Search for your user that you need to set as terminated.

Pull up his/her user record, and click the link:
"Employee Termination Tool"

at the top right hand corner.

At the bottom of the terminate employee form make sure you pick someone for
this:

Employee that will handle Remaining Open Referrals

If the persons that you are trying to terminate has open referrals you will be blocked from completing this operation until you select someone that will get the open referrals.