EXHIBIT 10.3
------------
AMENDED AND RESTATED AGREEMENT
------------------------------
This Amended and Restated Agreement is entered into as of this 13th day of
February, 1997 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 with 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
-2-
Company); (ii) individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any person becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of the Company) shall be, for purposes of this
Agreement, considered to be a member of the Incumbent Board; (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than (A) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or (B) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no "person" (as defined above) acquires more
than 20% of the combined voting power of the Company's then outstanding
securities; or (iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
(c) A "Change in Status" of the Executive shall mean the occurrence,
without the Executive's written consent, of any of the following circumstances
(unless such circumstances constitute an isolated, insubstantial and inadvertent
action not taken in bad faith and are fully remedied by the Company within 30
days after receipt of notice thereof 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, including
without limitation the 1987 Incentive Stock Option Plan and the 1997 Incentive
Stock Option Plan.
5. Term. This Agreement shall continue in effect until February 13,
----
2000, unless extended by the mutual written consent of the Company and the
Executive.
-3-
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.
-------------
(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 02154
Attention: Corporate Counsel
-4-
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
-5-