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Employment Agreement - MatrixOne Inc. and Maurice L. Castonguay

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December 10, 1998

Mr. Maurice L. Castonguay
30 Hunter Lane
Canton, MA 02021

Dear Moe:

     I am very pleased to extend an offer to you for the position of Vice
President of Finance & Administration and Chief Financial Officer reporting to

     Your starting base salary will be $14,583.33 per month, which is equivalent
to $175,000 per year.  Additionally, you will be eligible to participate in the
FY `99 Executive Bonus Program.  This is valued at up to $35,000.

     The Company has agreed to guarantee payment of the full $35,000 FY '99
bonus on July 1999 provided you have active employment status at the time of
payment.  The Bonus will still be payable to you in full in the event you are
not in active employment if there has been a "Change of Control," as defined
hereunder, prior to June 30, 1999.  Future bonus payments will be contingent
upon successfully meeting mutually agreed objectives, satisfactory performance
and an active employment status at the time of scheduled payment.

     Upon your date of hire, you will be granted Incentive Stock Options to
purchase 100,000 shares of MatrixOne common stock.  The current fair market
value of the stock has been determined to be $2.00 per share.  These options
will begin vesting upon your date of hire.  These options vest quarterly in 16
equal installments over a four-year period.  Regardless of any other Company
benefit, all unvested options will become fully vested upon a "Change of
Control" of MatrixOne.

     In addition, you will receive a one-year severance package at target
compensation (base salary plus target bonus), including all customary Executive
benefits, in the event of a Change of Control.  If you are not removed from
office following a Change of Control, you will have the ability to voluntarily
terminate your employment for "good reason" within 18 months of the Change of
Control, as defined herein and receive the lump-sum payment for the one-year
severance package on your last day of employment.

     Enclosed is information that outlines the benefits that are offered at
MatrixOne, Inc.  In addition to the benefits outlined there, you will become a
participant in the Executive Benefit Program entitled Section 105.  This program
will reimburse you for any expenses that would normally not be covered at 100%
under regular plan limits (i.e., orthodontia, co-payments, etc.).

     As a condition of employment, you will be required to sign MatrixOne's
Employee Secrecy, Invention and Non-Competition Agreement.  You must also
represent to the Company that your employment by the Company shall not cause you
to use, distribute, or in any other way disclose any confidential or proprietary
information or material from your former employer or any third party.


     You will also be required to provide documentation to verify your
employment eligibility in the United States.  Enclosed please find a list of
acceptable documents you will need to have with you on the first day of

     For purposes of this Agreement, a "Change of Control" shall occur only in
the event of the occurrence of one or more of the following:

     (a)  Beneficial Ownership: Any "person" as such term is used in Sections
          13(d) and 14(d) of the Securities and 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 of the Company), is or becomes the
          "beneficial owner" (as define din 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

     (b)  Merger or Consolidation: The stockholders of the Company approve a
          merger or consolidation of the Company with any other corporation,
          other than: (i) 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 a
          majority of the combined voting power of the voting securities of the
          Company or such surviving entity outstanding immediately after such
          merger or consolidation, or (ii) A merger or consolidation effected to
          implement a recapitalization of the Company (or similar transaction)
          in which no "person" (as hereinabove defined) acquired more than 50%
          of the combined voting power of the Company's then outstanding
          securities; or

     (c)  Liquidation or Sale of Assets: 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.

For purposes of this Agreement, "Good Reason" means, without your written
consent, the occurrence within 18 months after a Change of Control of any of the
following circumstances:

     (a)  The assignment to the Employee of any duties inconsistent with the
          highest position in the Company that the Employee held at any time
          during the 90-day period immediately preceding the initiation of the
          discussions leading to the Change of Control of the Company, or a
          significant adverse alteration in the nature or status of the
          Employee's responsibilities or the conditions of the Employee's
          employment from those in effect at any time during the 90-day period
          immediately preceding such Change in Control. For purposes of this
          provision, the mere occurrence of any event that would constitute a
          Change of Control would constitute Good Reason.


     (b)  A reduction in your annual base salary as in effect at the date of
          this agreement or increased during the term of your employment;

     (c)  The failure by the Company to continue any benefit or compensation
          plan including bonus plans, investment or retirement plan, life
          insurance plan, health-and-accident plan or disability plan,
          applicable to you at the time of the Change of Control (or plans or
          self-insurance providing you with substantially similar benefits), the
          taking of any action by the Company which would adversely affect your
          participation in or which would materially reduce your benefits under
          any of such plans or deprive you of any material fringe benefit you
          enjoyed at the time of the Change of Control, or the failure by the
          Company to provide you with the number of paid vacation days to which
          you are then entitled in accordance with the Company's normal vacation
          policy in effect immediately prior to the Change of Control;

     (d)  Any requirement by the Company or any person in control of the Company
          that the location at which you perform your principal duties for the
          Company be outside a radius of 50 miles from the location at which you
          performed such duties immediately prior to a change in control;

     (e)  The failure of the Company to obtain an agreement from any successor
          to assume and agree to perform the Agreement, as contemplated herein.

     I am very excited about the future of MatrixOne, Inc. and I look forward to
working with you.

     You agree, in consideration of the various rights and benefits afforded to
you hereunder, that for a one-year period following your last day of employment
with the Company (however such employment ceases), that you will not be employed
by or offer consulting or other services to Parametric Technology Corporation or
Inso Corporation or any affiliate of either of such corporations (unless either
of such corporations acquires the Company).


                              /s/ Mark F. O'Connell

                              Mark F. O'Connell
                              President & CEO

cc:  Mary de St. Croix

Offer accepted by:  /s/ Maurice L. Castonguay               January 11, 1999
                   --------------------------               ----------------
                         Signature                             Start Date