SFN Group Inc. DEF 14A 2007
Filed by the Registrant x)
Payment of Filing Fee (Check the appropriate box):
To our Stockholders:
On behalf of the Board of Directors, it is our pleasure to invite you to attend the annual meeting of stockholders of Spherion Corporation.
As shown in the formal notice enclosed, the annual meeting will be held at 8:30 a.m. (Eastern Daylight Time) on Tuesday, May 15, 2007 at our corporate headquarters, 2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309. At the annual meeting we will be acting on the matters described in this proxy statement. If you will need special assistance at the annual meeting because of a disability, please contact Ms. Dahlton Bennington at (954) 308-8427.
We hope you will be able to attend our annual meeting. However, whether or not you are personally present, it is important that your shares be represented at this meeting to assure the presence of a quorum. Whether or not you plan to attend the annual meeting, you are urged to date, sign and mail the enclosed proxy card in the envelope provided or vote by telephone or on-line.
Thank you for your support.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held
To our Stockholders:
NOTICE IS HEREBY GIVEN that the 2007 Annual Meeting of Stockholders (the Annual Meeting) of SPHERION CORPORATION, a Delaware corporation, will be held at 8:30 a.m. (Eastern Daylight Time) on Tuesday, May 15, 2007 at our corporate headquarters, 2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309. At the Annual Meeting, our stockholders will be asked to consider and vote upon the following matters:
Only stockholders of record at the close of business on March 23, 2007 are entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof.
Fort Lauderdale, Florida
2007 ANNUAL MEETING OF STOCKHOLDERS
This proxy statement (the Proxy Statement) is furnished in connection with the solicitation by the Board of Directors (the Board) of Spherion Corporation, a Delaware corporation (Spherion or the Company), of proxies from the holders of our common stock, $.01 par value per share (the Common Stock), for use at our 2007 Annual Meeting of Stockholders to be held pursuant to the enclosed Notice of Annual Meeting, at 8:30 a. m. (Eastern Daylight Time) on Tuesday, May 15, 2007, at our corporate headquarters, 2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309, telephone (954) 308-7600, or at any adjournments or postponements thereof (the Annual Meeting).
The approximate date that this Proxy Statement and the enclosed form of proxy (Proxy Card) are first being sent to stockholders is April 5, 2007.
ABOUT THE ANNUAL MEETING
Purpose of the Annual Meeting
At the Annual Meeting, stockholders will act upon the matters outlined in the notice of meeting attached to this Proxy Statement. In addition, management will respond to questions by stockholders.
Voting at the Annual Meeting
Only stockholders of record at the close of business on March 23, 2007, the record date for the Annual Meeting (the Record Date), are entitled to receive notice of and to participate in the Annual Meeting. If you were a stockholder of record on that date, you will be entitled to vote all of the Common Stock that you held on that date at the Annual Meeting, or any postponements or adjournments of the Annual Meeting.
Voting rights of the holders of our Common Stock
Each stockholder is entitled to one vote on each matter properly presented at the Annual Meeting for each share of Common Stock owned by that stockholder at the close of business on the Record Date. Therefore, if you owned 100 shares of Common Stock at the close of business on March 23, 2007, you can cast 100 votes for each matter properly presented at the Annual Meeting. Stockholders do not have a right to cumulate their votes for directors.
The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the aggregate voting power of the Common Stock outstanding on the Record Date will constitute a quorum, permitting us to conduct business at the Annual Meeting. As of the Record Date, there were 56,477,845 shares of Common Stock issued and outstanding and entitled to be voted at the Annual Meeting. Thus, the presence of the holders of Common Stock representing at least 28,238,923 shares will be required to establish a quorum. If less than a majority of the shares of Common Stock entitled to vote are represented at the Annual Meeting, the holders of a majority of the shares actually represented may adjourn the Annual Meeting to another date, time and place.
Pursuant to Delaware law, proxies received but marked as abstentions and broker non-votes are counted as present for purposes of determining the presence or absence of a quorum. Abstentions are counted as present and entitled to vote and will be counted as votes cast at the Annual Meeting, but will not be counted as votes cast for or against any given matter. However, a broker non-vote on a matter is considered as not entitled to vote on that matter and thus is not counted as a vote cast in determining whether a matter has been approved.
A list of stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder at our corporate headquarters, 2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309, for a period of ten days prior to the Annual Meeting and also at the Annual Meeting.
How to vote
Depending on how you hold your Common Stock, there are several ways in which you may vote:
No matter what method you ultimately decide to use to vote your Common Stock, we urge you to vote promptly.
Changing your vote
Even after you have submitted your Proxy Card you may change your vote at any time before the proxy is exercised by filing with our Corporate Secretary either a notice of revocation or a duly executed proxy bearing a later date; however, no such revocation or subsequent proxy will be effective unless and until written notice of the revocation or subsequent proxy is received by us at or prior to the Annual Meeting.
For 401(k) shares, you may revoke previously given voting instructions on or before May 11, 2007 by filing with the trustee either a written notice of revocation or a properly completed and signed voting instruction card bearing a later date.
The Boards recommendations
The Boards recommendations are set forth together with the description of each item in this Proxy Statement. In summary, the Board recommends a vote:
Unless you give other instructions on your Proxy Card, the persons named proxy holders on the Proxy Card will vote in accordance with the recommendations of the Board. With respect to any other matter that properly comes before the Annual Meeting, the proxy holders will vote as recommended by the Board or, if no recommendation is given, in their own discretion.
Required vote for approval
Election of Directors. The affirmative vote of a plurality of the votes cast at the Annual Meeting is required for the election of directors. A properly executed proxy marked WITHHOLD AUTHORITY with respect to the election of one or more directors will not be voted with respect to the director or directors indicated.
Other Items. For each other item, the affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote on the item will be required for approval. A properly executed proxy marked ABSTAIN with respect to any such matter will not be voted, although it will be counted as a vote cast at the Annual Meeting. Accordingly, an abstention will have the effect of a negative vote.
CORPORATE GOVERNANCE AND BOARD MATTERS
There are currently nine members of the Board of Directors:
Steven S. Elbaum, Chairman
Steven S. Elbaum has served as non-executive chairman of the Board of Directors since April 2001. Beginning in 2007, the Board intends to rotate the chairmanship approximately every five years. Mr. Elbaum has indicated that he intends to end his term as non-executive chairman immediately after the Annual Meeting, but will continue as a director. The Board anticipates electing Mr. Forese as non-executive chairman at that time.
The Board of Directors held seven meetings during Fiscal 2006. All directors attended at least seventy-five percent of the aggregate of (i) the total number of meetings of the Board and (ii) the total number of meetings held by all committees of the Board on which such director served during Fiscal 2006. We do not have a formal policy regarding attendance by members of the Board of Directors at the annual meeting of stockholders, but we encourage directors to attend and historically, most have done so. At our last annual meeting of stockholders, held in May 2006, five of our then eight directors attended. The Board of Directors has the ability to retain outside advisors as it deems necessary in the performance of its duties.
The standing committees of the Board include: the Audit Committee, the Compensation Committee, the Corporate Governance Committee, the Nominating Committee and the Executive Committee. The following table sets forth Committee memberships as of the date of this Proxy Statement.
The functions of the Audit Committee and its activities during Fiscal 2006 are described below in the Audit Committee Report. The Committee met twelve times during Fiscal 2006. All members of the Audit Committee are independent within the meaning of the listing standards of the New York Stock Exchange (NYSE) and meet financial literacy and management expertise requirements. Chairman William F. Evans has been designated by the Board as an audit committee financial expert within the meaning of Item 407 of Regulation S-K under the Securities Exchange Act of 1934. The charter of the Audit Committee is available on our website at www.spherion.com under the Corporate Governance tab found in the Investor Relations section and is attached to this proxy statement as Appendix A.
All members of the Compensation Committee are independent within the meaning of the listing standards of the NYSE. The Compensation Committee grants stock and equity-linked awards, determines and approves, in consultation with the other independent directors, the Chief Executive Officers (CEO) annual compensation, evaluates the performance and approves the compensation of our executive officers including our Named Executive Officers (as defined on page 9), administers our equity-based plans, and reviews and makes recommendations to the Board concerning compensation for directors and approval of compensation plans requiring stockholder approval. The Compensation Committee held five meetings during Fiscal 2006. The charter of the Compensation Committee is available on our website at www.spherion.com under the Corporate Governance tab found in the Investor Relations section.
The Corporate Governance Committee is comprised of all of the independent, non-employee directors and meets regularly in executive session without the presence of the CEO or other management. These executive sessions are presided over by the Committees Chairman who is selected annually by the Board of Directors. During Fiscal 2006, Steven S. Elbaum, as the Committees Chairman, presided over the executive sessions. The primary functions of the Corporate Governance Committee include reviewing and recommending to the Board: (i) roles and compositions of the various Board committees; (ii) evaluation of the performance of the Board; and (iii) evaluation of the senior management. This Committee held three meetings during Fiscal 2006. The charter of the Corporate Governance Committee is available on our website at www.spherion.com under the Corporate Governance tab found in the Investor Relations section.
The Nominating Committee, whose primary function is to identify and recommend nominees for election as directors, held two meetings during Fiscal 2006. All members of the Nominating Committee are independent within the meaning of the listing standards of the NYSE. The charter of the Nominating Committee is available on our website at www.spherion.com under the Corporate Governance tab found in the Investor Relations section.
The primary function of the Executive Committee is to exercise the authority of the Board during intervals between meetings of the Board, subject to limitations of Delaware law. The Executive Committee held one meeting during Fiscal 2006. The charter of the Executive Committee is available on our website at www.spherion.com under the Corporate Governance tab found in the Investor Relations section. The Board anticipates dissolving the Executive Committee immediately after the Annual Meeting.
The provisions of our Governance Principles regarding director independence meet the listing standards of the New York Stock Exchange. The portion of our Governance Principles addressing director independence is attached to this proxy statement as Appendix B. A copy of our Governance Principles is also available on our website at www.spherion.com under the Corporate Governance tab found in the Investor Relations section. The Board of Directors has determined that all of its members are independent within the meaning of these standards, with the exception of Roy G. Krause, who is also our President and Chief Executive Officer.
Director Selection Process
The Nominating Committee considers candidates for Board membership suggested by its members and other Board members, as well as management and stockholders. The Committee has also retained, from time to time, a third-party executive search firm to identify candidates upon request of the Committee. A stockholder who wishes to recommend a prospective nominee for the Board should notify the Companys Corporate Secretary in writing with whatever supporting material the stockholder considers appropriate. The Nominating Committee will also consider whether to nominate any person nominated by a stockholder pursuant to the provisions of our Restated By-laws relating to stockholder nominations as described in Stockholder Proposals below.
Once the Nominating Committee has identified a prospective nominee, the Committee makes an initial determination as to whether to conduct a full evaluation of the candidate. This initial determination is based on whatever information is provided to the Committee with the recommendation of the prospective candidate, as well as the Committees own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others. The preliminary determination is based primarily on the need for additional Board members to fill vacancies or expand the size of the Board and the likelihood that the prospective nominee can satisfy the evaluation factors described below. If the Committee determines, in consultation with the Chairman of the Board and other Board members as appropriate, that additional consideration is warranted, it may request the third-party search firm to gather additional information about the prospective nominees background and experience and to report its findings to the Committee. The Committee then evaluates the prospective nominee against the standards and qualifications set out in the Charter of the Nominating Committee, including:
The Committee also considers such other relevant factors as it deems appropriate, including the current composition of the Board, the balance of management and independent directors, the need for Audit Committee expertise and the evaluations of other prospective nominees. In connection with this evaluation, the Committee determines whether to interview the prospective nominee, and if warranted, one or more members of the Committee, and others as appropriate, interview prospective nominees in person or by telephone. After completing this evaluation and interview, the Committee makes a recommendation to the full Board as to the persons who should be nominated by the Board, and the Board determines the nominees after considering the recommendation and report of the Committee.
Non-employee directors receive an annual retainer. The annual retainer is determined by the Board each year and is effective for a twelve-month period commencing on July 1st of such year. The Board may designate the manner in which the annual retainer shall be payable including, but not limited to, in cash, in shares of our Common Stock or in any combination thereof, and may permit up to 100% of the annual retainer to be deferred and paid to the directors in the form of Deferred Stock Units (DSUs). The annual retainer payable to each non-employee director is currently set at $35,000.
Our Chairman receives an additional annual retainer in the amount of $100,000 payable in cash, DSUs or stock options, at the election of the Board. In 2006, the Board elected to pay the Chairman in DSUs, granting him 11,099 DSUs. In addition, the Chairperson of each of the Compensation Committee, the Executive Committee and the Nominating Committee receive an additional annual retainer in the amount of $10,000, payable in cash. The Chairperson of the Audit Committee receives an additional annual retainer in the amount of $20,000, payable in cash. In 2006, the Board of Directors awarded Mr. Forese an additional $43,000, paid in cash, as fees for work performed as the Chair of the Executive Committee, in excess of what was expected to be covered by payment of the annual retainer for that position.
Additionally, non-employee directors are compensated at the rate of $2,000 per Board meeting attended and $1,500 per Committee meeting attended, each payable in cash. Directors are reimbursed for expenses incurred by them in connection with our business. In addition, Messrs. Morrison and Victory participate in certain of our health benefit plans for which they pay the entire premium.
Each non-employee director is entitled to receive an annual grant of DSUs in an amount equal to $50,000 based on the value of the underlying Common Stock, vesting on the first anniversary of the date of grant. Five thousand five-hundred fifty (5,550) DSUs were granted to each non-employee director on July 3, 2006 and will vest on July 3, 2007.
Non-employee members of the Board of Directors are required to meet certain stock ownership guidelines. Each is required to own and hold a minimum of 10,000 shares of our Common Stock. Vested DSUs count toward this requirement. With the exception of Ms. Pellow, who joined the Board of Directors in October 2006, all of our current directors have already met the stock ownership requirement. New directors have two years from the time of election to the Board to meet this goal.
The table below shows the total cash and equity-based compensation paid in 2006 to each of our current non-employee directors.
Certain Relationships and Related Transactions
We did not have any related party transactions during Fiscal 2006. The Companys policy is to not enter into any transaction that would require disclosure under Item 404(a) of Regulation S-K. If such a transaction were to arise, the Company would require approval of the full Board of Directors, excluding any interested directors.
Corporate Governance Guidelines and Code of Ethics
The Board of Directors has adopted a set of Governance Principles, which provide a framework within which the Board of Directors and its Committees direct the affairs of the Company. The Governance Principles address the roles of the Board and management, functions of the Board, qualifications for directors, director independence, ethics and conflicts of interest, among other matters. The Governance Principles are available on our website at www.spherion.com under the Corporate Governance tab found in the Investor Relations section.
We also have a Code of Business Conduct and Ethics, which is applicable to all of our employees, officers and directors and a separate Code of Ethics for Chief Executive Officer and Senior Financial Officers, which is applicable to the principal executive officer, the principal financial officer, the principal accounting officer, the controller and the assistant controller. Both the Code of Business Conduct and Ethics and the Code of Ethics for Chief Executive Officer and Senior Financial Officers are available on our website at www.spherion.com under the Corporate Governance tab found in the Investor Relations section. We intend to post amendments or waivers, if any, to the Code of Business Conduct and Ethics (to the extent applicable to our principal executive officer, principal financial officer or principal accounting officer) and waivers to the Code of Ethics for Chief Executive Officer and Senior Financial Officers at this location on our website.
Communication with the Board Of Directors
Any stockholder or other interested party who wishes to communicate with the Board of Directors, a committee of the Board, the non-management directors as a group or any member of the Board (including our non-executive Chairman), may send correspondence to the Corporate Secretary at Spherion Corporation, 2050 Spectrum Boulevard, Fort Lauderdale, Florida, 33309. The Corporate Secretary will submit all stockholder correspondence relating to material matters affecting our company to the Board of Directors, committee of the Board, non-management directors as a group or individual member, as the case may be.
As more specifically provided in our Restated By-laws, no business may be brought before an annual meeting unless it is specified in the notice of the meeting or is otherwise brought before the meeting by or at the direction of our Board of Directors or by a stockholder entitled to vote who has delivered proper notice to us not less than 50 days nor more than 75 days prior to the scheduled date of the annual meeting. Accordingly, as our Restated Bylaws state that our annual meeting be held on the third Tuesday of May each year, any stockholder proposal to be considered at the 2008 Annual Meeting must be properly submitted to us not earlier than March 6, 2008 nor later than March 31, 2008. Stockholders desiring to suggest qualified nominees for director positions should submit the required information to our Corporate Secretary within the same time period. Detailed information for submitting stockholder proposals or recommendations for director nominees will be provided to you if you make a written request to our Corporate Secretary, 2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309. These requirements are separate from the Securities and Exchange Commissions requirements that a stockholder must meet in order to have
a proposal included in our Proxy Statement. For the 2008 Annual Meeting, under the Commissions requirements, any stockholder proposals and recommendations for director nominees must be received by our Corporate Secretary no later than December 7, 2007 in order to be included in our 2008 Proxy Statement.
Compensation Committee Governance
Charter. The Compensation Committees charter is available on our website at www.spherion.com under the Corporate Governance tab found in the Investor Relations section.
Scope of authority. Per the charter, the Committee is responsible for the following:
Delegation authority. The Committee may delegate authority to officers or to a subcommittee as it may deem appropriate from time to time. For 2006, the Compensation Committee delegated to the Chief Executive Officer the ability to award up to an aggregate of 100,000 shares under the 2006 Stock Incentive Plan to non-insider new hires during the year, with a maximum of 25,000 shares for any individual.
Governance. The Committee focuses on good governance practices in its operation. In 2006 this included:
Role of executive officers. The Chief Executive Officer, with input from the Chief Human Resources Officer, recommends to the Committee base salary, target bonus levels, actual bonus payouts and long-term incentive grants for Named Executive Officers other than the CEO. The Committee considers, discusses, modifies as appropriate, and takes action on such proposals.
Role of compensation consultants. In 2006, the Committee directly retained Hewitt Associates as its outside compensation consultant. The Committee informed Hewitt in writing that it expected Hewitt to be frank with the Committee at all times and to advise the Committee if and when there were elements of management proposals to the Committee that Hewitt believed the Committee should not support.
During 2006, Hewitt assisted the Committee with executive pay data and its implications for pay at the Company, director pay market data, and various other executive compensation issues. Hewitt representatives attended two of the four Committee meetings during 2006.
Compensation Committee Interlocks and Insider Participation
The 2006 Compensation Committee was comprised of Anne Szostak (Chairperson), James J. Forese, J. Ian Morrison and A. Michael Victory. Barbara Pellow joined the Compensation Committee in February 2007. None of these committee members has ever been an officer or employee of Spherion or any of our subsidiaries and none of our executive officers has served on the Compensation Committee or Board of Directors of any company of which any of our other directors is an executive officer.
Summary Compensation Table
The following table sets forth the aggregate compensation earned during Fiscal 2006 by President and Chief Executive Officer Roy G. Krause (our Principal Executive Officer or PEO), Senior Vice President and Chief Financial Officer Mark W. Smith (our Principal Financial Officer or PFO) and the three other most highly compensated executive officers in Fiscal 2006 (collectively, the Named Executive Officers).
Executive/Director Perks and Benefits Table
The tables that follow set forth information regarding grants of plan-based awards during Fiscal 2006, outstanding equity awards at fiscal year-end, options exercised and stock vested during Fiscal 2006 and nonqualified deferred compensation for each of our Named Executive Officers.
Grants of Plan-Based Awards
Outstanding Equity Awards at Fiscal Year-End
Stock Vested During Fiscal 2006
Nonqualified Deferred Compensation
Deferred Compensation Plan. The Company maintains a deferred compensation plan for highly compensated employees who are not eligible to participate in the Companys 401(k) plan. As a staffing company which employs a large number of temporary workers, IRS regulations severely limit the amount an employee can earn and still participate in the 401(k). Consequently the only savings plan available to highly compensated employees is the Deferred Compensation Plan (DCP). This plan is not qualified under IRS guidelines and distributions to the employees are taxable income when received. The DCP allows the participant to defer from 1% to 50% of gross pay, excluding bonus payments, annually. Contributions are not required to be matched by the Company but the Company can elect to make matching contributions. No such matching contributions were made by the Company for Fiscal 2006 and have not been made for several years. Participant deferrals are held by the Company but are not guaranteed by the Company. The employee makes hypothetical investment elections in funds offered by T. Rowe Price and their DCP balance reflects investment gains and losses from these hypothetical investments. Participant balances are at risk for all market changes and all earnings and losses are based on external market data. The participant must elect the distribution method at the time they elect to participate in the plan and these can be changed annually but such changes only apply to subsequent deferrals. Messrs. Grubbs and Mulrooney did not participate in the DCP.
Deferred Stock Plan. DSUs are granted pursuant to the Companys Deferred Stock Plan. A DSU represents the right to receive a share of Common Stock in the future after meeting service requirements or financial targets. The holder may elect to accept delivery of the common share underlying such DSU at the time of vesting or to defer delivery until a designated time in the future. A stockholder does not possess voting power as to a common share underlying a DSU until the stockholder accepts delivery of such common share. A stockholder does possess dispositive power as to a DSU once the DSU has vested. In July 2006, the Deferred Stock Plan was replaced with the 2006 Plan. For subsequent grants, DSUs will be granted pursuant to the 2006 Plan.
Potential Payments on Account of Retirement, Termination without Cause, Change in Control,
The chart below describes the benefit plans that potentially become payable to a Named Executive Officer at, following, or in connection with any retirement, termination without cause, change in control, death/disability or resignation of or by a Named Executive Officer.
Estimated Potential Incremental Cash Payments Due to Event Prior to Annual
Byrne Mulrooney served as our President, Staffing Services during Fiscal 2006. His employment with us terminated in March 2007. Mr. Mulrooneys former employment agreement, the form of which is filed as an exhibit to our Form 10-K for the fiscal year ended January 1, 2006, provided him certain benefits upon his termination. Mr. Mulrooney received a $578,563 cash severance payment in March 2007. In addition, Mr. Mulrooney agreed to certain non-competition, non-disparagement and confidentiality provisions as well as a full release and settlement of any and all claims against Spherion. The full text of Mr. Mulrooneys separation agreement will be available as an exhibit to our Form 10-Q for the fiscal quarter ended April 1, 2007.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the following Compensation Discussion and Analysis with management and based on these interactions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Companys annual report or Form 10-K, as applicable, and the Companys proxy statement.
Compensation Discussion and Analysis
The Compensation Discussion and Analysis describes and analyzes the material elements of our compensation policies and decisions with respect to the Named Executive Officers during 2006.
The compensation program is designed to contribute to our viability and long-term success by meeting the following objectives:
Spherion management and the Compensation Committee of the Board of Directors believe strongly in pay for performance. Rewards to senior management are tied closely to Company performance, while mindful of executive talent practices used by our competitors. Our guiding philosophy for compensation is to provide a performance-driven, market competitive total pay package for executive management.
Total compensation is targeted at the market median, with a greater emphasis on annual and long-term incentive compensation based on the achievement of business growth and challenging performance targets.
Spherions executive reward package encompasses base salary, annual incentives, long-term incentive awards, and access to mainstream benefits. No additional perquisites are provided to Spherion executives. For the CEO, the targeted allocation of pay components ranges approximately from 25% to 30% for base salary, from 25% to 30% for annual incentives, and from 45% to 50% for long-term incentives.
Spherion has compared its compensation to competitive firms consistently for several years. In January 2006, an internal executive compensation review was conducted for the senior officers utilizing publicly available information and survey data. Information from Spherions similarly sized competitors for talent in the staffing and recruiting industry and from a broader similar-sized company list based on revenue and number of staff associates, was utilized to determine a market competitive package for key executives. The staffing and recruiting comparator group companies are shown below:
We define the market as the size-adjusted 50th percentile of the data, with a focus on target pay opportunities, not actual plan payouts. We provide target pay opportunities approximately at market and design our incentive plans to pay significantly more or less than the target amount as results warrant. As a result, actual payouts should be market-appropriate given our performance for that year or period.
Pay decisions are made based on a combination of market data, internal equity, individual performance, and Company performance. The Compensation Committee determines pay for all of the Named Executive Officers. In the case of the CEO, the Compensation Committee makes the decisions in consultation with the other independent members of the Board of Directors after a review of the CEOs performance.
Competitive base salaries are necessary to recruit and retain our executives, as with any other employee. As a result, in 2006, base salaries were increased for Messrs. Krause, Smith and Mulrooney and Ms. Iglesias to bring them in line with competitive levels shown in our compensation analysis. The amount of the increase was 4.5% or less for Mr. Krause and Ms. Iglesias. The salary increase for Mr. Smith was 10% based on data showing his pay to be below the market for a Chief Financial Officer in our industry. Mr. Mulrooney also received a 10% salary increase to reflect his role as division president. Mr. Grubbs base salary was increased by $50,000 during the year to recognize his additional responsibilities in performing two key roles, as Chief Marketing and Development Officer and acting President of the Professional Services Group.
Our annual incentive plan rewards executives for achievement of specified goals for key financial measures, which should lead to increased shareholder value. The plan reinforces the need for profitable growth.
How Amounts are Determined
The ranges of award opportunities for the Named Executive Officers are shown in the Grants of Plan-Based Awards table. During 2006, based on the executive compensation review, Mr. Krauses target annual incentive was increased to 100% of base salary for 2006 from 90% of base salary. This increased annual incentive opportunity provided greater differentiation for the CEO role from the rest of the senior management team and, based on proxy data for our industry, was more competitive with peer CEOs.
The 2006 annual incentive opportunity was conditioned on achievement of the following metrics, primarily Earnings per Share, which is a key indicator of our success.
At the February 19, 2007 Compensation Committee meeting, cash incentive payments relating to Fiscal 2006 performance were approved in accordance with the plan terms. These are shown in the Bonus column of the Summary Compensation Table on page 9. The award for Mr. Grubbs included an additional $50,000 based on his performance during his interim assignment as leader of the Professional Services Group and was approved by the Compensation Committee.
2007 Program Modifications
For 2007, the plan was modified such that corporate executives will be rewarded based 85% on EPS and 15% on their contribution to core values of the Company. This provides greater ability to the Committee to differentiate awards based on individual performance.
Long-term incentives were awarded in two forms to senior management in 2006: stock options and performance-based DSUs, with approximately 50% of the targeted value allocated to each. This mix balances the goals of rewarding for increasing the stock price and driving the long-term financial success of the Company.
Timing of Grants
Grants are typically made to existing management at the February meeting of the Compensation Committee each year. Stock option grant amounts were discussed at the January 2006 Compensation Committee meeting and finalized and granted on February 21, 2006, the date of a subsequent Board of Directors meeting. As is the Companys usual practice, the grant strike price was set as the closing price on the day of the grant. While the CEO participated in setting the date of the Board of Directors meeting several months in advance, no member of senior management influenced the timing of the grant date and the setting of the meeting was not made so as to time option grants in coordination with the release of material non-public information.
How Amounts Were Determined
The targeted long-term incentive values were based on percentage of total cash guidelines developed using peer group data and with the support of information provided by Frederic W. Cook & Co., Inc. We target the size-adjusted market median for long-term incentive opportunities, but determine actual award sizes using assumptions that result in total opportunity lower than market in order to ensure that programs are affordable. Stock options were valued utilizing the Black-Scholes-Merton methodology. DSUs are valued at the Companys closing stock price on the date of grant.
Stock options granted in 2006 had a ten-year term and vested over a three-year period in cumulative increments of 33¹/³% per year beginning with the first anniversary of the grant date. Our forms of stock option agreement and all forms of our deferred stock agreement are exhibits to our Form 10-K for the fiscal year ended December 31, 2006.
DSUs granted in 2006 will cliff vest in proportions based on revenue growth and return on capital performance relative to Spherions peers over a three-year period. Recipients must be employed on the vesting date to receive the shares. Because awards are denominated in shares of Company stock, the value of the grants realized by participants is affected by stock price changes during the performance and vesting period.
2007 Program Modifications
For 2007, stock options granted had a 7-year term instead of a 10-year term. DSU awards made in 2007 measure EPS performance against goals, rather than peers, over a one-year period rather than a three-year period, and once the goal is achieved, vest over the remaining two years.
Spherion implemented formal stock ownership guidelines for our senior executive officers at the beginning of 2006. These guidelines are intended to align executive focus and direction with stockholder interests. The President and Chief Executive Officer is expected to hold Common Stock in an amount equal to two times his annual base salary. Other Named Executive Officers are expected to hold Common Stock in an amount equal to one time their annual base salary. Senior executive officers have four years to comply with the guidelines.
The Company maintains the following policies regarding security ownership and the hedging of the economic risk of such ownership for the Named Executive Officers:
Employment Agreements and Change in Control Agreements
We have Employment Agreements and Change in Control Agreements for all of the Named Executive Officers. The Employment Agreements provide a competitive level of benefits to the Named Executive Officers in return for several provisions benefiting the Company. The Change in Control Agreements exist to ensure management makes decisions in the best interests of the shareholders in the event of a potential Change In Control. The Employment Agreements and the Change in Control Agreements for Messrs. Krause, Smith and Grubbs and Ms. Iglesias, are exhibits to our Form 10-K for the fiscal year ended December 31, 2006. Mr. Mulrooneys employment with Spherion terminated in March 2007.
We entered into employment agreements with Mr. Krause in May 2001 as amended through March 2005, and with Messrs. Smith and Mulrooney and Ms. Iglesias in November 2003, as amended through March 2005. Mr. Grubbs entered into an agreement in February 2006, as amended through February 2007. The employment agreements provide for employment at will and, accordingly, may be terminated by either party thereto at any time for any reason. However, if we terminate the executive without cause (as such term is defined in the agreements), the executive would receive a cash severance payment, payable in a lump sum, in an amount equal to: (i) in the case of Mr. Krause, three times his annual base salary, plus his prorated target annual incentive payment; and (ii) in the case of Messrs. Smith, Grubbs and Mulrooney and Ms. Iglesias, the executives annual base salary plus a prorated target annual incentive payment.
Change in Control Agreements
We also entered into Change in Control Agreements (the CIC Agreements) with Mr. Krause in May 2001 as amended through March 2005, and with Messrs. Smith and Mulrooney and Ms. Iglesias in November 2003, as amended through March 2005. Mr. Grubbs entered into an agreement in February 2006, as amended through February 2007. The CIC Agreements provide for certain benefits to be paid upon the occurrence of a Change in Control (as defined in the CIC Agreements), including the vesting of stock options and DSUs and certain specified severance payments in the event that the employment of such executive is terminated within 2 years following a Change in Control. Such severance includes a lump sum cash payment in an amount equal to: (i) three times the sum of the executives annual salary plus the target annual incentive payment, in the case of Mr. Krause and (ii) two times the sum of the executives annual salary plus the target annual incentive payment, in the case of Messrs. Smith, Grubbs and Mulrooney and Ms. Iglesias. Mr. Krauses agreement contains a provision to provide him with a gross-up payment for any excise tax imposed under Internal Revenue Code Section 280G as a result of a CIC.
Retirement and Savings Plans
The Named Executive Officers are not eligible to participate in the Spherion 401(k) Plan. They are eligible to participate in the Spherion Deferred Compensation Plan. This Deferred Compensation Plan represents the sole savings vehicle available to the Named Executive Officers. Investment choices utilize market-based returns. These market-based returns are credited to the Named Executive Officers notional deferred compensation account. No match was awarded to plan participants in 2006. No other qualified or nonqualified retirement plan exists at Spherion. All employees, including the Named Executive Officers, employed for at least six months may purchase Spherion stock at a 15% discount to the market through the Spherion Employee Stock Purchase Plan, an Internal Revenue Code Section 423 Plan.
Health and Welfare Plans
The Named Executive Officers are eligible for the same health and welfare benefits at the same employee contribution rates as other staff associates in the Company.
No additional perquisites are provided to the Named Executive Officers.
Audit Committee Report
The following Report of the Audit Committee of the Board of Directors (the Audit Committee) of Spherion does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Spherion filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent Spherion specifically incorporates this Report by reference therein.
The Audit Committees purpose is to assist the Board of Directors oversight of:
A more detailed description of the scope of the Audit Committees responsibilities and how they will be carried out is contained in the Audit Committees charter which is available on our website at www.spherion.com under the Corporate Governance tab found in the Investor Relations section. A copy of the Audit Committees charter is also attached to this proxy statement as Appendix A.
The Audit Committee has implemented procedures to ensure that during the course of each fiscal year it devotes the attention that it deems necessary or appropriate to each of the matters assigned to it under the Audit Committees charter. To carry out its responsibilities, the Audit Committee held twelve meetings during Fiscal 2006. The Audit Committee regularly meets in executive sessions with our independent auditors and with our internal auditors, in each case without the presence of our management.
The members of the Audit Committee during Fiscal 2006 were William F. Evans (Chairman), James J. Forese and David R. Parker. Each member of the Audit Committee has certified that he is independent from us as such term is defined in Sections 303.01(B)(2)(a) and (3) of the NYSEs listing standards and Chairman William F. Evans has been designated by the Board as an audit committee financial expert within the meaning of Item 407 of Regulation S-K under the Securities Exchange Act of 1934.
In discharging its oversight responsibility as to the audit process, the Audit Committee obtained from our independent auditors, Deloitte & Touche LLP, a formal written statement describing all relationships between the auditors and Spherion that might bear on the auditors independence consistent with Independence Standards Board Standard No. 1, as amended, Independence Discussions with Audit Committees; discussed with the auditors any relationships that may impact their objectivity and independence; and satisfied itself as to the auditors independence. The Audit Committee also discussed with management, the internal auditors and the independent auditors, the quality and adequacy of our internal controls and the internal audit functions organization and responsibilities. The Audit Committee reviewed with both the independent and the internal auditors their audit plans, audit scope and identification of audit risks.
The Audit Committee discussed and reviewed with the independent auditors all communications required by auditing standards generally accepted in the United States of America, including those described in Statement on Auditing Standards No. 61, Communication with Audit Committees, with and without management present, discussed and reviewed the results of the independent auditors examination of the financial statements. The Audit Committee also discussed the results of the internal audit examinations.
The Audit Committee reviewed and discussed our audited financial statements as of and for the fiscal year ended December 31, 2006, with management and the independent auditors. Management has the responsibility for the preparation of our financial statements and the independent auditors have the responsibility for the examination of those statements.
Based on the above-mentioned review and discussions with management and the independent auditors, the Audit Committee recommended to the Board of Directors that our audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, for filing with the Securities and Exchange Commission.
The Audit Committee and the Board of Directors have also recommended, subject to stockholder ratification, the selection of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2007.
Date: April 5, 2007
Audit and Non-Audit Fees
The aggregate fees billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, Deloitte), for professional services rendered for Fiscal 2006 and 2005 are set forth below:
Audit-related fees for both years include statutory audit fees. Tax fees for 2006 include consultation fees associated with the adoption of new accounting standards. The Audit Committee has considered and has agreed that the provision of services as described above are compatible with maintaining Deloittes independence.
Pre-Approval Policies and Procedures
The Audit Committee pre-approves the engagement of the independent auditor for all professional services. The pre-approval process generally involves the full Audit Committee evaluating and approving the particular engagement prior to the commencement of services. However, the Audit Committee has delegated pre-approval authority to Mr. Evans, as Audit Committee Chairperson, for circumstances when it is impractical to hold a meeting of the full Audit Committee. In the event that Mr. Evans pre-approves an engagement, he is then required to report the pre-approval to the full Audit Committee at the next regularly scheduled Audit Committee meeting.
All non-audit services performed by our independent auditor during Fiscal 2006 were pre-approved by the Audit Committee in accordance with its policy and procedures, and the Audit Committee concluded that the provision of such services by our independent auditor is compatible with maintaining its independence.
ITEMS TO BE VOTED ON
Item 1 - Election of Directors
Our Restated Certificate of Incorporation and Restated By-laws provide that the number of directors needed to constitute the Board of Directors shall be nine unless otherwise fixed by a resolution adopted by a majority of the entire Board. The Restated Certificate of Incorporation further provides that the Board of Directors shall be divided into three classes: Class I, Class II and Class III, with each class to consist, as nearly as possible, of one-third of the members of the Board. Members of each class of the Board of Directors are elected for a term of three years, and the term of office of one class of directors expires at each annual meeting of stockholders. In October 2006, the Board of Directors increased the size of the Board from eight members to nine members and appointed Barbara Pellow as a Class I director.
Our Restated By-Laws provide that directors appointed by the Board must stand for election at the next annual meeting after the Boards appointment. Therefore, at the 2007 Annual Meeting of Stockholders, one Class I director will be elected to hold office for 2 years and three Class II directors will be elected to hold office for three years, or in each case, until their respective successors are duly elected and qualified. Barbara Pellow has been nominated for election as a Class I director and she is currently serving as a Class I director. Steven S. Elbaum, David R. Parker and Anne Szostak have been nominated for election as Class II directors and each of them are currently serving as Class II directors. The shares voted by proxies solicited by the Board will be voted for the election of Ms. Pellow, Messrs. Elbaum and Parker and Ms. Szostak unless authority to do so is withheld as provided in the Proxy Card. All nominees have consented to serve if elected and the Board of Directors has no reason to believe that any of the nominees will be unable to accept the office of director, but if such contingency should arise, it is the intention of the proxies to vote for such person or persons as the Board of Directors may recommend.
Directors Standing for Election
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEE FOR CLASS I DIRECTOR AND FOR EACH OF THE NOMINEES FOR CLASS II DIRECTOR. IF YOU COMPLETE THE ENCLOSED PROXY CARD, UNLESS YOU DIRECT TO THE CONTRARY ON THAT CARD, THE SHARES REPRESENTED BY THAT PROXY CARD WILL BE VOTED FOR ALL THE NOMINEES.
Item 2 - Ratification of Appointment of Auditors
The Audit Committee of our Board of Directors has recommended the appointment of Deloitte & Touche LLP as our independent auditor for the 2007 fiscal year. Services provided to us and our subsidiaries by Deloitte & Touche LLP in Fiscal 2006 are described under Audit and Non-Audit Fees on page 22. Deloitte & Touche LLP audited our accounts for Fiscal 2006. Our Audit Committee considers Deloitte & Touche LLP to be well qualified. The Audit Committee is responsible for the appointment, oversight and termination of our independent auditor. We are seeking the ratification of our stockholders of this appointment, although our Audit Committee is not bound by any stockholder action on this matter. If the appointment of Deloitte & Touche LLP as our independent auditor is not ratified by our stockholders, the Audit Committee will reconsider its appointment, but may nevertheless retain Deloitte & Touche LLP. Also, even if the appointment of Deloitte & Touche LLP as our independent auditor is ratified by our stockholders, the Audit Committee may direct the appointment of a different independent auditor at any time during the year if the Audit Committee determines, in its discretion, that such a change would be in our best interests. Representatives of Deloitte & Touche LLP plan to attend the Annual Meeting, will be afforded an opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions by stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP. IF YOU COMPLETE THE ENCLOSED PROXY CARD, UNLESS YOU DIRECT TO THE CONTRARY ON THAT CARD, THE SHARES REPRESENTED BY THAT PROXY CARD WILL BE VOTED FOR THIS PROPOSAL.
The Board of Directors knows of no other matters which will be presented at the Annual Meeting, but if other matters do properly come before the Annual Meeting it is intended that the persons named in the proxy will vote as recommended by the Board or, if no recommendation is given, in their own discretion.
Based on a review of filings with the Securities and Exchange Commission, the following represents each person known to us to be the beneficial owner of more than five percent of the Common Stock (footnotes begin on the following page):
The following table sets forth the beneficial ownership of our Common Stock as of March 1, 2007 by each of the Named Executive Officers in the Summary Compensation Table on page 9 and all of our continuing directors and nominees to the Board of Directors, as well as the directors and executive officers as a group. The determinations of beneficial ownership by our directors and executive officers of the Common Stock are based upon Rule 13d-3 under the Securities Exchange Act of 1934, as amended. This Rule provides that shares shall be deemed so owned where a person has, either solely or in conjunction with others, the power to vote or to direct the voting of shares and/or the power to dispose or to direct the disposition of shares; or where a person has the right to acquire any such power within 60 days after the date such beneficial ownership is determined.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires certain of our officers, directors and persons who beneficially own more than ten percent of our Common Stock to file with the Securities and Exchange Commission and the New York Stock Exchange initial reports of beneficial ownership of the Common Stock on Form 3 and reports of changes in beneficial ownership of the Common Stock on Form 4 or Form 5. Such persons are also required to furnish us with copies of all such reports filed. Based solely on our review of Forms 3, 4 and 5 and amendments thereto furnished to us with respect to Fiscal 2006, as well as any written representations furnished to us that no other reports were required, we believe that, during Fiscal 2006, all Section 16(a) filing requirements applicable to such persons were timely filed.
Proxy Solicitation Costs
In addition to soliciting proxies by mail, certain of our employees may also solicit proxies personally, by telephone or otherwise, but such persons will not receive any special compensation for such services. We will reimburse brokerage firms, banks, fiduciaries, voting trustees and other nominees for customary costs of forwarding the soliciting material to each beneficial owner of stock held of record by them. We will pay the entire cost of this solicitation.
Reduce Duplicate Mailings
The Securities and Exchange Commission rules permit companies and intermediaries, such as a brokerage firm or a bank, to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more security holders sharing the same address by delivering only one proxy statement and annual report to that address. This process, which is commonly referred to as householding, can effectively reduce our printing and postage costs. Under householding, each stockholder would continue to receive a separate proxy card or voting instruction card.
If you are currently receiving multiple sets of Annual Meeting materials and wish only to receive one set, please make sure to choose that option on your Proxy Card when voting. If you own your shares in street name, you can request householding by calling or writing your brokerage firm, bank or other nominee.
Certain of our stockholders whose shares are held in street name and who have consented to householding will receive only one set of our Annual Meeting materials per household this year. If your household received a single set of our Annual Meeting materials this year, you can request to receive additional copies of these materials
by calling or writing your brokerage firm, bank or other nominee. Additionally, you may also contact us to receive additional Annual Meeting materials or to request that we cease householding your Annual Meeting materials by writing to the attention of Investor Relations at Spherion Corporation, 2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309 or by calling 954-308-7600.
The Annual Report to our Stockholders for fiscal year ended December 31, 2006 (the Annual Report), and the Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (the Form 10-K) are being mailed concurrently with this Proxy Statement to all stockholders of record as of March 23, 2007. In addition, we have provided brokers, dealers, banks, voting trustees and their nominees, at our expense, with additional copies of the Annual Report and the Form 10-K so that such record holders could supply such material to beneficial owners as of March 23, 2007. A copy of our Form 10-K, our Governance Principles, each of the Charters of our Committees of the Board of Directors, and our Code of Business Conduct and Ethics and the Code of Ethics for Chief Executive Officer and Senior Financial Officers, will be available without charge upon written request to:
Teri L. Miller
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors of Spherion Corporation (the Company) to assist the Board in fulfilling its oversight responsibilities.
The Audit Committees purpose is to assist Board of Directors oversight of:
The Audit Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and it has direct access to the independent auditors as well as anyone in the organization. The Audit Committee has the ability to retain special legal, accounting, or other consultants or experts (collectively, Advisors) it deems necessary in the performance of its duties. The Company shall provide funding, as determined by the Audit Committee, for payment of (i) compensation to the independent auditors (ii) compensation to any Advisors employed by the Audit Committee and (iii) ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out is duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the requirements of the New York Stock Exchange (NYSE). The Audit Committee shall be comprised of three or more directors as determined by the Board, each of whom shall be independent and financially literate in accordance with NYSE rules. All members of the Committee shall have a basic understanding of finance and accounting and be able to read and understand fundamental financial statements, and at least one member of the Committee shall have accounting or related financial management expertise, as determined by the Board of Directors in its business judgment in accordance with NYSE rules, sufficient to be considered an audit committee financial expert as defined by Item 407 of Regulation S-K under the Securities Exchange Act of 1934. In addition, the Audit Committee shall satisfy the requirements of Rule 10A-3 under the Securities Exchange Act of 1934.
Audit Committee members shall be appointed by the Board of Directors and may be removed by the Board of Directors at any time. If an Audit Committee Chair is not designated or present, the members of the Audit Committee may designate a Chair by majority vote of the Audit Committee membership.
The Committee shall meet at least four times annually, or more frequently as circumstances dictate. The Audit Committee Chair shall prepare and/or approve an agenda in advance of each meeting. The Committee should meet separately and periodically (at least annually) with management, the director of the internal auditing department, and the independent auditors, and in executive session as a committee to discuss any matters that the Committee or each of these groups believe should be discussed.
III. Audit Committee Responsibilities and Duties
The primary responsibility of the Audit Committee is to oversee the Companys financial reporting process on behalf of the Board and report the results of their activities to the Board. Management is responsible for preparing the Companys financial statements and the independent auditors are responsible for auditing those statements.
In carrying out these responsibilities, the Audit Committee will be responsible for the following:
Internal Audit Department
Legal & Tax Compliance
Other Audit Committee Responsibilities
Governance Principles on Director Independence
A majority of the directors will be independent directors under the proposed New York Stock Exchange (NYSE) rules. The Board has determined that all of Spherions directors are independent with the exception of the CEO. All future non-employee directors will be independent. The independent directors will meet regularly without management present.
To be considered independent under the proposed NYSE rules, the Board must determine that a director does not have any direct or indirect material relationship with Spherion. The Board has established the following guidelines to assist it in determining director independence in accordance with that proposed rule:
a. A director will not be independent if, within the preceding three years: (i) the director was employed by Spherion; (ii) an immediate family member of the director was employed by Spherion as an officer; (iii) the director was employed by or affiliated with Spherions independent auditor; (iv) an immediate family member of the director was employed by Spherions independent auditor as a partner, principal or manager; or (v) a Spherion executive officer was on the Board of Directors of a company which employed the Spherion director, or which employed an immediate family member of the director as an officer;
b. The following commercial or charitable relationships will not be considered to be material relationships that would impair a directors independence: (i) if a Spherion director is an executive officer of another company that does business with Spherion and the annual sales to, or purchases from, Spherion are less than two percent (2%) of the annual revenues of the company for which he or she serves as an executive officer; (ii) if a Spherion director is an executive officer of another company which is indebted to Spherion, or to which Spherion is indebted, and the total amount of either companys indebtedness to the other is less than one percent of the total consolidated assets of the company for which he or she serves as an executive officer; and (iii) if a Spherion director serves as an officer, director or trustee of a charitable organization, and Spherions discretionary charitable contributions to the organization are less than two percent (2%) of that organizations total annual charitable receipts. The Board will annually review all commercial and charitable relationships of directors.
c. For relationships not covered by the guidelines in subsection (b) above, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, shall be made by the directors who satisfy the independence guidelines set forth in subsections (a) and (b) above. For example, if a director is the CEO of a company that purchases services from Spherion that are more than two percent of that companys annual revenues, the independent directors could determine, after considering all of the relevant circumstances, whether such a relationship was material or immaterial, and whether the director would therefore be considered independent under the proposed NYSE rules.
The company will not make any personal loans or extensions of credit to directors or executive officers. No director or family member may provide personal services for compensation to the company.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) of Spherion Corporation, a Delaware corporation (Spherion), hereby acknowledge(s) receipt of the Notice of the 2007 Annual Meeting of Stockholders and related Proxy Statement, Spherions Form 10-K for the 2006 fiscal year and Spherions 2006 Annual Report to Stockholders. The undersigned hereby appoint(s) Mark W. Smith and Lisa G. Iglesias, and each of them, proxies and attorneys-in-fact, with full power to each of substitution, to vote on behalf and in the name of the undersigned, all shares of common stock, which the undersigned would be entitled to vote if then and there personally present at the Annual Meeting of Stockholders, to be held May 15, 2007 at 8:30 a.m., EDT, at Spherion's corporate headquarters, 2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309, and at any adjournment or adjournments thereof, on all matters set forth on the reverse side.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)