EXHIBIT 1.1
AMENDED AND RESTATED
CONSULTING AGREEMENT
This Amended and Restated Consulting Agreement, dated as of July 28, 2005
(hereinafter "Agreement") is between Parametric Technology Corporation, a
Massachusetts corporation, having its principal business address at 000 Xxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter "PTC"), and Xxxxxxx X. Xxxxxx,
an individual affiliated with Harvard Business School, Soldier's Xxxxx Xxxx,
Xxxxxx Xxxxx, Xxxxxx, XX 00000 (hereinafter "Consultant").
PRELIMINARY STATEMENT
PTC and Consultant are parties to a Consulting Agreement effective as of
November 1995, which agreement has been amended by amendments dated May 15,
1997, January 6, 1998, July 20, 1998, February 11, 1999, February 10, 2000,
September 14, 2000, May 16, 2001 and December 31, 2002 (as so amended, the
"Original Consulting Agreement"). Pursuant to the Original Consulting Agreement,
Consultant has participated in preparing and presenting a series of executive
management seminars sponsored by PTC. In consideration for those services, PTC
has granted consultant options with respect to an aggregate of 364,000 shares of
PTC common stock, $.01 par value per share, of which options with respect to an
aggregate of 214,000 shares have not been exercised or terminated and remain
outstanding, each outstanding option being for a number of shares and with an
exercise price and expiration date as set forth on Appendix A attached hereto.
PTC and Consultant now desire to further amend the Original Consulting Agreement
to provide for Consultant to provide additional services to PTC in consideration
for the compensation set forth herein and, in connection therewith, to amend and
restate the Original Consulting Agreement in its entirety.
ARTICLE 1
TERM AND TERMINATION
1.1 Term. This Agreement will remain in full force and effect unless
and until terminated in accordance with the provisions of Section 1.2 hereof.
1.2 Termination of Agreement.
(a) By Consultant. Consultant may, at his sole option, terminate this
Agreement, at any time, upon thirty (30) days' advance written notice to PTC.
(b) By PTC. PTC may terminate this Agreement for Cause (as defined
below), effective immediately upon notice to Consultant that, in the good faith
judgment of the Board, (1) an event constituting Cause for termination has
occurred, and (2) either Consultant had a reasonable opportunity to take
remedial action but failed or refused to do so, or an opportunity to take
remedial action would not have been meaningful or appropriate under the
circumstances. For purposes of this Section 1.2, "Cause" shall mean: (i)
Consultant willfully commits an act of dishonesty or breach of trust, or
willfully acts in a manner which is inimical or injurious to the business or
interest of PTC, (ii) Consultant willfully violates or breaches any of the
provisions of this Agreement and such violation or breach results in
demonstrable injury to PTC and has not been remedied within thirty (30) days of
receipt of written notice of such violation or breach, (iii) Consultant's act or
omission to act results in or is intended to result in gain to or personal
enrichment of Consultant at PTC's expense, or (iv) Consultant is convicted of a
felony or any crime involving larceny, embezzlement or moral turpitude.
1.3 Effect of Termination.
(a) Services. Upon termination of this Agreement the Consultant shall
be relieved of performing the Services set forth below, except for such
engagements that have already been scheduled prior to the termination date.
(b) Equity Awards. With respect to stock options granted (both
previously or hereafter) by PTC to Consultant as compensation for Services
provided hereunder (each an "Option" and collectively the "Options"), (i) to the
extent exercisable at the date of such termination, Options may not be exercised
as to any shares after the expiration of seven (7) months from the date of such
termination, and (ii) to the extent not exercisable at the date of such
termination, Options shall be canceled as to any such shares effective on the
date of such termination (in both cases in accordance to the Exercisability
Schedule contained within the stock option agreement governing the respective
Option). With respect to restricted stock awards granted by PTC to Consultant as
compensation for Services provided hereunder (each a "Restricted Stock Award"
and collectively the Restricted Stock Awards"), to the extent the Vesting
Criteria contained within the restricted stock agreement governing the
respective Restricted Stock Award has not been satisfied on the date of such
termination, the Restricted Stock Award shall be forfeited and returned to PTC
in accordance with the terms of such Restricted Stock Award.
1.4 Survival. In the event of any termination of this Agreement,
Articles 5 and 6 hereof shall survive and continue in effect.
ARTICLE 2
INDEPENDENT CONTRACTOR STATUS
It is the intention of the parties that Consultant be an independent
contractor and not an employee, agent, joint venturer, or partner of PTC.
Nothing in this Agreement shall be interpreted or construed as creating or
establishing the relationship of employer and employee between PTC and either
Consultant or any employee or agent of Consultant. Consultant shall retain the
right to perform work for others during the terms of this Agreement, provided
such work does not otherwise violate the provisions of Article 5 of this
Agreement. PTC shall retain the right to cause work of the same or a different
kind to be performed by its own personnel or other contractors during the term
of this Agreement.
ARTICLE 3
SERVICES TO BE PERFORMED BY CONSULTANT
3.1 Services. Consultant is engaged to provide the following consulting
services (the "Services") to PTC in connection with strategic initiatives with
respect to PTC's business and its products:
(a) Strategic Planning Services. Strategic planning sessions with PTC
executives, with such sessions to be on a quarterly basis or at such intervals
as mutually agreed from time to time.
(b) Executive Management Seminars. Consultant will assist PTC in the
development of and participate in executive management seminars sponsored by PTC
as mutually agreed from time to time.
3.2 Oversight. PTC and Consultant will mutually determine the methods
and means Consultant will use to perform the services to be carried out for PTC.
ARTICLE 4
COMPENSATION AND EXPENSES
4.1 Compensation. For the strategic planning Services described in
Section 3.1(a) above, PTC shall issue to Consultant a one-time grant of 100,000
shares of PTC's common stock, $.01 par value per share, as an award of
restricted stock pursuant to PTC's 2000 Equity Incentive Pan, the restrictions
on which shall lapse in three equal annual installments as set forth in the
Restricted Stock Agreement dated July 28, 2005, and attached hereto as Appendix
B.
For executive management seminars in which Consultant assists in preparation and
participates from time to time after the date of this Agreement, PTC shall pay
Consultant a fee of $15,000 for each such executive management seminar.
Consultant shall have sole responsibility for payment of all federal, state and
local taxes or contributions imposed or required under unemployment insurance,
social security and income tax laws and for filing all required tax forms with
respect to any amounts paid by PTC to Consultant hereunder.
PTC makes no representation, warranty or covenant with respect to the equity
awards previously or hereafter provided hereunder or PTC's common stock.
Consultant understands, acknowledges and agrees that he may never realize any
value from such equity awards, which constitute the only compensation payable
hereunder for strategic planning Services as described in Section 3.1(a)
hereafter provided, and that any value that he may realize on such equity awards
will be directly tied to performance of PTC's common stock, which performance is
not guaranteed or warranted by PTC.
4.2 Expenses. PTC shall reimburse Consultant for all reasonable,
out-of-pocket expenses incurred by Consultant in connection with the performance
of the services hereunder by providing PTC with a written request for
reimbursement accompanied by such written documentation as may be reasonably
requested by PTC to support the amount and validity of such expense.
ARTICLE 5
CONFIDENTIALITY AND INTELLECTUAL PROPERTY RIGHTS
5.1 Confidentiality. Consultant shall maintain in strict confidence,
and shall use and disclose only as authorized by PTC, all information of a
competitively sensitive or proprietary nature that he receives in connection
with the work performed for PTC hereunder. Consultant agrees that, by its
nature, the services to be performed hereunder, and any information gathered or
compiled in connection therewith, is of a competitively sensitive nature which
must be maintained in the strictest of confidence. These restrictions shall not
be construed to apply to (1) information generally available to the public; (2)
information released by PTC generally without restriction; (3) information
independently developed or acquired by Consultant without reliance in any way on
other protected information of PTC; or (4) information approved in advance in
writing for the use and disclosure of Consultant without restriction.
Notwithstanding the foregoing restrictions, Consultant may use and disclose any
information (a) to the extent required by an order of any court or other
governmental authority or (b) as necessary for him to protect his interest in
this Agreement, but in each case only after PTC has been so notified in advance
in writing and has had the opportunity, if possible, to obtain reasonable
protection for such information in connection with such disclosure.
5.2 Ownership of Work Product. The reports, writings, documents and
other work product that Consultant produces during the course of performing the
services under this Agreement (collectively, the "Work Product") shall belong to
PTC and shall, to the extent possible, be considered a work made for hire for
PTC within the meaning of Title 17 of the United States Code. PTC shall have a
copyright in all such Work Product and Consultant shall take such actions as may
be reasonably requested by PTC to vest in PTC all rights of ownership in such
copyright(s).
ARTICLE 6
GENERAL PROVISIONS
6.1 Notices. Any notices to be given hereunder by either party to the
other shall be delivered to the address set forth in the introductory paragraph
of this Agreement and may be effected either by personal delivery in writing or
by mail, registered or certified, postage prepaid with return receipt requested.
Notices delivered personally will be deemed communicated as of actual receipt.
Mailed notices will be deemed communicated as of two days after mailing.
6.2 Entire Agreement of the Parties; Effect of Amendment and
Restatement. This Agreement amends and restates in its entirely the Original
Consulting Agreement and supersedes the Original Consulting Agreement and any
and all other agreements, either oral or written, between the parties hereto
with respect to the rendering of services by Consultant for PTC and contains all
the covenants and agreements between the parties with respect to the rendering
of such services in any manner whatsoever, except that the respective stock
option agreements governing the Options shall remain in full fore and effect in
accordance with their respective terms.
6.3 Partial Invalidity. If any provision in this agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions will nevertheless continue in full force without being
impaired or invalidated in any way.
6.4 Parties in Interest. This Agreement is enforceable only by
Consultant and PTC. The terms of this Agreement are not a contract or assurance
regarding compensation, continued employment, or benefit of any kind to
Consultant, or any beneficiary of Consultant, and neither Consultant, nor any
such beneficiary thereof, shall be a third-party beneficiary under or pursuant
to the terms of this Agreement.
6.5 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts.
6.6 Successors. This Agreement shall inure to the benefit of, and be
binding upon, Consultant and PTC, and their permitted successors and assigns.
This Agreement, and the rights and obligations hereunder, may not be assigned,
nor may the duties be delegated by Consultant. PTC may assign this Agreement,
and the rights and obligations hereunder, and may delegate the duties, to any
entity that controls, is controlled by, or is under common control with PTC, or
to any purchaser or other transferee of all or substantially all of PTC's assets
or business.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
CONSULTANT PARAMETRIC TECHNOLOGY CORPORATION
By: /s/ C. Xxxxxxx Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxx -----------------------------------
--------------------------------- Name: C. Xxxxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxx Title: Chief Executive Officer &
President
APPENDIX A
All of the options identified below are fully exercisable as of the date of this
Agreement.
-------------------- ------------------- ------------------- -------------------
Grant Date Expiration Date Exercise Price Shares
-------------------- ------------------- ------------------- -------------------
11/17/95 (1) 11/17/05 $16.750 16,000
-------------------- ------------------- ------------------- -------------------
5/15/97 (2) 5/15/07 $24.00 50,000
-------------------- ------------------- ------------------- -------------------
1/6/98 (2) 1/6/08 $24.1563 48,000
-------------------- ------------------- ------------------- -------------------
7/20/98 (2) 7/20/08 $14.5625 30,000
-------------------- ------------------- ------------------- -------------------
9/14/00 (2) 9/14/05 $13.1875 20,000
-------------------- ------------------- ------------------- -------------------
5/16/01 (3) 5/16/06 $13.00 20,000
-------------------- ------------------- ------------------- -------------------
9/19/02 (3) 9/19/07 $2.10 30,000
-------------------- ------------------- ------------------- -------------------
(1) Indicates option granted pursuant to PTC's 1987 Incentive Stock Option Plan
and subject to the terms and conditions set forth in the form of nonstatutory
stock option certificate adopted in connection with said Plan in February 1987
by PTC's Board of Directors for awards of nonstatutory stock options under such
plan.
(2) Indicates option granted pursuant to PTC's 1997 Incentive Stock Option Plan
and subject to the terms and conditions set forth in the form of nonstatutory
stock option certificate adopted in connection with said plan on November 14,
1996 by PTC's Board of Directors for awards of nonstatutory stock options under
such plan.
(3) Indicates option granted pursuant to PTC's 2000 Equity Incentive Plan and
subject to the terms and conditions set forth in the form of nonstatutory stock
option certificate adopted on February 10, 2000 by PTC's Board of Directors for
awards of nonstatutory stock options under such plan.
APPENDIX B
PARAMETRIC TECHNOLOGY CORPORATION
2000 Equity Incentive Plan
Restricted Stock Agreement
--------------------------------------------------------------------------------
Grantee: Xxxxxxx X. Xxxxxx Date: July 28, 2005
Number of Shares of Restricted Stock: 100,000
Vesting Criteria:
as to 33,334 shares on July 28, 2006;
as to 33,333 shares on July 28, 2007; and
as to 33,333 shares on July 28, 2008.
--------------------------------------------------------------------------------
AGREEMENT dated as of the date set forth above between
Parametric Technology Corporation, a Massachusetts corporation (the "Company"),
and the undersigned (the "Grantee"), pursuant to the Company's 2000 Equity
Incentive Plan (the "Plan"), receipt of a copy of which is hereby acknowledged
by the Grantee. Capitalized terms used and not otherwise defined in this
Agreement have the meanings given to them in the Plan.
WHEREAS the Grantee is a director of the Company and the
Company desires to reward such individual for his or her services rendered to
the Company by affording him or her the opportunity to acquire, or increase, his
or her stock ownership in the Company.
NOW, THEREFORE, in consideration of the premises, the parties
hereto mutually covenant and agree as follows:
Grant of Restricted Stock. Pursuant to the Plan and subject to
the restrictions and the terms and conditions set forth therein, which terms and
conditions are incorporated herein by reference, and in this Agreement, the
Company grants to the Grantee and the Grantee accepts the number of shares of
Common Stock, $0.01 par value, of the Company set forth above (the "Restricted
Stock"). The term "Restricted Stock" shall include any additional shares of
stock of the Company issued on account of the foregoing shares by reason of
stock dividends, stock splits or recapitalizations (whether by way of mergers,
consolidations, combinations or exchanges of shares or the like).
Restrictions on Stock.
Until the termination of restrictions as provided in
Section 3 hereof, the Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered except as provided in this Agreement.
No rights or interests of the Grantee under this
Agreement or under the Plan may be assigned, encumbered or transferred other
than (i) to the extent permitted and in accordance with such procedures adopted
by the Committee from time to time and (ii) by will or the laws of descent and
distribution. The naming of a Designated Beneficiary does not constitute a
transfer.
If the Grantee ceases to serve as a director of the
Company for any reason (voluntary or involuntary), in the absence of any other
provisions prescribed in the vote granting any Restricted Stock under the Plan
or thereafter, such Restricted Stock, to the extent remaining subject to
restrictions, shall immediately be forfeited to the Company subject to the
Company reimbursing the consideration (if any) paid for the Restricted Stock to
the Non-Employee Director or to such person(s) to whom the Non-Employee
Director's rights pass by will or by the applicable laws of descent and
distribution in the case the Non-Employee Director ceases to serve as a director
of the Company by reason of his or her death.
Termination of Restrictions. The shares of Restricted Stock
shall be divided into the number of separate parts set forth above under
"Vesting Criteria," and the restrictions set forth in Section 2 hereof shall
terminate in accordance with such Vesting Criteria (with any fractional share
resulting being added to the next part), so that the restrictions on all such
shares shall have terminated when all Vesting Criteria have been met, if at all.
The achievement of any of the Vesting Criteria (other than the passage of time)
shall be determined by the Committee in its sole discretion.
Rights as Stockholder. Except for the restrictions and other
limitations and conditions provided in this Agreement, the Grantee as owner of
the Restricted Stock shall have all the rights of a stockholder, including but
not limited to the right to receive all dividends paid on such Restricted Stock
and the right to vote such Restricted Stock.
Stock Certificates. Each certificate issued for shares of
Restricted Stock shall be registered in the name of the Grantee and deposited by
the Grantee, together with a stock power endorsed in blank, with the Company and
shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms, conditions
and restrictions (including forfeiture) contained in a Plan
and an Agreement between the registered owner and Parametric
Technology Corporation. A copy of such Plan and Agreement will
be furnished to the holder of this certificate upon written
request and without charge."
Upon the termination of the restrictions imposed under this
Agreement as to any shares of Restricted Stock, the Company shall return to the
Grantee (or to such Grantee's legal representative, beneficiary or heir)
certificates, without a legend, for the shares of Common Stock deposited with it
pursuant to this Section 5 as to which the restrictions have terminated.
Tax Withholding. The Grantee shall pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld with respect to the Restricted Stock no later than the date
of the event creating the tax liability. The Company and its Affiliates may, to
the extent permitted by law, deduct any such tax obligations from any payment of
any kind due to the Grantee. In the Committee's discretion, the minimum tax
obligations required by law to be withheld with respect to the Restricted Stock
may be paid in whole or in part in shares of Common Stock valued at their Fair
Market Value on the date of delivery.
Securities and Other Laws. It shall be a condition to the
Grantee's right to receive the shares of Restricted Stock hereunder that the
Company may, in its discretion, require (a) that the shares of Restricted Stock
shall have been duly listed, upon official notice of issuance, upon any national
securities exchange or automated quotation system on which the Company's Common
Stock may then be listed or quoted, (b) that either (i) a registration statement
under the Securities Act of 1933, as amended (the "Act"), with respect to the
shares shall be in effect, or (ii) in the opinion of counsel for the Company,
the proposed issuance and delivery of the shares to the Grantee shall be exempt
from registration under the Act and the Grantee shall have made such
undertakings and agreements with the Company as the Company may reasonably
require, and (c) that such other steps, if any, as counsel for the Company shall
consider necessary to comply with any law applicable to the issue of such shares
by the Company shall have been taken by the Company or the Grantee, or both. The
certificates representing the shares of Restricted Stock may contain such
legends as counsel for the Company shall consider necessary to comply with any
applicable law.
Adjustment in Provisions. In the event that there are any
changes in the outstanding Common Stock of the Company by reason of stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares or other such
transaction affecting the Company's Common Stock, the divisions of shares of
Restricted Stock into parts, the provisions for termination of restrictions on
parts of Restricted Stock, and any other relevant portions of this Agreement
shall be appropriately adjusted by the Committee, if necessary, to reflect
equitably such change or changes.
Change in Control. In order to preserve Grantee's rights under
this Agreement in the event of a change in control of the Company (as defined by
the Committee), unless otherwise provided for in the vote granting such
restricted stock, all restrictions remaining on any restricted stock (other than
any restrictions the lapse of which is based on factors other than continued
service) granted to Non-Employee Directors under the Plan shall lapse without
regard to any vesting criteria imposed pursuant to the Plan or any restricted
stock agreement. The Committee in its discretion may at any time take one or
more of the following actions: (i) provide for the acceleration of any time
period relating to the termination of restrictions set forth in Section 2
hereof, (ii) provide for payment to Grantee of cash or other property with a
Fair Market Value equal to the amount that would have been received upon the
termination of restrictions set forth in Section 2 hereof had such restrictions
terminated upon the change in control, provided such amount would not otherwise
have been received by Grantee because of the restrictions set forth in Section
2, (iii) adjust the terms of this Agreement in a manner determined by the
Committee to reflect the change in control, (iv) cause the Agreement to be
assumed, or new rights substituted therefor, by another entity, or (v) make such
other provision as the Committee may consider equitable to Grantee and in the
best interests of the Company.
Notice of Election Under Section 83(b). If the Grantee makes
an election under Section 83(b) of the Internal Revenue Code of 1986, as
amended, and the regulations and rulings promulgated thereunder, he or she will
provide a copy thereof to the Company within thirty days of the filing of such
election with the Internal Revenue Service.
Amendments. The Committee may amend, modify or terminate this
Agreement, including substituting therefor another Award of the same or a
different type, provided that Grantee's consent to such action shall be
required, unless the Committee determines that the action, taking into account
any related action, would not materially and adversely affect Grantee.
Directorship. The Grantee shall not be deemed to have any
rights to continued service as a director of the Company by virtue of the grant
of Restricted Stock. Neither the adoption, maintenance, nor operation of the
Plan nor this Agreement shall confer upon the Grantee any right with respect to
the continuance of his/her directorship of the Company or of any Affiliate.
Decisions by Committee. Any dispute or disagreement that shall
arise under, or as a result of, or pursuant to this Agreement shall be resolved
by the Committee in its absolute and sole discretion, and any such resolution or
any other determination by the Committee under, or pursuant to, this Agreement
and any interpretation by the Committee of the terms of this Agreement or the
Plan shall be final, binding, and conclusive on all persons affected thereby.
Notices. Any notice that either party hereto shall be required
or permitted to give to the other shall be in writing and may be delivered
personally, by facsimile or by mail, postage prepaid, addressed as follows: to
the Company at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000: Attention
Chief Financial Officer (copy to General Counsel, Legal Department), or at such
other address as the Company by notice to the Grantee may designate in writing
from time to time, and to the Grantee at his or her address as shown below or at
such other address as the Grantee, by notice to the General Counsel of the
Company, may designate in writing from time to time.
Copies of the Plan. Copies of the Plan may be obtained by
Grantee upon written request without charge from the General Counsel of the
Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Grantee has hereunto set his
or her hand, all as of the day and year first above written.
PARAMETRIC TECHNOLOGY CORPORATION
By: /s/ C. Xxxxxxx Xxxxxxxx
-------------------------------------------------
Name: C. Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer & President
GRANTEE
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------------------
Xxxxxxx X. Xxxxxx
