QRS CORP
RESTRICTED SHARE RIGHT AGREEMENT BETWEEN THE COMPANY AND JAMES G. ROWLEY
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<TYPE>EX-10.42
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<DESCRIPTION>RESTRICTED SHARE RIGHT AGREEMENT BETWEEN THE COMPANY AND JAMES G. ROWLEY
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<TITLE>Restricted Share Right Agreement between the Company and James G. Rowley</TITLE>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>EXHIBIT 10.42
</B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">March 18, 2003 </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">James Rowley </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">444 Douglass Street </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">San Francisco, CA 94114 </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Re:&nbsp;&nbsp;&nbsp;&nbsp;<U>Restricted Share Right Grant</U>
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Dear James: </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Pursuant to its 1993 Stock Option/Stock Issuance Plan (the
&#147;Plan&#148;), QRS Corporation (the &#147;Company&#148;) hereby grants you Fifteen Thousand (15,000) restricted share rights (&#147;share rights&#148;) with respect to its Common Stock (&#147;Common Stock&#148;). These share rights are granted
to you in accordance with the restrictions, terms and conditions hereinafter set forth and are in all respects limited and conditioned by the provisions of the Plan. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1.&nbsp;&nbsp;&nbsp;&nbsp;Each share right entitles you to receive one share of Common Stock on the date that
the share rights vest in accordance with paragraph 2 (the &#147;Vesting Date&#148;). A certificate representing the shares of Common Stock will be issued without restriction on or as soon as practicable following the Vesting Date of the share right,
provided that such share right has not been terminated or canceled before such date in accordance with the provisions hereinafter set forth. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2.&nbsp;&nbsp;&nbsp;&nbsp;100% of your share rights will vest on March 18, 2006, provided that you remain employed with the Company
through such date. However, if you are employed by the Company at the time of a Change of Control or Corporate Transaction (as defined below), all of your outstanding share rights, to the extent not previously vested or canceled, will immediately
vest in full upon a Change in Control or a Corporate Transaction (both as defined in the Plan, except that 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&#146;s stockholders immediately before the
merger in substantially the same proportion as their stockholdings immediately before the merger), except that where any excess parachute payment under Internal Revenue Code Section 280G(b) would occur when such accelerated vesting is aggregated
with any other compensation that constitutes a parachute payment, such accelerated vesting will be limited to the extent necessary to assure that no excess parachute payment will occur and the remaining non-accelerated share rights will continue to
vest in accordance with this agreement; provided, however, those remaining share rights shall immediately vest in full (i) at the time of a Corporate Transaction, if the successor corporation or parent thereof does not assume the remaining
non-accelerated share rights or (ii) upon your employment being involuntarily terminated other than for &#147;misconduct&#148; (as defined below) at the time of or within twenty four (24) months after a Corporate Transaction or a Change in Control
or upon your resignation at the time of or within twenty four (24) months after a Corporate Transaction or a Change in Control by reason of (a) a material reduction (15% will be deemed a material reduction) in your base compensation, your annual
total target compensation, or your benefits; (b) a material reduction in your duties or responsibilities, or (c) a change in your principal place of employment that increases your commute by more than 25 miles. </FONT></P>

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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Except as
provided in the previous paragraph, if your employment with the Company terminates for any reason before March 18, 2006, any share right held by you that has not vested before the date of your termination of employment will be canceled automatically
and will no longer be outstanding and no shares of Common Stock will be issued hereunder. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">For purposes of this Agreement, &#147;misconduct&#148; 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 Board of Directors; (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. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3.&nbsp;&nbsp;&nbsp;&nbsp;The issuance of shares of Common Stock under vested share rights is subject to
satisfaction of all tax withholding obligations with respect to such shares. At your discretion, the number of shares of Common Stock which you would otherwise be entitled to receive on the Vesting Date may be reduced by that number of shares which,
as of that date, has an aggregate Fair Market Value (as defined in the Plan) equal to the employer&#146;s minimum statutory tax withholding obligations applicable to the shares issuable on that date. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4.&nbsp;&nbsp;&nbsp;&nbsp;Your share rights hereunder may not
be sold, assigned, transferred, alienated, subject to garnishment or otherwise encumbered in any manner other than by transfer by will or the laws of descent and distribution. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">5.&nbsp;&nbsp;&nbsp;&nbsp;The issuance of shares of Common Stock hereunder is subject to the procurement by
the Company of all approvals and permits required by regulatory authorities having jurisdiction over the share rights and stock to be issued hereunder. The inability of the Company to obtain approval from any regulatory body having authority deemed
by the Company to be necessary to the lawful issuance of any Common Stock hereunder will relieve the Company of any liability with respect to the non-issuance of the Common Stock as to which such approval is not obtained. The Company, however, will
use its best efforts to obtain all such approvals. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">6.&nbsp;&nbsp;&nbsp;&nbsp;If any change is made to the Common Stock issuable hereunder by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without receipt of consideration, the Compensation Committee of the Board of Directors of the Company (the &#147;Compensation Committee&#148;) will make appropriate adjustments to such share rights to prevent the
enlargement or dilution of your rights thereunder. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">7.&nbsp;&nbsp;&nbsp;&nbsp;You will not have any rights as a shareholder with respect to the shares of Common Stock issuable hereunder until you have been issued a stock certificate for such shares. It is the intention of the parties
that the Company&#146;s obligations under your share rights are unfunded for purposes of the Internal Revenue Code and that the Employee Retirement Income Security Act of 1974 does not apply to your share rights. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">8.&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee, may, in
its discretion, modify or waive any or all of the terms, conditions or restrictions hereof, provided, however, that no such modification or waiver may, without your consent, adversely affect your rights hereunder. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">9.&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee has full
authority to administer the Plan, including authority to interpret and construe any provision thereof and hereof and to adopt such rules and regulations for </FONT></P>

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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">administering the Plan as it
may deem necessary. Decisions of the Compensation Committee are final and binding on all persons who have an interest in the Plan. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">10.&nbsp;&nbsp;&nbsp;&nbsp;This agreement does not constitute a contract of employment. Neither the grant of this share right, nor any
action taken under the terms of this share right or the Plan, nor any provision of this share right or the Plan will be construed to grant you the right to remain in the employ of the Company (or any subsidiary or parent of the Company) for any
period of specific duration, and the Company (or any subsidiary or parent of the Company retaining your services) may terminate your employment at any time and for any reason, with or without cause. However, nothing contained in this share right or
the Plan will affect any contractual rights you may have pursuant to a written employment agreement, duly executed on behalf of the Company. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">If the foregoing is satisfactory, please sign, date and return the enclosed copy of this letter to me. </FONT></P><P
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<TD VALIGN="top" COLSPAN="3" WIDTH="37%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Very truly yours,</FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
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<TD VALIGN="top" COLSPAN="3" ROWSPAN="2" WIDTH="37%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;E<SMALL>LIZABETH</SMALL> A. F<SMALL>ETTER</SMALL></FONT></P><HR
SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Elizabeth A. Fetter</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">President and Chief Executive Officer</FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P></TD></TR>
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<TD VALIGN="top" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">AGREED AND ACCEPTED:</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;J<SMALL>AMES</SMALL>
R<SMALL>OWLEY</SMALL></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR>
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<TD VALIGN="bottom" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">James Rowley</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">Senior Vice President, Engineering and Chief Technology Officer</FONT></P></TD></TR>
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