AMENDED & RESTATED SEVERANCE AGREEMENT, GILLIS


 EXHIBIT 10.4

 AMENDED AND RESTATED AGREEMENT

      This Amended and Restated
   Agreement is entered into as of this 10th day of February, 2000 between
   Parametric Technology Corporation, a Massachusetts corporation (the
   "Company"), and Edwin J. Gillis (the Officer"), and amends
   and restates the Agreement dated October 2, 1995, as amended, between the
   Company and the Officer.

      WHEREAS, the Officer is
   the Executive Vice President, Chief Financial Officer and Treasurer of the
   Company; and

      WHEREAS, to provide
   incentive for the Officer to maintain employment with the Company, the
   Company desires to make the following arrangements with the Officer
   concerning his termination of employment.

      NOW, THEREFORE, the
   Company and the Officer hereby agree as follows:

      1.     
   Termination Notice. The Company agrees that it may not terminate the
   employment of the Officer unless (i) such termination is for Cause (as
   defined below) or (ii) the Company has delivered to the Officer a written
   notice of such termination (the "Termination Notice") at least six
   months in advance of the termination date. The duties of the Officer during
   the period from the date of delivery of a Termination Notice until the
   termination of his employment shall be as determined by the Board of
   Directors.

      2.     
   Salary. During the period from the date of delivery of the
   Termination Notice (the "Notice Date") until the earlier of (i)
   the date six months after the Notice Date or (ii) the date the Officer
   commences employment with another company or organization, the Company shall
   pay to the Officer a salary that is equal, on an annualized basis, to the
   highest annual salary (excluding any bonuses) in effect with respect to the
   Officer during the six-month period immediately preceding the Termination
   Notice.

      3.     
   Stock Options. Effective upon a Change in Control (as defined below)
   of the Company, all stock options granted to the Officer and then
   outstanding under any Stock Option Plan (as defined below) of the Company
   shall become exercisable in full, notwithstanding any vesting schedule or
   other provisions to the contrary in the agreements evidencing such options;
   and the Company and the Officer hereby agree that such option agreements are
   hereby and will be deemed amended to give effect to this
   provision.

      4.     
   Definitions.

           
       (a)      A termination by
   the Company of the Officer's employment for "Cause" shall mean
   termination (i) for the Officer's willful and continued failure to
   substantially perform his duties to the Company (other than any such failure
   resulting from the Officer's incapacity due to physical or mental illness or
   any such actual or perceived failure after a Change in Status of the
   Officer), provided that (a) the Company has delivered a written demand for
   substantial performance to the Officer specifically identifying the manner
   in which the Company believes that the Officer has not substantially
   performed his duties, and (b) the Officer has not cured such
 failure within 30 days after such demand, (ii) for willful conduct by the
   Officer which is demonstrably and materially injurious to the Company, or
   (iii) for the Officer's willful violation of any material provision of any
   confidentiality, nondisclosure, assignment of invention, noncompetition or
   similar agreement entered into by the Officer in connection with his
   employment by the Company. For purposes of this paragraph, no act or failure
   to act on the Officer's part shall be deemed "willful" unless done
   or omitted to be done by the Officer not in good faith and without
   reasonable belief that his action or omission was in the best interests of
   the Company.

           
       (b)      A "Change in
   Control" of the Company shall mean the occurrence of any of the
   following events: (i) any "person", as such term is used in
   Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
   (the "Exchange Act") (other than the Company, any trustee or other
   fiduciary holding securities under an employee benefit plan of the Company,
   or any corporation owned directly or indirectly by the stockholders of the
   Company in substantially the same proportion as their ownership of stock in
   the Company) is or becomes the "beneficial owner" (as defined in
   Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
   the Company representing 50% or more of the combined voting power of the
   Company's then outstanding securities (other than as a result of
   acquisitions of such securities from the Company); (ii) individuals who, as
   of the date hereof, constitute the Board of Directors of the Company (the
   "Incumbent Board") cease for any reason to constitute at least a
   majority of the Board, provided that any person becoming a director
   subsequent to the date hereof whose election, or nomination for election by
   the Company's stockholders, was approved by a vote of at least a majority of
   the directors then comprising the Incumbent Board (other than an election or
   nomination of an individual whose initial assumption of office is in
   connection with an actual or threatened election contest relating to the
   election of the directors of the Company) shall be, for purposes of this
   Agreement, considered to be a member of the Incumbent Board; (iii) the
   stockholders of the Company approve a merger or consolidation of the Company
   with any other corporation, other than (A) a merger or consolidation which
   would result in the voting securities of the Company outstanding immediately
   prior thereto continuing to represent (either by remaining outstanding or by
   being converted into voting securities of the surviving entity) more than
   50% of the combined voting power of the voting securities of the Company or
   such surviving entity outstanding immediately after such merger or
   consolidation or (B) a merger or consolidation effected to implement a
   recapitalization of the Company (or similar transaction) in which no
   "person" (as defined above) acquires more than 20% of the combined
   voting power of the Company's then outstanding securities; or (iv) the
   stockholders of the Company approve a plan of complete liquidation of the
   Company or an agreement for the sale or disposition by the Company of all or
   substantially all of the Company's assets.

           
       (c)      A "Stock
   Option Plan" of the Company shall mean any stock option or equity
   compensation plan of the Company in effect at any time, including without
   limitation the 1987 Incentive Stock Option Plan and the 1997 Incentive Stock
   Option Plan.

      5.     
   Term. This Agreement shall continue in effect until February 28,
   2003, unless extended by the mutual written consent of the Company and the
   Officer.

      6.     
   Successors.

           
       (a)      This Agreement is
   personal to the Officer and without the prior written

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 consent of the Company shall not be assignable by the Officer otherwise than
   by will or the laws of descent and distribution.

           
       (b)      This Agreement
   shall inure to the benefit of and be binding upon the Company and its
   successors and assigns.

           
       (c)      The Company will
   require any successor (whether direct or indirect, by purchase, merger,
   consolidation or otherwise) to all or substantially all of the business
   and/or assets of the Company to assume expressly and agree to perform this
   Agreement in the same manner and to the same extent that the Company would
   be required to perform it if no such succession had taken place. As used in
   this Agreement, "Company" shall mean the Company as defined above
   and any successor to its business and/or assets as aforesaid which assumes
   and agrees to perform this Agreement.

      7.     
   Miscellaneous.

           
       (a)      This Agreement
   shall be governed by and construed in accordance with the laws of the
   Commonwealth of Massachusetts, without reference to principles of conflict
   of laws.

           
       (b)      This Agreement may
   not be amended or modified otherwise than by a written agreement executed by
   the parties hereto or their respective successors and legal
   representatives.

           
       (c)      All notices and
   other communications hereunder shall be in writing and shall be delivered by
   hand delivery, by a reputable overnight courier service, or by registered or
   certified mail, return receipt requested, postage prepaid, in each case
   addressed as follows:

           
        If to the Company:

           
        Parametric Technology Corporation
 


              
       128 Technology Drive
 

           
        Waltham, MA 02453
 

           
        Attention: Corporate Counsel


              
       If to the Officer: 

 
              
       Edwin J. Gillis
 


              
       7 Merrill Street
 


              
       Hingham, MA 02043

 or to such other address as either party shall have
   furnished to the other in writing in accordance herewith. Any notice or
   communication shall be deemed to be delivered upon the date of hand
   delivery, one day following delivery to such overnight courier service, or
   three days following mailing by registered or certified mail.

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      EXECUTED as of the date
   first written above.

 	 	PARAMETRIC TECHNOLOGY CORPORATION
	 	 	 
	 	 	 
	 	By:	/s/ C. Richard Harrison 
	 	 	 
 
	 	 	C. Richard Harrison
   

   President and Chief Operating Officer 
	 	 	 
	 	 	/s/ Edwin J. Gillis 
	 	 	 
 
	 	 	Edwin J. Gillis


  

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