AMENDED & RESTATED SEVERANCE AGREEMENT, WALSKE 2/10


 EXHIBIT 10.1

 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 Steven C. Walske (the "Executive"), and
   amends and restates the Agreement dated June 20, 1990, as amended, between
   the Company and the Executive. 

      WHEREAS, the Executive is
   the Chairman of the Board and Chief Executive Officer of the Company;
   and

      WHEREAS, to provide
   incentive for the Executive to remain with the Company, the Company desires
   to make the following arrangements with the Executive concerning his
   termination of employment;

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

      1.     
   Termination Notice. The Company agrees that it may not terminate the
   employment of the Executive unless (i) it does so for Cause (as defined
   below) or (ii) the Company has delivered to the Executive a written notice
   of such termination of employment (the "Termination Notice") at
   least six months in advance of the effective date thereof. The duties of the
   Executive 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.

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

           
       (b)      In the event that
   a Change in Status of the Executive occurs prior to a Notice Date, the
   Company shall pay the Severance Period Salary to the Executive during the
   period from the effective date of the Change in Status until the earlier of
   (i) the date six months after such date or (ii) the date the Executive
   commences employment with another company or organization; and the Company
   shall have no obligation to make any payments to the Executive under Section
   2(a) above. 

           
       (c)      In the event that
   the Executive remains employed with the Company for a period of six months
   following the earlier of (i) a Notice Date or (ii) the effective date of a
   Change in Status, the Company shall pay to the Executive on such six-month
   anniversary date an amount equal to the most recent fiscal year end bonus
   paid to the Executive. For purposes of this

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 Agreement, "fiscal year end bonus" shall include all amounts paid to
   the Executive under any bonus plans or programs of the Company with respect
   to his services to the Company in the preceding fiscal year.

      3.     
   Stock Options.

           
       (a)      Effective upon (i)
   a Change in Control (as defined below) of the Company or (ii) the death or
   Disability (as defined below) of the Executive, all stock options granted to
   the Executive 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 Executive hereby agree that
   such option agreements are hereby and will be deemed amended to give effect
   to this provision.

           
       (b)      Effective upon (i)
   a termination by the Company of the Executive's employment without Cause or
   (ii) a Change in Status of the Executive, all stock options granted to the
   Executive and then outstanding under any Stock Option Plan of the Company
   shall become exercisable for such number of shares of common stock for which
   such options would have been exercisable had the Executive's employment with
   the Company continued for one year following the date of the employment
   termination or the Change in Status, as the case may be, notwithstanding any
   vesting schedule or other provisions to the contrary in the agreements
   evidencing such options; and the Company and the Executive hereby agree that
   such option agreements are hereby amended to give effect to this
   provision.

      4.     
   Definitions.

           
       (a)      The Company shall
   be deemed to have terminated the Executive's employment for
   "Cause" if it does so (i) for the Executive's willful and
   continued failure to substantially perform his duties to the Company (other
   than any such failure resulting from the Employee's incapacity due to
   physical or mental illness or any such actual or anticipated failure after a
   Change in Status of the Executive), provided that the Company has delivered
   a written demand for substantial performance to the Executive specifically
   identifying the manner in which the Company believes that the Executive has
   not substantially performed his duties and that the Executive has not cured
   such failure within 30 days after such demand, (ii) for willful conduct by
   the Executive which is demonstrably and materially injurious to the Company,
   or (iii) for the Executive's willful violation of any material provision of
   any confidentiality, nondisclosure, assignment of invention, noncompetition
   or similar agreement entered into by the Executive in connection with his
   employment by the Company. For purposes of this paragraph, no act or failure
   to act on the Executive's part shall be deemed "willful" unless
   done or omitted to be done by the Executive 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

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 corporation owned directly or indirectly by the stockholders of the Company in
   substantially the same proportion as their ownership of stock of 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 "Change in
   Status" of the Executive shall mean the occurrence, without the
   Executive's written consent, of any of the following circumstances (unless
   such circumstances constitute an isolated, insubstantial and inadvertent
   action not taken in bad faith and are fully remedied by the Company within
   30 days after receipt of notice thereof given by the Executive): (i) any
   diminution or change in a manner adverse to the Executive of (A) his title,
   office or position with the Company, (B) his salary or other benefits, or
   (C) his duties, responsibilities or employment condition, or (ii) the
   failure by the Company to pay to the Executive any portion of his
   compensation within ninety (90) days after such compensation is
   due.

           
       (d)
        "Disability" shall mean the
   inability of the Executive, for a period of at least 60 consecutive days, to
   perform his employment duties as a result of a physical or mental illness or
   incapacity.

           
       (e)      A "Stock
   Option Plan" of the Company shall mean any stock option or equity
   compensation plan of the Company in effect at any time.

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

      6.     
   Successors.

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       (a)      This Agreement is
   personal to the Executive and without the prior written consent of the
   Company shall not be assignable by the Executive 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 Executive:

           
       Steven C. Walske
 

           
       164 Chestnut Hill Road
 

           
       Chestnut Hill, MA 02167

 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/ Steven C. Walske
	 	 	 
 
	 	 	Steven C. Walske


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