UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) October 4, 2004
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Parametric Technology Corporation
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(Exact Name of Registrant as Specified in Its Charter)
Massachusetts
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(State or Other Jurisdiction of Incorporation)
0-18059 04-2866152
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(Commission File Number) (IRS Employer Identification No.)
140 Kendrick Street
Needham, Massachusetts 02494-2714
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(Address of Principal Executive Offices) (Zip Code)
(781) 370-5000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 1 - Registrant's Business and Operations
Item 1.01. Entry into a Material Definitive Agreement
Adoption of Executive Incentive Performance Plan for Fiscal 2005. On October 4,
2004, the Compensation Committee of the Company's Board of Directors adopted an
incentive performance plan for executive officers, including the Company's Chief
Executive Officer, for the 2005 fiscal year. Pursuant to the plan, the Committee
designated for each officer a target cash bonus amount and thresholds for both
revenue and operating margin to be met in fiscal 2005 by the Company or one of
its divisions, as applicable, in order for the bonus to be paid. The executive
officers designated to participate in the plan are: C. Richard Harrison, Chief
Executive Officer & President, Barry F. Cohen, Executive Vice President,
Strategic Services & Partners, Paul J. Cunningham, Executive Vice President,
Sales, Anthony DiBona, Executive Vice President, Maintenance, James E.
Heppelmann, Executive Vice President, Software Solutions and Chief Technology
Officer, Cornelius F. Moses, Executive Vice President and Chief Financial
Officer, and Aaron C. von Staats, Senior Vice President, General Counsel.
Under the plan, an officer's target bonus is split into two halves. With respect
to the first 50%, the Committee determined that no bonus would be paid unless
the Company meets designated minimum revenue and operating margin thresholds
(the "Minimum Performance Metrics"), whereupon the officer would be eligible for
a payout of 20% of the officer's target bonus. The bonus payable would then
increase proportionately up to the full 50% of the respective target bonus if
the Company meets higher revenue thresholds up to a designated threshold (the
"Target Performance Metric").
Payment of the second 50% of an officer's bonus will be determined differently
for two groups of officers. For the Chief Executive Officer, the Chief
Technology Officer, the Chief Financial Officer and the General Counsel, payment
of the second 50% of the target bonus would be contingent upon the Company
meeting both the Minimum Performance Metrics and the Target Performance Metric.
For the Executive Vice President of Sales, the Executive Vice President,
Maintenance and the Executive Vice President, Strategic Services and Partners,
payment of part or all of the second 50% of the officer's respective target
bonus will be contingent upon the Company meeting the Minimum Performance
Metrics and the officer's particular division meeting one or more additional
revenue thresholds.
In order to provide an additional performance incentive, if the Company exceeds
the Target Performance Metric and revenues meet certain additional criteria,
each officer would become eligible for an additional bonus of up to 50% of the
officer's respective target bonus.
The aggregate of the target bonuses for the seven executive officers is
$2,275,000. The aggregate of the additional bonuses that may be paid under the
plan is $1,137,500 (i.e. 50% of the aggregate target bonus).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Parametric Technology Corporation
Date: October 8, 2004 By: /s/ Cornelius F. Moses, III
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Cornelius F. Moses, III
Executive Vice President and
Chief Financial Officer