<SUBMISSION>
<ACCESSION-NUMBER>0001299933-05-002097
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20050427
<ITEMS>1.01
<ITEMS>9.01
<FILING-DATE>20050503
<DATE-OF-FILING-DATE-CHANGE>20050502
<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>05792155
</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_4505.htm
<DESCRIPTION>LIVE FILING
<TEXT>
<!-- CoverPageHeader start -->
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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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<BR>
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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 27, 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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	&nbsp;&nbsp;
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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>
	(Zip Code)
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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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[&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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<B>
	Item 1.01. Entry into a Material Definitive Agreement.
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On April 27, 2005, the Compensation Committee of the Board of Directors of Pegasystems Inc. (the "Company") adopted a Section 16 Officers Corporate Incentive Compensation Plan (the "Incentive Plan"), along with the 2005 incentive bonus targets for the Company&#x2019;s officers required to report under Section 16(a) of the Securities Exchange Act of 1934 (the "Section 16 Officers").  The Incentive Plan covers the period from January 1, 2005 to December 31, 2005.  <br> <br>For each Section 16 Officer, the precise bonus incentive paid under the Incentive Plan is based on the level of achievement of certain corporate goals, which have been established by the Compensation Committee of the Board of Directors.   These corporate goals include financial goals (revenue, bookings and profit before taxes) and strategic goals.  Each corporate goal is assigned a specific weight by the Compensation Committee, which then reviews the performance against these corporate goals after the end of the Incentive Plan period and determines the level of goal achievement.  <br><br>A Section 16 Officer&#x2019;s individual bonus is calculated by multiplying (i) the cumulative percentage achievement of the target corporate goals (the "Achievement Percentage") by (ii) the bonus target dollar amount for that Section 16 Officer (which is expressed as a percentage of the Section 16 Executives&#x2019;s annual base salary).  No payment is made under the Incentive Plan if the Achievement Percentage is less than 70%.  For Achievement Percentages between 70% and 100%, the percentage payment of the individual bonus target equals the Achievement Percentage.  If the Achievement Percentage is above 100%, an accelerating factor is applied, so that for every 1% achieved above 100%, an additional 2% is added to the bonus payment, up to a maximum payment of 200% of the incentive bonus target.  The Incentive Plan provides for payments, if any, to be made on or before March 15, 2006. <br><br>The 2005 individual bonus targets for the Company&#x2019;s Section 16 Officers are listed on Exhibit 99.1 to this Current Report on Form 8-K.  Additional information regarding compensation of the Section 16 Officers is included in the Company&#x2019;s proxy statement to be mailed to stockholders on or about May 6, 2005, in connection with the Company&#x2019;s Annual Meeting of Stockholders to be held on June 2, 2005. <br><br>The foregoing summary description of the Incentive Plan is qualified in its entirety by reference to Exhibit 99.2 to this Current Report on Form 8-K.<br><br> <br><br> <br><br>
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<B>
	Item 9.01. Financial Statements and Exhibits.
</B>
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<P ALIGN="LEFT">
<FONT SIZE="2">
(c) Exhibits<br><br>99.1       2005 Individual Bonus Targets for Pegasystems' Section 16 Officers<br><br>99.2       Section 16 Officers Corporate Incentive Compensation Plan <br><br><br>
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<B>
	SIGNATURES
</B>
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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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	&nbsp;
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	Pegasystems Inc.
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	&nbsp;&nbsp;
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	&nbsp;
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	&nbsp;
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	&nbsp;
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<I>
	May 2, 2005
</I>
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	&nbsp;
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<I>
	By:
</I>
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</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
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<I>
	/s/ Shawn S. Hoyt
</I>
<BR>
</FONT>
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<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
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	&nbsp;
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	&nbsp;
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	&nbsp;
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<FONT SIZE="2">
	&nbsp;
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	&nbsp;
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	&nbsp;
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	&nbsp;
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<I>
	Name: Shawn S. Hoyt
</I>
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	&nbsp;
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	&nbsp;
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	&nbsp;
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<I>
	Title: Vice President and General Counsel
</I>
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	Exhibit&nbsp;Index
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	&nbsp;
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<B>
	Exhibit No.
</B>
</FONT>
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<TD>
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	&nbsp;
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<TD NOWRAP ALIGN="LEFT">
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<B>
	Description
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<DIV ALIGN="LEFT">
	99.1
</DIV>
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<FONT SIZE="2">
	&nbsp;
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</TD>
<TD ALIGN="LEFT" VALIGN="TOP" WIDTH="77%">
<FONT SIZE="2">
2005 Individual Bonus Targets for Pegasystems' Section 16 Officers
</FONT>
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<DIV ALIGN="LEFT">
	99.2
</DIV>
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</TD>
<TD WIDTH="15%">
<FONT SIZE="2">
	&nbsp;
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</TD>
<TD ALIGN="LEFT" VALIGN="TOP" WIDTH="77%">
<FONT SIZE="2">
Section 16 Officers Corporate Incentive Plan
</FONT>
</TD>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exhibit1.htm
<DESCRIPTION>EX-99.1
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<TITLE> EX-99.1 </TITLE>
</HEAD>
<BODY TEXT="#000000" BGCOLOR="#FFFFFF" ALINK="#0000FF" HLINK="#FF0000" VLINK="#800080">

<BODY style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><FONT style="font-size: 10pt"><U><B>2005 Individual Bonus Targets for Pegasystems Inc.&#146;s Section&nbsp;16 Officers</B></U></FONT>


<DIV align="center">
<TABLE style="font-size: 10pt" 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="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name of Executive Officer</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Incentive Bonus Target</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 10pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Alan Trefler</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Chief Executive Officer and                <BR></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">105.6</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 10pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="left">Chairman<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 10pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Douglas Kra</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Vice President, Global Services            <BR></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">40.0</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 10pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Michael Pyle</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="left">Senior Vice President,                     <BR></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">45.0</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 10pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="left">Engineering<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 10pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Christopher Sullivan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Senior Vice President, Chief               <BR></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">45.0</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 10pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="left">Financial Officer and<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 10pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Treasurer<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 10pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Michael Wallrich</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Senior Vice President, Global              <BR></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">76.0</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 10pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="left">Sales<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">In addition, the 2005 individual bonus target for Richard Jones, who is a Director of the Company
and an employee, but not an Executive Officer, is 50.0%



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


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<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>exhibit2.htm
<DESCRIPTION>EX-99.2
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
<HTML>
<HEAD>
<TITLE> EX-99.2 </TITLE>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-size: 12pt"><B>Section&nbsp;16 Officers Corporate Incentive Compensation Plan</B></FONT></DIV></TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-size: 9pt"><B>Plan Period: January 1- December&nbsp;31, 2005<BR>
Applies to Officers of the Company under Section&nbsp;16(a) of the Securities Exchange Act of 1934 (&#147;Section&nbsp;16 Officers&#148;)</B></FONT></DIV></TD>
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<P align="left" style="font-size: 9pt"><FONT style="font-size: 10pt"><B>General Purpose &#038; Structure</B></FONT>


<P align="left" style="font-size: 10pt"><FONT style="font-size: 9pt">This corporate incentive plan is designed to provide the potential for variable pay to Section
16 Officers of Pegasystems Inc. (the &#147;Company&#148;) when fully achieving annual goals that align and
support the Company&#146;s financial and strategic business objectives. Annual goals will be
established by the Company&#146;s senior management and Board of Directors (or the Compensation
Committee of the Company&#146;s Board of Directors), and evaluated regularly to ensure that the goals
are effective in supporting and/or achieving the Company&#146;s overall financial and strategic
objectives.</FONT>


<P align="left" style="font-size: 9pt">Based on each Section&nbsp;16 Officer&#146;s position and role, he or she is eligible for a Target Incentive
Opportunity, which is calculated as a percentage of his or her actual, earned base salary for the
year. The Target Incentive Opportunity for each Section&nbsp;16 Officer is determined by the
Compensation Committee of the Company&#146;s Board of Directors, which takes into account surveyed
market values, and is approved at the beginning of the plan year.


<P align="left" style="font-size: 9pt"><FONT style="font-size: 10pt"><B>Corporate Goal Performance</B></FONT>


<P align="left" style="font-size: 10pt"><FONT style="font-size: 9pt">When the Company meets its financial goals relating to revenue, license bookings and
profitability and its strategic goals (collectively referred to as <B>Target</B>), it will provide
incentive compensation under this Plan at target incentive levels. Should the corporate
performance come in <U>below</U> Target but <U>above</U> <B>Threshold </B>(which is defined as above <B>70</B>%
of Target), the incentive payment will be calculated based on the level of actual performance
relative to Target<B>. </B>Should corporate performance fall <U>below</U> Threshold, incentive
compensation will not be paid out.</FONT>


<P align="left" style="font-size: 9pt">If corporate performance comes in above Target, the Company will provide an enhanced incentive
under this Plan, with an accelerated incentive payment rate used for the portion that exceeds
Target. From 101% of Target, the accelerator will be 2.0 times the normal incentive payment rate.
In no event will the incentive payout exceed 200% of the Target Incentive Opportunity for the
Section&nbsp;16 Officer.


<P align="left" style="font-size: 9pt">Pay out for this plan shall be made after the close of the Plan year, but no later than March
15<sup>th</sup> of the subsequent year.


<P align="left" style="font-size: 9pt">Notwithstanding the above, Pegasystems reserves the right in its sole discretion to either increase
or decrease individual payout amounts.


<P align="left" style="font-size: 9pt">In addition, the Chief Executive Officer and the Compensation Committee of the Company&#146;s Board of
Directors may utilize management discretion and judgment to evaluate the individuals&#146; contribution
towards corporate goal achievement and performance to determine the final payment amounts.


<P align="left" style="font-size: 9pt"><FONT style="font-size: 10pt"><B>Eligibility</B></FONT>


<P align="left" style="font-size: 10pt"><FONT style="font-size: 9pt">Only active, full time Section&nbsp;16 Officers are potentially eligible for this plan. Those hired
after November 1st of the Plan year will need the Chief Executive Officer&#146;s approval to
participate.</FONT>


<P align="left" style="font-size: 9pt">In order to receive any payments under this plan, a Section&nbsp;16 Officer must: A) Be actively
employed by Pegasystems Inc at the time of pay out, and B) Sign an acknowledgement that he/she has
read, understood, and agreed to this plan and requirements for participation.

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    <TD>This short-term (one year) incentive plan supersedes all other annual incentive plans for the eligible Section&nbsp;16
Officers as of the effective date and will remain in effect only for the plan year indicated.</TD>
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    <TD>Employees that are transferred into Section&nbsp;16 Officer status or join as a Section&nbsp;16 Officer during the Plan year
will have a prorated payment based on time in their Section&nbsp;16 Officer position<I>.</I></TD>
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    <TD>This plan is based on the company&#146;s current position and goals, as well as market conditions, and is subject to
change. Pegasystems reserves the sole right to modify, revoke, suspend, or terminate this plan at any time.</TD>
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    <TD>In the event of actual termination of employment for any reason, incentive that has not yet been paid will not be paid.</TD>
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    <TD>The language in this policy is not intended to create, nor is it to be construed to create a contract of employment
between Pegasystems and any of its employees. Employment at Pegasystems is at-will, which means the Section&nbsp;16
Officer or Pegasystems can terminate the employment at any time for any reason or no reason with or without notice (to
the extent permitted by law or superseded by the applicable Section&nbsp;16 Officer&#146;s Employment Agreement).</TD>
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    <TD>This plan and the individual payments to Section&nbsp;16 Officers are subject to receiving the approval of the Compensation
Committee of the Company&#146;s Board of Directors.</TD>
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    <TD>By signing below, you are affirming that you have read and understand the terms of your plan. Your signature also
serves as reaffirmation that as a Pegasystems&#146; employee you are agree to abide by Pegasystems&#146; policies, as well as
the terms of your Standards Letter (or employment agreement for applicable employees outside of the United States)
with Pegasystems and your obligations thereunder, including restrictions on competition and solicitation.</TD>
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<P align="left" style="font-size: 9pt"><FONT style="font-size: 10pt">Approved By:</FONT>


<P align="left" style="font-size: 10pt">Chief Executive Officer, Alan Trefler
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>Date:<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>


<P align="left" style="font-size: 10pt">VP of HR, Carmelina Procaccini
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>Date:<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>


<P align="left" style="font-size: 10pt">CFO, Chris
Sullivan<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>Date:<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>


<P align="left" style="font-size: 10pt">Please indicate that you have read, understood, and agree to this plan by signing below. Return
the signed original, within three weeks to C.J. Stabeno in the Human Resources Department.


<P align="left" style="font-size: 10pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
<BR>
Print Name Signature Date


<P align="left" style="font-size: 10pt">CC: Employee file


<P align="left" style="font-size: 10pt; text-indent: 2%">Incentive file </FONT><FONT style="font-size: 12pt"></FONT>



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