Sec Form 4 Filing - STILLWELL KENNETH @ PEGASYSTEMS INC - 2020-03-03

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person STILLWELL KENNETH 2. Issuer Name and Ticker or Trading Symbol PEGASYSTEMS INC [ PEGA] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) CFO, SVP (Last) (First) (Middle) C/O PEGASYSTEMS INC, ONE ROGERS STREET 3. Date of Earliest Transaction (MM/DD/YY) 03/03/2020 (Street) CAMBRIDGE, MA02142 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 03/05/2020 M 426 ( 1 ) A $ 0 9,899 D Common Stock 03/05/2020 F 147 D $ 91.86 9,752 ( 2 ) D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Restricted Stock Units ( 3 ) $ 0 03/03/2020 A 2,107 ( 4 ) 03/03/2021 ( 5 ) Common Stock 2,107 $ 0 2,107 D Restricted Stock Units ( 3 ) $ 0 03/03/2020 A 13,931 ( 6 ) 03/03/2021 ( 5 ) Common Stock 13,931 $ 0 13,931 D Stock Options $ 90.05 03/03/2020 A 55,213 ( 7 ) 03/03/2021 03/03/2030 Common Stock 55,213 $ 0 55,213 D Restricted Stock Units ( 3 ) $ 0 03/05/2020 M 426 ( 1 ) 03/05/2019 ( 5 ) Common Stock 426 $ 0 5,115 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other STILLWELL KENNETH C/O PEGASYSTEMS INC ONE ROGERS STREET CAMBRIDGE, MA02142 CFO, SVP Signatures /s/ Janet Mesrobian, Esq., Attorney-in-Fact for Kenneth Stillwell 03/05/2020 Signature of Reporting Person Date

Explanation of Responses:

( 1 )Represents 5% vesting on March 5, 2020. The original grant was 8,524 restricted stock units, with 20% vesting on March 5, 2019, and the remaining 80% vesting in equal quarterly installments over the remaining four years. ( 2 )Does not include shares of common stock subject to unvested restricted stock units and/or options awards. ( 3 )Each restricted stock unit represents the right to receive, following vesting, one share of the issuer's common stock. ( 4 )Represents election by the individual, as part of the Company's Corporate Incentive Plan (CICP), to receive half of their annual bonus in RSUs, based upon the Company's stock price as of March 3, 2020. All RSUs vest 100% on March 3, 2020, subject to attainment of the CICP performance threshold funding for the year ending December 31, 2020. ( 5 )Once vested, the shares of common stock are not subject to expiration. ( 6 )RSUs will vest 20% on March 3, 2021, with the remaining 80% vesting in equal quarterly installment over the remaining four years. ( 7 )Options will vest 20% on March 3, 2021, with the remaining 80% vesting in equal quarterly installments over the remaining four years.

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

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