Exhibit 10.55

 

TRANSITION AGREEMENT

 

This Transition Agreement (“Agreement”) is entered into by and between QRS
Corporation (together with its officers, directors, employees, representatives,
agents, attorneys, investors, shareholders, administrators, subsidiaries,
affiliates, predecessor and successor corporations and assigns, the “Company”),
and John C. Parsons, Jr. (together with his heirs, executors, representatives
and assigns, “Parsons”).

 

WHEREAS, Parsons has been employed by the Company;

 

WHEREAS, the Company and Parsons have mutually agreed to terminate the existing
employment relationship, to enter into a consulting relationship and to provide
for certain other matters;

 

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company
and Parsons (collectively referred to as the “Parties”) hereby agree as follows:

 

1. Resignation. Parsons hereby submits his resignation as Chief Financial
Officer of the Company, effective as of November 12, 2003, and from all other
offices and positions he holds with the Company, effective as of November 14,
2003 (the “Termination Date”), and the Company has accepted his resignations.

 

2. Consulting Services.

 

  (a) During the period from the Termination Date through the earlier of June
30, 2004 and the termination date determined in accordance with Section 2(b)
below (the “Consulting Period”), Parsons shall serve as a consultant to the
Company. In such capacity, Parsons shall provide such services as requested from
time to time by the Chief Executive Officer including, without limitation,
transitioning financial and accounting matters to the Company’s senior financial
officers and restructuring the lease for the premises located at 1450 Marina Way
South in Richmond (the “Consulting Services”). During the Consulting Period,
Parsons shall diligently, and to the best of his ability, perform all duties
incident to his position, and devote the time, attention and effort to the
business and affairs of the Company necessary to perform each of the tasks
designated by the Chief Executive Officer, and shall use his best efforts to
promote the interests of the Company. This consulting arrangement shall be
automatically extended for six months at the end of the Consulting Period and at
the end of each extension period thereafter, unless written notice of
termination is given by either Parsons or the Company at any time prior to the
last day of the respective period.

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  (b) In the event Parsons becomes an employee of or a service provider to a
Competitor (as defined below), Parsons’ service as a consultant to the Company
shall immediately and automatically be terminated without any action on the part
of the Company. A Competitor shall mean any business that provides to other
businesses in the retail industry similar products and services to those then
offered by the Company.

 

3. Compensation during Consulting Period. The Company shall pay Parsons an
aggregate of Thirty Five Thousand Six Hundred Seventy Dollars ($35,670) for his
consulting services during the period from the Termination Date through December
31, 2003 (the “Initial Consulting Period”). Should Parsons elect to continue
group health benefits under COBRA during the Initial Consulting Period, the
Company will pay for Parsons’ COBRA coverage costs during the Initial Consulting
Period. Thereafter, the only compensation which will be due to Parsons during
the Consulting Period shall be the continued vesting set forth in Paragraph 4 of
this Agreement.

 

4. Treatment of Outstanding Stock Options. During the Consulting Period, the
outstanding options to purchase shares of Common Stock of the Company granted to
Parsons, a complete list of which is set forth on Exhibit A hereto (the
“Options”), shall continue in force and effect as provided in the applicable
stock option agreements and under the Company’s 1993 Stock Option/Stock Issuance
Plan, except as modified herein. During the Initial Consulting Period, the
Options shall continue to vest in accordance with the terms provided in the
applicable share option agreement. After January 1, 2004, the Options shall vest
in the monthly increments set forth in Section 1 of Exhibit A upon the
completion by Parsons of each month of Consulting Services hereunder. The
Options shall be exercisable for ninety (90) days after cessation of Consulting
Services by Parsons. Should there occur a Corporate Transaction or Change in
Control (as those terms are defined in the Company’s 1993 Stock Option/Stock
Issuance Plan) while Parsons continues to provide Consulting Services hereunder,
then all of the Options will, immediately prior to the specified effective date
for the Corporate Transaction or Change in Control, become exercisable for all
the shares at the time subject to those Options and those accelerated Options
may be exercised for all or any portion of the Option shares as fully vested
shares.

 

5. Severance. In consideration for Parsons’ satisfactory employment performance
through the Termination Date, his agreement to perform consulting services
during the Consulting Period, his release of claims set forth below and the
other obligations under this Agreement, the Company and Parsons agree as
follows:

 

  (a) The Company will pay Parsons severance in the amount of One Hundred Ninety
Eight Thousand Seven Hundred Fifty Dollars ($198,750), less applicable taxes,
withholdings and deductions, representing six months of Parsons annual targeted
compensation in effect on the Termination Date. Such severance will be paid in
four equal installments, with the first payment occurring on January 15, 2004
and the remaining three payments to be made two, four and six months following
such date.

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  (b) Notwithstanding his resignation and the termination of his Employment
Agreement (as defined below), the Company will pay Parsons $64,258,
(representing seventy-five percent (75%) of his target incentive compensation
for 2003, or $97,969, minus $33,711 previously received by Parsons as a mid-year
payout), less applicable taxes, withholdings and deductions, in February 2004
and will pay him $32,656, (representing the remaining twenty-five percent (25%)
of his target incentive compensation), less applicable taxes, withholdings and
deductions, upon a successful resolution of the lease restructuring described in
Paragraph 2.a. of this Agreement, as determined by the Chief Executive Officer
in her sole discretion, prior to June 30, 2004.

 

  (c) The Company will provide Parsons with up to $5,000 in executive coaching
services with The Lifework Institute (Carole E. Murray) provided that such
services are initiated within ninety days of Termination Date.

 

  (d) Should Parsons elect to continue group health benefits coverage under
COBRA, the Company will pay for six months of Parsons’ COBRA coverage costs,
commencing on January 1, 2004.

 

Parsons acknowledges and agrees that but for his execution of this Agreement, he
would not otherwise be entitled to the benefits described in Paragraphs 5(b) and
5(c) above.

 

6. Termination of Employment Agreement/No Other Payments Due. Parsons agrees
that the Company has no further obligations to him under the Employment
Agreement, dated April 1, 2003 (the “Employment Agreement”) and attached hereto
as Exhibit B. Parsons acknowledges and agrees that he has received all salary,
(including any applicable overtime pay) accrued vacation, bonuses, or other such
sums due to Parsons through the date of this Agreement other than amounts to be
paid and benefits provided pursuant to Paragraph 3 and Paragraph 5 of this
Agreement. In light of the payment by the Company of all wages due, the Parties
further acknowledge and agree that California Labor Code section 206.5 is not
applicable to the Parties hereto. That section provides in pertinent part as
follows:

 

No employer shall require the execution of any release of any claim or right on
account of wages due, or to become due, or made as an advance on wages to be
earned, unless payment of such wages has been made.

 

7. Release of Claims. Parsons hereby fully and forever releases the Company from
any claim, duty, obligation or cause of action relating to any matters of any
kind, whether known or unknown, suspected or unsuspected, that he may possess
arising from any omissions, acts or facts that have occurred up until and
including the Termination Date including, without limitation:

 

  (a) any and all claims relating to or arising from Parsons’ recruitment to,
employment with or termination from employment with the Company;

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  (b) any and all claims relating to, or arising from, Parsons’ right to
purchase, or actual purchase of shares of stock of the Company;

 

  (c) any and all claims for wrongful discharge of employment; breach of
contract, both express and implied; breach of the covenant of good faith and
fair dealing, both express and implied; negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage,
defamation or, unfair business practices;

 

  (d) any and all claims for violation of any federal, state or municipal
statute, including, but not limited to, Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act of 1967, and the California Fair
Employment and Housing Act;

 

  (e) any and all claims arising out of any other laws and regulations relating
to employment or employment discrimination; and

 

  (f) any and all claims for attorney’s fees and costs.

 

Parsons agrees that the release set forth in the section shall be and will
remain in effect in all respects as a complete and general release as to the
matters released. This release does not extend to any obligations incurred under
this Agreement nor does it abrogate any rights of Parsons pursuant to California
Labor Code section 2802.

 

8. Waiver of Unknown or Future Claims. Parsons represents that he is not aware
of any claim other than the claims that are released by this Agreement. Parsons
acknowledges that he is familiar with the provisions of California Civil Code
section 1542, which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM/HER MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

Parsons, being aware of such code section, agrees to waive any rights either
party may have thereunder, as well as under any other state or federal statute
or common law principles of similar effect.

 

9. Confidentiality. Parsons agrees to use his best efforts to maintain in
confidence the existence of this Agreement, the contents and terms of this
Agreement, and the consideration for this Agreement (hereinafter collectively
referred to as “Separation Information”). Parsons agrees to take every
reasonable precaution to prevent disclosure of any Separation Information to
third parties, and agrees that there will be no publicity, directly or
indirectly, concerning any Separation Information. Parsons agrees to take
precaution to disclose Separation Information only to those attorneys,
accountants, governmental entities, and family members who have a reasonable
need to know of such Separation Information.

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10. Non Disparagement. Parsons agrees to refrain from any defamation, libel or
slander of the Company and its respective officers, directors, employees,
investors, shareholders, administrators, affiliates, divisions, subsidiaries,
predecessor and successor corporations, and assigns or tortious interference
with the contracts and relationships of the Company and its respective officers,
directors, employees, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, predecessor and successor corporations, and assigns.

 

11. Nondisclosure of Confidential and Proprietary Information; Nonsolicitation.
Parsons agrees that he shall continue to maintain the confidentiality of all
confidential and proprietary information of the Company. Parsons agrees that at
all times hereafter, in accordance with the terms of this Agreement and any
other confidentiality agreements which may exist between Company and Parsons, as
well as any applicable state and federal law, Parsons shall not divulge, furnish
or make available to any party any confidential information, trade secrets,
patents, patent applications, price decisions or determinations, inventions,
customers, proprietary information or other intellectual property rights of the
Company, until after such time as such information has become publicly known
otherwise than by act of collusion of Parsons. Parsons further agrees that for a
12-month period commencing on the January 1, 2004, he will not solicit, recruit,
or induce any employee of QRS Corporation to terminate or alter his employment
or consulting relationship with the Company. Parsons further acknowledges and
agrees that, with the exception of the DSL equipment provided by the Company to
Parsons which Parsons may retain, he has returned or will have returned all the
Company’s computer equipment and related property in his possession and the
Company’s confidential and proprietary information in his possession to the
Company as of the January 1, 2004.

 

12. Breach of this Agreement. Parsons acknowledges that breach of the
confidential and proprietary information provision contained in Paragraph 9 of
this Agreement would cause the Company to sustain irreparable harm from such
breach, and, therefore, Parsons agrees that in addition to any other remedies
which the Company may have for any breach of this Agreement or otherwise,
including termination of the Company’s obligations to provide benefits to
Parsons as described in Paragraph 5 of this Agreement, the Company shall be
entitled to obtain equitable relief including specific performance and
injunctions, restraining Parsons from committing or continuing any such
violation of this Agreement.

 

13. Non-Admission of Liability. It is expressly understood and agreed that
nothing contained in this Agreement shall constitute or be treated as an
admission of any wrongdoing by the Company nor any admission of Company
liability.

 

14. No Prior Filing of Claims. Parsons represents and warrants that he does not
presently have on file any claims, charges, grievances or complaints against the
Company in or with any administrative, state, federal or governmental entity,
agency, board or court, or before any other tribunal or panel or arbitrators,
public or private, based upon any actions or omissions by the Company occurring
prior to the date of this Agreement

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15. Authority; Ownership. Parsons represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through
him to bind them to the terms and conditions of this Agreement. Parsons
represents and warrants that he is the sole and lawful owner of all rights,
title and interest in and to all released matters, claims and demands referred
to herein. Parsons further represents and warrants that there has been no
assignment or other transfer of any interest in any such matters, claims or
demands which he may have against the Company and there are no liens or claims
of lien or assignments in law or equity or otherwise of or against any of the
claims or causes of action released herein.

 

16. No Representations. Parsons has carefully read and understands the scope and
effect of the provisions of this Agreement. Parsons has not relied upon any
representations or statements made by the Company which are not specifically set
forth in this Agreement.

 

17. Costs. The Company and Parsons shall each bear their own costs, attorneys’
fees and other fees incurred in connection with this Agreement.

 

18. Severability. In the event that any provision hereof becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision.

 

19. Arbitration. The Company and Parsons shall attempt to settle all disputes
arising in connection with this Agreement through good faith consultation. In
the event no agreement can be reached on such dispute within fifteen (15) days
after notification in writing by either Party to the other concerning such
dispute, the dispute shall be settled by binding arbitration to be conducted in
San Francisco before the American Arbitration Association under its National
Employment Dispute Resolution Rules, by an arbitrator or judge to be mutually
agreed upon. The arbitration decision shall be final, conclusive and binding on
both Parties and any arbitration award or decision may be entered in any court
having jurisdiction. The Parties agree that the prevailing party in any
arbitration shall be entitled to injunctive relief in any court of competent
jurisdiction to enforce the arbitration award. The Company and Parsons each
further agree that the prevailing party in any such proceeding shall be awarded
reasonable attorneys’ fees and costs. The Company and Parsons each hereby waive
any rights they may have to trial by jury in regard to claims arising out of
this Agreement or the enforcement of this Agreement.

 

20. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Parsons concerning Parsons’ separation
from the Company and supersedes and replaces any and all prior agreements and
understandings concerning Parsons’ relationship with the Company and his
compensation by the Company other than the confidentiality agreement described
above in Paragraph 9.

 

21. No Oral Modification. This Agreement may only be amended in writing signed
by Parsons and the Company.

 

22. Governing Law. This Agreement shall be governed by the laws of the State of
California without reference to its conflict of laws provisions.

 

23. Effective Date/Acknowledgement of Waiver of Claims under ADEA. Parsons
acknowledges that he is waiving and releasing any rights he may have under the
Age

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Discrimination in Employment Act of 1967 and its amendments, including the Older
Worker Benefits Protection Act (“ADEA”), and that this waiver and release is
knowing and voluntary. Parsons further acknowledges that he has been advised by
this writing that (a) he should consult with an attorney prior to executing this
Agreement; (b) he has up to twenty-one (21) days within which to consider this
Agreement; (c) he has seven (7) days following the execution of this Agreement
to revoke the Agreement (the “Revocation Period”); and (d) this Agreement shall
not be effective until the Closing Date. Notice of revocation shall be made in
writing by delivery to President of BRH within the seven day period provided for
herein.

 

24. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

 

25. Assignment. This Agreement may not be assigned by Parsons or the Company
without the prior written consent of the other party. Notwithstanding the
foregoing, this Agreement may be assigned by the Company to a corporation
controlling, controlled by or under common control with the Company without the
consent of Parsons.

 

26. Voluntary Execution of Agreement. Parsons agrees that he is executing this
Agreement voluntarily and without any duress or undue influence, with the full
intent of releasing all claims. Parsons acknowledges that:

 

  (a) He has read this Agreement;

 

  (b) He has been advised by this writing to consult with legal counsel of his
own choice or has voluntarily declined to seek such counsel;

 

  (c) He understands the terms and consequences of this Agreement and of the
releases it contains; and

 

  (d) He is fully aware of the legal and binding effect of this Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the respective
dates set forth below.

 

QRS CORPORATION

       

By:

 

/s/ Elizabeth A. Fetter

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/s/ John C. Parsons

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John C. Parsons, Jr.

   

Dated: December 18, 2003

     

Dated: December 28, 2003

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EXHIBIT A

 

LIST OF OPTIONS:

 

Name

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   Grant Date

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   Shares

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   Price

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   Vested

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John C. Parsons, Jr.

   2/13/2002    120,000    $ 12.61    [52,500 ]      2/12/03    20,000    $ 4.90
   —          7/17/03    20,000    $ 6.00    —    

 

SECTION 1:

 

Grant Date

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   Shares

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   Price

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   Vested as of
12/31/03

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Monthly Vesting
Increments

after January 1,
2004

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2/13/2002

   120,000    $ 12.61    [55,000 ]   1000

2/12/2003

   20,000    $ 4.90    —       600

7/17/2003

   20,000    $ 6.00    —       600

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EXHIBIT B

 

April 1, 2003

 

Mr. John C. (Jack) Parsons

1400 Marina Way South

Richmond, CA 94804

 

Dear Jack,

 

It is a pleasure for me to provide you with this letter agreement setting forth
the terms of your continuing employment with QRS Corporation (“QRS” or the
“Company”). This letter supersedes and replaces all prior agreements between you
and QRS regarding the terms of your continuing employment with the Company. This
letter does not affect the terms of the written Indemnification Agreement
between you and QRS or the stock options previously granted to you.

 

POSITION: Senior Vice President and Chief Financial Officer

 

REPORTING TO: Elizabeth A. Fetter, President and CEO

 

LOCATION: 1400 Marina Way South, Richmond, CA

 

ANNUAL COMPENSATION:

 

Your annual compensation, incentive compensation and performance evaluation will
be administered by QRS’ Chief Executive Officer and reviewed by the Compensation
Committee of the Board of Directors. Effective as of April 1, 2003, your annual
compensation shall be as follows:

 

1. Your annual base compensation will be US$265,000 or $22,083 per month. QRS
employees are paid semi-monthly (i.e., on the fifteenth and last working day of
each month).

 

2. In addition, your annual target incentive compensation shall be 50% of your
base compensation or $132,500. The actual incentive compensation that you
receive shall be based upon the performance of the Company as a whole and your
individual performance during the calendar year as described below under annual
incentive compensation components. Your total annual target compensation is the
sum of your base compensation and your target incentive compensation. Your
compensation, including incentives, will be reviewed in the fourth quarter of
2003 and each year thereafter in conjunction with the year-end evaluation of
your performance. If there is a material change in the nature of your
responsibilities, your (compensation will be reviewed at that time.

 

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ANNUAL INCENTIVE COMPENSATION COMPONENTS:

 

1. General Corporate Financial Objectives – seventy-five percent (75%) of your
incentive compensation shall be based upon the extent to which QRS achieves its
overall financial objectives as defined by the applicable annual operating plan
approved by the Board of Directors. Should the Company not achieve the financial
objectives set forth in the operating plan, your incentive compensation will be
subjectively determined based upon your performance against your objectives and
the Company’s determination as to available incentive compensation funding. The
timing of any payouts for the corporate component of your incentive compensation
shall be consistent with the incentive compensation program adopted by the
Compensation Committee for the Executive Leadership Team as a whole.

 

2. Personal Strategies and Objectives – twenty-five percent (25%) of your
incentive compensation is subject to fulfillment of your specific objectives as
Senior Vice President and Chief Financial Officer as identified from time to
time by QRS’ Chief Executive Officer. Such factors may include the overall
performance of you and your direct reporting organization in meeting Company and
individual responsibilities, adhering to QRS’ Guiding Principles, developing and
executing appropriate Company strategies, achieving a high degree of customer
service and loyalty, ensuring employee satisfaction and retention, and
supporting overall Company objectives.

 

REIMBURSEMENT OF REASONABLE BUSINESS EXPENSES:

 

QRS will reimburse you for all business expenses reasonably incurred by you in
the performance of your duties hereunder. You will adhere to QRS’ travel and
entertainment polices and procedures, submit expense reports with appropriate
vouchers, receipts, and other substantiation of such expenses within thirty (30)
days after they are incurred. You should expect prompt reimbursement.

 

BENEFITS:

 

In addition to the benefits available to all QRS associates as defined in the
Employee Handbook, as Senior Vice President and Chief Financial Officer you are
provided with additional benefits as follows:

 

Life Insurance – The Company shall purchase and maintain in effect term life
insurance sufficient to provide a benefit equal to two times your annual base
salary.

 

Long-Term Disability Insurance – The Company shall purchase and maintain in
effect long-term disability insurance sufficient to provide you with an income
equal to 66% of your base compensation while you are disabled and unable to
perform the duties of your current employment with QRS. You will have the option
of continuing this additional disability insurance coverage at your own expense
in the event of the termination of your employment. This additional insurance
benefit is taxable and will be reported for tax purposes as additional income to
you. The Company shall adjust your base compensation to include an amount
sufficient to compensate you for the federal and state taxes for which you will
be responsible on account of the additional income reported on account of this
disability insurance benefit.

 

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Liability Insurance – The Company shall purchase and maintain in effect for the
period of relevant statute(s) of limitation, sufficient Director’s and Officer’s
liability insurance to provide you with reasonable coverage, including the
provision of legal counsel and/or reimbursement of appropriate legal fees you
pay personally, against all liability claims and judgments arising from your
legal exercise of your duties as a Director or Officer of QRS, including any
actions filed after you cease your duties as a Director or Officer or in the
event of the termination of your employment. The Company shall also provide in
its bylaws, a full indemnification for you as a QRS officer, to the maximum
extent permissible under Delaware law. The Company shall retain the sole
discretion to determine the amount and form of Director’s and Officer’s
liability insurance that is sufficient to provide you with reasonable coverage.

 

PTO – You will be entitled to 10 holidays per calendar year and 20 PTO (Personal
Time Off) days per calendar year. A prorated portion of PTO is accrued each pay
period. PTO may be used for vacation, illness, or other purposes at your
discretion. A maximum of 10 days of unused PTO may be carried over from one
calendar year to the next. It is expected that you will claim your PTO time as
you use it.

 

TERMINATION AND SEVERANCE:

 

This position is for no set period or term and just as you have the right to
resign your position at any time, for any reason, QRS reserves the right to
terminate your employment at any time, with or without good cause, with or
without advance notice.

 

If the Company terminates your employment without cause within twelve (12)
months after the date of this letter under circumstances not entitling you to
severance and accelerated vesting under “Change of Control” below, you will
become entitled to severance pay equal in the aggregate to six months of your
total annual targeted compensation at the level in effect at the time of your
termination. Such severance pay will be made in four equal installments with the
first payment occurring within ten days following the termination of your
employment and the remaining three payments to be made two, four and six months
following the date that the Company terminates your employment. All such
payments will be subject to applicable deductions and withholding taxes. The
Company will also make COBRA payments on your behalf for six (6) months
following your termination. You shall receive no severance benefits under this
paragraph if the Company terminates your employment for cause or you voluntarily
resign your position. As a condition of receiving the severance benefits set
forth in this paragraph, the Company may require you to sign a written release
in a form acceptable to the Company of any known and unknown claims by you
against the Company arising out of your employment, excluding any claims for
indemnification against claims made by third parties, in which case no payment
will be made to you under this paragraph until you have executed such release
and any time period during which you may revoke such release has lapsed.

 

For purposes of this agreement, termination “for cause” shall mean the Company’s
termination of your employment for any of the following reasons: (1) your
failure to perform in a diligent or competent fashion consistent with your
position as Senior Vice President and Chief Financial Officer the material
duties of your job after a written demand for such performance is delivered to
you by the Company that identifies the manner in which you have not
substantially performed those duties and that provides a reasonable period for
you to cure those deficiencies; (2) a material breach by you of your obligations
under any confidential or proprietary information agreements with the Company or
of any of your fiduciary or legal obligations as a director or officer of the
Company, (3) your failure to follow in a

 

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material respect Company policies or directives applicable to your position, (4)
any willful misconduct m your part or (5) any unauthorized activity on your part
that creates a material conflict of interest between you and the Company after
you have been provided a reasonable opportunity to refrain from that activity.

 

CHANGE OF CONTROL BENEFITS:

 

  1. Should there occur a Corporate Transaction or a Change in Control (as those
terms are defined in the Company’s 1993 Stock Option/Stock Issuance Plan) and
either (i) your employment is subsequently involuntarily terminated other than
for “Misconduct” (as defined below) within twelve (12) months or (ii) you
subsequently resign within twelve (12) months by reason of a material reduction
in your base compensation, your annual total target compensation, or your
benefits (for this purpose, 15% will be deemed a material reduction of base
compensation, total target compensation and benefits), a material reduction in
your duties or responsibilities, or a change in your principal place of
employment that increases your commute by more than 25 miles, then you will be
entitled to severance pay equal in the aggregate to the amount of your targeted
total annual compensation at the level in effect at the time of your termination
or resignation or (if greater) at the level in effect immediately prior to the
Corporate Transaction or Change in Control. The payments set forth in this
paragraph shall be made in four equal installments with the first payment
occurring within ten days following the termination of your employment and the
remaining three payments to be made two, four and six months following the date
that the Company terminates your employment.

 

The Company shall also make COBRA payments on your behalf for a period of 12
month~ from the date you resign or are terminated.

 

  2. Except to the extent otherwise provided in paragraph 3 below, should a
Corporate Transaction or Change in Control occur during your period of
employment with the Company, then (i) all of your outstanding options will,
immediately prior to the specified effective date for the Corporate Transaction
or Change in Control, become exercisable for all the shares at the time subject
to those options, whether or not those options are to be assumed or replaced
with a cash incentive program, and those accelerated options may be exercised
for all or any portion of the option shares as fully vested shares; and (ii) all
of your unvested restricted share rights for QRS stock will immediately vest at
the time of such Corporate Transaction or Change in Control.

 

  3. However, the following limitation will be in effect for (i) all of your
unvested restricted share rights for QRS stock and (ii) any unvested options
that are to be assumed by the successor entity (or parent company) or otherwise
continued in effect or which are to be replaced with a cash incentive program
that preserves the spread existing at the time of such Corporate Transaction or
Change in Control on any shares for which your options are not otherwise at that
time exercisable (the excess of the fair market value of those shares over the
exercise price): The accelerated vesting of those unvested restricted share
rights and options will be limited to the extent and only to the extent
necessary to assure that the parachute payment attributable to the accelerated
vesting of those shares and options, when aggregated with any other compensation
that constitutes a parachute payment, would not constitute an excess parachute
payment under Internal Revenue Code Section 280G(b).

 

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To the extent one of more of your options or unvested restricted share rights do
not vest on an accelerated basis upon a Corporate Transaction or Change in
Control by reason of such limitation, those options will continue to become
exercisable in accordance with the exercise schedule indicated in the respective
grant notices for those options, and those unvested restricted share rights will
continue to vest in accordance with the vesting schedule set forth in the
applicable Restricted Share Right Agreements. However, following a Corporate
Transaction or Change in Control should either (i) your employment be
involuntarily terminated other than for Misconduct within twelve (12) months
after the Corporate Transaction or Change in Control or (ii) you resign within
twelve (12) months after the Corporate Transaction or Change in Control by
reason of a material reduction in your base compensation, your annual total
target compensation, or your benefits (for this purpose, 15% will be deemed a
material reduction), a material reduction in your duties or responsibilities, or
a change in your principal place of employment that increases your commute by
more than 25 miles, then each of your outstanding options, to the extent not
otherwise fully exercisable at that time, shall automatically accelerate and
become immediately exercisable for all the option shares and may be exercised
for any or all of those shares as fully vested shares at any time prior to the
expiration or sooner termination of the option term. In addition, all of your
unvested restricted share rights will immediately vest upon such a termination
of employment or your resignation.

 

  4. Any of your options or restricted share rights that are assumed by the
successor entity (or parent company) in the Corporate Transaction or are
otherwise continued in effect following the Change in Control transaction shall
be appropriately adjusted to apply and pertain to the number and class of
securities that would have been issued to you in the consummation of such
Corporate Transaction or Change in Control had the options been exercised or the
restricted share rights settled immediately prior to such event. Appropriate
adjustments shall also be made to the option prices payable per share under the
options, provided the aggregate option prices payable shall remain the same.

 

  5. For purposes of this Agreement, Misconduct means (i) your willful
engagement in gross misconduct injurious to the Company or your commission of
any act of gross negligence or malfeasance with respect to your duties incident
to your employment; (ii) your willful failure to attend to the material duties
assigned to you by the Chief Executive Officer; (iii) your commission of any act
of fraud, embezzlement or dishonesty against the Company or any affiliate
thereof, or (iv) your conviction for any criminal offense involving fraud or
dishonesty or any similar conduct that is injurious to the reputation of the
Company. For purposes of this Agreement, a Corporate Transaction shall not
include any merger, whether forward or reverse, if, immediately after the
merger, securities possessing 50% or more of the total combined voting power of
the surviving entity or parent thereof are beneficially owned, directly or
indirectly, by those persons who were the Company’s stockholders immediately
before the merger in substantially the same proportion as their stockholdings
immediately before the merger.

 

EMPLOYMENT AT WILL:

 

Your employment in the position of Senior Vice President and Chief Financial
Officer will remain an Employment At Will. This means that your position is for
no set period or term and just as you have the right to resign your position at
any time, for any reason, QRS reserves the right to terminate your

 

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employment at any time, with or without cause and with or without advance
notice. If any contrary representation has been made to you, this letter
supersedes it. Neither subsequent agreement contrary to this nor any amendment
to this term can be made unless it is in writing and signed by both of us and
copied to QRS’ Senior Vice President, Human Resources.

 

I trust the above meets your approval. However, should you have any questions or
concerns, you should not hesitate to contact me or Fred Ruffin, Senior Vice
President of Human Resources. For our part we look forward to your continuing
employment with QRS and our ongoing relationship.

 

Sincerely,

 

/s/ Elizabeth A. Fetter

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Elizabeth A. Fetter,

President and Chief Executive Officer

 

cc: Fred Ruffin

 

I accept this ongoing position with QRS Corporation on the terms and conditions
above and understand and agree that it supersedes any other agreement, written
or oral, I may have with QRS with respect to employment or compensation by QRS,
including salary, incentive, options, termination

 

/s/ Jack Parsons

      October 10, 2003

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Jack Parsons

      Date