EXHIBIT 10.1

FIRST AMENDMENT TO THE

PEGASYSTEMS INC.

2004 LONG-TERM INCENTIVE PLAN

(as amended and restated)

Pegasystems Inc., a Massachusetts corporation (the “Company”), previously
established the Pegasystems, Inc. 2004 Long-Term Incentive Plan (the “Plan”).
The Plan, as amended and restated, was approved by the Company’s stockholders at
the Company’s 2016 Annual Meeting on June 10, 2016. At a duly noticed meeting
held on May 23, 2017, the Board of Directors of the Company, and the
Compensation Committee of the Board, approved and adopted the following
amendment to the Plan.

 

  1. Section 2(dd) is hereby amended as follows:

 

  (dd) “Retirement” means retirement of an Employee or Director from active
employment or service with any Related Company after having attained age 60,
with no intention to continue to provide services, whether as an employee,
director, independent contractor or otherwise, to any other person or entity and
with the intention of concluding the Employee or Director’s working or
professional career.

 

  2. Sections 9(d) through (g) are hereby amended as follows:

 

  (d) Termination of Service. If a Participant terminates Service other than by
reason of the Participant’s death, Disability or Retirement, such Participant
may exercise his or her Option within such period of time as is specified in the
Stock Option Agreement to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Stock Option Agreement). In the absence of a specified time
in the Stock Option Agreement, the Option shall remain exercisable for three
months following the Participant’s termination of Service. If, on the date of
termination, the Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan
unless the Committee has determined that all or part of the unvested portion of
the Option will continue to vest following termination of Service, in which case
the Shares covered by the portion of the Option that will continue to vest will
not revert to the Plan until the vesting of those Shares is no longer possible.
If, after termination of Service, the Participant does not exercise his or her
Option within the time specified by the Committee in the Stock Option Agreement,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

 

  (e) Disability of Participant. If a Participant terminates Service as a result
of the Participant’s Disability, the Participant may exercise his or her Option
within such period of time as is specified in the Stock Option Agreement to the
extent the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Stock Option
Agreement). In the absence of a specified time in the Stock Option Agreement,
the Option shall remain exercisable for 24 months following the Participant’s
termination of Service as the result of the Participant’s Disability. If, on the
date of termination of Service, the Participant is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan unless the Committee has determined that all or part of the
unvested portion of the Option will continue to vest following termination of
Service, in which case the Shares covered by the portion of the Option that will
continue to vest will not revert to the Plan until the vesting of those Shares
is no longer possible. If, after termination of Service, the Participant does
not exercise his or her Option within the time specified in the Stock Option
Agreement, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

 

  (f)

Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised within such period of time as is specified in the Stock Option
Agreement to the extent that the Option is vested on the date of death (but in
no event later than the expiration of the term of such Option as set forth in
the Stock Option Agreement) by the Participant’s estate or by a person who
acquires the right to exercise the Option by bequest or inheritance. In the
absence of a specified time in the Stock Option Agreement, the Option shall
remain exercisable for 24 months following the Participant’s termination of
Service because of death. If, at the time of death, the Participant is not
vested as to the entire Option, the Shares covered by the unvested portion of
the Option shall revert to the Plan on the last day of the 12th month following
the date of the Participant’s death unless the Committee earlier determines that
all or part of the unvested portion of the Option will become vested as of the
date of the Participant’s death and/or will continue to vest following the death
of the Participant, in

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  which case the Shares covered by the unvested portion of the Option will not
revert to the Plan until the vesting of those Shares is no longer possible. If
the Option is not so exercised within the time specified in the Stock Option
Agreement, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

 

  (g) Retirement of Participant. If a Participant terminates Service as a result
of Retirement, the Participant may exercise his or her Option within such period
of time as is specified in the Stock Option Agreement to the extent the Option
is vested on the date of termination (but in no event later than the expiration
of the term of such Option as set forth in the Stock Option Agreement). In the
absence of a specified time in the Stock Option Agreement, the Option shall
remain exercisable for 24 months following the Participant’s termination of
Service as the result of the Participant’s Retirement. If, on the date of
termination of Service, the Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan unless the Committee has determined that all or part of the unvested
portion of the Option will continue to vest following termination of Service, in
which case the Shares covered by the portion of the Option that will continue to
vest will not revert to the Plan until the vesting of those Shares is no longer
possible. If, after termination of Service, the Participant does not exercise
his or her Option within the time specified in the Stock Option Agreement, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

 

  3. Section 13(g) is hereby amended as follows:

 

  (g) Amendment of Award. The Committee may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or different type, changing the expiration date or Exercise
Price or Purchase Price, providing for continued vesting of the Award following
termination of Service or converting an Incentive Stock Option to a Nonstatutory
Stock Option, provided that the Participant’s consent to such action shall be
required unless the Committee determines that the action would not materially
and adversely affect the Participant.

 

  4. Section 13(i) is hereby amended as follows:

 

  (i) Cancellation and Forfeiture for Misconduct, Clawback Policy.
Notwithstanding the terms of any Award or other provision of the Plan in the
event of any Misconduct by the Participant or Purchaser (whether before or after
the termination of Service), (i) all Awards granted to the Participant shall be
terminated and the holder thereof shall have no further rights thereunder
(ii) all Shares then held by the Participant or Purchaser (or any successor)
which were acquired by the Participant or Purchaser (or any successor) pursuant
to an Award under the Plan shall thereupon be (or revert to being) Restricted
Shares and shall be subject to a Right of Repurchase exercisable by the Company
and (iii) the Participant or Purchaser (or any successor) shall pay to the
Company, within 10 business days of the Company’s request therefor, the
aggregate after-tax proceeds (taking into account all amounts of tax that would
be recoverable upon a claim of loss for payment of such proceeds in the year of
repayment) received by the Participant or Purchaser (or any successor) upon the
sale or other disposition of, or distributions in respect of, any Award under
the Plan and any Shares acquired in respect thereof. The purchase price for
Shares repurchased by the Company pursuant to the Right of Repurchase pursuant
to this Section 13(i) shall be equal to the lesser of (i) the purchase price
originally paid by the Participant or Purchaser for such Shares or (ii) the Fair
Market Value of such Shares as of the date of the repurchase. The following
shall constitute “Misconduct” by an Participant or Purchaser: (i) the
unauthorized use or disclosure of the confidential information or trade secrets
of any Related Company which use or disclosure causes material harm to the
Related Company; (ii) conviction of a crime involving moral turpitude, deceit,
dishonesty or fraud; (iii) gross negligence or willful misconduct of the
Participant or Purchaser with respect to any Related Company; or (iv) the breach
by the Participant or Purchaser of any material term of an agreement with a
Related Company including covenants not to compete and not to solicit, and
provisions relating to confidential information and intellectual property
rights. In addition, Awards and Shares (and proceeds therefrom) obtained
pursuant to or upon exercise of such Awards are subject to forfeiture, setoff,
clawback, recoupment or other recovery if the Committee determines in good faith
that such action is required by Applicable Law or Company policy as amended from
time to time.

 

  5. Except as amended by this First Amendment, all other terms of the Plan
shall remain unmodified and in full force and effect Adopted by the Board:
May 23, 2017