August 28, 2013

Rafe Brown

433 Clark Drive

San Mateo, CA 94402

Pegasystems is pleased to offer you the position of Chief Administration Officer, Chief Financial Officer and Senior Vice President, presently reporting directly to Alan Trefler. This offer is contingent upon the successful completion of our pre-employment process and upon your signing the enclosed Standards Letter. Your starting salary for this position will be paid at a biweekly rate of $14,615.38 at the annualized rate of $380,000.00. You will also be eligible to participate in our Corporate Incentive Compensation Plan (CICP), at a target rate of 50% of your base salary which in 2013 is $190,000.00 on an annualized basis. Your CICP will be pro-rated based on your start date during 2013 and in accordance with the terms of the CICP in effect for each applicable year, bringing your potential annualized on target earnings to $570,000.00.

As a demonstration of the company's commitment to you, we will provide you with an equity grant for which Pega's future financial statements will incur $2,000,000.00 of expense. This grant will combine a value of 25% stock options and 75% Restricted Stock Units (RSUs) pursuant to our Long-Term Incentive Plan and is contingent on Compensation Committee approval at the meeting following your date of hire. The number of RSUs and Options granted will be determined based on the closing price of our common stock on the first business day of the month following Compensation Committee approval. The full terms of this grant will be conveyed to you in a separate document after you become a Pegasystems employee.

In addition, Pega agrees to provide you a $250,000 sign-on/relocation bonus paid in two increments. The first payment of $125,000.00 will be made upon date of hire. The second payment will be balanced against the reimbursement of your movement of household goods and final travel to the Cambridge area and paid 30 days following the final reimbursement expense submission. This bonus is intended to minimally cover all of your relocation expenses. The $250,000 sign-on/relocation bonus is repayable to Pega in the event of a voluntary termination within 12 months of your date of hire.

You will be eligible to participate in the benefit programs which Pegasystems makes available to similarly situated employees, providing the option to elect individual or family coverage in our medical, dental and vision plans. In addition, we offer a tuition reimbursement program, a 401(k) plan, and medical and dependent care reimbursement accounts which enable you to pay for eligible expenses with pre-tax dollars. Pega will also provide you with short-term disability, long-term disability, life insurance and long-term care insurance. You will accrue paid time-off in accordance with Pegasystems' Paid Time-Off Policy which will provide 20 days of vacation per year. Your vacation is prorated during your first year of employment. A summary of these benefits are included for your convenience. Please note that our compensation and benefit plans are subject to change at any time.

This offer of employment is not a contract. Pegasystems is an at-will employer and either you or Pegasystems may terminate employment at any time. In the event that Pegasystems terminates your employment without cause, you will be entitled to severance equal to six months of base salary, provided that you sign a mutually acceptable form of release. In the event of a change of control and termination of your employment as CAO and CFO, all unvested Pega equity will accelerate.

As discussed, we would like you to begin working as a full-time employee on October 7, 2013.  As a condition of employment, we require you to sign and return the enclosed Standards Letter and provide proper employment authorization. Please note that as a requirement to work in the United States, you must complete the Employment Eligibility Verification (I-9) form and bring with you the required supporting identification. We would appreciate a written response by 12:00pm on August 29, 2013. Please send or fax (617- 577-0110) both your signed Offer Letter and Standards Letter to our Cambridge office, in care of Kate Guarino (kate.guarino@pega.com).

Please do not hesitate to call Alan or me with any questions. We are all delighted at the prospect of your joining our staff and working with us!

Sincerely,

Jeff Yanagi

Senior Vice President, Human Resources

I accept the terms of this offer letter and will begin work at Pegasystems on October 7, 2013.

/s/ Rafeal E. Brown 28 August 2013

Rafe Brown Date