Document:

Offer Letter between the Registrant and Michael J. Wallrich

 Exhibit 10.21 
  
 Offer Letter between the Registrant and Michael J. Wallrich, dated October 22, 2004 
  
 Michael J. Wallrich 
  
 October 22, 2004 
  
 Dear Mike, 
  
 Pegasystems is pleased to offer you the position of Senior Vice President, Global Sales, reporting directly to Henry Ancona, President and COO in our Cambridge office. In this key position, you will be traveling
approximately 67% of your time. This offer is subject to the completion of satisfactory reference and background checks, and successful meetings with our North America and European Sales Vice Presidents: John Barone and David Wells. 
  
 Your starting salary for this position will be paid semi-monthly at a rate of $10,417 at the
annualized rate of $250,000 per year. You will also be eligible to participate in our Corporate Incentive Plan with total target earnings (base and incentive) at a rate of $440,000, prorated for this year. The details of this plan will be outlined
during your first week of employment. 
  
 Pegasystems will cover the cost of
out-of-pocket relocation expenses from Illinois to Boston. Specifically, this includes transportation and the storage of household goods, and one or two house-hunting trips for you and your family. Company paid relocation payments, both tax
deductible and non-tax deductible, will be capped at $50,000. Pegasystems will also provide a monthly reimbursement up to $2,000 to defray the cost of local housing through June of 2005. 
  
 If your employment with Pegasystems is terminated for any reason other than resignation or cause, you will receive a severance package
equaling six months of your base salary. Under these same conditions, you will also be eligible for a return to Illinois relocation reimbursement of up to $50,000. 
  
 In addition, you will be granted an option to purchase 140,000 shares of Pegasystems’ common stock pursuant to our Long-Term Incentive
Plan. These terms, which become effective on your date of hire, will be conveyed to you in a separate document after you become a Pegasystems employee. A synopsis of our plan is also enclosed. 
  
 You will have the option to elect individual or family coverage in our medical and/or dental
plans. In addition, we offer a tuition reimbursement program, a 401(k) plan, and child care reimbursement accounts, which enable you to pay for dependent childcare expenses with pre-tax dollars. The company will also provide you with short-term
disability, long-term disability, and life insurance coverage. You will accrue paid time off in accordance with Pegasystems’ Paid Time Off Policy. This includes twenty days of vacation per year along with 10 paid Holidays plus 1 paid Personal
Day per year. Your vacation and holidays are prorated during your first year of employment. A summary of these benefits is included for your convenience. 
  
 This offer of employment is not a contract, and Pegasystems reserves its rights as an employer at will. Thus, either you or Pegasystems may terminate employment at
anytime. We would like you to begin working as a Pegasystems employee on a full-time basis on November 15, 2004. At that time, as a condition of employment, you will be required to sign our Standards Letter, enclosed, as well as provide us with
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 documentation (i.e. driver’s
license and social security card; U.S. passport; appropriate work visa, etc.). Also, we would appreciate a written response no later than October 25, 2004. Please send or fax your response to our Cambridge office in care of Tom Sullivan, Global
Recruitment Manager. The fax number is 617-494- 5581. 

 We are all delighted that you are joining our staff, and are very excited at the prospect of you working with us!

  

	
	 Sincerely,

	
	/S/    CARMELINA PROCACCINI
	 Carmelina Procaccini
 Vice President, Human Resources

  
 I accept the terms of this offer
letter and will begin work at Pegasystems on November 15, 2004. 
  

					
	/S/    MICHAEL J. WALLRICH	  	             10/26/2004            

	  	 
	Michael J. Wallrich	  	DateAmendment to Executive Employment Agreement/Henry Ancona

 Exhibit 10.22 
  
 Amendment to Executive Employment Agreement between the Registrant and Henry Ancona, dated February 4, 2005

  
 This Amendment (the “Amendment”) to that certain
Executive Employment Agreement dated as of July 25, 2002 (the “Original Agreement”) between Pegasystems Inc. (the “Company”) and Henry Ancona (the “Executive”), is entered into as of the 4th day of February, 2005
between the Company and the Executive. All terms used but not defined in this Amendment shall have the meanings set forth in the Original Agreement. 
  
 Introduction 
  
 The Company and the Executive entered into the Original Agreement to reflect the terms and conditions of the Executive’s employment as President and
Chief Operating Officer of the Company. On January 3, 2005 (the “Termination Date”), the Executive resigned his positions as the President and Chief Operating Officer of the Company, and ceased to be employed by the Company. The Company
and the Executive are entering into this Amendment to reflect certain additional terms and conditions applicable to the Executive’s resignation. Except as expressly modified by this Amendment, the terms and conditions of the Original Agreement
shall remain in full force and effect. 
  
 In consideration of the
mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the Company and the Executive hereby agree as follows: 
  
 1. Acknowledgement. The Company acknowledges that the provisions of
Sections 3.6(b) and 5.2 of the Original Agreement shall be applicable to the Executive in connection with his resignation. 
  
 2. Amendment of Section 5.2(B). Section 5.2(B) of the Original Agreement is hereby amended as follows: 
  

	 	A.	All Benefits relating to life insurance, accidental death and dismemberment, and disability will cease as of the Termination Date. In exchange, the Company will pay the Executive a
lump sum of $16,400, which the Executive may use for his personal purchase of these types of coverages. 

  

	 	B.	If the Executive desires to continue any supplemental coverages that he previously purchased at his own cost through carriers used by the Company, he must complete all required
forms and return them by the applicable deadlines in order to continue coverage, and will be responsible for payment of these coverages. 

  

	 	C.	All Benefits relating to medical and dental insurance will cease as of January 31, 2005. The Executive has received notice of his rights to continue his medical and dental insurance
through COBRA. The Company will pay for the Executive’s COBRA premiums until the earlier of one year from the Terminate Date or the date upon which the Executive obtains coverage through his spouse’s employer. In exchange, the Company will
pay the Executive a lump sum of $8,000, which represents the cash equivalent of the Company’s contributions for medical and dental insurance over a twelve-month period, less any amounts paid by the Company for COBRA premiums pursuant to the
preceding sentence. 

  

	 	D.	For long-term care coverage, the Company will cover the cost for the base level of coverage only for the required twelve-month period. 

  

	 	E.	The Executive will be entitled to payment of the Company match for his 2004 contributions to the 401(k), to the extent the Compensation Committee approves a match for 2004. All
Benefits relating to participation in the Company’s 401(k) plan for the calendar year 2005 will cease as of the Termination Date. The Executive acknowledges that the severance payments to be paid under the Original Agreement are not eligible
for contribution to the Company’s 401(k) plan. 

	 	F.	The Executive will be entitled to payment of a bonus for 2004, subject to the terms and conditions of the Corporate Incentive Compensation Plan applicable to that year. In measuring
the amount of the bonus due to the Executive for 2004, the Company agrees that: (i) the Executive will be assigned the same percentage with respect to the attainment of the corporate-level targets (as opposed to any unit-level targets) as is
assigned to all other members of the Company’s Executive Team for that year; and (ii) the amount of the bonus payment will not be adjusted on the basis of any assessment of the Executive’s individual performance for the year.

  
 The lump sum payments described in paragraphs
2(A) and 2(B) above will be paid to the Executive at the same time as the severance payments due under the Original Agreement are paid, which shall be seven days after the Executive signs and delivers this Amendment and the Confidential Release of
Claims referenced below to the Company. 
  
 3. Required Actions
by Executive. As a condition for the payment of the lump sums described in Section 2 above, the Executive agrees to take the following actions: 
  

	 	A.	Within two business days of the execution of this Agreement, sign and deliver to the Company a Confidential Release of Claims, in the form attached to the Original Agreement.

  

	 	B.	Within two business days of the execution of this Agreement, sign and deliver to the Company a letter evidencing his resignation as President and Chief Operating Officer of the
Company and as a member of the Board of Directors of the Company, effective as of the Termination Date. 

  

	 	C.	Within two business days of the execution of this Agreement, sign and deliver to the Company any previously-unsigned grant notices regarding stock option grants made by the Company
to the Executive. 

  

	 	D.	Within two business days following the delivery of a final draft of the Company’s Annual Report on Form 10-K for 2004 to the Executive, sign and deliver to the Company a
Certification for the fiscal year ending December 31, 2004, in the form attached to this Amendment. 

  

	 	E.	Within two business days of the execution of this Agreement, sign and deliver to the Company the performance review forms for the Company’s Executive Team covering the July
2003 - December 2003 time period, which had been completed prior to the Executive’s resignation but not signed by the Executive. 

  
 IN WITNESS WHEREOF, the parties have hereunto executed this Amendment to Executive Employment Agreement as of the day and year set forth above.

  

			
	 PEGASYSTEMS INC.

		
	By:	 	 /S/    CARMELINA
PROCACCINI

	 Carmelina Procaccini,
 Vice President, Human Resources

	
	 /S/    HENRY
ANCONA

	 Henry Ancona

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