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.
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(a)
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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)
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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.
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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:
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(a)
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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)
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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.
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(c)
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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.
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(d)
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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.
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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:
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(a)
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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)
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any and all
claims relating to, or arising from, Parsons’ right to
purchase, or actual purchase of shares of stock of the
Company;
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(c)
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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;
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(d)
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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;
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(e)
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any and all
claims arising out of any other laws and regulations relating to
employment or employment discrimination; and
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(f)
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any and all
claims for attorney’s fees and costs.
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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.
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
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
