On August 28, 2013, Pegasystems Inc. (the "Company") executed an offer letter with Rafeal E. Brown, age 45, for his appointment as the Company's Chief Administrative Officer, Chief Financial Officer and Senior Vice President, effective October 7, 2013.

Mr. Brown's offer letter specifies the details of his compensation and provides for his employment on an "at-will" basis at an annual base salary of $380,000. Mr. Brown is eligible for an annual bonus of up to 50% of his base salary, subject to the funding provisions of the applicable bonus plan. Mr. Brown is also eligible to receive a $250,000 sign-on/relocation bonus, which is repayable to the Company in the event of a voluntary termination within twelve months from his date of hire. In the event the Company terminates Mr. Brown's employment without cause, he is eligible to receive a severance payment equal to six months of his base salary.

The Company will also provide Mr. Brown with an equity grant of stock options and restricted stock units, for which the Company will incur a $2,000,000 expense. The grant is subject to approval by the Company's Compensation Committee following the commencement of Mr. Brown's employment. The equity grant will vest twenty percent on its one year anniversary date, and, thereafter, the remainder will vest in equal quarterly installments over a four-year period. The vesting schedule for the equity grant is subject to acceleration in full, in the event of a change in control and termination of Mr. Brown's employment.

A copy of Mr. Brown's offer letter is attached hereto as Exhibit 99.1.

A copy of the Company's press release is attached hereto as Exhibit 99.2.

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.