<SUBMISSION>
<ACCESSION-NUMBER>0001299933-05-001650
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20050406
<ITEMS>1.01
<ITEMS>9.01
<FILING-DATE>20050411
<DATE-OF-FILING-DATE-CHANGE>20050411
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>PEGASYSTEMS INC
<CIK>0001013857
<ASSIGNED-SIC>7374
<IRS-NUMBER>042787865
<STATE-OF-INCORPORATION>MA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>001-11859
<FILM-NUMBER>05743296
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>101 MAIN ST
<CITY>CAMBRIDGE
<STATE>MA
<ZIP>02142-1590
<PHONE>6173749600
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>101 MAIN ST
<CITY>CAMBRIDGE
<STATE>MA
<ZIP>02142-1590
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>htm_4060.htm
<DESCRIPTION>LIVE FILING
<TEXT>
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<TITLE> Pegasystems Inc.  (Form: 8-K) </TITLE>
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		UNITED STATES<BR>
	SECURITIES AND EXCHANGE COMMISSION
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	WASHINGTON, D.C. 20549
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	FORM 8-K
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	CURRENT REPORT
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	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
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	Date of Report (Date of Earliest Event Reported):
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	&nbsp;
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	April 6, 2005
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	Pegasystems Inc.
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<BR>__________________________________________<BR>
	(Exact name of registrant as specified in its charter)
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	Massachusetts
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	1-11859
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	04-2787865
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_____________________<BR>
	(State or other jurisdiction
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_____________<BR>
	(Commission
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______________<BR>
	(I.R.S. Employer
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	of incorporation)
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	File Number)
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	Identification No.)
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	101 Main Street, Cambridge, Massachusetts
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	&nbsp;
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	02142
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_________________________________<BR>
	(Address of principal executive offices)
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	&nbsp;
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___________<BR>
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	Registrant&#146;s telephone number, including area code:
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	617-374-9600
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<FONT SIZE="2">
	Not Applicable
<BR>______________________________________________<BR>
	Former name or former address, if changed since last report
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	&nbsp;
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<!-- CoverPageRegistrant END --><P><FONT SIZE="2">
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:</FONT>
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<P><FONT SIZE="2">
[&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br>
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	Item 1.01. Entry into a Material Definitive Agreement.
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  On April 6, 2005, Pegasystems Inc. (the "Company") and each of Alexander V. d&#x2019;Arbeloff, Richard H. Jones, Steven F. Kaplan, William H. Keough, Edward A. Maybury, James P. O&#x2019;Halloran, Edward B. Roberts, Alan Trefler and William W. Wyman (collectively, the "Directors") entered into a Director Indemnification Agreement (collectively, the "Director Indemnification Agreements"), pursuant to which the Company has agreed to indemnify each Director against certain liabilities that may arise by reason of such Director&#x2019;s status or service as a director of the Company, and to advance such Director the expenses incurred as a result of a proceeding as to which such Director may be indemnified.  The Director Indemnification Agreements are intended to provide rights of indemnification to the fullest extent permitted under the Massachusetts Business Corporation Act and are in addition to any other rights such Directors may have under the Company&#x2019;s Articles of Organization, its By-laws and applicable law.  The Director Indemnification Agreements also require the Company to maintain directors&#x2019; and officers&#x2019; liability insurance with respect to each Director for so long as such Director continues to serve as a director of the Company and for six (6) years thereafter.<br><br>  The foregoing summary description of the Director Indemnification Agreements are qualified in their entirety by reference to Exhibit 99.1 filed with this Current Report on Form 8-K.  <br><br>  On April 6, 2005, the Company also entered into an amendment to certain existing stock option agreements between the Company and each of Alexander V. d&#x2019;Arbeloff, Steven F. Kaplan, William H. Keough, Edward A. Maybury, James P. O&#x2019;Halloran, Edward B. Roberts and William W. Wyman (each, a "Non-Employee Director").<br><br>  Pursuant to these amendments, the Company agreed to extend the period of time during which a Non-Employee Director may exercise the applicable stock option following the date upon which such Non-Employee Director ceased to be a member of the Company&#x2019;s Board of Directors.  The amendments provide that, if a Non-Employee Director has been a member of the Board of Directors for five years or more as of the date that such Non-Employee Director ceases to be a Board member, such Non-Employee Director may exercise the applicable stock option at any time before the scheduled expiration date of the option agreement (which is typically ten years from the date of grant).  <br><br>  These amendments apply to all stock options held by the Non-Employee Directors with an exercise price equal to or greater than the fair market value of the Company&#x2019;s common stock on April 6, 2005.  These amendments do not apply to any stock options held by a Non-Employee Director with an exercise price less than the fair market value of the Company&#x2019;s common stock on April 6, 2005.   <br> <br><br>
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	Item 9.01. Financial Statements and Exhibits.
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99.1  Form of Director Indemnification Agreement dated April 6, 2005.
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<B>
	SIGNATURES
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	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.
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	Pegasystems Inc.
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	&nbsp;&nbsp;
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<I>
	April 11, 2005
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<I>
	By:
</I>
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	&nbsp;
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<I>
	/s/ Shawn S. Hoyt
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<BR>
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	&nbsp;
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<I>
	Name: Shawn S. Hoyt
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<I>
	Title: Vice President and General Counsel
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	Exhibit&nbsp;Index
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	Exhibit No.
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	Description
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	99.1
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	&nbsp;
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Form of Director Indemnification Agreement
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<TYPE>EX-99.1
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<P align="center" style="font-size: 10pt"><FONT style="font-size: 12pt">DIRECTOR INDEMNIFICATION AGREEMENT</FONT>



<P align="left" style="font-size: 12pt; text-indent: 4%">This Agreement is made as of the 6th day of April, 2005, by and between Pegasystems Inc.,
Massachusetts corporation (the &#147;Corporation&#148;), and <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>(&#147;Indemnitee&#148;).


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, it is essential to the Corporation to retain and attract as directors the most
capable persons available, and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, it is the express policy of the Corporation to indemnify its directors so as to
provide them with the maximum possible protection permitted by law, and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, Indemnitee does not regard the protection that may be available under the
Corporation&#146;s insurance as adequate in the present circumstances, and is not willing to remain as a
director without adequate protection, and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Corporation desires Indemnitee to continue to serve as a director of the
Corporation.



<P align="left" style="margin-left:4%; font-size: 12pt">NOW, THEREFORE, the Corporation and Indemnitee do hereby agree as follows:


<P align="left" style="font-size: 12pt; text-indent: 4%">1.&nbsp;<U>Agreement to Serve</U>. Indemnitee agrees to continue to serve as a director of the
Corporation for so long as he is duly elected or appointed or until such time as he resigns in
writing.



<P align="left" style="margin-left:4%; font-size: 12pt">2. <U>Definitions</U>. As used in this Agreement:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;The term &#147;Corporate Status&#148; shall mean the status of a person who is or was a director of
the Corporation or who, while a director of the Corporation, is or was serving at the request of
the Corporation, as a director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan, or other entity. A director
is considered to be serving an employee benefit plan at the Corporation&#146;s request if his duties to
the Corporation also impose duties on, or otherwise involve services by, him to the plan or to
participants in or beneficiaries of the plan.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;The term &#147;D&#038;O Insurance&#148; shall mean the directors&#146; and officers&#146; liability insurance
issued by the insurer(s), and having the policy number(s), amount(s) and deductible(s) set forth on
<U>Exhibit&nbsp;A</U> hereto and any replacement or substitute policies issued by one or more reputable
insurers providing in all respects coverage at least comparable to and in the same amount as that
provided under the policy or policies identified on <U>Exhibit&nbsp;A</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;The term &#147;Disinterested Director&#148; shall mean a director of the Corporation who, at the
time of a vote referred to in Paragraph&nbsp;8 of this Agreement, is not (a)&nbsp;a party to the Proceeding,
or (b)&nbsp;an individual having a familial, financial, professional, or employment relationship with
the Indemnitee, which relationship would, in the circumstances, reasonably be expected to exert an
influence on the director&#146;s judgment when voting on the decision being made.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;The term &#147;Expenses&#148; shall include, without limitation, attorneys&#146; fees, retainers, court
costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees and other disbursements or expenses of the
types customarily incurred in connection with a Proceeding.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;The term &#147;Liability&#148; shall mean the obligation to pay a judgment, settlement, penalty,
fine including an excise tax assessed with respect to an employee benefit plan, or reasonable
expenses incurred with respect to a Proceeding.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;The term &#147;Proceeding&#148; shall mean any threatened, pending or completed action, suit, or
proceeding, whether civil, criminal, administrative, arbitrative or investigative, and whether
formal or informal.



<P align="left" style="margin-left:4%; font-size: 12pt">3. <U>Indemnification.</U>


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;The Corporation shall indemnify the Indemnitee if he was, is or is threatened to be made a
defendant or respondent in a Proceeding because of his Corporate Status against Liability incurred
in the Proceeding if (1) (i)&nbsp;he conducted himself in good faith, and (ii)&nbsp;he reasonably believed
that his conduct was in the best interests of the Corporation or that his conduct was at least not
opposed to the best interests of the Corporation, and (iii)&nbsp;in the case of any criminal proceeding,
he had no reasonable cause to believe his conduct was unlawful, or (2)&nbsp;he engaged in conduct for
which he shall not be liable under Article&nbsp;VI, Section&nbsp;4 of the Corporation&#146;s Articles of
Organization.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;The Indemnitee&#146;s conduct with respect to an employee benefit plan for a purpose he
reasonably believed to be in the interests of the participants in, and the beneficiaries of, the
plan is conduct that satisfies the requirement that his conduct was at least not opposed to the
best interests of the Corporation.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;The termination of a proceeding by judgment, order, settlement, or conviction, or upon a
plea of <I>nolo contendere </I>or its equivalent, is not, of itself, determinative that the Indemnitee did
not meet the relevant standard of conduct described in this Paragraph&nbsp;3.


<P align="left" style="font-size: 12pt; text-indent: 4%">4.&nbsp;<U>Exceptions to Right of Indemnification</U>. Notwithstanding anything to the contrary
in this Agreement, except as set forth in Paragraphs 9 and 10, the Corporation shall not indemnify
the Indemnitee in connection with a Proceeding (or part thereof) initiated by the Indemnitee unless
the initiation thereof was approved by the Board of Directors of the Corporation. Notwithstanding
anything to the contrary in this Agreement, the Corporation shall not indemnify the Indemnitee to
the extent Indemnitee is reimbursed from the proceeds of insurance, and in the event the
Corporation makes any indemnification payments to the Indemnitee and the Indemnitee is subsequently
reimbursed from the proceeds of insurance, the Indemnitee shall promptly refund such
indemnification payments to the Corporation to the extent of such insurance reimbursements.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.&nbsp;<U>Indemnification of Expenses of Successful Party</U>. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful, on the merits or
otherwise, in the defense of any Proceeding to which he was a party because of his Corporate
Status, the Indemnitee shall be indemnified against all reasonable Expenses incurred by him on
behalf in connection therewith. Without limiting the foregoing, if any Proceeding is disposed of,
on the merits or otherwise (including a disposition without prejudice), without (i)&nbsp;the disposition
being adverse to the Indemnitee, (ii)&nbsp;an adjudication that the Indemnitee was liable to the
Corporation, (iii)&nbsp;a plea of guilty or <I>nolo contendere </I>by the Indemnitee, (iv)&nbsp;an adjudication that
the Indemnitee did not act in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and (v)&nbsp;with respect to any criminal proceeding,
an adjudication that the Indemnitee had no reasonable cause to believe his conduct was unlawful,
the Indemnitee shall be considered for the purposes hereof to have been wholly successful with
respect thereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">6.&nbsp;<U>Notification and Defense of Claim</U>. As a condition precedent to his right to be
indemnified, the Indemnitee must notify the Corporation in writing as soon as practicable of any
Proceeding for which indemnity will or could be sought by him and provide the Corporation with a
copy of any summons, citation, subpoena, complaint, indictment, information or other document
relating to such Proceeding with which he is served. With respect to any Proceeding of which the
Corporation is so notified, the Corporation will be entitled to participate therein at its own
expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably
acceptable to the Indemnitee. After notice from the Corporation to the Indemnitee of its election
so to assume such defense, the Corporation shall not be liable to the Indemnitee for any legal
expenses subsequently incurred by the Indemnitee in connection with such claim, other than as
provided below in this Paragraph&nbsp;6. The Indemnitee shall have the right to employ his own counsel
in connection with such claim, but the fees and expenses of such counsel incurred after notice from
the Corporation of its assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i)&nbsp;the employment of counsel by the Indemnitee has been authorized by the Corporation, (ii)
counsel to the Indemnitee shall have reasonably concluded that there may be a conflict of interest
or position on any significant issue between the Corporation and the Indemnitee in the conduct of
the defense on such action or (iii)&nbsp;the Corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases fees and expenses of counsel for the
Indemnitee shall be at the expense of the Corporation, except as otherwise expressly provided by
this Agreement. The Corporation shall not be entitled, without the consent of the Indemnitee, to
assume the defense of any claim brought by or in the right of the Corporation or as to which
counsel for the Indemnitee shall have reasonably made the conclusion provided for in clause (ii)
above. The Corporation shall not be required to indemnify the Indemnitee under this Agreement for
any amounts paid in settlement of any Proceeding effected without its written consent. The
Corporation shall not settle any Proceeding in any manner which would impose any penalty or
limitation on Indemnitee without Indemnitee&#146;s written consent. Neither the Corporation nor the
Indemnitee will unreasonably withhold its or his consent to any proposed settlement.


<P align="left" style="font-size: 12pt; text-indent: 4%">7.&nbsp;<U>Advancement of Expenses</U>. Any expenses incurred by the Indemnitee in connection
with any Proceeding to which the Indemnitee was or is a party or is threatened to be a party by
reason of his Corporate Status or by reason of any action alleged to have been taken or omitted in
connection therewith shall be paid by the Corporation in advance of the final disposition of such
matter; <U>provided</U>, <U>however</U>, that the payment of such Expenses incurred by the
Indemnitee in advance of the final disposition of such matter shall be made only upon receipt of
(i)&nbsp;a written affirmation of the Indemnitee&#146;s good faith belief that he has met the standard of
conduct required in Paragraph&nbsp;3 of this Agreement or that the Proceeding involves conduct for which
liability has been eliminated under Article&nbsp;VI, Section&nbsp;4 of the Corporation&#146;s Articles of
Organization and (ii)&nbsp;an unlimited undertaking by or on behalf of the Indemnitee to repay all
amounts so advanced in the event that it shall ultimately be determined that the Indemnitee is not
entitled to be indemnified by the Corporation as authorized in this Agreement. Such expenses shall
be paid immediately upon the written request of the Indemnitee to the Corporation. The undertaking
referred to in clause (ii)&nbsp;above shall be an unlimited general obligation of the Indemnitee but
shall not be secured and shall be accepted without referral to the Indemnitee&#146;s financial ability
to make repayment.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.&nbsp;<U>Procedure for Indemnification</U>. In order to obtain the indemnification pursuant to
Paragraphs 3 or 5 of this Agreement, the Indemnitee shall submit to the Corporation a written
request, including in such request such documentation and information as is reasonably available to
the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee
is entitled to indemnification or advancement of Expenses. Any such indemnification shall be made
promptly, and in any event within 60&nbsp;days after receipt by the Corporation of the written request
of the Indemnitee, unless with respect to requests under Paragraph&nbsp;3 the Corporation determines
within such 60-day period that the Indemnitee did not meet the applicable standard of conduct set
forth in Paragraph&nbsp;3. Such determination, and any determination pursuant to Section&nbsp;7 that
advanced Expenses must be repaid to the Corporation, shall be made in each instance (a)&nbsp;if there
are two or more Disinterested Directors, by the Board of Directors by a majority vote of all the
Disinterested Directors, or by a majority of the members of a committee of two or more
Disinterested Directors appointed by vote; or (b)&nbsp;by special legal counsel (i)&nbsp;selected in the
manner prescribed in clause (a), or (ii)&nbsp;if there are fewer than two Disinterested Directors,
selected by those members of the Board of Directors who do not qualify as Disinterested Directors.


<P align="left" style="font-size: 12pt; text-indent: 4%">9.&nbsp;<U>Right to Seek Court-Ordered Indemnification and Advance of Expenses</U>. Nothing
contained in this Agreement shall abrogate or limit the right of the Indemnitee to apply to a court
of competent jurisdiction for indemnification or an advance of expenses to the extent permitted by
Section&nbsp;8.54 of Chapter&nbsp;156D of the General Laws of the Commonwealth of Massachusetts (&#147;Chapter
156D&#148;) or any successor provision that increases the scope of permitted indemnification.


<P align="left" style="font-size: 12pt; text-indent: 4%">10.&nbsp;<U>Remedies</U>. The right to indemnification and immediate advancement of Expenses as
provided by this Agreement shall be enforceable by the Indemnitee in any court of competent
jurisdiction. Unless otherwise required by law, the burden of proving that indemnification is not
appropriate shall be on the Corporation. Neither the failure of the Corporation to have made a
determination prior to the commencement of such action that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Corporation pursuant to Paragraph&nbsp;8 that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the standard of conduct. Indemnitee&#146;s expenses (of the type described in
the definition of &#147;Expenses&#148; in Paragraph&nbsp;2(c)) reasonably incurred in connection with successfully
establishing his right to indemnification, in whole, or in part, in any such Proceeding shall also
be indemnified by the Corporation.


<P align="left" style="font-size: 12pt; text-indent: 4%">11.&nbsp;<U>Partial Indemnification</U>. If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Corporation for some or a portion of the Expenses,
judgments, fines, penalties or amounts paid in settlement actually and reasonably incurred by him
or on his behalf, in connection with any Proceeding but not, however, for the total amount thereof,
the Corporation shall nevertheless indemnify Indemnitee for the portion of such Expenses,
judgments, fines, penalties or amounts paid in settlement to which Indemnitee is entitled.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.&nbsp;<U>Subrogation</U>. In the event of any payment under this Agreement, the Corporation
shall be subrogated to the extent of such payment to all of the rights of recovery of the
Indemnitee, who shall execute all papers required and take all action necessary to secure such
rights, including execution of such documents as are necessary to enable the Corporation to bring
suit to enforce such rights.


<P align="left" style="font-size: 12pt; text-indent: 4%">13.&nbsp;<U>Effectiveness; Term of Agreement</U>. This Agreement shall become effective upon
shareholder approval of the proposed amendment of the Corporation&#146;s Articles of Organization
eliminating the provisions relating to director and officer indemnification to be considered at the
Corporation&#146;s 2005 annual shareholders meeting and shall continue until and terminate upon the
later of (a)&nbsp;six years after the date that the Imdemnitee shall have ceased to serve as a director
of the Corporation or, at the request of the Corporation, as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise or (b)&nbsp;the final
termination of all Proceedings pending on the date set forth in clause (a)&nbsp;in respect of which
Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Paragraph&nbsp;10 of this Agreement relating thereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">14.&nbsp;<U>Indemnification Hereunder Not Exclusive</U>. The indemnification and advancement of
Expenses provided by this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under the Corporation&#146;s Articles of Organization, the By-Laws, any
agreement, any vote of stockholders or Disinterested Directors, Chapter&nbsp;156D, any other law (common
or statutory), or otherwise, both as to action in the Indemnitee&#146;s official capacity and as to
action in another capacity while holding office for the Corporation. Notwithstanding any other
provision of this Agreement, the Corporation hereby agrees to indemnify Indemnitee to the fullest
extent permitted by applicable law and the Corporation&#146;s Articles of Organization and By-Laws,
notwithstanding that such indemnification is not specifically authorized by the other provisions of
this Agreement, the Corporation&#146;s Articles of Organization or By-Laws or by statute. In the event
of any change, after the date of this Agreement, in any applicable law, statute, or rule which
expands the right of a Massachusetts corporation to indemnify a member of its board of directors,
such changes shall be, <U>ipso facto</U>, within the purview of Indemnitee&#146;s rights and the
Corporation&#146;s obligations under this Agreement. In the event of any change in any applicable law,
statute or rule which narrows the right of a Massachusetts corporation to indemnify a member of its
Board of Directors, such changes, to the extent not otherwise required by such law, statute, or
rule to be applied to this Agreement or by the Corporation&#146;s Articles of Organization or By-Laws
and provided that such changes do not conflict with Corporation&#146;s Articles of Organization or
By-Laws, shall have no effect on this Agreement or the parties&#146; rights and obligations hereunder.


<P align="left" style="font-size: 12pt; text-indent: 4%">15.&nbsp;<U>Insurance</U>. The Corporation hereby represents and warrants that <U>Exhibit&nbsp;A</U>
contains a complete and accurate description of the policies of directors&#146; and officers&#146; liability
insurance maintained by the Corporation and that such policies are in full force and effect. The
Corporation hereby covenants and agrees that, so long as Indemnitee shall continue to serve as a
director of the Corporation and thereafter for a period of six years, the Corporation shall
maintain in full force and effect D&#038;O Insurance. In all policies of D&#038;O Insurance, Indemnitee
shall be named as an insured in such a manner as to provide Indemnitee the same rights and
benefits, subject to the same limitation, as are accorded to the Corporation&#146;s officer or officers
most favorably insured by such policies. Notwithstanding the foregoing, the Corporation shall have
no obligation to maintain D&#038;O Insurance if the Board of Directors of the Corporation determines in
good faith that such insurance is not reasonably available, the premium costs for such insurance is
disproportionate to the amount of coverage provided, or the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit. Upon receipt by the Corporation of
notice of a Proceeding, the Corporation shall give prompt notice of the commencement of such
Proceeding to its liability insurers in accordance with the procedures set forth in the respective
D&#038;O Insurance policies. The Corporation shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policies. The Corporation shall not be liable
under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the
extent Indemnitee has otherwise actually received such payment under any insurance policy,
contract, agreement, the Corporation&#146;s Articles of Organization or By-Laws, or otherwise.


<P align="left" style="font-size: 12pt; text-indent: 4%">16.&nbsp;<U>No Special Rights</U>. Nothing herein shall confer upon the Indemnitee any right to
continue to serve as a director of the Corporation for any period of time or at any particular rate
of compensation.


<P align="left" style="font-size: 12pt; text-indent: 4%">17.&nbsp;<U>Savings Clause</U>. If this Agreement or any portion thereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Corporation shall nevertheless
indemnify the Indemnitee as to Expenses, judgments, fines, penalties and amounts paid in settlement
with respect to any Proceeding to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated and to the fullest extent permitted by applicable
law.


<P align="left" style="font-size: 12pt; text-indent: 4%">18.&nbsp;<U>Counterparts</U>. This Agreement may be executed in any number of counterparts, each
of which shall constitute the original.


<P align="left" style="font-size: 12pt; text-indent: 4%">19.&nbsp;<U>Successors and Assigns</U>. This Agreement shall be binding upon the Corporation and
its successors and assigns and shall inure to the benefit of the estate, heirs, executors,
administrators and personal representatives of the Indemnitee.


<P align="left" style="font-size: 12pt; text-indent: 4%">20.&nbsp;<U>Headings</U>. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">21.&nbsp;<U>Modification and Waiver</U>. This Agreement may be amended from time to time to
reflect changes in Massachusetts law or for other reasons. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof nor shall any such waiver constitute a continuing waiver.


<P align="left" style="font-size: 12pt; text-indent: 4%">22.&nbsp;<U>Notices</U>. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been given (i)&nbsp;when delivered by hand or (ii)&nbsp;if mailed
by certified or registered mail with postage prepaid, on the third day after the date on which it
is so mailed:



<P align="left" style="margin-left:8%; font-size: 12pt">(a)&nbsp;if to the Indemnitee, to:



<P align="left" style="margin-left:8%; font-size: 12pt">(b)&nbsp;if to the Corporation, to:



<P align="left" style="margin-left:12%; font-size: 12pt">Pegasystems Inc.
<BR>
101 Main Street
<BR>
Cambridge, Massachusetts 02138
<BR>
Attention: General Counsel


<P align="left" style="font-size: 12pt">or to such other address as may have been furnished to Indemnitee by the Corporation or to the
Corporation by Indemnitee, as the case may be.


<P align="left" style="font-size: 12pt; text-indent: 4%">23.&nbsp;<U>Applicable Law</U>. This Agreement shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts.


<P align="left" style="font-size: 12pt; text-indent: 4%">24.&nbsp;<U>Enforcement</U>. The Corporation expressly confirms and agrees that it has entered
into this Agreement in order to induce the Indemnitee to continue to serve as a director of the
Corporation, and acknowledges that Indemnitee is relying upon this Agreement in continuing in such
capacity.


<P align="left" style="font-size: 12pt; text-indent: 4%">IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.



<P align="left" style="margin-left:23%; font-size: 12pt">PEGASYSTEMS INC.



<P align="left" style="margin-left:23%; font-size: 12pt">By: /s/ Shawn S. Hoyt


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="25%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Name: Shawn S. Hoyt</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:25%; font-size: 12pt">Title: General Counsel



<P align="left" style="margin-left:23%; font-size: 12pt">INDEMNITEE:


<P align="left" style="font-size: 12pt; text-indent: 23%"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>


<P align="center" style="font-size: 10pt; display: none; text-indent: 23%">1
<!-- PAGEBREAK -->

<P align="right" style="font-size: 12pt"><B>Exhibit&nbsp;A</B></u>



<P align="center" style="font-size: 12pt"><U>Schedule of Director and Officer Liability Insurance Policies</U>


<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name of Insurer</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Policy Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Coverage Amount</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Retention</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">National Union Fire<BR>
Insurance Co. of<BR>
Pittsburgh, PA (a<BR>
subsidiary of AIG)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><BR>
<BR>
<BR>
827-94-35
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><BR>
<BR>
<BR>
US $10,000,000
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><BR>
<BR>
<BR>
US $500,000</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<P align="center" style="font-size: 10pt; display: none">2


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