Document:

AMENDED & RESTATED SEVERANCE AGREEMENT, WALSKE 3/1

 EXHIBIT 10.2 

 AMENDED AND RESTATED AGREEMENT

      This Amended and Restated
   Agreement is entered into as of this 1st day of March, 2000 between
   Parametric Technology Corporation, a Massachusetts corporation (the
   "Company"), and Steven C. Walske (the "Executive"), and
   amends and restates the Agreement dated June 20, 1990, as amended, between
   the Company and the Executive. 

      WHEREAS, effective March
   1, 2000, the Executive is the Chairman of the Board and Chief Business
   Strategist of the Company; and

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

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

      1.     
   Termination Notice. The Company agrees that it may not terminate the
   employment of the Executive unless it does so for Cause (as defined below)
   by delivering to the Executive a written notice of such termination of
   employment (the "Termination Notice").

      2.     
   Salary.

           
       (a)      In the event that
   a Change in Status (as defined below) of the Executive occurs prior to a
   Termination Notice, the Company and the Executive shall enter into a
   five-year Employment Agreement in the form attached hereto as Exhibit A, and
   the Company shall have no obligation to make any payments to the Executive
   under this Agreement; provided, however, that in the event that the
   Executive remains employed with the Company for a period of six months
   following the effective date of a Change in Status, the Company shall pay to
   the Executive on such six-month anniversary date a one-time amount equal to
   the most recent fiscal year end bonus paid to the Executive. For purposes of
   this Agreement, "fiscal year end bonus" shall include all amounts
   paid to the Executive under any bonus plans or programs of the Company with
   respect to his services to the Company in the preceding fiscal
   year.

           
       (b)      In the event of a
   termination for Cause, the Executive's salary and benefits shall cease at the time of
   such termination.

      3.     
   Stock Options.

           
       (a)      Effective upon (i)
   a Change in Control (as defined below) of the Company or (ii) the death or
   Disability (as defined below) of the Executive, all stock options granted to
   the Executive and then outstanding under any Stock Option Plan (as defined
   below) of the Company shall become exercisable in full, notwithstanding any
   vesting schedule or other provisions to the contrary in the agreements
   evidencing such options; and the Company and the Executive hereby 

 -1-
 agree that such option agreements are hereby and will be deemed amended to
   give effect to this provision.

           
       (b)      Effective upon a
   termination by the Company of the Executive's employment for Cause, each
   vested stock option under any Stock Option Plan that is held by the
   Executive on the date of termination of the Executive's employment, to the
   extent not previously exercised at the date of such termination, shall
   expire to the extent not exercised within ten (10) days after the date of
   such termination. All non-vested stock options shall terminate on the date
   of such termination.

           
       (c)      Effective upon a
   Change in Status, the terms of the Employment Agreement attached hereto as
   Exhibit A shall apply.

      4.     
   Definitions.

           
       (a)      The Company shall
   be deemed to have terminated the Executive's employment for
   "Cause" if it does so (i) for willful conduct or gross negligence
   by the Executive which is demonstrably and materially injurious to the
   Company, or (ii) for the Executive's willful violation of any material
   provision of any confidentiality, nondisclosure, assignment of invention,
   noncompetition or similar agreement entered into by the Executive in
   connection with his employment by the Company. For purposes of this
   paragraph, no act or failure to act on the Executive's part shall be deemed
   "willful" unless done or omitted to be done by the Executive not
   in good faith and without reasonable belief that his action or omission was
   in the best interests of the Company.

           
       (b)      A "Change in
   Control" of the Company shall mean the occurrence of any of the
   following events: (i) any "person", as such term is used in
   Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
   (the "Exchange Act") (other than the Company, any trustee or other
   fiduciary holding securities under an employee benefit plan of the Company,
   or any corporation owned directly or indirectly by the stockholders of the
   Company in substantially the same proportion as their ownership of stock of
   the Company) is or becomes the "beneficial owner" (as defined in
   Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
   the Company representing 50% or more of the combined voting power of the
   Company's then outstanding securities (other than as a result of
   acquisitions of such securities from the Company); (ii) individuals who, as
   of the date hereof, constitute the Board of Directors of the Company (the
   "Incumbent Board") cease for any reason to constitute at least a
   majority of the Board, provided that any person becoming a director
   subsequent to the date hereof whose election, or nomination for election by
   the Company's stockholders, was approved by a vote of at least a majority of
   the directors then comprising the Incumbent Board (other than an election or
   nomination of an individual whose initial assumption of office is in
   connection with an actual or threatened election contest relating to the
   election of the directors of the Company) shall be, for purposes of this
   Agreement, considered to be a member of the Incumbent Board; (iii) the
   stockholders of the Company approve a merger or consolidation of the Company
   with any other corporation, other than (A) a merger or consolidation which
   would result in the voting securities of the Company outstanding immediately
   prior thereto continuing to represent (either by remaining outstanding or by
   being converted into voting securities of the surviving entity) more than
   50% of the combined

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 voting power of the voting securities of the Company or such surviving entity
   outstanding immediately after such merger or consolidation or (B) a merger
   or consolidation effected to implement a recapitalization of the Company (or
   similar transaction) in which no "person" (as defined above)
   acquires more than 20% of the combined voting power of the Company's then
   outstanding securities; or (iv) the stockholders of the Company approve a
   plan of complete liquidation of the Company or an agreement for the sale or
   disposition by the Company of all or substantially all of the Company's
   assets.

           
       (c)      "Change in
   Status" of the Executive shall mean (i) the Company's written notice to
   the Executive of a Change in Status (which may be effected at any time and
   for any reason in the Company's sole discretion), after approval by the
   Board of Directors of the Company, or (ii) the Executive's written notice to
   the Company of a Change in Status, based on the Executive's good faith
   belief that any of the following circumstances have occurred: any diminution
   or change in a manner adverse to the Executive of (A) his title, office or
   position with the Company, (B) his salary or other benefits, or (C) his
   duties, responsibilities or employment condition. The Executive may not
   effect a Change in Status pursuant to subsection (ii)(C) of this paragraph
   prior to one year from the date hereof.

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

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

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

      6.     
   Successors.

           
       (a)      This Agreement is
   personal to the Executive and without the prior written consent of the
   Company shall not be assignable by the Executive otherwise than by will or
   the laws of descent and distribution.

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

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

 -3-

      7.     
   Miscellaneous.

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

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

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

           
       If to the Company: 

           
       Parametric Technology Corporation
 

           
       128 Technology Drive
 

           
       Waltham, MA 02453
 

           
       Attention: General Counsel 

           
       If to the Executive:

           
       Steven C. Walske
 

           
       164 Chestnut Hill Road
 

           
       Chestnut Hill, MA 02167

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

      EXECUTED as of the date
   first written above. 

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

   President and Chief Executive Officer 
	 	 	 
	 	 	/s/ Steven C. Walske
	 	 	 
 
	 	 	Steven C. Walske
	 	 	 

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 EXHIBIT A

 EMPLOYMENT AGREEMENT 

      This Employment Agreement
   ("Agreement") is entered into as of [..........] (the
   "Effective Date") by and between Parametric Technology Corporation
   (the "Company"), a Massachusetts corporation with its principal
   place of business at 128 Technology Drive, Waltham, Massachusetts 02453 and
   Steven C. Walske (the "Executive"), residing at 164 Chestnut Hill
   Road, Chestnut Hill, MA 02467.

 RECITALS

      WHEREAS, the Executive
   has resigned his position as Chairman of the Board and Chief Business
   Strategist effective as of the close of business on [..........]; and
   

      WHEREAS, the Company
   desires to continue to employ the Executive in the new position of
   [..........], under the terms and conditions set forth below, effective
   immediately. 

      NOW, THEREFORE, in
   consideration of the foregoing recitals, the mutual promises and covenants
   contained herein, and other good and valuable consideration, the receipt and
   sufficiency of which are hereby acknowledged, the Company and the Executive
   hereby agree as follows:

 ARTICLE I
 

 EMPLOYMENT

      The Company hereby agrees
   to continue to employ the Executive and the Executive hereby agrees to serve
   the Company in the position of [..........] and to perform such specific
   duties as may reasonably be assigned to the Executive from time to time by
   the Chief Executive Officer of the Company for the period commencing on the
   Effective Date and terminating on [..........], unless earlier terminated as
   provided herein (the "Employment Period").

 ARTICLE II
 

 COMPENSATION

      For services to be
   rendered by the Executive to the Company pursuant to this Agreement, during
   the Employment Period the Company shall pay to the Executive the
   compensation and provide to the Executive the benefits set forth
   below:

       (i)     
   Salary: The Company shall pay to the Executive, a bi-weekly salary in
   the gross amount of $18,461.50.

      (ii)     
   Executive Benefits: In addition, (A) the Company shall provide to
   the

 -5-
 Executive benefits under the Company's standard benefit plans pursuant to the
   same terms and conditions under which the Company makes such benefits
   available to Executives generally, including health insurance, dental
   insurance, life insurance, and short-term and long-term disability coverage,
   and (B) the Executive shall remain eligible to participate in the Company's
   401(k) Savings Plan and 2000 Employee Stock Purchase Plan, as well as the
   Company's 1987 Incentive Stock Option Plan, 1997 Nonstatutory Stock Option
   Plan and 2000 Equity Incentive Plan (the "Option Plans"), all
   subject to the terms and conditions of the respective plans.

 

 ARTICLE III
 

 TERMINATION

      3.1     
   For Cause. The Executive may be terminated from his employment by the
   Company only for "Cause." "Cause" shall mean, for
   purposes of this Agreement, (i) willful conduct or gross negligence by the
   Executive which is demonstrably and materially injurious to the Company,
   (ii) the Executive's willful violation of Articles VI or VII hereof, and/or
   (iii) the Executive's becoming a full-time employee with another company;
   provided, however that the Executive shall be permitted to provide
   consulting services to entities other than the Company so long as such
   services are provided in a manner consistent with this Agreement. 

      3.2     
   Without Cause. The Executive may terminate his employment by the
   Company without cause by providing to the Company fourteen days' prior
   written notice of such termination.

      3.3     
   Death. In the event of the death of the Executive during the term
   hereof, the Executive's employment shall automatically terminate as of the
   date of his death.

 ARTICLE IV
 

 EFFECT OF TERMINATION

      4.1     
   For Cause. Upon termination of the Executive's employment for Cause,
   the Executive's salary and benefits specified in Article II shall cease at
   the time of such termination, provided that the Company shall pay to the
   Executive, within twenty (20) days after the date of such termination, all
   amounts accrued under clause (i) of Article II as of the date of such
   termination. Each vested stock option under the Option Plans that is held by
   the Executive on the date of termination of the Executive's employment, to
   the extent not previously exercised at the date of such termination, shall
   expire to the extent not exercised within ten (10) days after the date of
   such termination. All non-vested stock options shall terminate on the date
   of such termination.

      4.2     
   Without Cause. In the event that the Executive terminates his
   employment with the Company without Cause, the Executive's salary and
   benefits specified in Article II shall cease on the date of termination of
   Executive's employment, provided that the Company shall pay to the
   Executive, within twenty (20) days after the date of such termination, all
   amounts

 -6-
 accrued under clause (i) of Article II as of the date of such termination.
   Each vested stock option under the Option Plans that is held by the
   Executive on the date of termination of the Executive's employment, to the
   extent not previously exercised at the date of such termination, shall
   expire to the extent not exercised within ten (10) days after the date of
   such termination. All non-vested stock options shall terminate on the date
   of such termination.

      4.3     
   Death. Upon termination of the Executive's employment due to the
   Executive's death, the Executive's salary and benefits specified in Article
   II shall cease at the time of such termination, provided that the Company
   shall pay to the Executive's estate, within twenty (20) days after the date
   of such termination, all amounts then accrued under Article II, clause (i)
   hereof. Effective upon the termination of Executive's employment, all
   outstanding stock options under the Option Plans that are held by the
   Executive shall become exercisable in full, notwithstanding any vesting
   schedule or other provisions to the contrary in the agreements evidencing
   such options; and the Company and the Executive hereby agree that such
   option agreements are hereby amended to give effect to this
   provision.

      4.4     
   Expiration of Employment Period. Upon expiration of the Employment
   Period, the Executive's salary and benefits specified in Article II shall
   cease, provided that the Company shall pay to the Executive, within twenty
   (20) days after the date of such expiration, all amounts accrued under
   clause (i) of Article II as of the date of such expiration. Each vested
   stock option under the Option Plans that is held by the Executive on the
   date of expiration of the Employment Period, to the extent not previously
   exercised as of the date of expiration of the Employment Period, shall
   expire to the extent not exercised within ten (10) days after the date of
   expiration of the Employment Period. All non-vested stock options shall
   terminate on the date of expiration of the Employment Period.
   

  ARTICLE V
 

 CHANGE IN CONTROL

      5.1     
   Change in Control Defined. A "Change in Control" of the
   Company shall mean the occurrence of any of the following events: (i) any
   "person", as such term is used in Sections 13(d) and 14(d) of the
   Securities Exchange Act of 1934, as amended (the "Exchange Act")
   (other than the Company, any trustee or other fiduciary holding securities
   under an employee benefit plan of the Company, or any corporation owned
   directly or indirectly by the stockholders of the Company in substantially
   the same proportion as their ownership of stock of the Company) is or
   becomes the "beneficial owner" (as defined in Rule 13d-3 under the
   Exchange Act), directly or indirectly, of securities of the Company
   representing 50% or more of the combined voting power of the Company's then
   outstanding securities (other than as a result of acquisitions of such
   securities from the Company); (ii) individuals who, as of the date hereof,
   constitute the Board of Directors of the Company (the "Incumbent
   Board") cease for any reason to constitute at least a majority of the
   Board, provided that any person becoming a director subsequent to the date
   hereof whose election, or nomination for election by the Company's
   stockholders, was approved by a vote of at least a majority of the directors
   then comprising the Incumbent Board (other than an election or nomination of
   an individual whose initial assumption of office is in connection with an
   actual or threatened election contest relating to the election of the
   directors of the Company) shall be, for 

 -7-

 
 purposes of this Agreement, considered to be a member of the Incumbent Board;
   (iii) the stockholders of the Company approve a merger or consolidation of
   the Company with any other corporation, other than (A) a merger or
   consolidation which would result in the voting securities of the Company
   outstanding immediately prior thereto continuing to represent (either by
   remaining outstanding or by being converted into voting securities of the
   surviving entity) more than 50% of the combined voting power of the voting
   securities of the Company or such surviving entity outstanding immediately
   after such merger or consolidation or (B) a merger or consolidation effected
   to implement a recapitalization of the Company (or similar transaction) in
   which no "person" (as defined above) acquires more than 20% of the
   combined voting power of the Company's then outstanding securities; or (iv)
   the stockholders of the Company approve a plan of complete liquidation of
   the Company or an agreement for the sale or disposition by the Company of
   all or substantially all of the Company's assets.

      5.2     
   Effect of a Change in Control. Effective upon a Change in Control of
   the Company, all stock options granted to the Executive and then outstanding
   under any Option Plan shall become exercisable in full, notwithstanding any
   vesting schedule or other provisions to the contrary in the agreements
   evidencing such options; and the Company and the Executive hereby agree that
   such option agreements are hereby and will be deemed amended to give effect
   to this provision.

 ARTICLE VI
 

 NON-DISPARAGEMENT

      During the Employment
   Period and thereafter, the Executive agrees to refrain from making any
   disparaging remarks about the Company, its officers, employees, customers,
   business partners or products. The provisions of this Article shall survive
   the termination or expiration of this Agreement.

 ARTICLE VII
 

 COMPLIANCE WITH EXISTING AGREEMENT

      The Executive agrees to
   be bound by all of the terms and conditions contained in that certain
   Non-Competition, Non-Disclosure and Inventions Agreement signed by the
   Executive on or about December 1, 1986, by and between the Company and the
   Executive (the "1986 Agreement"), a copy of which is attached
   hereto and which is incorporated herein by reference.

 ARTICLE VIII
 

 SUCCESSORS AND ASSIGNS

      8.1     
   Assignment. This Agreement is personal to the Executive and shall not
   be assignable by the Executive.

      8.2     
   Binding Effect. This Agreement shall inure to the benefit of and be
   binding upon the Company and its successors and assigns. 

      8.3     
   Obligations of Successor. The Company will require any successor
   (whether direct or indirect, by purchase, merger, consolidation or
   otherwise) to all or substantially all of 

 -8-

 
 the business and/or assets of the Company to assume expressly and agree to
   perform this Agreement in the same manner and to the same extent that the
   Company would be required to perform it if no such succession had taken
   place. As used in this Agreement, "Company" shall mean the Company
   as defined above and any successor to its business and/or assets as
   aforesaid which assumes and agrees to perform this Agreement.

 ARTICLE IX
 

 MISCELLANEOUS

      9.1      No
   Representations. The Executive represents and acknowledges that in
   executing this Agreement the Executive does not rely and has not relied upon
   any representation or statement not set forth herein made by the Company or
   by the Company's agents, representatives, or attorneys with regard to the
   subject matter, basis or effect of the Agreement or otherwise.

      9.2     
   Governing Law. This Agreement and any and all litigation that may
   arise as a result of, based upon, or in connection with this Agreement shall
   be brought exclusively before a court in Cambridge or Boston, Massachusetts
   and be governed by and construed in accordance with the laws of The
   Commonwealth of Massachusetts, without reference to principles of conflict
   of laws.

      9.3     
   Amendment. This Agreement may not be amended or modified otherwise
   than by a written agreement executed by the parties hereto or their
   respective successors and legal representatives.

      9.4     
   Counterparts. This Agreement may be executed in one or more
   counterparts, any one of which shall be deemed to be the original even if
   the others are not produced.

      9.5     
   Notices. All notices hereunder shall be in writing and shall be
   delivered by hand delivery, by a reputable overnight courier service, or by
   registered or certified mail, return receipt requested, postage prepaid, to
   the parties at their respective addresses set forth above or at such other
   address as either party shall have furnished to the other in writing in
   accordance herewith. Any notice shall be deemed to be delivered upon the
   date of hand delivery, one day following delivery to such overnight courier
   service, or three days following mailing by registered or certified
   mail.

      9.6     
   Captions. Captions herein have been inserted solely for convenience
   of reference and in no way define, limit or describe the scope or substance
   of any provision of this Agreement.

      9.7     
   Severability. In case any provision hereof shall, for any reason, be
   held to be invalid or unenforceable in any respect, such invalidity or
   unenforceability shall not effect any other provision hereof, and the
   parties agree to substitute for such invalid or unenforceable provision a
   valid and enforceable provision which most clearly approximates the interest
   and economic effect of such invalid or unenforceable provision.

 -9-

      9.8     
   Entire Agreement. This Agreement, the 1986 Agreement and any
   outstanding agreements pursuant to the Option Plans, constitutes the
   entire understanding and agreement between the parties hereto with regard to
   the subject matter hereof, and fully supersedes all prior understandings and
   agreements, whether oral or written.

      IN WITNESS WHEREOF, this
   Agreement has been signed as of the date set forth below.

 	PARAMETRIC TECHNOLOGY CORPORATION	 	THE EXECUTIVE
	 	 	 	 
	 	 	 	 
	By:	 
 	 	 

     
	Name:	 
 	 	Steven C. Walske
	Title:	 
 	 	 

  

 -10-AMENDED & RESTATED SEVERANCE AGREEMENT, HARRISON

 EXHIBIT 10.3

 AMENDED AND RESTATED AGREEMENT

      This Amended and Restated
   Agreement is entered into as of this 10th day of February, 2000 between
   Parametric Technology Corporation, a Massachusetts corporation (the
   "Company"), and C. Richard Harrison (the "Executive"),
   and amends and restates the Agreement dated August 19, 1994, as amended,
   between the Company and the Executive.

      WHEREAS, the Executive is
   the President and Chief Operating Officer of the Company; and

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

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

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

      2.     
   Salary.

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

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

      3.     
   Stock Options. 

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

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

      4.     
   Definitions. 

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

           
       (b)      A "Change in
   Control" of the Company shall mean the occurrence of any of the
   following events: (i) any "person", as such term is used in
   Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
   (the "Exchange Act") (other than the Company, any trustee or other
   fiduciary holding securities under an employee benefit plan of the Company,
   or any corporation owned directly or indirectly by the stockholders of the
   Company in substantially the same proportion as their ownership of stock in
   the Company) is or becomes the "beneficial owner" (as defined in
   Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
   the Company representing 50% or more of the combined voting power of the
   Company's then outstanding securities (other than as a result of
   acquisitions of such securities from the Company); (ii) individuals who, as
   of the date hereof, constitute the Board of Directors of the Company (the
   "Incumbent Board") cease for any reason to constitute at least a
   majority of the Board, provided that any person becoming a director
   subsequent to the date hereof whose election, or nomination for election by
   the Company's stockholders, was approved by a vote of at least a majority of
   the directors then comprising the Incumbent Board (other than an election or
   nomination of an individual whose initial assumption of office is in
   connection with an actual or threatened election contest relating to the
   election of the directors of the Company) shall be, for purposes of this
   Agreement, considered to be a member of the Incumbent Board; (iii) the
   stockholders of the Company approve a merger or consolidation of the Company
   with any other corporation, other than (A) a merger or consolidation which
   would result in the voting securities of the Company

 -2-
 outstanding immediately prior thereto continuing to represent (either by
   remaining outstanding or by being converted into voting securities of the
   surviving entity) more than 50% of the combined voting power of the voting
   securities of the Company or such surviving entity outstanding immediately
   after such merger or consolidation or (B) a merger or consolidation effected
   to implement a recapitalization of the Company (or similar transaction) in
   which no "person" (as defined above) acquires more than 20% of the
   combined voting power of the Company's then outstanding securities; or (iv)
   the stockholders of the Company approve a plan of complete liquidation of
   the Company or an agreement for the sale or disposition by the Company of
   all or substantially all of the Company's assets.

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

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

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

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

      6.     
   Successor.

           
       (a)      This Agreement is
   personal to the Executive and without the prior written consent of the
   Company shall not be assignable by the Executive otherwise than by will or
   the laws of descent and distribution.

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

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

      7.     
   Miscellaneous.

 -3-

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

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

           
        (c)      This
   Agreement constitutes the entire understanding and agreement between the
   parties hereto with regard to the subject matter hereof, superseding all
   prior understandings and agreements, whether oral or written, including
   without limitation that certain agreement dated as of June 20, 1990 and
   amended as of the 15th day of June 1993 between the Company and the
   Executive which agreement shall be of no force or effect during the term of
   this Agreement.

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

           
        If to the Company:
 

           
        Parametric Technology Corporation
 

              
       128 Technology Drive
 

              
       Waltham, MA 02453
 

              
       Attention: Corporate Counsel 

           
        If to the Executive
 

           
        C. Richard Harrison
 

              
       15 Claridge Drive
 

              
       Weston, MA 02193

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

 EXECUTED as of the date first written above.

 
 	 	PARAMETRIC TECHNOLOGY CORPORATION
	 	 	 
	 	By:	/s/ Steven C. Walske 
	 	 	 
 
	 	 	Steven C. Walske
   

   Chairman of the Board
   

   and Chief Executive Officer
	 	 	 
	 	 	/s/ C. Richard Harrison
	 	 	 
 
	 	 	C. Richard Harrison

  

 -4-

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