (“ADEA”) 29 U.S.C. Section 621et seq., Title VII of the Civil Rights Act, the Americans with DisabilitiesAct, the Employee Retirement Income Security Act of 1974, as amended (excludingclaims for accrued, vested benefits under any employee benefit plan of theCompany in accordance with the terms and conditions of such plan and applicablelaw) or the Family and Medical Leave Act; (ii) any claim under the FloridaCivil Rights Act of 1992 (formerly known as the Human Rights Act of 1977), theFlorida Equal Pay Law, the Florida Aids Act, the Florida Whistle Blower Law andwaivable rights under the Florida Constitution; (iii) any other claim (whetherbased on federal, state or local law or ordinance statutory or decisional)

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## relating to or arising out of your employment, theterms and conditions of such employment, the termination of such employmentand/or any of the events relating directly or indirectly to or surrounding thetermination of such employment, and/or any of the events relating directly orindirectly to or surrounding the termination of that employment, including, butnot limited, breach of contract (express or implied), tort, wrongful discharge,detrimental reliance, defamation, emotional distress or compensatory orpunitive damages; and (iv) any claim for attorney’s fees, costs,disbursements and the like.

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## c)     You agree that you will not, from anysource or proceeding, seek or accept any award or settlement with respect toany claim or right covered by Section 9(a) or (b) above,including, without limitation, any source or proceeding involving any person orentity, the United States Equal Employment Opportunity Commission or othersimilar federal or state agency.  Exceptas otherwise required by law, you further agree that you will not, at any timehereafter, commence, maintain, prosecute, participate in as a party, permit tobe filed by any other person on your behalf (to the extent it is within yourcontrol or permitted by law), or assist in the commencement or prosecution ofas an advisor, witness (unless compelled by legal process or court order) orotherwise, any action or proceeding of any kind, judicial or administrative (onyour own behalf, on behalf of any other person and/or on behalf of or as amember of any alleged class of persons) in any court, agency, investigative oradministrative body against any Releasee with respect to any actual or allegedact, omission, transaction, practice, conduct, occurrence or any other matterup to and including the date of your execution of this Agreement which youreleased pursuant to Section 9(a) or (b) above.  You further represent that, as of the dateyou sign this Agreement, you have not taken any action encompassed by this Section 9(c).  If, notwithstanding the foregoing promises,you violate this Section 9(c), you will indemnify and hold harmlessReleasees from and against any and all demands, assessments, judgments, costs,damages, losses and liabilities and attorneys’ fees and other expenses whichresult from, or are incidents to, such violation.  Notwithstanding anything herein to thecontrary, this Section 9(c) shall not apply to any claims that youmay have under the ADEA and shall not apply to the portion of the releaseprovided for in Section 9(a) or (b) relating to the ADEA.

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# (d)   The sole matters to which the release andcovenants in this Section 9 do not apply are:  (i) your rights of indemnification towhich you were entitled immediately prior to the Resignation Date under theCompany’s By-laws, the Company’s Certificate of Incorporation or otherwise withregard to your service as an officer of the Company; (ii) rights under anytax-qualified pension plan maintained by the Company or under the EmployeeRetirement Income Security Act of 1974, as amended (“ERISA”); (iii) rightsunder this Agreement; or (iv) your general rights as a common stockholderof the Company.

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# 10.   Company Policies, Plans and Programs.  Whenever any rights under this Agreementdepend on the terms of a policy, plan or program established or maintained bythe Company, any determination of these rights shall be made on the basis ofthe policy, plan or program in effect at the time as of which the determinationis made.  No reference in this Agreementto any policy, plan or program established or maintained by the Company shallpreclude the Company from prospectively or retroactively changing or amendingor terminating that policy, plan or program or adopting a new policy, plan orprogram in lieu of the then-existing policy, plan or program.

 

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# 11.   Confidentiality of Agreement.  a)  Theexistence, terms, and conditions of this Agreement are and will be deemed to befully confidential and will not be disclosed by you to any other person orentity, except: (i) as may be required by law; (ii) to youraccountant to the extent necessary to prepare your tax returns; (iii) toyour spouse and attorney, provided that, to the maximum extent permitted bylaw, you give to each such person to whom disclosure is made notice of theconfidentiality provisions of this Agreement and each agrees to keep theexistence, terms and conditions of this Agreement fully confidential.  You, your accountant, attorney and spousefurther agree not to solicit or initiate any demand by others not party to thisAgreement for any disclosure of the existence, terms or conditions of thisAgreement.

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## b)    You agree that this Agreement may be used byyou or the Company only as evidence in a subsequent proceeding in which eitheryou or the Company alleges a breach of this Agreement.  You further agree that this Agreementotherwise will not be filed with a court or used for any other purpose.  Notwithstanding anything herein to thecontrary, you acknowledge that the existence, terms and conditions of thisAgreement may be disclosed by the Company to the extent required by law,including, without limitation, as required by legal filing or disclosurerequirements, or as otherwise advised by the Company’s legal counsel.

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# 12.   Resolution of Disputes.

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## a)     Except as set forth in Section 12(b),the parties shall submit any claim, demand, dispute, charge or cause of action(in any such case, a “Claim”) arising out of, in connection with, or relatingto this Agreement to binding arbitration in conformance with theJ*A*M*S/ENDISPUTE Streamlined Arbitration Rules and Procedures or theJ*A*M*S/ENDISPUTE Comprehensive Arbitration Rules and Procedures, asapplicable, but expressly excluding Rule 28 of the J*A*M*S/ ENDISPUTE StreamlinedRules and Rule 33 of the J*A*M*S/ENDISPUTE Comprehensive Rules, asthe case may be.  All arbitrationprocedures shall be held in Fort Lauderdale, Florida and shall be subject tothe choice of law provisions set forth in Section 13 of this Agreement.

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## b)    In the event of any dispute arising out ofor relating to this Agreement for which any party is seeking injunctive relief,specific performance or other equitable relief, such matter may be resolved bylitigation.  Accordingly, the partiesshall submit such matter to the exclusive jurisdiction of the United StatesDistrict Court for the Southern District of Florida or, if jurisdiction is notavailable therein, any other court located in Broward County, Florida, andhereby waive any and all objections to such jurisdiction or venue that they mayhave.  Each party agrees that process maybe served upon such party in any manner authorized under the laws of the UnitedStates or Florida, and waives any objections that such party may otherwise haveto such process.

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# 13.   Miscellaneous.  a)  ThisAgreement represents the complete understanding between you and the Company andsupersedes any and all other agreements between the parties, including withoutlimitation, the Employment Agreement and the Change in Control Agreement, eachbetween you and the Company and each dated November 30, 2003, as all suchhave been amended to date, as well as any memorandums, letters or otheragreements regarding your employment or separation from the Company.    No other promises or agreements will bebinding unless in writing and signed by you and the Company.

 

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## b)    Except as it may be preempted by ERISA, thisAgreement will be construed and enforced in accordance with the laws of theState of Florida without regard to that state’s principles of conflicts of law.

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## c)     If, at any time after the execution of thisAgreement, any provision of this Agreement will be held to be illegal orunenforceable by a court of competent jurisdiction, solely such provision willbe of no force or effect.  Except withrespect to claims under the ADEA, if you seek to challenge the validity of orotherwise vitiate this Agreement, you will, as a precondition, be required torepay the Company all amounts paid to you by the Company pursuant to this Agreementand, if applicable, the Company will not be required to make any additionalpayments.

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## d)    This Agreement is binding upon, and willinure to the benefit of, you and the Company and your and its respective heirs,executors, administrators, successors and assigns.  In addition, without limiting the generalityof the foregoing, the restrictive covenants contained in Sections 5 and 6, aswell as the provisions in Sections 7 and 8 are intended for the benefit of anySuccessor of Spherion, and such Successor shall be entitled to enforce such Sectionson the terms and conditions as the Company.

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## e)     This Agreement may be executed in one ormore counterparts, including by facsimile signatures, each of which shall bedeemed an original, but all of which together shall constitute one and the sameinstrument.

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# 14.   Acknowledgement.  You are hereby advised by the Company, andacknowledge that you have been so advised in writing, to consult independentlegal counsel of your choice before signing this Agreement.  You further acknowledge that you have had theopportunity to consult independent legal counsel and to consider the terms ofthis Agreement for a period of at least 21 days.  You further acknowledge that you havecarefully read this Agreement in its entirety; that you have had an adequateopportunity to consider it and to consult with any advisors of your choiceabout it; that you have had the opportunity to consult independent legalcounsel of your choice who has answered to your satisfaction all questions you hadregarding this Agreement; that you understand all the terms of this Agreementand their significance; that you knowingly and voluntarily assent to all theterms and conditions contained herein; and that you are signing this Agreementvoluntarily and of your own free will.

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# 15.   Effective Date.  This Agreement will not become effective untilthe date (the “Effective Date”) that is the eighth day following your signingof this Agreement, as evidenced by the date you have indicated next to yoursignature below.  You may at any timeprior to the Effective Date revoke this Agreement by delivering written noticeof revocation to: the Company at 2050 Spectrum Boulevard, Fort Lauderdale,Florida 33309, to the attention of the General Counsel.  In the event you do not accept this Agreementor, in the event that you revoke this Agreement prior to the eighth day afterits execution, this Agreement, and the promises contained in it, willautomatically be null and void.  If thelast day of the revocation period falls on a Saturday, Sunday or holiday, thelast day of the revocation period will be deemed to be the next business day.

 

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Ifthis Agreement is acceptable to you, please sign the enclosed duplicateoriginal and return the signed Agreement to me. Again, we thank you for all of your contributions to the Company andwish you the best of luck in all of your future endeavors.

 

 
|                     | **SPHERION  CORPORATION** |
|--------------------------|---------------------------|
|                     |                      |   |
|                     |                      |   |
|                     | By:                       |   | /s/ Lisa G.  Iglesias |   |
|                     |                      | Lisa G.  Iglesias, Senior Vice President |
|                     |                      |   |
| Accepted and  Agreed to: |                      |   |
|                     |                      |   |
|                     |                      |
| By:                      |                      | /s/ Eric Archer |   |
|                     |   Eric Archer   |
|                     |                      |   |
|                     |                      |   |
| Dated:                   | 2/16                      | , 2006 |
|                          |                           |  |  |  |  |  |  |  |  |

 

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**EXHIBIT A**

 

Section 6(b): Extended No-Hire Provision Applicablepersons:

*

 

 
|   | Acknowledged and Agreed: |
|--------|--------------------------|
|   |                     |
|   | /s/ Eric Archer          |   |
|   | Eric Archer              |

 

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* Confidentialportions omitted and filed separately with the Commission.

 

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