Exhibit 10.12

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October 1, 2010

Marc Diouane

10 West Hill

Aspley Guise

Bedfordshire, UK

MK17 8DN

Dear Marc:

We are pleased to offer you the position of Executive Vice President, Global
Services on the following terms and conditions:

 

  1. You will report to Jim Heppelmann, President and Chief Executive Officer,
effective from October 1, 2010.

 

  2. You will be employed by Parametric Technology (UK) Ltd. (“PTC UK”) under a
contract of employment with PTC UK (the “UK Agreement”) for the period
October 1, 2010 through March 31, 2011. Commencing April 1, 2011, you will be
employed by Parametric Technology Corporation (“PTC”) located at PTC corporate
headquarters in Needham, Massachusetts.

 

  3. All amounts referenced in this letter are in United States dollars.

 

  4. Effective October 1, 2010, your annualized salary will be $350,000. You
will be paid in accordance with the terms of the UK Agreement (monthly in
arrears) for the period October 1, 2010 to March 31, 2011. Thereafter, you will
be paid a bi-weekly salary of $13,461.53 in accordance with PTC’s payroll
policy.

 

  5. Commencing October 1, 2010, you will be eligible to participate in the
Executive Incentive Plan (EIP) with an annual target bonus of $300,000 for
FY2011. Payout of the EIP bonus for FY2011 is subject to the terms of the EIP
and achievement of performance targets to be established by the Compensation
Committee in November 2010, which in your case for FY2011 will include 50% tied
to corporate performance goals and 50% tied to Global Services performance
goals.

 

  6. Effective October 1, 2010, you will be awarded restricted stock units with
a total value of approximately $500,000 as a promotion grant. You will also be
granted restricted stock units as your annual incentive awards for FY2011 at
such time or times as such annual awards are made to the other executive
officers of the Company as a group. The annual awards will be comprised of
time-based restricted stock units with a total value of approximately $425,000
and performance-based restricted stock units with a total value of approximately
$425,000. For the promotion grant and the annual awards, the value will be based
on the closing price of PTC’s stock on the date of grant, with the total number
of shares to be rounded down to the nearest whole share and such awards to be
issued under and subject to the terms of PTC’s 2000 Equity Incentive Plan. The
promotion grant and the time-based award will vest in three substantially equal
installments on each of November 15, 2011, 2012 and 2013. The performance-based
award will be subject to performance criteria established by the Compensation
Committee at the time of grant and will be subject to additional time-based
vesting criteria which shall provide that, to the extent the performance based
criteria are achieved, the portion of the award earned will vest in three
substantially equal installments on each of November 15, 2011, 2012 and 2013.

 

  7. For the period October 1, 2010 through March 31, 2011, you will be eligible
to receive the benefits described in the UK Agreement. Effective April 1, 2011
when you become an employee of PTC, you will have the opportunity to participate
in PTC’s US benefit plans, including health insurance, dental insurance, vision
insurance, 401(k), paid time off, life insurance, and short-term and long-term
disability coverage.

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  8. You are expected to relocate to the United States no later than April 1,
2011. You will receive a relocation allowance of up to $100,000 to cover actual
relocation expenses. The budget for these expenses is set forth below. The
Unallocated Relocation Expenses payment set forth in the budget is meant to
cover expenses incurred in connection with your relocation, such as expenses
associated with termination of leases, loss on sales of vehicles or belongings
and the like, not otherwise itemized in the budget. You will not be required to
itemize such expenses. Please note that the “Unallocated Relocation Expenses”
payment will be paid directly through Payroll and will be paid only after all
other relocation expenses have been paid to ensure that the budget for the other
itemized relocation items is not exceeded. The Unallocated Relocation Expenses
payment will be reduced to the extent the other allowances have been exceeded.

 

Relocation Item

   Allowance     

Payment Method

Airfare to Host Location

   $ 10,500       Relo Expense Report

House Hunting Trip - Family

   $ 9,000       Relo Expense Report

Shipment of Household Goods

   $ 40,000       Direct bill to PTC

Shipment of SUV

   $ 10,000       Direct bill to PTC

Relocation Services

   $ 5,500       Direct bill to PTC

Unallocated Relocation Expenses

   $ 25,000       Payroll (subject to tax)            

Relocation Allowance

   $ 100,000      

 

  9. Any actual taxable relocation benefits that will be reimbursed to you or
paid on your behalf in connection with your relocation will be included as
income in your U.S. W-2. Except as provided below, any taxable items will be
“grossed-up” and PTC will pay tax to the government based on the gross-up. This
gross-up is an estimate of the tax due on these items and may not exactly
reflect your effective tax rate on your U.S. income tax returns. PTC will make
the appropriate U. S. and Massachusetts tax payments directly through payroll,
which will be reflected on your last payroll stub in December 2011. Please note
that the “Unallocated Relocation Expenses” payment that is paid through payroll
will have tax withheld and will not be grossed-up.

 

  10. If you voluntarily terminate employment with PTC within one year from the
date of your relocation to Massachusetts, you agree to reimburse PTC all of the
relocation-related payments on a pro-rated basis. For example, if you terminate
employment three months after your relocation, you will be required to reimburse
PTC for 75% of the total cost of the relocation. This will be based on actual
payments to you and relocation vendors. In the event you are terminated without
Cause (as defined in the Executive Agreement between you and PTC executed on the
same date as your execution of this offer letter) before April 1, 2014, PTC will
pay for your relocation to your country of choice in Europe subject to a
reasonable budget to be established by PTC at such time, but not to exceed
$100,000 unless PTC otherwise agrees at that time.

 

  11. Except as otherwise provided herein, you are responsible for your
individual tax obligations worldwide. You are entitled to receive tax
preparation services for tax years 2010 through 2013, which may include filings
in the UK, the United States and Massachusetts as needed but not limited to
those jurisdictions. Returns will be prepared by PTC’s designated tax
consultant. You understand that this is a taxable perquisite that will be
included in your W-2 income.

 

  12. When you become an employee of PTC, you will receive seniority credit
based on your prior employment with a PTC subsidiary or subsidiaries.
Accordingly, your PTC seniority date shall be effective from August 16, 1994.

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  13. As an executive officer, you are also eligible for certain severance and
change in control benefits, as set forth in the enclosed Executive Agreement.
Please sign and return the Executive Agreement with your signed acceptance of
this offer letter. Other than as set forth in the Executive Agreement, your
employment with PTC shall be at-will and nothing in this offer letter shall be
construed to constitute a contract of employment. You hereby acknowledge and
agree that termination of your employment under the UK Agreement or any of the
prior employment agreements referenced therein and subsequent employment by
another PTC subsidiary or by PTC as contemplated by this offer letter does not,
and shall not be deemed to, constitute a termination under the Executive
Agreement.

 

  14. As a condition to your promotion to Executive Vice President, Global
Services and to receiving the benefits stated in this letter and the UK
Agreement, including those under the Executive Agreement, you agree to enter
into the enclosed Proprietary Information Agreement. Please sign and return the
Proprietary Information Agreement with your signed acceptance of this offer
letter.

 

  15. Also enclosed is a copy of PTC’s Code of Business Conduct & Ethics. You
must review the Code and agree to comply with the Code. Please sign the last
page of the Code as acknowledgement of your receipt of the Code and your
agreement to comply with the Code. Please return the executed acknowledgement
with your signed acceptance of this offer letter. As an executive officer, you
are also required to comply with PTC’s Code of Ethics for Senior Executive
Officers, a copy of which is enclosed for your reference.

 

  16. This offer is contingent upon you having the proper work authorization and
a valid social security number. If you require employment authorization from the
U.S. Citizenship and Immigration Service (CIS) as a condition to working for
PTC, please inform me immediately. In addition, PTC participates in the E-Verify
program and will use E-Verify to confirm your work authorization. If the
E-Verify system is unable to confirm that you are authorized to work, PTC is
required to provide you written instructions and an opportunity to resolve the
issue.

We are delighted that you are joining PTC’s executive team. If you have any
questions about this offer, please do not hesitate to contact me directly at
781.370.6540. Otherwise, please indicate your acceptance of this offer by
returning a countersigned copy of this offer letter, along with signed copies of
the Executive Agreement, the Proprietary Information Agreement, the Code of
Business Conduct & Ethics acknowledgment, and the UK Agreement and the documents
referenced therein.

 

Sincerely, /s/ Barry Cohen Barry Cohen Executive Vice President

 

Accepted and Agreed to:  

            /s/ Marc Diouane

   

October 1, 2010

          Marc Diouane     Date