Ancillary Incentive Plan

On March 3, 2009, the Compensation Committee of the Board of Directors established an ancillary incentive plan for PTC's executive officers in recognition of the fact that market conditions had deteriorated significantly since the annual incentive plan was established in November 2008 and based on the committee's belief that executives were unlikely to achieve any of the performance criteria established at that time. Accordingly, in order to provide an incentive for those officers to achieve desired company performance for the year, the committee established an ancillary incentive plan under which executives will have an opportunity to earn a portion of their fiscal 2009 target annual incentive. These amounts will be earned only if PTC achieves an established target of non-GAAP operating margin dollars for the second half of fiscal 2009. Amounts will be earned under the plan only if no amounts are earned under the annual incentive plan established in November 2008. The plan will be funded with restricted stock units that, if earned, will vest on the later of November 15, 2009 and the date the Compensation Committee determines that the performance target has been met. The number of restricted stock units that would be earned by each of the executive officers under the plan if the target is met is set forth below.

Name                   RSUs
C. Richard Harrison   154,172
James E. Heppelmann   72,225
Barry F. Cohen        34,922
Paul J. Cunningham    34,922
Cornelius F. Moses    41,235
Anthony DiBona        25,065
Aaron C. von Staats   16,360