<PAGE>
 
                                                                   Exhibit 10.50


                    PLATINUM technology International, inc.
                            SEVERANCE PAY AGREEMENT
                            -----------------------



     This Severance Pay Agreement ( this "Agreement") is made and entered into
as of the 31st day of August, 1998 by and between PLATINUM technology, inc., a
Delaware corporation (together with its subsidiaries, the "Company"), and Paul
A. Tatro (the "Executive").

                                   WITNESSETH
                                   ----------

     WHEREAS, Executive has certain unique expertise, skills, contacts and
experience relating to the Company's business;

     WHEREAS, Executive is currently employed by the Company and the Company
believes that the continuation of such employment is material to the continued
success of the Company;

     WHEREAS, in light of the fact that the Company is publicly-held, the
Company recognizes and acknowledges that it is necessary, to retain Executive,
to provide certain security to Executive in the event that a Change in Control
(as defined below) of the Company should occur; and

     WHEREAS, to that end, the Company desires to provide for severance pay to
Executive in the event that Executive's employment with the Company is
terminated in connection with or as a result of a Change in Control, on the
terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

1.   Certain Definitions.  As used in this Agreement the following initially
capitalized terms shall have the following meanings:

     a.  Severance Pay Rate:  The annual rate of compensation payable by the
Company to Executive as severance pay, which shall be equal to the sum of the
greatest amount of each of (i) the base salary plus (ii) the incentive
compensation, respectively, paid to Executive during any trailing 12 month
period or periods (it being expressly understood that the 12 month periods
utilized to determine base salary and incentive compensation may be different)
during the 36 month period preceding termination of Executive's employment with
the Company; provided, however, if Executive's annual base salary rate at the
time of termination is greater than his base salary in the greatest trailing 12
month period, then such annual base salary rate shall be utilized for purposes
of this Section 1(a).

     b.  Payout Period:  A period of 36 months from the effective date of the
termination of Executive's employment with the Company.

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<PAGE>
 
     c.  Bonus Amount:  The product of (1) the higher of (i) the annual bonus
paid or payable, including by reason of any deferral, to the Executive by the
Company or its affiliate companies for the most recently completed fiscal year
prior to termination of Executive's employment with the Company, or (ii) the
average annualized (for any fiscal year consisting of less than twelve full
months) bonus paid or payable to the Executive by the Company or its affiliated
companies in respect of the three fiscal years immediately preceding the fiscal
year in which the Change in Control occurs, or (iii) Executive's targeted annual
bonus for the fiscal year in which the Change in Control occurs and (2) a
fraction, the numerator of which is the number of days in the current fiscal
year through the date on which Executive's employment is terminated, and the
denominator of which is 365.

     d.  Aggregate Severance Pay: The sum of (1) the Bonus amount, plus (2)
the product obtained by multiplying: (i) the Severance Pay Rate divided by
twelve; by (ii) the number of months in the applicable Payout Period.

     e.  Change in Control:  The first to occur of the following:

         1.    The acquisition by any individual, entity or group (within the
               meaning of Section 13(d)(3) or 14(d)(2) of the Securities
               Exchange Act of 1934, as amended (the "Exchange Act")) (a
               "Person") of beneficial ownership (within the meaning of Rule
               13d-3 promulgated under the Exchange Act) of twenty percent (20%)
               or more of either (A) the then-outstanding shares of common stock
               of the Company (the "Outstanding Company Common Stock") or (B)
               the combined voting power of the then-outstanding voting
               securities of the Company entitled to vote generally in the
               election of directors (the "Outstanding Company Voting
               Securities"); provided, however, that for purposes of this
               subsection (i), the following acquisitions shall not constitute a
               Change in Control: (A) any acquisition directly from the Company
               other than in connection with the acquisition by the Company or
               its affiliates of a business, (B) any acquisition by the Company,
               (C) any acquisition by any employee benefit plan (or related
               trust) sponsored or maintained by the Company or any corporation
               controlled by the Company, (D) any acquisition by a lender to the
               Company pursuant to a debt restructuring of the Company, or (E)
               any acquisition by any corporation pursuant to a transaction
               which complies with clauses (A), (B) and (C) of subsection (3) of
               this Section 1(e);

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<PAGE>
 
          2.   Individuals who, as of the date hereof, constitute the Board (the
               "Incumbent Board") cease for any reason to constitute at least a
               majority of the Board; provided, however, that any individual
               becoming a director subsequent to the date hereof whose election,
               or nomination for election by the Company's shareholders, was
               approved by a vote of at least a majority of the directors then
               comprising the Incumbent Board shall be considered as though such
               individual were a member of the Incumbent Board, but excluding,
               for this purpose, any such individual whose initial assumption of
               office occurs as a result of an actual or threatened election
               contest with respect to the election or removal of directors or
               other actual or threatened solicitation of proxies or consents by
               or on behalf of a Person other than the Board;

          3.   Consummation of a reorganization, merger or consolidation of the
               Company or any direct or indirect subsidiary of the Company or
               sale or other disposition of all or substantially all of the
               assets of the Company (a "Business Combination"), in each case,
               unless, following such Business Combination, (A) all or
               substantially all of the individuals and entities who were the
               beneficial owners, respectively, of the Outstanding Company
               Common Stock and Outstanding Company Voting Securities
               immediately prior to such Business Combination beneficially own,
               directly or indirectly, more than sixty percent (60%) of,
               respectively, the then-outstanding shares of common stock and the
               combined voting power of the then outstanding voting securities
               entitled to vote generally in the election of directors, as the
               case may be, of the corporation resulting from such Business
               Combination (which shall include for these purposes, without
               limitation, a corporation which as a result of such transaction
               owns the Company or all or substantially all of the Company's
               assets either directly or through one or more subsidiaries) in
               substantially the same proportions as their ownership,
               immediately prior to such Business Combination of the Outstanding
               Company Common Stock and Outstanding Company Voting Securities,
               as the case may be, (B) no Person (excluding any corporation
               resulting from such Business Combination or any employee benefit
               plan (or related trust) of the Company or such corporation
               resulting from such Business Combination and any Person
               beneficially owning, immediately prior to such Business
               Combination, directly or indirectly, 20% or more of the
               Outstanding Common Stock or Outstanding Voting Securities, as the
               case may be) beneficially owns, directly or indirectly, twenty
               percent (20%) or more of, respectively, the then outstanding
               shares of common stock of the corporation resulting from such
               Business Combination, or the combined voting power of the then
               outstanding voting securities of such corporation entitled to
               vote generally in the election of directors and (C) at least a
               majority of the members of the board of directors of the
               corporation resulting from such Business Combination were members
               of the Incumbent Board at the time of 

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<PAGE>
 
               the execution of the initial agreement, or of the action of the
               Board, providing for such Business Combination; or

          4.   Approval by the shareholders of the Company of a complete
               liquidation or dissolution of the Company other than to a
               corporation which would satisfy the requirements of clauses (A),
               (B) and (C) of Subsection (3) of this Section 1(e), assuming for
               this purpose that such liquidation or dissolution was a Business
               Combination.



     f.  Good Cause:  The determination by board of directors of the Company, in
good faith and in the exercise of its reasonable judgment, that Executive has
committed an act or acts which constitute (i) a felony which reasonably could be
expected to have a material adverse impact on the Company or the ability of
Executive to perform his duties to the Company in connection with his
employment, (ii) dishonesty or fraud with respect to the Company having a
material adverse impact on the Company, excluding for this purpose an isolated
and inadvertent action not taken in bad faith by Executive and which Executive
promptly takes reasonable actions to remedy after the board of directors has
delivered written notice thereof to Executive, or (iii) willfully engaging in
one or more acts, or willfully omitting to act, which is demonstrably and
materially damaging to the Company or any of its subsidiaries.  For purposes of
this Agreement, an act or failure to act on Executive's part shall be considered
"willful" only if it was done or omitted to be done by him not in good faith,
and shall not include any act or failure to act resulting from any incapacity of
Executive.  Notwithstanding the foregoing, Executive may not be terminated for
Good Cause unless and until (1) the Executive shall have committed acts which
constitute Good Cause as set forth in this Section 1(f), and (2) there shall
have been delivered to him a copy of a resolution duly adopted by a seventy-five
percent (75%) affirmative vote of the membership of the Board of Directors of
the Company (the "Board") (excluding Executive, if he is then a member) at a
meeting of the Board called and held for such purpose (after giving Executive
reasonable notice specifying the nature of the grounds for such termination and
not less than 30 days to correct the acts or omissions complained of, if
correctable, and affording Executive the opportunity, together with his counsel,
to be heard before  the Board) finding that Executive was guilty of conduct
which constitutes Good Cause as set forth in this Section 1(f).



     g.  Good Reason:   The occurrence of any of the following:  (i) the
assignment to Executive of duties materially inconsistent with the status of
Executive's position with the Company or the diminution in the nature or status
of Executive's duties and powers and Executive's responsibilities in connection
with such duties and powers excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive; (ii) a requirement by the Company that Executive relocate his primary
residence outside of the area comprising a 50 mile radius around the then
current location of such residence (the "Area"); (iii) any requirement for
Executive to spend on a regular basis a greater number of days per month or a
greater number of consecutive days away from the Area, excluding any days of
travel initiated by Executive or travel agreed to by the Company and Executive
and provided that Executive agrees to travel consistent with past practice

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and as reasonably required to perform the responsibilities of his position
consistent with past practice; (iv) the reduction of Executive's base salary;
(v) a change in the composition of the plan pursuant to which Executive is
eligible for incentive compensation such that Executive's ability to earn such
incentive compensation is significantly diminished; or (vi) reduction in the
benefits provided or made available by the Company to Executive or the portion
of the cost of such benefits borne by the Company, other than modifications of
benefits under general benefit plans which are available to substantially all
full time employees.

          For purposes of this Section, any good faith determination of "Good
Reason" made by the Executive shall be conclusive.

2.   Termination of Employment; Severance Pay.  If Executive's employment with
the Company is terminated by Executive for Good Reason or by the Company, other
than for Good Cause, then the Company shall:

     a.  pay to Executive, during the applicable Payout Period, the Aggregate
Severance Pay as follows:

          (i) if such termination occurs at any time during the period beginning
     on the [60th] day preceding the occurrence of a Change in Control and
     ending on the first anniversary of the occurrence of such Change in Control
     (the "Initial Period"), then the applicable Payout Period shall be 36
     months; or

          (ii) if such termination occurs at any time during the period
     beginning immediately following the expiration of the Initial Period and
     ending on the second anniversary of such Change in Control (the "Extended
     Period"), then the applicable Payout Period shall be 24 months; and



     b.  if such termination occurs during the Initial Period, pay the Bonus
Amount to Executive in a lump sum in cash within 30 days after the date of
Executive's termination of employment; and



     c.  if such termination occurs during the Initial Period or the Extended
Period, during the one year period following termination of Executive's
employment with the Company or its affiliated companies the Executive and/or the
Executive's family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated companies (including,
without limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with benefits
which are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the 

                                       5
<PAGE>
 
Executive at any time during the 90-day period immediately preceding the
occurrence of the Change in Control or, if more favorable to the Executive,
those provided generally at any time after the occurrence of the Change in
Control to other peer executives of the Company and its affiliated companies.

     The Aggregate Severance Pay shall be payable, at the Severance Pay Rate, in
accordance with the Company's or its successor's standard payroll practices
during the applicable Payout Period.  In lieu of regular payments of the
Aggregate Severance Pay during the Payout Period, Executive shall be entitled to
receive, upon Executive's written election delivered within 10 business days
following the termination of Executive's employment with the Company, a lump sum
payment equal to the present value of the stream of monthly payments of the
Aggregate Severance Pay during the Payout Period, for purposes of which each
monthly payment shall be equal to the Severance Pay Rate divided by twelve.  For
purposes of this computation, present value shall be determined in accordance
with Internal Revenue Code (the "Code") Section 280G, using a discount rate
equal to 120% of the applicable Federal Rate (determined under Section 1274(d)
of the Code), compounded semi-annually, determined as of the date of Executive's
election to receive the lump sum payment provided for herein.

3.   Gross Up for Excise Tax Liability. If it shall be determined that any
payment received or to be received by Executive under this Agreement or any
other agreement, plan or program which provides for additional compensation to
be paid to the Executive upon the occurrence of a Change in Control (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of the
Internal revenue Code of 1986, as amended (the "Excise Tax"), then the Company
shall pay to Executive an additional payment (a "Gross-Up Payment") in an amount
necessary to reimburse Executive, on an after-tax basis, for the Excise Tax and
for any federal, state and local income tax and excise tax (including any
interest and penalties imposed with respect to such taxes) that may be imposed
by reason of the Payment.  For purposes of determining the amount of any Gross-
Up Payment, Executive shall be deemed to pay federal, state and local income
taxes at the highest applicable marginal rate of taxation in the calendar year
in which such Gross-Up Payment is to be made.  All determinations required to be
made under this Section 3, including whether a Gross-Up Payment is required and
the amount of such Gross-Up Payment shall be made by the firm of independent
certified public accountants then retained by the Company (the "Accounting
Firm") which shall provide, in writing, detailed supporting calculations both to
the Company and Executive within 15 business days of the request for such
determination.  Such request may be made by either party.  The Company shall pay
the fees and expenses of the Accounting Firm in connection with any
determinations hereunder.  The Gross-Up Payment shall be paid by the Company
within 10 days of the Accounting Firm's determination of the amount thereof.

     In the event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time the Gross-up Payment is made, including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-up Payment, the Company shall make an additional Gross-up
Payment in respect of such excess (plus any interest and penalties payable with
respect to such excess) at the time that the amount of such excess is 

                                       6
<PAGE>
 
finally determined.

     In the event that the Excise Tax is subsequently determined to be less than
the amount determined by the Accounting Firm, the Executive shall repay to the
Company at the time that the amount of such reduction in Excise Tax is finally
refunded to or otherwise realized as a benefit by Executive, the portion of the
Gross-up Payment that would not have been paid, plus interest on the amount of
such repayment at the rate provided in Section 1274(b)(2)(B) of the Code.

     The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that would require payment by the Company of the Gross-
Up Payment.  If the Company elects to contest such claim, the Executive shall:

               (i)    give the Company any information reasonably requested by
                      the Company relating to such claim,

               (ii)   take such action to contest such claim as the Company (or
                      its counsel) shall reasonably request, and

               (iii)  cooperate with the Company in good faith in order to
                      effectively contest such claim.


The Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such contest, and the Executive agrees to prosecute such
contest to a determination as the Company shall determine; provided, however,
the Company shall advance the amount of any payment pending the contest to the
Executive and shall indemnify the Executive with respect to any taxes (including
penalties and interest, if any) which may be imposed in connection with the
advance of such funds.

4.   No Duty to Mitigate.  The Executive shall not be required or have any duty
or obligation to mitigate the amount of any payment provided for under this
Agreement by seeking other employment or otherwise.  In addition, no payment to
be provided to Executive pursuant to this Agreement shall be reduced by any
compensation or other amount earned or collected by Executive at any time before
or after the termination of Executive's employment with the Company.


5.   Cooperation.

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<PAGE>
 
     a.  Executive agrees to cooperate with the Company (including following
Executive's termination of employment for any reason), provided that such
cooperation would not unreasonably interfere with the business activities or
employment obligations of the Executive, by making himself available to testify
on behalf of the Company or any subsidiary or affiliate of the Company, in any
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, and to assist the Company, or any subsidiary or affiliate of the
Company, in any such action, suit, or proceeding, by providing information and
meeting and consulting with the Board and its representatives or counsel, or
representatives or counsel of or to the Company, or any subsidiary or affiliate
of the Company, as requested; provided, however, this subsection (a) shall not
apply to any action between the Executive and the Company to enforce this
Agreement.  The Company agrees to reimburse Executive, on an after-tax basis,
for all expenses actually incurred in connection with his provision of testimony
or assistance.

     b.  Executive agrees, as a condition to receipt of the termination payments
and benefits provided hereunder, that he will execute a release agreement, in a
form satisfactory to the Company, releasing any and all claims arising out of
Executive's employment (other than claims made pursuant to any indemnities
provided under the articles or by-laws of the Company, under any directors or
officers liability insurance policies maintained by the Company, under any
employee benefit plans or executive compensation plans of the Company, or
enforcement of this Agreement).

6.   Intellectual Property Rights.

     a.  Executive agrees that the Company will be the sole owner of any and all
of Executive's "Discoveries" and "Work Product" made during the term of his
employment with the Company.  For these purposes "Discoveries" means all
inventions, discoveries, improvements, and copyrightable works (including,
without limitation, any information relating to the Company's software products,
source code, know-how, processes, designs, algorithms, computer programs and
routines, formulae, techniques, developments or experimental work, work-in-
progress, or business trade secrets) made or conceived or reduced to practice by
Executive, whether or not potentially patentable or copyrightable in the United
States or elsewhere.  For purposes of this Agreement, "Work Product" means any
and all work product relating to Discoveries.

     b.  Executive shall promptly disclose to the Company all Discoveries and
Work Product.  All such disclosures must include complete and accurate copies of
all source code, object code or machine-readable copies, documentation, work
notes, flow-charts, diagrams, test data, reports, samples, and other tangible
evidence or results (collectively, "Tangible Embodiments") of such Discoveries
or Work Product.  All Tangible Embodiments of any Discoveries or Work Product
will be deemed to have been assigned to the Company as a result of the act of
expressing any Discovery or Work Product therein.

     c.  Executive hereby assigns and agrees to assign to the Company all of his
interest in any country in any and all Discoveries and Work Product, whether
such interest arises under patent law, copyright law, trade-secret law,
semiconductor chip protection law, or otherwise.  Without 

                                       8
<PAGE>
 
limiting the generality of the preceding sentence, Executive hereby authorizes
the Company to make any desired changes to any part of any Discovery or Work
Product, to combine it with other materials in any manner desired, and to
withhold Executive's identity in connection with any distribution or use thereof
alone or in combination with other materials. This assignment and assignment
obligation applies to all Discoveries and Work Product arising during
Executive's employment with the Company (or its predecessors), whether pursuant
to this Agreement or otherwise.

     d.  At the request of the Company, Executive shall promptly and without
additional compensation execute any and all patent applications, copyright
registration applications, waivers of moral rights, assignments, or other
instruments that the Company deems necessary or appropriate to apply for or
obtain Letters Patent of the United States or any foreign country, copyright
registrations or otherwise to protect the Company's interest in such Discovery
and Work Product, the expenses for which will be borne by the Company.
Executive hereby irrevocably designates and appoints the Company and its duly
authorized officers and agents as his agents and attorneys-in-fact to, if the
Company is unable for any reason to secure Executive's signature to any lawful
and necessary document required or appropriate to apply for or execute any
patent application, copyright registration application, waiver of moral rights,
or other similar document with respect to any Discovery and Work Product
(including, without limitation, renewals, extensions, continuations, divisions,
or continuations in part), (I) act for and in his behalf, (ii) execute and file
any such document, and (iii) do all other lawfully permitted acts to further the
prosecution of the same legal force and effect as if executed by him; this
designation and appointment constitutes an irrevocable power of attorney coupled
with an interest.

     e.  To the extent that any Discovery or Work Product constitutes
copyrightable or similar subject matter that is eligible to be treated as a
"work made for hire" or as having similar status in the United States or
elsewhere, it will be so deemed.  This provision does not alter or limit
Executive's other obligations to assign intellectual property rights as provided
above.

     f.  The obligations of Executive set forth in this Section 6 (including,
without limitation, the assignment obligations) will survive and continue
beyond the termination of Executive's employment and termination of this
Agreement with respect to Discoveries and Work Product conceived or made by
Executive alone or in concert with others during Executive's employment with the
Company.  Those obligations will be binding upon Executive, his executors,
administrators, and other representatives.

7.   Exposure to Proprietary Information.

     a.  As used in this Agreement, "Proprietary Information" means all
information of a business or technical nature that relates to the Company
including, without limitation, all information about software products whether
currently released or in development, all inventions, discoveries, improvements,
copyrightable work, source code, know-how, processes, designs, algorithms,
computer programs and routines, formulae and techniques, and any information
regarding the business of any customer or supplier of the Company or any other
information that the Company is 

                                       9
<PAGE>
 
required to keep confidential. Notwithstanding the preceding sentence, the term
"Proprietary Information" does not include information that is or becomes
publicly available through no fault of Executive.

     b.  Executive acknowledges that the Proprietary Information constitutes a
protectible business interest of the Company, and covenants and agrees that
during and after the term of his employment by the Company or, he will not,
directly or indirectly, disclose, furnish, make available or utilize any of the
Proprietary Information, other than in the proper performance of his duties for
the Company.  Executive's obligations under this Section 7 with respect to
particular Proprietary Information will survive expiration or termination of
this Agreement and Executive's employment with the Company, and will terminate
only at such time (if any) as the Proprietary Information in question becomes
generally known to the public other than through a breach of Executive's
obligations under this Section 7.

     c.  Executive acknowledges that all records, documents, and Tangible
Embodiments containing or of Proprietary Information prepared by Executive or
coming into his possession by virtue of his employment by the Company are and
will remain the property of the Company.  Upon termination of his employment
with the Company, Executive shall immediately return to the Company all such
items in his possession and all copies of such items.

8.   Equitable Remedies.

     a.  Executive acknowledges and agrees that the agreements and covenants set
forth in Sections 6, 7, and 8 are reasonable and necessary for the protection of
the Company's business interests, that irreparable injury will result to the
Company if Executive breaches any of the terms of said covenants, and that in
the event of Executive's actual or threatened breach of any such covenants, the
Company will have no adequate remedy at law.  Executive accordingly agrees that,
in the event of any actual or threatened breach by him of any of said covenants,
the Company will be entitled to immediate injunctive and other equitable relief,
without bond and without the necessity of showing actual monetary damages.
Nothing in this Section 8 will be construed as prohibiting the Company from
pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of any damages that it is able to prove.

     b.  Each of the covenants in Sections 6, 7, and 8 will be construed as
independent of any other covenants or other provisions of this Agreement.

     c.  In the event of any judicial determination that any of the covenants in
Sections 6, 7, and 8 are not fully enforceable, it is the intention and desire
of the parties that the court treat said covenants as having been modified to
the extent deemed necessary by the court to render them reasonable and
enforceable, and that the court enforce them to such extent.

9.   Termination.  The Company may terminate this Agreement at any time, for any
reason or no reason by written notice to Executive, provided that a Change in
Control has not yet occurred at the 

                                       10
<PAGE>
 
time such notice is given and does not occur within 90 days after the notice of
termination has been given by the Company to Executive, and in such cases such
purported termination shall be of no effect and this Agreement shall continue
and may not be terminated by the Company.

10.  Miscellaneous.  Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been properly given
(a) if sent by United States mail, certified or registered, (b) if sent prepaid
by overnight courier, or (c) when delivered in person to the following
addresses:

     (i)  If to the Company, to:

          PLATINUM technology International, inc.
          1815 South Meyers Road
          Oakbrook Terrace, IL  60181
          Attn:  Chief Financial Officer

          with a copy to :

          PLATINUM technology International, inc.
          1815 South Meyers Road
          Oakbrook Terrace, IL  60181
          Attn:  General Counsel



     (ii) If to Executive to:

          --------------------------

          --------------------------

          --------------------------

     Any party may change its address for notice hereunder by notice to the
other party hereto.

     b.  Governing Law.  The parties agree that this Agreement shall be
construed and governed in accordance with the laws of the State of Illinois
applicable to agreements made and to be performed entirely within such state,
without regard to its conflict of laws rules, except insofar as the Delaware
General Corporation Law and federal laws and regulations may be applicable.

     c.  Binding Effect.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
executors, administrators, successors and assigns.  Any successor, including,
without limitation, a purchaser of substantially all of the Company's assets,
will automatically succeed to the obligations of the Company under this
Agreement; provided that, the Company shall remain liable under this Agreement
in such event.

     d.  Counterparts.  This Agreement may be executed simultaneously in one or
more 

                                       11
<PAGE>
 
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

     e.  Entire Agreement.  Subject to the rights, benefits and obligations
provided for under any executive compensation and employee benefit plans of the
Company, this Agreement represents the entire agreement and understanding of the
parties hereto with respect to the matters set forth herein. This Agreement
supersedes all prior negotiations, discussions correspondence, communications,
understandings and agreements between the parties, written or oral, relating to
the subject matter of this Agreement except as set forth under any executive
compensation and employee benefit plans of the Company.  This Agreement may be
amended, superseded, canceled, renewed, or extended and the terms hereof may be
waived, only by a written instrument signed by the parties hereto or, in the
case of a waiver, by the party waiving compliance.

     f.  Waivers.  No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof.  Nor shall any
waiver on the part of any party of any such right, power or privilege hereunder,
nor any single or partial exercise of any right, power or privilege hereunder,
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.

     g.  Headings.  The headings in this Agreement are inserted for convenience
only and are not to be considered in the interpretation or construction of the
provisions hereof.

     h.  Arbitration.  Except for any claim or dispute which gives rise or could
give rise to equitable relief under this Agreement, at the request of the
Executive any disagreement, dispute, controversy or claim arising out of or
relating to this Agreement or the breach hereof shall be settled exclusively and
finally by binding arbitration.  The arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (hereinafter referred to as "AAA Rules").  Such arbitration shall be
conducted in Chicago, Illinois, or in such other city as the parties to the
dispute may designate by mutual consent.  The arbitral tribunal shall consist of
three arbitrators (or such lesser number as may be agreed upon by the parties)
selected according to the procedure set forth in the AAA Rules in effect on the
date hereof and the arbitrators shall be empowered to order any remedy which is
appropriate to the proceedings and issues presented to them.  The chairman of
the arbitral tribunal shall be appointed by the American Arbitration Association
from among the three arbitrators so selected.  Any party to a decision rendered
in such arbitration proceedings may seek an order enforcing the same by any
court having jurisdiction.

     i.  No Strict Construction.  The language used in this Agreement will be
deemed to be the language chosen by Executive and the Company to express their
mutual intent, and no rule of strict construction will be applied against
Executive or the Company.

     j.  Legal Expenses. Executive shall be entitled to recover any expenses for
attorney's fees and disbursements incurred by him in connection with enforcing
his rights under this Agreement whether or not Executive is successful in
asserting such rights; provided, however, that no 

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<PAGE>
 
reimbursement shall be made of such expenses relating to any unsuccessful
assertion of rights if and to the extent that Executive's assertion of such
rights was in bad faith or frivolous, as determined by independent counsel
mutually acceptable to Executive and the Company and made without reference to
or not related to a Change in Control. Amounts payable to Executive hereunder
which are not paid when due to be paid shall bear interest from their due date
at the prime rate of interest published from time to time in the Midwest edition
of the Wall Street Journal plus two percent (2%).

     k.  Non-Transferability.  Neither this Agreement nor the rights or
obligations hereunder of the parties hereto shall be transferable or assignable
by Executive, except in accordance with the laws of descent and distribution.
The Company may assign this Agreement and the Company's rights and obligations
hereunder, and shall assign this Agreement, to any Successor (as hereinafter
defined) which, by operation of law or otherwise, continues to carry on
substantially the business of the Company prior to the event of succession, and
the Company shall, as a condition of the succession, require such Successor to
agree to assume the  Company's obligations and be bound by this Agreement.  For
purposes of this Agreement, "Successor" shall mean any person that succeeds to,
or has the practical ability to control (either immediately or with the passage
of time), the Company's business directly, by merger or consolidation, or
indirectly, by purchase of the Company's voting securities or all or
substantially all of its assets, or otherwise.

     l.  No Offsets.  The amounts required to be paid by the Company to
Executive pursuant to this Agreement shall not be subject to offset,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others, other than with respect to any
amounts that are owed to the Company by Executive due to his receipt of Company
funds as a result of his fraudulent activity.  The foregoing and other
provisions of this Agreement notwithstanding, all payments to be made to
Executive under this Agreement will be subject to required withholding taxes and
other required deductions.

     IN WITNESS WHEREOF, the Company and Executive have signed or caused a duly
authorized representative to sign this Agreement as of the day and year written
above.

                                   PLATINUM technology, inc.


                                   By: /s/ Larry S. Freedman
                                       ---------------------

                                   Its:  Senior Vice President & General Counsel
                                         ---------------------------------------


                                   /s/ Paul A. Tatro
                                   -----------------
                                   Paul A. Tatro

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