Document:

AMENDMENT #5 TO CONSULTING AGREEMENT

 EXHIBIT 10.6

 AMENDMENT #5 TO

 CONSULTING AGREEMENT

      This Amendment #5 To
   Consulting Agreement, dated as of February 10, 2000, hereby amends the terms
   of that certain Consulting Agreement dated November 17, 1995, as amended,
   (hereinafter "Consulting Agreement") by and between Parametric
   Technology Corporation, a Massachusetts corporation, having its principal
   business address at 128 Technology Drive, Waltham, Massachusetts 02453
   (hereinafter "PTC") and Michael E. Porter, an individual currently
   residing at 44 Green Hill Road, Brookline, Massachusetts 02146 (hereinafter
   "Consultant").

 Article 3 Services To Be Performed By
   Consultant, is hereby amended by adding the following Section
   3.5:

  3.5   Consultant is engaged pursuant
   to this Amendment #5 to Consulting Agreement, to participate in five (5) top
   management seminars, including Chief Information Officer (CIO) seminars,
   consistent with the purposes and scope which Consultant was previously
   engaged to provide under Sections 3.2, 3.3 and 3.4 of the Consulting
   Agreement.

 

 Article 4 Compensation And Expenses, is hereby
   amended by adding the following Section 4.6:

  4.6   Option grant for services to be
   performed under Section 3.5. In connection with those services to be
   performed pursuant to this Amendment #5 to Consulting Agreement (as
   described in Section 3.5 above), Consultant shall receive an option to
   purchase 50,000 shares of PTC's common stock, $.01 par value per share,
   under the terms of the Stock Option Agreement dated February 10, 2000
   between PTC and the Consultant attached hereto.

 

      IN WITNESS WHEREOF, the
   parties have executed this Amendment #5 to Consulting Agreement as of the
   date and year first above written.

 	Consultant	 	Parametric Technology Corporation
	 	 	 
	 	 	 
	/s/ Michael E. Porter	 	/s/ Steven C. Walske 
	 
 	 	 
 
	Michael E. Porter	 	Steven C. Walske
	 	 	 Chairman and Chief Executive Officer 

 	 No. 030457

   	 50,000 Shares

   

 PARAMETRIC TECHNOLOGY CORPORATION 1997
 

 Incentive Stock Option Plan

 Nonstatutory Stock Option Certificate

 February 10, 2000

      Parametric Technology
   Corporation (the "Company"), a Massachusetts corporation, hereby
   grants to the person named below an option to purchase shares of Common
   Stock, $0.01 par value, of the Company (the "Option") under and
   subject to the Company's 1997 Incentive Stock Option Plan (the
   "Plan") exercisable on the following terms and conditions set
   forth below and those attached hereto and in the Plan:

 	Name of Optionholder: 	Michael E. Porter
	 	 
	Social Security Number	###-##-####
	 	 
	Number of Shares:	50,000
	 	 
	Option Price:	$22.9375
	 	 
	Date of Grant: 	February 10, 2000 
	 	 
	Expiration:	February 10, 2005
	 	 
	Exercisability Schedule:	 

           on or
   after      February 10, 2000, as to 50% of the
   shares,
 

           on or
   after      April 2, 2000, as to 50% of the
   shares,

 

 
 
  provided that Optionholder's consulting agreement with
   the Company is not terminated earlier, in which event the Option, (i) to the
   extent exercisable at the date of such termination, may not be exercised as
   to any shares after the expiration of seven (7) months from the date of such
   termination, and (ii) to the extent not exercisable at the date of such
   termination, shall be canceled as to any such shares effective on the date
   of such termination.

 

           This
   Option shall not be treated as an Incentive Stock Option under section 422
   of the Internal Revenue Code of 1986, as amended.

           By
   acceptance of this Option, the Optionholder agrees to the terms and
   conditions set forth above and those attached hereto and in the
   Plan.

 	OPTIONHOLDER	 	PARAMETRIC TECHNOLOGY CORPORATION
	 	 	 	 	 
	By: 	 /s/ Michael E. Porter 
 	 	By: 	 /s/ Edwin J. Gillis 
 
	 	Optionholder	 	 	Executive Vice President - CFO

  

 PARAMETRIC TECHNOLOGY CORPORATION 1997 INCENTIVE STOCK
   OPTION PLAN

 Nonstatutory Stock Option Terms And
   Conditions

           1.
         Plan Incorporated by Reference. This
   Option is issued pursuant to the terms of the Plan and may be amended as
   provided in the Plan. Capitalized terms used and not otherwise defined in
   this certificate have the meanings given to them in the Plan. This
   certificate does not set forth all of the terms and conditions of the Plan,
   which are incorporated herein by reference. The Committee administers the
   Plan and its determinations regarding the operation of the Plan are final
   and binding. Copies of the Plan may be obtained upon written request without
   charge from the Corporate Counsel of the Company.

           2.
         Option Price. The price to be paid for
   each share of Common Stock issued upon exercise of the whole or any part of
   this Option is the Option Price set forth on the face of this
   certificate.

           3.
         Exercisability Schedule. This Option
   may be exercised at any time and from time to time for the number of shares
   and in accordance with the exercisability schedule set forth on the face of
   this certificate, but only for the purchase of whole shares. This Option may
   not be exercised as to any shares after the Expiration Date.

           4.
         Method of Exercise. To exercise this
   Option, the Optionholder shall deliver written notice of exercise to the
   Company specifying the number of shares with respect to which the Option is
   being exercised accompanied by payment of the Option Price for such shares
   in cash, by certified check or in such other form, including shares of
   Common Stock of the Company valued at their Fair Market Value on the date of
   delivery or a payment commitment of a financial or brokerage institution, as
   the Committee may approve. Promptly following such notice, the Company will
   deliver to the Optionholder a certificate representing the number of shares
   with respect to which the Option is being exercised.

           5.
         No Right To Employment. No person
   shall have any claim or right to be granted an Option. Each employee of the
   Company or any of its Affiliates is an employee-at-will (that is to say that
   either the Participant or the Company or any Affiliate may terminate the
   employment relationship at any time for any reason or no reason at all)
   unless, and only to the extent, provided in a written employment agreement
   for a specified term executed by the chief executive officer of the Company
   or his duly authorized designee or the authorized signatory of any
   Affiliate. Neither the adoption, maintenance, nor operation of the Plan nor
   any Option hereunder shall confer upon any employee of the Company or of any
   Affiliate any right with respect to the continuance of his/her employment by
   the Company or any such Affiliate nor shall they interfere with the right of
   the Company (or Affiliate) to terminate any employee at any time or
   otherwise change the terms of employment, including, without limitation, the
   right to promote, demote or otherwise re-assign any employee from one
   position to another within the Company or any Affiliate.

           6.
         Effect of Grant. Participant shall not
   earn any Options granted hereunder until such time as all the conditions put
   forth herein and in the Plan which are required to be met in order to
   exercise the Option have been fully satisfied.

           7.
        Recapitalization, Mergers, Etc. As
   provided in the Plan, in the event of corporate transactions affecting the
   Company's outstanding Common Stock, the number and kind of shares subject to
   this Option and the exercise price hereunder shall be equitably adjusted. If
   such transaction involves a consolidation or merger of the Company with
   another entity, the sale or exchange of all or substantially all of the
   assets of the Company or a reorganization or liquidation of the Company,
   then in lieu of the foregoing, the Committee may upon written notice to the
   Optionholder provide that this Option shall terminate on a date not less
   than 20 days after the date of such notice unless theretofore exercised. In
   connection with such notice, the Committee may in its discretion accelerate
   or waive any deferred exercise period.

           8.
         Option Not Transferable. This Option
   is not transferable by the Optionholder otherwise than by will or the laws
   of descent and distribution, and is exercisable, during the Optionholder's
   lifetime, only by the Optionholder. The naming of a Designated Beneficiary
   does not constitute a transfer.

           9.
         Termination of Employment or
   Engagement. If the Optionholder's status as an employee or consultant of
   (a) the Company, (b) an Affiliate, or (c) a corporation (or parent or
   subsidiary corporation of such corporation) issuing or
 assuming a stock option in a transaction to which section 424(a) of the Code
   applies, is terminated for any reason (voluntary or involuntary) and the
   period of exercisability for a particular Option following such termination
   has not been specified by the Board, each such Option then held by that
   Participant shall expire to the extent not previously exercised ten (10)
   calendar days after such Participant's employment or engagement is
   terminated, except that-

      (a)      If
   the Participant is on military, sick leave or other bona fide
   leave of absence (such as temporary employment by the federal government),
   his or her employment or engagement with the Company will be treated as
   continuing intact if the period of such leave does not exceed ninety (90)
   days, or, if longer, so long as the Participant's right to reemployment or
   the survival of his or her service arrangement with the Company is
   guaranteed either by statute or by contract; otherwise, the Participant's
   employment or engagement will be deemed to have terminated on the 91st day
   of such leave.

      (b)      If
   the Participant's employment is terminated by reason of his or her
   retirement from the Company at normal retirement age, each Option then held
   by the Participant, to the extent exercisable at retirement, may be
   exercised by the Participant at any time within three (3) months after such
   retirement unless terminated earlier by its terms.

      (c)      If
   the Participant's employment or engagement is terminated by reason of his or
   her death, each Option then held by the Participant, to the extent
   exercisable at the date of death, may be exercised at any time within one
   year after that date (unless terminated earlier by its terms) by the
   person(s) to whom the Participant's option rights pass by will or by the
   applicable laws of descent and distribution.

      (d)      If
   the Participant's employment or engagement is terminated by reason of his or
   her becoming permanently and totally disabled, each Option then held by the
   Participant, to the extent exercisable upon the occurrence of permanent and
   total disability, may be exercised by the Participant at any time within one
   (1) year after such occurrence unless terminated earlier by its terms. For
   purposes hereof, an individual shall be deemed to be "permanently and
   totally disabled" if he or she is unable to engage in any substantial
   gainful activity by reason of any medically determinable physical or mental
   impairment which can be expected to result in death or which has lasted or
   can be expected to last for a continuous period of not less than twelve (12)
   months. Any determination of permanent and total disability shall be made in
   good faith by the Company on the basis of a report signed by a qualified
   physician.

           10.
         Compliance with Securities Laws. It
   shall be a condition to the Optionholder's right to purchase shares of
   Common Stock hereunder that the Company may, in its discretion, require (a)
   that the shares of Common Stock reserved for issuance upon the exercise of
   this Option shall have been duly listed, upon official notice of issuance,
   upon any national securities exchange or automated quotation system on which
   the Company's Common Stock may then be listed or quoted, (b) that either (i)
   a registration statement under the Securities Act of 1933 with respect to
   the shares shall be in effect, or (ii) in the opinion of counsel for the
   Company, the proposed purchase shall be exempt from registration under that
   Act and the Optionholder shall have made such undertakings and agreements
   with the Company as the Company may reasonably require, and (c) that such
   other steps, if any, as counsel for the Company shall consider necessary to
   comply with any law applicable to the issue of such shares by the Company
   shall have been taken by the Company or the Optionholder, or both. The
   certificates representing the shares purchased under this Option may contain
   such legends as counsel for the Company shall consider necessary to comply
   with any applicable law.

           11.
         Payment of Taxes. The Optionholder
   shall pay to the Company, or make provision satisfactory to the Company for
   payment of, any taxes required by law to be withheld with respect to the
   exercise of this Option. The Committee may, in its discretion, require any
   other Federal or state taxes imposed on the sale of the shares to be paid by
   the Optionholder. In the Committee's discretion, such tax obligations may be
   paid in whole or in part in shares of Common Stock, including shares
   retained from the exercise of this Option, valued at their Fair Market Value
   on the date of delivery. The Company and its Affiliates may, to the extent
   permitted by law, deduct any such tax obligations from any payment of any
   kind otherwise due to the Optionholder.

           Adopted
   November 14, 1996PARAMETRIC TECH. CORP. 2000 EQUITY INCENTIVE PLAN

  EXHIBIT 10.7

 PARAMETRIC TECHNOLOGY CORPORATION

 2000 EQUITY INCENTIVE PLAN

 1.
        Purpose.

           The
   purpose of the Parametric Technology Corporation 2000 Equity Incentive Plan
   (the "Plan") is to attract and retain directors and key employees
   and consultants of the Company and its Affiliates, to provide an incentive
   for them to achieve performance goals, and to enable them to participate in
   the growth of the Company by granting Awards with respect to the Company's
   Common Stock. Certain capitalized terms used herein are defined in Section 9
   below.

 2.      Administration.

           The Plan
   shall be administered by the Committee; provided, that the Board may in any
   instance perform any of the functions of the Committee hereunder. The
   Committee shall select the Participants to receive Awards and shall
   determine the terms and conditions of the Awards. The Committee shall have
   authority to adopt, alter and repeal such administrative rules, guidelines
   and practices governing the operation of the Plan as it shall from time to
   time consider advisable, and to interpret the provisions of the Plan. The
   Committee's decisions shall be final and binding. To the extent permitted by
   applicable law, the Committee may delegate to one or more executive officers
   of the Company the power to make Awards to Participants who are not
   Reporting Persons or Covered Employees and all determinations under the Plan
   with respect thereto, provided that the Committee shall fix the maximum
   amount of such Awards for all such Participants and a maximum for any one
   Participant.

 3.      Eligibility.

           All
   directors and all employees and consultants of the Company or any Affiliate
   capable of contributing to the successful performance of the Company are
   eligible to be Participants in the Plan. Incentive Stock Options may be
   granted only to persons eligible to receive such Options under the
   Code.

 4.      Stock Available for Awards.

          
    (a)      Amount.
   Subject to adjustment under subsection (b), Awards may be made under the
   Plan for up to 11,500,000 shares of Common Stock, provided that no more than
   10% of the maximum number of shares authorized from time to time to be
   issued hereunder may be granted as Restricted Stock or unrestricted stock
   Awards for consideration less than 100% of the Fair Market Value of the
   Common Stock on the date of the respective grant. If any Award expires or is
   terminated unexercised or is forfeited or settled in a manner that results
   in fewer shares outstanding than were awarded, the shares subject to such
   Award, to the extent of such expiration, termination, forfeiture or
   decrease, shall again be available for award under the Plan. Common Stock
   issued through the assumption or substitution of outstanding grants from an
   acquired company shall not reduce the shares available for Awards under the
   Plan. Shares issued under the Plan may consist of authorized but unissued
   shares or treasury shares.

      (b)
        Adjustment. In the event that the
   Committee determines that any stock dividend, extraordinary cash dividend,
   recapitalization, reorganization, merger, consolidation, split-up, spin-off,
   combination, exchange of shares or other transaction affects the Common
   Stock such that an adjustment is required in order to preserve the benefits
   intended to be provided by the Plan, then the Committee (subject in the case
   of Incentive Stock Options to any limitation required under the Code) shall
   equitably adjust any or all of (i) the number and kind of shares in respect
   of which Awards may be made under the Plan, (ii) the number and kind of
   shares subject to outstanding Awards and (iii) the exercise price with
   respect to any of the foregoing, provided that the number of shares subject
   to any Award shall always be a whole number, and if considered appropriate,
   the Committee may make provision for a cash payment with respect to an
   outstanding Award. 

          
    (c)      Limit on
   Individual Grants. The maximum number of shares of Common Stock
   subject to Options and Stock Appreciation Rights that may be granted to any
   Participant in the aggregate in any calendar year shall not exceed
   2,000,000, and the maximum number of shares of Common Stock that may be
   granted as Restricted Stock or unrestricted stock Awards, with respect to
   which performance goals apply under Section 7 below, to any Participant in
   the aggregate in any calendar year shall not exceed 500,000, subject to
   adjustment under subsection (b).

 5.      Stock Options.

          
    (a)      Grant of
   Options. Subject to the provisions of the Plan, the Committee may
   grant options ("Options") to purchase shares of Common Stock (i)
   complying with the requirements of Section 422 of the Code or any successor
   provision and any regulations thereunder ("Incentive Stock
   Options") and (ii) not intended to comply with such requirements
   ("Nonstatutory Stock Options"). The Committee shall determine the
   number of shares subject to each Option and the exercise price therefor,
   which shall not be less than 100% of the Fair Market Value of the Common
   Stock on the date of grant, provided that a Nonstatutory Stock Option
   granted to a new employee or consultant in connection with the hiring of
   such person may have a lower exercise price so long as it is not less than
   100% of Fair Market Value on the date the person accepts the Company's offer
   of employment or the date employment commences, whichever is lower. No
   Options may be granted hereunder more than ten years after the effective
   date of the Plan.

          
    (b)      Terms and
   Conditions. Each Option shall be exercisable at such times and
   subject to such terms and conditions as the Committee may specify in the
   applicable grant or thereafter. The Committee may impose such conditions
   with respect to the exercise of Options, including conditions relating to
   applicable federal or state securities laws, as it considers necessary or
   advisable.

          
    (c)      Payment.
   No shares shall be delivered pursuant to any exercise of an Option until
   payment in full of the exercise price therefor is received by the Company.
   Such payment may be made in whole or in part in cash or, to the extent
   permitted by the Committee at or after the grant of the Option, by delivery
   of a note or other commitment satisfactory to the Committee or shares of
   Common Stock owned by the optionee valued at their Fair Market Value on the
   date of delivery, or such other lawful consideration, including a payment
   commitment of a financial or brokerage institution, as the Committee may
   determine.

 -2-

  

 6.      Stock Appreciation Rights.

          
    (a)      Grant of
   SARs. Subject to the provisions of the Plan, the Committee may grant
   rights to receive any excess in value of shares of Common Stock over the
   exercise price ("Stock Appreciation Rights" or "SARs").
   The Committee shall determine at the time of grant or thereafter whether
   SARs are settled in cash, Common Stock or other securities of the Company,
   Awards or other property, and may define the manner of determining the
   excess in value of the shares of Common Stock.

          
    (b)      Exercise
   Price. The Committee shall fix the exercise price of each SAR or
   specify the manner in which the price shall be determined. An SAR may not
   have an exercise price less than 100% of the Fair Market Value of the Common
   Stock on the date of the grant, provided that such an SAR granted to a new
   employee or consultant in connection with the hiring of such person may have
   a lower exercise price so long as it is not less than 100% of Fair Market
   Value on the date the person accepts the Company's offer of employment or
   the date employment commences, whichever is lower. 

 7.      Stock Awards.

          
    (a)      Grant of
   Restricted or Unrestricted Stock Awards. The Committee may grant
   shares of Common Stock subject to forfeiture ("Restricted Stock")
   and determine the duration of the period (the "Restricted Period")
   during which, and the conditions under which, the shares may be forfeited to
   the Company and the other terms and conditions of such Awards. Shares of
   Restricted Stock may not be sold, assigned, transferred, pledged or
   otherwise encumbered, except as permitted by the Committee, during the
   Restricted Period. Shares of Restricted Stock shall be evidenced in such
   manner as the Committee may determine. Any certificates issued in respect of
   shares of Restricted Stock shall be registered in the name of the
   Participant and unless otherwise determined by the Committee, deposited by
   the Participant, together with a stock power endorsed in blank, with the
   Company. At the expiration of the Restricted Period, the Company shall
   deliver such certificates to the Participant or if the Participant has died,
   to the Participant's Designated Beneficiary. The Committee also may make
   Awards of shares of Common Stock that are not subject to restrictions or
   forfeiture, on such terms and conditions as the Committee may determine from
   time to time.

          
    (b)      Performance
   Goals. The Committee may establish performance goals for the
   granting of Restricted Stock or unrestricted stock Awards or the lapse of
   risk of forfeiture of Restricted Stock. Such performance goals may be based
   on earnings per share, revenues, sales or expense targets of the Company or
   any subsidiary, division or product line thereof, stock price, or such other
   business criteria as the Committee may determine. Shares of Restricted Stock
   or unrestricted stock may be issued for no cash consideration, such minimum
   consideration as may be required by applicable law or such other
   consideration as the Committee may determine.

 8.      General Provisions Applicable to
   Awards.

          
    (a)     
   Documentation. Each Award under the Plan shall be evidenced by a
   writing delivered to the Participant or agreement executed by the
   Participant specifying the terms and conditions thereof and containing such
   other terms and

 -3-

 
 conditions not inconsistent with the provisions of the Plan as the Committee
   considers necessary or advisable to achieve the purposes of the Plan or to
   comply with applicable tax and regulatory laws and accounting
   principles.

          
    (b)      Committee
   Discretion. Each type of Award may be made alone, in addition to or
   in relation to any other Award. The terms of each type of Award need not be
   identical, and the Committee need not treat Participants uniformly. Except
   as otherwise provided by the Plan or a particular Award, any determination
   with respect to an Award may be made by the Committee at the time of grant
   or at any time thereafter.

          
    (c)      Dividends and Cash
   Awards. In the discretion of the Committee, any Award under the Plan
   may provide the Participant with (i) dividends or dividend equivalents
   payable (in cash or in the form of Awards under the Plan) currently or
   deferred with or without interest and (ii) cash payments in lieu of or in
   addition to an Award.

          
    (d)      Termination of
   Service. The Committee shall determine the effect on an Award of the
   disability, death, retirement or other termination of service of a
   Participant and the extent to which, and the period during which, the
   Participant's legal representative, guardian or Designated Beneficiary may
   receive payment of an Award or exercise rights thereunder.

           (e)
         Change in Control. In order to preserve
   a Participant's rights under an Award in the event of a change in control of
   the Company (as defined by the Committee), the Committee in its discretion
   may, at the time an Award is made or at any time thereafter, take one or
   more of the following actions: (i) provide for the acceleration of any time
   period relating to the exercise or payment of the Award, (ii) provide for
   payment to the Participant of cash or other property with a Fair Market
   Value equal to the amount that would have been received upon the exercise or
   payment of the Award had the Award been exercised or paid upon the change in
   control, (iii) adjust the terms of the Award in a manner determined by the
   Committee to reflect the change in control, (iv) cause the Award to be
   assumed, or new rights substituted therefor, by another entity, or (v) make
   such other provision as the Committee may consider equitable to Participants
   and in the best interests of the Company.

          
    (f)
        Transferability. In the discretion of
   the Committee, any Award may be made transferable upon such terms and
   conditions and to such extent as the Committee determines, provided that
   Incentive Stock Options may be transferable only to the extent permitted by
   the Code. The Committee may in its discretion waive any restriction on
   transferability.

          
    (g)      Withholding
   Taxes. The Participant shall pay to the Company, or make provision
   satisfactory to the Committee for payment of, any taxes required by law to
   be withheld in respect of Awards under the Plan no later than the date of
   the event creating the tax liability. The Company and its Affiliates may, to
   the extent permitted by law, deduct any such tax obligations from any
   payment of any kind due to the Participant hereunder or otherwise. In the
   Committee's discretion, the minimum tax obligations required by law to be
   withheld in respect of Awards may be paid in whole or in part in shares of
   Common Stock, including shares retained from the Award creating the tax
   obligation, valued at their Fair Market Value on the date of retention or
   delivery.

 -4-

  

          
    (h)      Foreign
   Nationals. Awards may be made to Participants who are foreign
   nationals or employed outside the United States on such terms and conditions
   different from those specified in the Plan as the Committee considers
   necessary or advisable to achieve the purposes of the Plan or to comply with
   applicable laws.

          
    (i)      Amendment of
   Award. The Committee may amend, modify or terminate any outstanding
   Award, including substituting therefor another Award of the same or a
   different type, changing the date of exercise or realization and converting
   an Incentive Stock Option to a Nonstatutory Stock Option, provided that the
   Participant's consent to such action shall be required (a) if such action
   would terminate, or reduce the number of shares issuable under, an Option,
   unless any time period relating to the exercise of such Option or the
   eliminated portion, as the case may be, is accelerated before such
   termination or reduction, in which case the Committee may provide for the
   Participant to receive cash or other property equal to the net value that
   would be received upon exercise of the terminated Option or the eliminated
   portion, as the case may be, and (b) in any other case, unless the Committee
   determines that the action, taking into account any related action, would
   not materially and adversely affect the Participant. The Committee shall
   not, without further approval of the stockholders of the Company, authorize
   the amendment of any outstanding Option to reduce the exercise price.
   Furthermore, no Option shall be canceled and replaced with Options having a
   lower exercise price without approval of the stockholders of the
   Company.

 9.      Certain Definitions.

          
    "Affiliate" means any business entity in which the Company
   owns directly or indirectly 50% or more of the total voting power or has a
   significant financial interest as determined by the Committee.

          
    "Award" means any Option, Stock Appreciation Right or
   Restricted Stock granted under the Plan.

          
    "Board" means the Board of Directors of the
   Company.

          
    "Code" means the Internal Revenue Code of 1986, as amended
   from time to time, or any successor law.

          
    "Committee" means one or more committees each comprised of
   not less than two members of the Board appointed by the Board to administer
   the Plan or a specified portion thereof. Unless otherwise determined by the
   Board, if a Committee is authorized to grant Awards to a Reporting Person or
   a Covered Employee, each member shall be a "non-employee director"
   within the meaning of Rule 16b-3 under the Exchange Act or an "outside
   director" within the meaning of Section 162(m) of the Code,
   respectively.

          
    "Common Stock" or "Stock" means the Common Stock,
   $.01 par value, of the Company.

          
    "Company" means Parametric Technology Corporation, a
   Massachusetts corporation.

          
    "Covered Employee" means a "covered employee"
   within the meaning of Section 162(m) of the Code.

 -5-

  

          
    "Designated Beneficiary" means the beneficiary designated by
   a Participant, in a manner determined by the Committee, to receive amounts
   due or exercise rights of the Participant in the event of the Participant's
   death. In the absence of an effective designation by a Participant,
   "Designated Beneficiary" means the Participant's estate.

          
    "Exchange Act" means the Securities Exchange Act of 1934, as
   amended from time to time, or any successor law.

          
    "Fair Market Value" means, with respect to Common Stock or
   any other property, the fair market value of such property as determined by
   the Committee in good faith or in the manner established by the Committee
   from time to time.

          
    "Participant" means a person selected by the Committee to
   receive an Award under the Plan.

          
    "Reporting Person" means a person subject to Section 16
   of the Exchange Act.

 10.      Miscellaneous.

          
    (a)      No Right To
   Employment. No person shall have any claim or right to be granted an
   Award. Each employee of the Company or any of its Affiliates is an
   employee-at-will (that is to say that either the Participant or the Company
   or any Affiliate may terminate the employment relationship at any time for
   any reason or no reason at all) unless and only to the extent provided in a
   written employment agreement for a specified term executed by the chief
   executive officer of the Company or his duly authorized designee or the
   authorized signatory of any Affiliate. Neither the adoption, maintenance,
   nor operation of the Plan nor any Award hereunder shall confer upon any
   employee or consultant of the Company or of any Affiliate any right with
   respect to the continuance of his/her employment by or other service with
   the Company or any such Affiliate nor shall they interfere with the rights
   of the Company (or Affiliate) to terminate any employee at any time or
   otherwise change the terms of employment, including, without limitation, the
   right to promote, demote or otherwise re-assign any employee from one
   position to another within the Company or any Affiliate. 

          
    (b)      No Rights As
   Stockholder. Subject to the provisions of the applicable Award, no
   Participant or Designated Beneficiary shall have any rights as a stockholder
   with respect to any shares of Common Stock to be issued under the Plan until
   he or she becomes the holder thereof. A Participant to whom Common Stock is
   awarded shall be considered the holder of the Stock at the time of the Award
   except as otherwise provided in the applicable Award.

          
    (c)      Effective
   Date. The Plan shall be effective on the date it is approved by the
   stockholders.

          
    (d)      Amendment of
   Plan. The Board may amend, suspend or terminate the Plan or any
   portion thereof at any time, subject to such stockholder approval as the
   Board determines to be necessary or advisable to comply with any tax or
   regulatory requirement.

          
    (e)      Governing
   Law. The provisions of the Plan shall be governed by and interpreted
   in accordance with the laws of the Commonwealth of Massachusetts.

 -6-

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