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) December 7, 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
Amendment of Executive Incentive Performance Plan for Fiscal 2005. On December
7, 2004, the Compensation Committee of the Company's Board of Directors revised
certain terms of the 2005 fiscal year incentive performance plan for executive
officers, including the Company's Chief Executive Officer, which was adopted on
October 4, 2004. 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,
Global Maintenance Support, 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 revised plan, the Committee determined that, as a condition to paying
any bonus under the plan, the Company must meet designated minimum revenue and
operating margin thresholds (the "Minimum Performance Gate"), whereupon the
officers would receive 50% of their target bonuses. The Minimum Performance Gate
under the revised plan is unchanged from the "Target Performance Metric"
approved in October.
In the event the Minimum Performance Gate is achieved, eligibility for payment
of the second 50% of an officer's respective target 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 any portion of the second 50% of the target bonus would be contingent
upon the Company meeting a designated performance goal measured by a revenue
metric (the "Second Performance Gate"). For the Executive Vice President,
Worldwide Sales, the Executive Vice President, Global Maintenance Support and
the Executive Vice President, Strategic Services and Partners, payment of any
portion of the second 50% of the officer's respective target bonus will be
contingent upon the Company meeting both the Second Performance Gate and the
officer's particular division meeting one or more additional revenue thresholds
("the Divisional Performance Gate").
The portion of the second 50% of the target bonus that is payable would increase
proportionately based on the Company's total revenues for fiscal year 2005, with
the full 50% being payable upon the Company attaining a "Target Revenue Level".
In order to provide an additional performance incentive, if the Company exceeds
the Second Performance Gate and revenue exceeds the Target Revenue Level, each
officer would become eligible for an additional bonus of up to 50% of the
officer's respective target bonus (the "Upside Bonus"). This Upside Bonus would
also increase proportionately based on the Company's total revenues above the
Target Revenue Level.
The aggregate of the target bonuses for the seven executive officers remains
unchanged at $2,275,000. The aggregate of the Upside Bonuses that may be paid
under the plan remains unchanged at $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: December 13, 2004 By: /s/ Aaron C. von Staats
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Aaron C. von Staats
Senior Vice President, General Counsel