Excluding a Parallels Virtual Machine

I run Parallels on my MacPro and sometimes get a warning that says that I may experience a slowdown because the virtual machine is being backed up. Is there a way to exclude this from the Time Capsule / Time Machine backup? I tried getting into settings but it would not let me select it.
Since I don't store anything on this side of the machine I am assuming that I will just have to reinstall it if necessary.
Thanks.

Open System Preferences (gear icon) on the dock
Open Time Machine
Click on the Options button
Click on the + (plus) button at the bottom of the Exlusions list
Use the Finder like interface to navigate to the Parellels application and click to highlight it
Then click Exclude at the bottom of the list
Parallels will no longer be backed up
You can exclude other items the same way if needed

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