Document:

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Exhibit 10.3

EXECUTIVE EMPLOYMENT AGREEMENT

     This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made as of the 2nd day of November, 2007
between Moldflow Corporation, a Delaware corporation (the “Company”), and Gregory Magoon
(“Executive”).

     WHEREAS, the Company and the Executive are party to a Change of Control Agreement dated
December 13, 2006 (“Prior Agreement”) and,

     WHEREAS, the Company and the Executive desire to replace the Prior Agreement with this
Executive Employment Agreement, which, upon execution will completely supersede the Prior
Agreement; provided, however that the parties agree that the terms and conditions of the Prior
Agreement shall have been in effect at all times from the date thereof until the date of this
Executive Employment Agreement.

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

1. Employment. The term of this Agreement shall extend from the date hereof (the “Commencement
Date”) until the first anniversary of the Commencement Date and shall automatically be extended for
one additional year on each anniversary thereafter unless, not less than 30 days prior to each such
date, either party shall have given notice that it does not wish to extend this Agreement;
provided, further, that following a Change in Control the term of this Agreement shall continue in
effect for a period of not less than twelve (12) months beyond the month in which the Change in
Control occurred. The term of this Agreement shall be subject to termination as provided in
Paragraph 6 and may be referred to herein as the “Period of Employment.”

2. Position and Duties. During the Period of Employment, Executive shall serve as the Executive
Vice President of Finance and Chief Financial Officer, Treasurer and Assistant Secretary and shall
have such duties as may from time to time be prescribed by the Chief Executive Officer or the Board
of Directors of the Company (the “Board”). Executive shall devote his full working time and
efforts to the business and affairs of the Company.

3. Compensation and Related Matters.

     (a) Base Salary and Incentive Compensation. Executive’s annual base salary shall be $205,000.
Executive’s base salary shall be redetermined annually by the Chief Executive Officer, the Board
or a Committee thereof. The annual base salary in effect at any given time is referred to herein
as “Base Salary.” The Base Salary shall be payable in a manner consistent with the general payroll
policy of the Company. In addition to Base Salary, Executive shall be eligible to participate in
such incentive compensation plans and Employee Benefit Plans as the Board or a Committee thereof
shall determine from time to time for senior executives of the Company. As used herein, the term
“Employee Benefit Plans” includes, without limitation, each pension and retirement plan;
supplemental pension, retirement and deferred compensation plan; savings and profit-sharing plan;
stock ownership plan; stock purchase plan; stock option plan; life insurance plan; medical
insurance plan; disability plan; and health and accident plan or arrangement established and
maintained by the Company.

     (b) Vacations. Executive shall be entitled to twenty (20) paid vacation days in each fiscal
year, which shall be accrued ratably during the fiscal year, and Executive shall also be entitled
to all paid holidays given by the Company to its executives. Executive shall be entitled to
additional vacation based on any policy of the Company that provides for additional vacation based
on years of service or other criteria.

     (c) Additional Benefits. During the Period of Employment the Company will reimburse the
Executive for the cost of a supplemental policy of long-term disability insurance for the
Executive.

     (d) Indemnification and Directors’ and Officers’ Insurance. During Executive’s employment and
for the period of time following termination of the Executive for any reason during which time
Executive could be subject to any

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claim based on his position in the Company, Executive shall
receive the maximum indemnification protection from the
Company as permitted by the Company’s by-laws and shall receive directors’ and officers’
insurance coverage equivalent to that which is provided to any other director or officer of the
Company.

4. Unauthorized Disclosure.

     Executive acknowledges that in the course of his employment with the Company (and, if
applicable, its predecessors), he has and will become acquainted with the Company’s business
affairs, information, trade secrets, and other matters which are of a proprietary or confidential
nature, including but not limited to the Company’s and its affiliates’ and predecessors’
operations, business opportunities, price and cost information, finance, customer information,
product development information, business plans, various sales techniques, manuals, letters,
notebooks, procedures, reports, products, processes, services, and other confidential information
and knowledge (collectively the “Confidential Information”) concerning the Company’s and its
affiliates’ and predecessors’ business. Executive understands and acknowledges that such
Confidential Information is confidential, and he agrees not to disclose such Confidential
Information to anyone outside the Company except to the extent that (i) Executive deems such
disclosure or use reasonably necessary or appropriate in connection with performing his duties on
behalf of the Company; (ii) Executive is required by order of a court of competent jurisdiction (by
subpoena or similar process) to disclose or discuss any Confidential Information, provided that in
such case, Executive shall promptly inform the Company of such event, shall cooperate with the
Company in attempting to obtain a protective order or to otherwise restrict such disclosure, and
shall only disclose Confidential Information to the minimum extent necessary to comply with any
such court order; or (iii) such Confidential Information becomes generally known to and available
for use in the Company’s industry, other than as a result of any action or inaction by Executive.
Executive further agrees that he will not during employment and/or at any time thereafter use such
Confidential Information in competing, directly or indirectly, with the Company. At such time as
Executive shall cease to be employed by the Company, he will immediately turn over to the Company
all Confidential Information, including papers, documents, writings, electronically stored
information, other property, and all copies of them provided to or created by him during the course
of his employment with the Company. The foregoing provisions shall be binding upon Executive’s
heirs, successors, and legal representatives and shall survive the termination of this Agreement
for any reason.

5. Covenant Not to Compete. In consideration for Executive’s employment by the Company under the
terms provided in this Agreement and as a means to aid in the performance and enforcement of the
terms of the provisions of Paragraph 4, Executive agrees that:

     (a) during the Period of Employment and for a period of twelve (12) months thereafter,
regardless of the reason for termination of employment, Executive will not, directly or indirectly,
as an owner, director, principal, agent, officer, employee, partner, consultant, servant, or
otherwise, carry on, operate, manage, control, or become involved in any manner with any business,
operation, corporation, partnership, association, agency, or other person or entity which is
engaged in a business that is directly competitive with any of the Company’s products which are
produced or in development by the Company as of the date of Executive’s termination of employment,
anywhere in the world; provided, however, that the foregoing shall not prohibit Executive from
owning up to one percent (1%) of the outstanding stock of a publicly held company engaged in
activities competitive with that of the Company; and

     (b) during the term of Executive’s employment with the Company and for a period of twelve (12)
months thereafter, regardless of the reason for termination of employment, Executive will not
directly or indirectly solicit or induce any present or future employee of the Company or any
affiliate of the Company to accept employment with Executive or with any business, operation,
corporation, partnership, association, agency, or other person or entity with which Executive may
be associated, and Executive will not knowingly employ or cause any business, operation,
corporation, partnership, association, agency, or other person or entity with which Executive may
be associated to employ any present or future employee of the Company without providing the Company
with ten (10) days’ prior written notice of such proposed employment.

     Should Executive violate any of the provisions of this Paragraph, then in addition to all
other rights and remedies available to the Company at law or in equity, the duration of this
covenant shall automatically be extended for the period of time from which Executive began such
violation until he permanently ceases such violation.

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6. Termination. Except for termination as specified in Subparagraph 6(a), any termination of
Executive’s employment by the Company or any such termination by Executive shall be communicated by
written notice of termination to the other party hereto (“Notice of Termination”). Executive’s
employment hereunder may be terminated without any breach of this Agreement under the following
circumstances:

     (a) Death. Executive’s employment hereunder shall terminate upon his death.

     (b) Disability. If, as a result of Executive’s incapacity due to physical or mental illness,
Executive shall have been absent from his duties hereunder on a full-time basis for one hundred
eighty (180) calendar days in the aggregate in any twelve (12) month period, the Company may
terminate Executive’s employment hereunder.

     (c) Termination by Company For Cause. At any time during the Period of Employment, the
Company may terminate Executive’s employment hereunder for Cause if such termination is approved by
not less than a majority of the Board. For purposes of this Agreement, “Cause” shall mean: (A)
conduct by Executive constituting a material act of willful misconduct in connection with the
performance of his duties; (B) criminal or civil conviction of Executive, a plea of nolo contendere
by Executive or conduct by Executive that would reasonably be expected to result in material injury
to the reputation of the Company if he were retained in his position with the Company; (C)
continued, willful and deliberate non-performance by Executive of his duties hereunder (other than
by reason of Executive’s physical or mental illness, incapacity or disability) which has continued
for more than thirty (30) days following written notice of such non-performance from the Board; or
(D) a breach by Executive of any of the provisions contained in Paragraphs 4 and 5 of this
Agreement.

     (d) Termination Without Cause. At any time during the Period of Employment, the Company may
terminate Executive’s employment hereunder without Cause if such termination is approved by a
majority of the Company’s Board of Directors. Any termination by the Company of Executive’s
employment under this Agreement which does not constitute a termination for Cause under
Subparagraph 6(c) or result from the death or disability of the Executive under Subparagraph 6(a)
or (b) shall be deemed a termination without Cause. If the Company provides notice to Executive
under Paragraph 1 that it does not wish to extend the Period of Employment, such action shall be
deemed a termination without Cause.

     (e) Termination by Executive. At any time during the Period of Employment, Executive may
terminate his employment hereunder for any reason, including but not limited to Good Reason. If
Executive provides notice to the Company under Paragraph 1 that he does not wish to extend the
Period of Employment, such action shall be deemed a voluntary termination by Executive and one
without Good Reason. For purposes of this Agreement, “Good Reason” shall mean: (A) a substantial
diminution or other substantive adverse change, not consented to by Executive, in the nature or
scope of Executive’s responsibilities, authorities, powers, functions or duties; ( (B) an
involuntary material reduction in Executive’s Base Salary except for across-the-board reductions
similarly affecting all or substantially all management employees; (C) a breach by the Company of
any of its other material obligations under this Agreement; or (D) a material change in the
geographic location at which Executive must perform his services. To constitute a termination for
Good Reason, the Executive must provide notice to the Company within 90 days following the initial
existence of any event constituting Good Reason and may not terminate employment pursuant to this
Section unless the Company fails to take action to remedy the event constituting Good Reason within
30 days of such notice.

     (f) Date of Termination. “Date of Termination” shall mean: (A) if Executive’s employment is
terminated by his death, the date of his death; (B) if Executive’s employment is terminated under
Subparagraph 6(b) or under Subparagraph 6(c), the date on which Notice of Termination is given; (C)
if Executive’s employment is terminated by the Company under Subparagraph 6(d), thirty (30) days or
such longer period as the Board of Directors may approve, after the date on which a Notice of
Termination is given; and (D) if Executive’s employment is terminated by Executive under
Subparagraph 6(e), thirty (30) days after the date on which a Notice of Termination is given.

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7. Compensation Upon Termination or During Disability.

     (a) If Executive’s employment terminates by reason of his death, the Company shall, within
ninety (90) days of death, pay in a lump sum amount to such person as Executive shall designate in
a notice filed with the Company or, if no such person is designated, to Executive’s estate,
Executive’s accrued and unpaid Base Salary, plus accrued vacation, to the date of his death, plus
the pro-rata portion (based on months worked during the fiscal year) of the actual cash bonus that
the Executive would have received had the Company met all of the “at plan” targets in the annual
bonus plan that has been approved by the Board of Directors for the fiscal year in which
Executive’s death occurred. Upon the death of Executive, (i) all stock options granted to
Executive on or after June 1, 2007, which would otherwise vest over the next twelve (12) months
shall immediately vest in Executive’s estate or other legal representatives and become exercisable,
and Executive’s estate or other legal representatives shall have twelve (12) months from the Date
of Termination or the remaining option term, if earlier, to exercise all such stock options granted
to Executive and (ii) all repurchase rights and other restrictions on the shares of Restricted
Stock granted to Executive on or after June 1, 2007 and held by the Executive which would otherwise
lapse over the next twelve (12) months shall immediately lapse. All other stock-based grants and
awards held by Executive shall be canceled upon the death of Executive in accordance with their
terms. For a period of one (1) year following the Date of Termination, the Company shall pay such
health and dental insurance premiums as may be necessary to allow Executive’s spouse and dependents
to receive health and dental insurance coverage substantially similar to coverage they received
immediately prior to the Date of Termination. In addition to the foregoing, any payments to which
Executive’s spouse, beneficiaries, or estate may be entitled under any employee benefit plan shall
also be paid in accordance with the terms of such plan or arrangement. Such payments, in the
aggregate, shall fully discharge the Company’s obligations hereunder.

     (b) During any period that Executive fails to perform his duties hereunder as a result of
incapacity due to physical or mental illness, Executive shall continue to receive his accrued and
unpaid Base Salary until Executive’s employment is terminated due to disability in accordance with
Subparagraph 6(b) or until Executive terminates his employment in accordance with Subparagraph
6(e), whichever first occurs. Upon the Date of Termination, Executive shall receive the pro-rata
portion (based on months worked during the fiscal year) of the actual cash bonus that the Executive
would have received had the Company met all of the “at plan” targets in the annual bonus plan that
has been approved by the Board of Directors for the fiscal year in which the Date of Termination
occurred and (i) all stock options granted to Executive on or after June 1, 2007, which would
otherwise vest over the next twelve (12) months shall immediately vest and become exercisable, and
Executive shall have twelve (12) months from the Date of Termination or the remaining option term,
if earlier, to exercise all such stock options granted to Executive and (ii) all repurchase rights
and other restrictions on the shares of Restricted Stock granted to Executive on or after June 1,
2007 and held by the Executive which would otherwise lapse over the next twelve (12) months shall
immediately lapse. All other stock-based grants and awards held by Executive shall vest or be
canceled upon the Date of Termination in accordance with their terms. For a period of one (1) year
following the Date of Termination, the Company shall pay such health and dental insurance premiums
as may be necessary to allow Executive and Executive’s spouse and dependents to receive health and
dental insurance coverage substantially similar to coverage they received prior to the Date of
Termination. In addition to the foregoing, any payments to which Executive may be entitled under
any employee benefit plan shall also be paid in accordance with the terms of such plan or
arrangement.

     (c) If Executive’s employment is terminated by Executive other than for Good Reason as
provided in Subparagraph 6(e), then the Company shall, through the Date of Termination, pay
Executive his accrued and unpaid Base Salary plus accrued vacation, at the rate in effect at the
time Notice of Termination is given. Thereafter, the Company shall have no further obligations to
Executive except as otherwise expressly provided under this Agreement. In addition, all vested but
unexercised stock options held by Executive as of the Date of Termination must be exercised by
Executive within three (3) months following the Date of Termination or by the end of the option
term, if earlier. All other stock-based grants and awards held by Executive shall vest or be
canceled upon the Date of Termination in accordance with their terms.

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     (d) If Executive terminates his employment for Good Reason as provided in Subparagraph 6(e) or
if Executive’s employment is terminated by the Company without Cause as provided in Subparagraph
6(d), then the Company shall, through the Date of Termination, pay Executive his accrued and unpaid
Base Salary, plus accrued vacation, at the rate in effect at the time Notice of Termination is
given plus the pro-rata portion (based on months worked during the fiscal year) of the actual cash
bonus that the Executive would have received had the Company met all of the “at plan” targets in
the annual bonus plan that has been approved by the Board of Directors for the fiscal year in which
termination occurred. In addition, subject to signing by Executive of a general release of claims
in a form and manner satisfactory to the Company (the “Release”) within 21 days after receipt of
the Release from the Company and the passage of the seven-day revocation period the Company shall
provide the following benefits to Executive:

(i) The Company shall pay Executive an amount equal one (1) times the sum of (A) Executive’s
Base Salary in effect on the Date of Termination and (B) the Executive’s average annual
bonus or other variable cash compensation (including commissions) over the five (5) fiscal
years immediately prior to the year of termination (the “Termination Amount”). The
Termination Amount shall be calculated by the Company within ten (10) business days
following the Date of Termination and communicated to the Executive in writing and shall
then be paid out in a lump sum within 30 days following effective date of the Release.
Anything in this Agreement to the contrary notwithstanding, if at the time of the
Executive’s separation from service within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), the Executive is considered a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment
that the Executive becomes entitled to under this Agreement would be considered deferred
compensation subject to interest, penalties and additional tax imposed pursuant to Section
409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code,
then no such payment shall be payable prior to the date that is the earlier of (i) six
months and one day after the Executive’s separation from service, or (ii) the Executive’s
death. Any such deferred payment shall earn interest calculated at the short-term
applicable federal rate. On or before the Executive’s Date of Termination, the Company
shall make an irrevocable contribution to a rabbi trust with an independent bank trustee in
an amount equal to the amount of such deferred payment plus interest.

     (ii) Upon the Date of Termination, (i) all stock options granted to Executive on or
after June 1, 2007 which would otherwise vest over the next twelve (12) months shall
immediately vest and become exercisable, and Executive shall have twelve (12) months from
the Date of Termination or the remaining option term, if earlier, to exercise all such stock
options granted to Executive and (ii) all repurchase rights and other restrictions on the
            shares of Restricted Stock granted to Executive on or after June 1, 2007 and held by the
Executive which would otherwise lapse over the next twelve (12) months shall immediately
lapse. All other stock-based grants and awards held by Executive shall be canceled upon the
Termination Date in accordance with their terms.

     (iii) In addition to any other benefits to which Executive may be entitled in
accordance with the Company’s then existing severance policies, the Company shall, for so
long as the Executive, his spouse and beneficiaries remain eligible for continuation
coverage under the law know as COBRA, but not for longer than one (1) year commencing on the
Date of Termination, pay such health and dental insurance premiums as may be necessary to
allow Executive and Executive’s spouse and dependents to continue to receive health and
dental insurance coverage substantially similar to coverage they received prior to the Date
of Termination. In addition to the foregoing, any payments to which Executive may be
entitled under any employee benefit plan shall also be paid in accordance with the terms of
such plan or arrangement.

     (e) If Executive’s employment is terminated by the Company for Cause as provided in
Subparagraph 6(c), then the Company shall, through the Date of Termination, pay Executive his
accrued and unpaid Base Salary at the rate in effect at the time Notice of Termination is given.
Thereafter, the Company shall have no further obligations to Executive except as otherwise
expressly provided under this Agreement. In addition, all stock options held by Executive as of
the Date of Termination shall cease to vest as of the Date of Termination and Executive shall have
30 days from the Date of Termination or the remaining option term, if earlier, to exercise all such
vested stock options. All other stock-based grants and awards held by Executive shall be canceled
upon the Termination Date in accordance with their terms.

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     (f) Nothing contained in the foregoing Subparagraphs 7(a) through 7(e) shall be construed so
as to affect Executive’s rights or the Company’s obligations relating to agreements or benefits
that are unrelated to termination of employment.

8. Change in Control Benefit. Upon a Change of Control of the Company the following provisions
shall apply in lieu of, and expressly supersede, the provisions of Subparagraph 7(d).

     (a) Change in Control.

     (i) In the event that within 12 months following a Change of Control, the Executive
terminates his employment for Good Reason or if the Executive’s employment is terminated by
the Company without Cause, the Company shall pay Executive an amount equal to 1.5 times the
sum of (A) Executive’s Base Salary and (B) the Executive’s cash bonus calculated at an
amount equal to the actual cash bonus that the Executive would have received if the Company
had met all of the aggressive targets in the annual bonus plan that has been approved by the
Board of Directors for the fiscal year in which the change of control occurred or, if
greater, the fiscal year in which the termination of employment is effective (collectively,
the “Severance Amount”). The Severance Amount shall be calculated by the Company within ten
(10) business days following the Date of Termination and communicated to the Executive in
writing and shall then be paid out in a lump sum within 30 days following the effective date
of the Release. For purposes of this Agreement, “Base Salary” shall mean the annual Base
Salary in effect on the Date of Termination). Anything in this Agreement to the contrary
notwithstanding, if at the time of the Executive’s separation from service within the
meaning of Section 409A of the Code, the Executive is considered a “specified employee”
within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment that the
Executive becomes entitled to under this Agreement would be considered deferred compensation
subject to interest, penalties and additional tax imposed pursuant to Section 409A(a) of the
Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such
payment shall be payable prior to the date that is the earlier of (i) six months and one day
after the Executive’s separation from service, or (ii) the Executive’s death. Any such
deferred payment shall earn interest calculated at the short-term applicable federal rate.
On or before the Executive’s Date of Termination, the Company shall make an irrevocable
contribution to a rabbi trust with an independent bank trustee in an amount equal to the
amount of such deferred payment plus interest.

     (ii) Notwithstanding anything to the contrary in any applicable option agreement or
stock-based award agreement, upon a Change in Control, all stock options, shares of
Restricted Stock and other stock-based awards granted to Executive by the Company shall
immediately accelerate and become exercisable or non-forfeitable as of the effective date of
such Change in Control. Executive shall also be entitled to any other rights and benefits
with respect to stock-related awards, to the extent and upon the terms provided in the
employee stock option or incentive plan or any agreement or other instrument attendant
thereto pursuant to which such options or awards were granted; and

     (iii) The Company shall, for so long as the Executive, his spouse and beneficiaries
remain eligible for continuation coverage under the law know as COBRA, but not for longer
than a period of one (1) year commencing on the Date of Termination, pay such health and
dental insurance premiums as may be necessary to allow Executive, Executive’s spouse and
dependents to continue to receive health and dental insurance coverage substantially similar
to the coverage they received prior to the Date of Termination.

(b) Additional Limitation.

          (i) Anything in this Agreement to the contrary notwithstanding, in the event that any
compensation, payment or distribution by the Company to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise (the “Severance Payments”), would be subject to the excise tax imposed by Section 4999 of
the Code, the following provisions shall apply:

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          (A) If the Severance Payments, reduced by the sum of (1) the Excise Tax and (2) the
total of the Federal, state, and local income and employment taxes payable by the Executive
on the amount of the Severance Payments which are in excess of the Threshold Amount, are
greater than or equal to the Threshold Amount, the Executive shall be entitled to the full
benefits payable under this Agreement.

          (B) If the Threshold Amount is less than (x) the Severance Payments, but greater than
(y) the Severance Payments reduced by the sum of (1) the Excise Tax and (2) the total of the
Federal, state, and local income and employment taxes on the amount of the Severance
Payments which are in excess of the Threshold Amount, then the benefits payable under this
Agreement shall be reduced (but not below zero) to the extent necessary so that the maximum
Severance Payments shall not exceed the Threshold Amount. To the extent that there is more
than one method of reducing the payments to bring them within the Threshold Amount, the
Executive shall determine which method shall be followed; provided that if the Executive
fails to make such determination within 45 days after the Company has sent the Executive
written notice of the need for such reduction, the Company may determine the amount of such
reduction in its sole discretion.

          (ii) For the purposes of this Section 8(b), “Threshold Amount” shall mean three times the
Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations
promulgated thereunder less one dollar ($1.00); and “Excise Tax” shall mean the excise tax imposed
by Section 4999 of the Code, and any interest or penalties incurred by the Executive with respect
to such excise tax.

          (iii) The determination as to which of the alternative provisions of Section 8(b)(i) shall
apply to the Executive shall be made by a nationally recognized accounting firm selected by the
Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the Date of Termination, if applicable, or at
such earlier time as is reasonably requested by the Company or the Executive. For purposes of
determining which of the alternative provisions of Section 8(b)(i) shall apply, the Executive shall
be deemed to pay federal income taxes at the highest marginal rate of federal income taxation
applicable to individuals for the calendar year in which the determination is to be made, and state
and local income taxes at the highest marginal rates of individual taxation in the state and
locality of the Executive’s residence on the Date of Termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and local taxes. Any
determination by the Accounting Firm shall be binding upon the Company and the Executive.

     (c) Definitions. For purposes of this Paragraph 8, the following terms shall have the
following meanings:

     “Change in Control” shall mean any of the following:

          (a) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Act”) (other than the Company, any of its
subsidiaries, or any trustee, fiduciary or other person or entity holding securities under
any employee benefit plan or trust of the Company or any of its subsidiaries), together with
all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Act) of
such person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company representing forty
percent (40%)or more of either (A) the combined voting power of the Company’s then
outstanding securities having the right to vote in an election of the Company’s Board
(“Voting Securities”) or (B) the then outstanding shares of Company’s common stock, par
value $0.01 per share (“Common Stock”) (other than as a result of an acquisition of
securities directly from the Company); or

          (b) persons who, as of the Commencement Date, constitute the Company’s Board (the
“Incumbent Directors”) cease for any reason, including, without limitation, as a result of a
tender offer, proxy contest, merger or similar transaction, to constitute at least a
majority of the Board, provided that any person becoming a director of the Company
subsequent to the Commencement Date shall be considered an Incumbent Director if such
person’s election was approved by or such person was nominated for election by a vote of at
least a majority of the Incumbent Directors; but provided further, that any such person
whose initial assumption of office is in connection with an actual or threatened election
contest relating to the election of members of the Board or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the

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Board, including by reason of agreement intended to avoid or settle any such actual or
threatened contest or solicitation, shall not be considered an Incumbent Director; or

          (c) the stockholders of the Company shall approve (A) any consolidation or merger of
the Company where the stockholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing in
the aggregate more than fifty percent (50%) of the voting shares of the Company issuing cash
or securities in the consolidation or merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of all or substantially
all of the assets of the Company or (C) any plan or proposal for the liquidation or
dissolution of the Company.

     Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred for
purposes of the foregoing clause (a) solely as the result of an acquisition of securities by the
Company which, by reducing the number of shares of Common Stock or other Voting Securities
outstanding, increases the proportionate number of shares beneficially owned by any person to forty
percent (40%) or more of either (A) the combined voting power of all of the then outstanding Voting
Securities or (B) Common Stock; provided, however, that if any person referred to
in this sentence shall thereafter become the beneficial owner of any additional shares of Voting
Securities or Common Stock (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the Company) and
immediately thereafter beneficially owns forty percent (40%) or more of either (A) the combined
voting power of all of the then outstanding Voting Securities or (B) Common Stock, then a “Change
of Control” shall be deemed to have occurred for purposes of the foregoing clause (a).

     9. Notice. For purposes of this Agreement, notices and all other communications provided for in
the Agreement shall be in writing and shall be deemed to have been duly given when delivered or
mailed by United States certified mail, return receipt requested, postage prepaid, addressed as
follows:

     if to the Executive:

At his home address as shown

in the Company’s personnel records;

     if to the Company:

Moldflow Corporation

492 Old Connecticut Path, Ste. 401

Framingham, MA 01701

Attention: Chief Executive Officer

Copy to: General Counsel

or to such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

10. Successor to Company. The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets
of the Company expressly to assume and agree to perform this Agreement to the same extent that the
Company would be required to perform it if no succession had taken place. Failure of the Company
to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall
be a material breach of this Agreement and shall constitute Good Reason if the Executive elects to
terminate employment.

11. Miscellaneous. No provisions of this Agreement may be modified, waived, or discharged unless
such waiver, modification, or discharge is agreed to in writing and signed by Executive and such
officer of the Company as may be specifically designated by the Board. No agreements or
representations, oral or otherwise, express or implied, unless specifically referred to herein,
with respect to the subject matter hereof have been made by either party which are not set

8

 

forth
expressly in this Agreement. The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the Commonwealth of Massachusetts (without regard to
principles of conflicts of laws).

12. Validity. The invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

13. Counterparts. This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the same instrument.

14. Arbitration; Other Disputes. In the event of any dispute or controversy arising under or in
connection with this Agreement, the parties shall first try in good faith for a period of 30 days
to settle such dispute or controversy by mediation under the applicable rules of the American
Arbitration Association before resorting to arbitration. Following such time period, the parties
will settle any remaining dispute or controversy exclusively by arbitration in Boston,
Massachusetts in accordance with the rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
Notwithstanding the above, the Company shall be entitled to seek a restraining order or injunction
in any court of competent jurisdiction to prevent any continuation of any violation of Paragraph 4
or 5 hereof.

15. Litigation and Regulatory Cooperation. During and after Executive’s employment, Executive
shall reasonably cooperate with the Company in the defense or prosecution of any claims or actions
now in existence or which may be brought in the future against or on behalf of the Company which
relate to events or occurrences that transpired while Executive was employed by the Company;
provided, however, that such cooperation shall not materially and adversely affect Executive or
expose Executive to an increased probability of civil or criminal litigation. The Company shall
also provide Executive with compensation on an hourly basis (to be derived from his Base Salary)
for requested litigation and regulatory cooperation that occurs after his termination of
employment, and reimburse Executive for all costs and expenses incurred in connection with his
performance under this Paragraph 15, including, but not limited to, reasonable attorneys’ fees and
costs.

     IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year
first above written.

	 	 	 	 	 
	 	MOLDFLOW CORPORATION

 	 
	 	By:  	 /s/ A. Roland Thomas	 
	 	Its:   President, CEO and Chairman of the Board of Directors 	 
	 	 	 	 
	 
	 	EXECUTIVE	 
	 
	 	/s/ Gregory W. Magoon	 
	 	Gregory W. Magoon 	 
	 	 	 
	 

9exv10w4

 

Exhibit 10.4

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

     This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made as of the
2nd day of November, 2007 between Moldflow Corporation, a Delaware corporation (the
“Company”), and Kenneth Welch (“Executive”).

     WHEREAS, the Company and the Executive are party to an Executive Employment Agreement dated as
of August 16, 2002, as amended on July 8, 2005 (“Prior Agreement”) and,

     WHEREAS, the Company desires to continue to employ Executive and Executive desires to continue
to be employed by the Company on the terms contained in this Amended and Restated Executive
Employment Agreement, which shall supersede all of the terms and conditions of the Prior Agreement;
provided, however that the parties agree that the terms and conditions of the Prior Agreement shall
have been in effect at all times from the date thereof until the date of this Amended and Restated
Executive Employment Agreement.

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

1. Employment. The term of this Agreement shall extend from the date hereof (the “Commencement
Date”) until the first anniversary of the Commencement Date and shall automatically be extended for
one additional year on each anniversary thereafter unless, not less than 30 days prior to each such
date, either party shall have given notice that it does not wish to extend this Agreement;
provided, further, that following a Change in Control the term of this Agreement shall continue in
effect for a period of not less than twelve (12) months beyond the month in which the Change in
Control occurred. The term of this Agreement shall be subject to termination as provided in
Paragraph 6 and may be referred to herein as the “Period of Employment.”

2. Position and Duties. During the Period of Employment, Executive shall serve as the Chief
Operating Officer, shall report to the Chief Executive Officer of the Corporation, and shall have
such duties as may from time to time be prescribed by the Chief Executive Officer or the Board of
Directors of the Company (the “Board”) which are consistent with the position of Chief Operating
Officer. Executive shall devote his full working time and efforts to the business and affairs of
the Company.

3. Compensation and Related Matters.

     (a) Base Salary and Incentive Compensation. Executive’s annual base salary shall be $265,000.
Executive’s base salary shall be redetermined annually by the Chief Executive Officer, the Board
or a Committee thereof. The annual base salary in effect at any given time is referred to herein
as “Base Salary.” The Base Salary shall be payable in a manner consistent with the general payroll
policy of the Company. In addition to Base Salary, Executive shall be eligible to participate in
such incentive compensation plans and Employee Benefit Plans as the Board or a Committee thereof
shall determine from time to time for senior executives of the Company. Executive’s “at plan” bonus
shall be $79,500 and “aggressive plan” bonus shall be $172,250 and shall be redetermined annually
by the Chief Executive Officer, the Board or a Committee thereof. As used herein, the term
“Employee Benefit Plans” includes, without limitation, each pension and retirement plan;
supplemental pension, retirement and deferred compensation plan; savings and profit-sharing plan;
stock ownership plan; stock purchase plan; stock option plan; life insurance plan; medical
insurance plan; disability plan; and health and accident plan or arrangement established and
maintained by the Company.

     (b) Vacations. Executive shall be entitled to twenty (20) paid vacation days in each fiscal
year, which shall be accrued ratably during the fiscal year, and Executive shall also be entitled
to all paid holidays given by the Company to its executives. Executive shall be entitled to
additional vacation based on any policy of the Company that provides for additional vacation based
on years of service or other criteria.

     (c) Additional Benefits. During the Period of Employment the Company will reimburse the
Executive for the cost of a supplemental policy of long-term disability insurance for the
Executive.

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     (d) Indemnification and Directors’ and Officers’ Insurance. During Executive’s employment and
for the period of time following termination of the Executive for any reason during which time
Executive could be subject to any claim based on his position in the Company, Executive shall
receive the maximum indemnification protection from the Company as permitted by the Company’s
by-laws and shall receive directors’ and officers’ insurance coverage equivalent to that which is
provided to any other director or officer of the Company.

4. Unauthorized Disclosure.

     Executive acknowledges that in the course of his employment with the Company (and, if
applicable, its predecessors), he has and will become acquainted with the Company’s business
affairs, information, trade secrets, and other matters which are of a proprietary or confidential
nature, including but not limited to the Company’s and its affiliates’ and predecessors’
operations, business opportunities, price and cost information, finance, customer information,
product development information, business plans, various sales techniques, manuals, letters,
notebooks, procedures, reports, products, processes, services, and other confidential information
and knowledge (collectively the “Confidential Information”) concerning the Company’s and its
affiliates’ and predecessors’ business. Executive understands and acknowledges that such
Confidential Information is confidential, and he agrees not to disclose such Confidential
Information to anyone outside the Company except to the extent that (i) Executive deems such
disclosure or use reasonably necessary or appropriate in connection with performing his duties on
behalf of the Company; (ii) Executive is required by order of a court of competent jurisdiction (by
subpoena or similar process) to disclose or discuss any Confidential Information, provided that in
such case, Executive shall promptly inform the Company of such event, shall cooperate with the
Company in attempting to obtain a protective order or to otherwise restrict such disclosure, and
shall only disclose Confidential Information to the minimum extent necessary to comply with any
such court order; or (iii) such Confidential Information becomes generally known to and available
for use in the Company’s industry, other than as a result of any action or inaction by Executive.
Executive further agrees that he will not during employment and/or at any time thereafter use such
Confidential Information in competing, directly or indirectly, with the Company. At such time as
Executive shall cease to be employed by the Company, he will immediately turn over to the Company
all Confidential Information, including papers, documents, writings, electronically stored
information, other property, and all copies of them provided to or created by him during the course
of his employment with the Company. The foregoing provisions shall be binding upon Executive’s
heirs, successors, and legal representatives and shall survive the termination of this Agreement
for any reason.

5. Covenant Not to Compete. In consideration for Executive’s employment by the Company under the
terms provided in this Agreement and as a means to aid in the performance and enforcement of the
terms of the provisions of Paragraph 4, Executive agrees that:

     (a) during the Period of Employment and for a period of twelve (12) months thereafter,
regardless of the reason for termination of employment, Executive will not, directly or indirectly,
as an owner, director, principal, agent, officer, employee, partner, consultant, servant, or
otherwise, carry on, operate, manage, control, or become involved in any manner with any business,
operation, corporation, partnership, association, agency, or other person or entity which is
engaged in a business that is directly competitive with any of the Company’s products which are
produced or in development by the Company as of the date of Executive’s termination of employment,
anywhere in the world; provided, however, that the foregoing shall not prohibit Executive from
owning up to one percent (1%) of the outstanding stock of a publicly held company engaged in
activities competitive with that of the Company; and

     (b) during the term of Executive’s employment with the Company and for a period of twelve (12)
months thereafter, regardless of the reason for termination of employment, Executive will not
directly or indirectly solicit or induce any present or future employee of the Company or any
affiliate of the Company to accept employment with Executive or with any business, operation,
corporation, partnership, association, agency, or other person or entity with which Executive may
be associated, and Executive will not knowingly employ or cause any business, operation,
corporation, partnership, association, agency, or other person or entity with which Executive may
be associated to employ any present or future employee of the Company without providing the Company
with ten (10) days’ prior written notice of such proposed employment.

2

 

     Should Executive violate any of the provisions of this Paragraph, then in addition to all
other rights and remedies available to the Company at law or in equity, the duration of this
covenant shall automatically be extended for the period of time from which Executive began such
violation until he permanently ceases such violation.

6. Termination. Except for termination as specified in Subparagraph 6(a), any termination of
Executive’s employment by the Company or any such termination by Executive shall be communicated by
written notice of termination to the other party hereto. Executive’s employment hereunder may be
terminated without any breach of this Agreement under the following circumstances:

     (a) Death. Executive’s employment hereunder shall terminate upon his death.

     (b) Disability. If, as a result of Executive’s incapacity due to physical or mental illness,
Executive shall have been absent from his duties hereunder on a full-time basis for one hundred
eighty (180) calendar days in the aggregate in any twelve (12) month period, the Company may
terminate Executive’s employment hereunder.

     (c) Termination by Company For Cause. At any time during the Period of Employment, the
Company may terminate Executive’s employment hereunder for Cause if such termination is approved by
not less than a majority of the Board. For purposes of this Agreement, “Cause” shall mean: (A)
conduct by Executive constituting a material act of willful misconduct in connection with the
performance of his duties; (B) Executive’s conviction of a felony or crime of moral turpitude, a
plea of nolo contendere by Executive or conduct by Executive that would reasonably be expected to
result in material injury to the reputation of the Company if he were retained in his position with
the Company; (C) continued, willful and deliberate non-performance by Executive of his duties
hereunder (other than by reason of Executive’s physical or mental illness, incapacity or
disability) which has continued for more than thirty (30) days following written notice of such
non-performance from the Board; or (D) a material breach by Executive of any of the provisions
contained in Paragraphs 4 and 5 of this Agreement which has continued for more than thirty (30)
days following written notice.

     (d) Termination Without Cause. At any time during the Period of Employment, the Company may
terminate Executive’s employment hereunder without Cause if such termination is approved by a
majority of the Company’s Board of Directors. Any termination by the Company of Executive’s
employment under this Agreement which does not constitute a termination for Cause under
Subparagraph 6(c) or result from the death or disability of the Executive under Subparagraph 6(a)
or (b) shall be deemed a termination without Cause. If the Company provides notice to Executive
under Paragraph 1 that it does not wish to extend the Period of Employment, such action shall be
deemed a termination without Cause.

     (e) Termination by Executive. At any time during the Period of Employment, Executive
may terminate his employment hereunder for any reason, including but not limited to Good Reason.
If Executive provides notice to the Company under Paragraph 1 that he does not wish to extend the
Period of Employment, such action shall be deemed a voluntary termination by Executive and one
without Good Reason. For purposes of this Agreement, “Good Reason” shall mean: (A) a substantial
diminution or other substantive adverse change, not consented to by Executive, in the nature or
scope of Executive’s responsibilities, authorities, powers, functions or duties; (B) any removal,
during the Period of Employment, from Executive of his title as set forth in paragraph 2 of this
Agreement; (C) an involuntary material reduction in the combined amount of Executive’s Base Salary
or “at plan” bonus except for across-the-board reductions similarly affecting all or substantially
all management employees; (D) a breach by the Company of any of its other material obligations
under this Agreement and the failure of the Company to cure such breach within thirty (30) days
after written notice thereof by Executive; (E) a material change in the geographic location of more
than 30 miles from existing location at which Executive must perform his services; (F) the failure
of the Company to obtain the agreement from any successor to the Company to assume and agree to
perform this Agreement as required by Paragraph 10; or (G) any change in reporting relationship. To
constitute a termination for Good Reason, the Executive must provide notice to the Company within
90 days following the initial existence of any event constituting Good Reason and may not terminate
employment pursuant to this Section unless the Company fails to take action to remedy the event
constituting Good Reason within 30 days of such notice.

     (f) Date of Termination. “Date of Termination” shall mean: (A) if Executive’s employment is
terminated by his death, the date of his death; (B) if Executive’s employment is terminated under
Subparagraph 6(b) or under

3

 

Subparagraph 6(c), the date on which Notice of Termination is given; (C) if Executive’s
employment is terminated by the Company under Subparagraph 6(d), thirty (30) days after the date on
which a Notice of Termination is given; and (D) if Executive’s employment is terminated by
Executive under Subparagraph 6(e), thirty (30) days after the date on which a Notice of Termination
is given..

7. Compensation Upon Termination or During Disability.

     (a) If Executive’s employment terminates by reason of his death, the Company shall, within
ninety (90) days of death, pay in a lump sum amount to such person as Executive shall designate in
a notice filed with the Company or, if no such person is designated, to Executive’s estate,
Executive’s accrued and unpaid Base Salary, plus accrued vacation, to the date of his death, plus
the pro-rata portion (based on months worked during the fiscal year) of the actual cash bonus that
the Executive would have received had the Company met all of the “at plan” targets in the annual
bonus plan that has been approved by the Board of Directors for the fiscal year in which
Executive’s death occurred. . Upon the death of Executive, (i) all stock options which would
otherwise vest over the next twelve (12) months shall immediately vest in Executive’s estate or
other legal representatives and become exercisable, and Executive’s estate or other legal
representatives shall have twelve (12) months from the Date of Termination or the remaining option
term, if earlier, to exercise all such stock options granted to Executive and (ii) all repurchase
rights and other restrictions on the shares of Restricted Stock held by the Executive which would
otherwise lapse over the next twelve (12) months shall immediately lapse. All other stock-based
grants and awards held by Executive shall be canceled upon the death of Executive in accordance
with their terms. For a period of one (1) year following the Date of Termination, the Company
shall pay such health and dental insurance premiums as may be necessary to allow Executive’s spouse
and dependents to receive health and dental insurance coverage substantially similar to coverage
they received immediately prior to the Date of Termination. In addition to the foregoing, any
payments to which Executive’s spouse, beneficiaries, or estate may be entitled under any employee
benefit plan shall also be paid in accordance with the terms of such plan or arrangement. Such
payments, in the aggregate, shall fully discharge the Company’s obligations hereunder.

     (b) During any period that Executive fails to perform his duties hereunder as a result
of incapacity due to physical or mental illness, Executive shall continue to receive his accrued
and unpaid Base Salary, plus accrued vacation until Executive’s employment is terminated due to
disability in accordance with Subparagraph 6(b) or until Executive terminates his employment in
accordance with Subparagraph 6(e), whichever first occurs. Upon the Date of Termination, Executive
shall receive the pro-rata portion (based on months worked during the fiscal year) of the actual
cash bonus that the Executive would have received had the Company met all of the “at plan” targets
in the annual bonus plan that has been approved by the Board of Directors for the fiscal year in
which the date of termination occurred and (i) all stock options which would otherwise vest over
the next twelve (12) months shall immediately vest and become exercisable, and Executive shall have
twelve (12) months from the Date of Termination or the remaining option term, if earlier, to
exercise all such stock options granted to Executive and (ii) all repurchase rights and other
restrictions on the shares of Restricted Stock held by the Executive which would otherwise lapse
over the next twelve (12) months shall immediately lapse. All other stock-based grants and awards
held by Executive shall vest or be canceled upon the Date of Termination in accordance with their
terms. For a period of one (1) year following the Date of Termination, the Company shall pay such
health and dental insurance premiums as may be necessary to allow Executive and Executive’s spouse
and dependents to receive health and dental insurance coverage substantially similar to coverage
they received prior to the Date of Termination. In addition to the foregoing, any payments to
which Executive may be entitled under any employee benefit plan shall also be paid in accordance
with the terms of such plan or arrangement.

     (c) If Executive’s employment is terminated by Executive other than for Good Reason as
provided in Subparagraph 6(e), then the Company shall, through the Date of Termination, pay
Executive his accrued and unpaid Base Salary plus accrued vacation, at the rate in effect at the
time Notice of Termination is given. Thereafter, the Company shall have no further obligations to
Executive except as otherwise expressly provided under this Agreement. In addition, all vested but
unexercised stock options held by Executive as of the Date of Termination must be exercised by
Executive within three (3) months following the Date of Termination or by the end of the option
term, if earlier. All other stock-based grants and awards held by Executive shall vest or be
canceled upon the Date of Termination in accordance with their terms.

4

 

     (d) If Executive terminates his employment for Good Reason as provided in Subparagraph 6(e) or
if Executive’s employment is terminated by the Company without Cause as provided in Subparagraph
6(d), then the Company shall, through the Date of Termination, pay Executive his accrued and unpaid
Base Salary, plus accrued vacation, at the rate in effect at the time Notice of Termination is
given plus the pro-rata portion (based on months worked during the fiscal year) of the actual cash
bonus that the Executive would have received had the Company met all of the “at plan” targets in
the annual bonus plan that has been approved by the Board of Directors for the fiscal year in which
termination occurred.. In addition, subject to signing by Executive of a general release of claims
in a form and manner satisfactory to the Company, the Company shall provide the following benefits
to Executive:

     (i) The Company shall pay Executive an amount equal one (1) times the sum of (A)
Executive’s Base Salary in effect on the Date of Termination and (B) the Executive’s average
annual bonus or other variable cash compensation (including commissions) over the five (5)
fiscal years immediately prior to the year of termination (the “Termination Amount”). The
Termination Amount shall be calculated by the Company within ten (10) business days
following the Date of Termination and communicated to the Executive in writing and shall
then be paid out in a lump sum within 30 days following the Date of Termination. Anything in
this Agreement to the contrary notwithstanding, if at the time of the Executive’s separation
from service within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), the Executive is considered a “specified employee” within the meaning
of Section 409A(a)(2)(B)(i) of the Code, and if any payment that the Executive becomes
entitled to under this Agreement is considered deferred compensation subject to interest,
penalties and additional tax imposed pursuant to Section 409A(a) of the Code as a result of
the application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be
payable prior to the date that is the earlier of (i) six months and one day after the
Executive’s date of termination, or (ii) the Executive’s death. Any such deferred payment
shall earn interest calculated at the short-term applicable federal rate. On or before the
Executive’s Date of Termination, the Company shall make an irrevocable contribution to a
rabbi trust with an independent bank trustee in an amount equal to the amount of such
deferred payment plus interest.

     (ii) Upon the Date of Termination, (i) all stock options which would otherwise vest
over the next twelve (12) months shall immediately vest and become exercisable, and
Executive shall have twelve (12) months from the Date of Termination or the remaining option
term, if earlier, to exercise all such stock options granted to Executive and (ii) all
repurchase rights and other restrictions on the shares of Restricted Stock held by the
Executive which would otherwise lapse over the next twelve (12) months shall immediately
lapse. All other stock-based grants and awards held by Executive shall be canceled upon the
Termination Date in accordance with their terms.

     (iii) In addition to any other benefits to which Executive may be entitled in
accordance with the Company’s then existing severance policies, the Company shall, for a
period of one (1) year commencing on the Date of Termination, pay such health and dental
insurance premiums as may be necessary to allow Executive and Executive’s spouse and
dependents to continue to receive health and dental insurance coverage substantially similar
to coverage they received prior to the Date of Termination. In addition to the foregoing,
any payments to which Executive may be entitled under any employee benefit plan shall also
be paid in accordance with the terms of such plan or arrangement.

     (e) If Executive’s employment is terminated by the Company for Cause as provided in
Subparagraph 6(c), then the Company shall, through the Date of Termination, pay Executive his
accrued and unpaid Base Salary at the rate in effect at the time Notice of Termination is given.
Thereafter, the Company shall have no further obligations to Executive except as otherwise
expressly provided under this Agreement. In addition, all stock options held by Executive as of
the Date of Termination shall cease to vest as of the Date of Termination and Executive shall have
30 days from the Date of Termination or the remaining option term, if earlier, to exercise all such
vested stock options. All other stock-based grants and awards held by Executive shall vest or be
canceled upon the Date of Termination in accordance with their terms.

     (f) Nothing contained in the foregoing Subparagraphs 7(a) through 7(e) shall be construed so
as to affect Executive’s rights or the Company’s obligations relating to agreements or benefits
that are unrelated to termination of employment.

5

 

8. Change in Control Benefit. Upon a Change of Control of the Company the following
provisions shall apply in lieu of, and expressly supersede, the provisions of Subparagraph 7(d).

(a) Change in Control.

     (i) In the event that within 12 months following a Change of Control, the Executive
terminates his employment for Good Reason or if the Executive’s employment is terminated by
the Company without Cause, the Company shall pay Executive an amount equal to 1.5 times the
sum of (A) Executive’s Base Salary and (B) the Executive’s cash bonus calculated at an
amount equal to the actual cash bonus that the Executive would have received if the Company
had met all of the aggressive targets in the annual bonus plan that has been approved by the
Board of Directors for the fiscal year in which the change of control occurred or, if
greater, the fiscal year in which the termination of employment is effective (collectively,
the “Severance Amount”). The Severance Amount shall be calculated by the Company within ten
(10) business days following the Date of Termination and communicated to the Executive in
writing and shall then be paid out in a lump sum within 30 days of the Date of Termination.
For purposes of this Agreement, “Base Salary” shall mean the annual Base Salary in effect on
the Date of Termination. Anything in this Agreement to the contrary notwithstanding, if
at the time of the Executive’s separation from service within the meaning of Section 409A of
the Code, the Executive is considered a “specified employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code, and if any payment that the Executive becomes entitled to
under this Agreement is considered deferred compensation subject to interest, penalties and
additional tax imposed pursuant to Section 409A(a) of the Code as a result of the
application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable
prior to the date that is the earlier of (i) six months and one day after the Executive’s
separation from service, or (ii) the Executive’s death. Any such deferred payment shall
earn interest calculated at the short-term applicable federal rate. On or before the
Executive’s Date of Termination, the Company shall make an irrevocable contribution to a
rabbi trust with an independent bank trustee in an amount equal to the amount of such
deferred payment plus interest.

     (ii) Notwithstanding anything to the contrary in any applicable option agreement or
stock-based award agreement, upon a Change in Control, all stock options and other
stock-based awards granted to Executive by the Company shall immediately accelerate and
become exercisable or non-forfeitable as of the effective date of such Change in Control.
Executive shall also be entitled to any other rights and benefits with respect to
stock-related awards, to the extent and upon the terms provided in the employee stock option
or incentive plan or any agreement or other instrument attendant thereto pursuant to which
such options or awards were granted; and

     (iii) The Company shall, for a period of one (1) year commencing on the Date of
Termination, pay such health and dental insurance premiums as may be necessary to allow
Executive, Executive’s spouse and dependents to continue to receive health and dental
insurance coverage substantially similar to the coverage they received prior to the Date of
Termination.

(b) Additional Limitation.

     (i) Anything in this Agreement to the contrary notwithstanding, in the event that any
compensation, payment or distribution by the Company to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (the “Severance Payments”), would be subject to the excise tax
imposed by Section 4999 of the Code, the following provisions shall apply:

          (A) If the Severance Payments, reduced by the sum of (1) the Excise Tax and (2) the
total of the Federal, state, and local income and employment taxes payable by the Executive
on the amount of the Severance Payments which are in excess of the Threshold Amount, are
greater than or equal to the Threshold Amount, the Executive shall be entitled to the full
benefits payable under this Agreement.

          (B) If the Threshold Amount is less than (x) the Severance Payments, but greater than
(y)the Severance Payments reduced by the sum of (1) the Excise Tax and (2) the total of
the Federal, state, and local income and employment taxes on the amount of the Severance
Payments which are in excess of the

6

 

Threshold Amount, then the benefits payable under this Agreement shall be reduced (but not
below zero) to the extent necessary so that the maximum Severance Payments shall not exceed
the Threshold Amount. To the extent that there is more than one method of reducing the
payments to bring them within the Threshold Amount, the Executive shall determine which
method shall be followed; provided that if the Executive fails to make such determination
within 45 days after the Company has sent the Executive written notice of the need for such
reduction, the Company may determine the amount of such reduction in its sole discretion.

     (ii) For the purposes of this Section 8(b), “Threshold Amount” shall mean three times
the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the
regulations promulgated thereunder less one dollar ($1.00); and “Excise Tax” shall mean the
excise tax imposed by Section 4999 of the Code, and any interest or penalties incurred by
the Executive with respect to such excise tax.

     (iii) The determination as to which of the alternative provisions of Section 8(b)(i)
shall apply to the Executive shall be made by a nationally recognized accounting firm
selected by the Company (the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of the Date of
Termination, if applicable, or at such earlier time as is reasonably requested by the
Company or the Executive. For purposes of determining which of the alternative provisions
of Section 8(b)(i) shall apply, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation applicable to individuals for the
calendar year in which the determination is to be made, and state and local income taxes at
the highest marginal rates of individual taxation in the state and locality of the
Executive’s residence on the Date of Termination, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local taxes. Any
determination by the Accounting Firm shall be binding upon the Company and the Executive.

(c) Definitions. For purposes of this Paragraph 8, the following terms shall have the
following meanings:

“Change in Control” shall mean any of the following:

     (a) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Act”) (other than the Company, any of its
subsidiaries, or any trustee, fiduciary or other person or entity holding securities under
any employee benefit plan or trust of the Company or any of its subsidiaries), together with
all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Act) of
such person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company representing forty
percent (40%)or more of either (A) the combined voting power of the Company’s then
outstanding securities having the right to vote in an election of the Company’s Board
(“Voting Securities”) or (B) the then outstanding shares of Company’s common stock, par
value $0.01 per share (“Common Stock”) (other than as a result of an acquisition of
securities directly from the Company); or

     (b) persons who, as of the Commencement Date, constitute the Company’s Board (the
“Incumbent Directors”) cease for any reason, including, without limitation, as a result of a
tender offer, proxy contest, merger or similar transaction, to constitute at least a
majority of the Board, provided that any person becoming a director of the Company
subsequent to the Commencement Date shall be considered an Incumbent Director if such
person’s election was approved by or such person was nominated for election by a vote of at
least a majority of the Incumbent Directors; but provided further, that any such person
whose initial assumption of office is in connection with an actual or threatened election
contest relating to the election of members of the Board or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the Board,
including by reason of agreement intended to avoid or settle any such actual or threatened
contest or solicitation, shall not be considered an Incumbent Director; or

     (c) the stockholders of the Company shall approve (A) any consolidation or merger of
the Company where the stockholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing in
the aggregate more than fifty percent (50%) of the voting shares of the Company issuing cash or securities in the consolidation or merger (or of
its ultimate parent

7

 

corporation, if any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions contemplated or arranged by any party as a
single plan) of all or substantially all of the assets of the Company or (C) any plan or
proposal for the liquidation or dissolution of the Company.

     Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have
occurred for purposes of the foregoing clause (a) solely as the result of an acquisition of
securities by the Company which, by reducing the number of shares of Common Stock or other Voting
Securities outstanding, increases the proportionate number of shares beneficially owned by any
person to forty percent (40%) or more of either (A) the combined voting power of all of the then
outstanding Voting Securities or (B) Common Stock; provided, however, that if any
person referred to in this sentence shall thereafter become the beneficial owner of any additional
shares of Voting Securities or Common Stock (other than pursuant to a stock split, stock dividend,
or similar transaction or as a result of an acquisition of securities directly from the Company)
and immediately thereafter beneficially owns forty percent (40%) or more of either (A) the combined
voting power of all of the then outstanding Voting Securities or (B) Common Stock, then a “Change
of Control” shall be deemed to have occurred for purposes of the foregoing clause (a).

9. Notice. For purposes of this Agreement, notices and all other communications provided for in
the Agreement shall be in writing and shall be deemed to have been duly given when delivered or
mailed by United States certified mail, return receipt requested, postage prepaid, addressed as
follows:

     if to the Executive:

At his home address as shown

in the Company’s personnel records;

     if to the Company:

Moldflow Corporation

492 Old Connecticut Path, Ste. 401

Framingham, MA 01701

Attention: Chief Executive Officer

Copy to: General Counsel

or to such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

10. Successor to Company. The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets
of the Company expressly to assume and agree to perform this Agreement to the same extent that the
Company would be required to perform it if no succession had taken place. Failure of the Company
to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall
be a breach of this Agreement and shall constitute Good Reason if the Executive elects to terminate
employment.

11. Miscellaneous. No provisions of this Agreement may be modified, waived, or discharged unless
such waiver, modification, or discharge is agreed to in writing and signed by Executive and such
officer of the Company as may be specifically designated by the Board. No agreements or
representations, oral or otherwise, express or implied, unless specifically referred to herein,
with respect to the subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the Commonwealth of Massachusetts (without regard to
principles of conflicts of laws).

12. Validity. The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

13. Counterparts. This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the same instrument.

8

 

14. Arbitration; Other Disputes. In the event of any dispute or controversy arising under or in
connection with this Agreement, the parties shall first try in good faith for a period of 30 days
to settle such dispute or controversy by mediation under the applicable rules of the American
Arbitration Association before resorting to arbitration. Following such time period, the parties
will settle any remaining dispute or controversy exclusively by arbitration in Boston,
Massachusetts in accordance with the rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
Notwithstanding the above, the Company shall be entitled to seek a restraining order or injunction
in any court of competent jurisdiction to prevent any continuation of any violation of Paragraph 4
or 5 hereof.

15. Litigation and Regulatory Cooperation. During and after Executive’s employment,
Executive shall reasonably cooperate with the Company in the defense or prosecution of any claims
or actions now in existence or which may be brought in the future against or on behalf of the
Company which relate to events or occurrences that transpired while Executive was employed by the
Company; provided, however, that such cooperation shall not materially and adversely affect
Executive or expose Executive to an increased probability of civil or criminal litigation. The
Company shall also provide Executive with compensation on an hourly basis (to be derived from his
Base Salary) for requested litigation and regulatory cooperation that occurs after his termination
of employment, and reimburse Executive for all costs and expenses incurred in connection with his
performance under this Paragraph 15, including, but not limited to, reasonable attorneys’ fees and
costs.

     IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year
first above written.

	 	 	 	 	 	 	 
	 	 	MOLDFLOW CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:  	 	 /s/ A. Roland Thomas 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Its: President, CEO and Chairman of the
Board of Directors

	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE

	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Kenneth R. Welch	 	 
	 	 	 	 	 
	 	 	Kenneth R. Welch	 	 

9

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