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Exhibit 10.71

PEREGRINE SYSTEMS, INC.
PERFORMANCE STOCK UNIT AGREEMENT

        PERFORMANCE STOCK UNIT AGREEMENT (the "Agreement"), effective August 16,
2004, by and between Kenneth Saunders ("Awardee") and Peregrine Systems, Inc., a
Delaware corporation ("PSI").

        RECITALS

        WHEREAS, Awardee and PSI are parties to an employment letter agreement
dated July 20, 2004, as amended and restated March    , 2005, pursuant to which
Awardee agreed to provide certain services to PSI as an employee and officer of
PSI (the "Employment Agreement"); and

        WHEREAS, the Employment Agreement provides that PSI will issue to
Awardee, and Awardee desires to acquire from PSI, performance stock units (the
"Units") representing the right to participate in the future value of PSI upon
the attainment of certain performance objectives, as contemplated in and subject
to the terms and conditions of the Employment Agreement and this Agreement.

        NOW THEREFORE, in consideration of the foregoing, and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:

        1.    Definitions.    

        Capitalized terms not explicitly defined in this Agreement but defined
in the Employment Agreement shall have the same meanings ascribed to them in the
Employment Agreement.

        2.    Grant of Award.    

        PSI hereby grants to Awardee, and Awardee hereby accepts, pursuant to
the terms of the Employment Agreement and this Agreement (collectively, the
"Award"), the right to acquire, upon satisfaction of the Performance Conditions
(as defined in Schedule II attached hereto) and the other terms and conditions
set forth in herein, that number of Issued Units specified herein and Awardee
hereby accepts the Award. The Units are not and shall not be considered an
equity interest in PSI and solely represent Awardee's right to receive the
financial benefits described herein if and only if a Sale Event is consummated
that satisfies the criteria relating thereto set forth on Schedule I hereto.

        3.    Units.    

        3.1.  If Awardee remains continuously employed by PSI through the date
of consummation of a Sale Event (in the event of certain terminations of
employment prior to a Sale Event Section 3.2 shall control), the target number
of Units to be issued to Awardee shall be determined based on the Total
Consideration and the Target Payout (each as defined and determined in
accordance with Schedule I hereto) (the "Target Number"). The actual number of
Units to be issued to Awardee shall be that portion of the Target Number to
which the Compensation Committee of the Board determines in good faith Awardee
is entitled based on Awardee's achievement of the performance conditions set
forth in Schedule II (the "Issued Units"). Each Issued Unit shall have a value
equal to the Per Share Consideration.

        3.2.  In the event of Awardee's Termination without Cause, Termination
for Good Reason or a Termination for Death or Disability (each as defined in the
Employment Agreement) prior to the occurrence of a Sale Event, and a Sale Event
subsequently occurs on or before December 31, 2005 in which the Per Share
Consideration equals or exceeds an amount that would have resulted in a Target
Number of Units being issued to Awardee if he had been employed at the date of
consummation of the Sale Event, the target number of Units to be issued to
Awardee (the "Pro-Rated Target Number") shall be equal to (i) the target number
of Units that would have been issued to Awardee had Awardee remained
continuously employed by PSI through the date of consummation of a Sale Event
multiplied by (ii) a fraction, the numerator of which is the number of days of
Awardee's employment with PSI from August 16, 2004 through the date of
termination, and the denominator of which is the total number of days from
August 16, 2004 through the date of consummation of a Sale Event. The actual

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number of Units to be issued to Awardee pursuant to this Section 3.2 shall be
that portion of the Pro-Rated Target Number to which the Compensation Committee
of the Board determines in good faith Awardee is entitled based on Awardee's
achievement of the performance conditions set forth in Schedule II through the
date of Awardee's termination of employment with PSI (the "Pro-Rated Issued
Units"). Each Pro-Rated Issued Unit shall have a value equal to the Per Share
Consideration.

        4.    Non-transferability.    

        Awardee shall not transfer, assign, encumber or otherwise dispose of the
Units, or any interest therein.

        5.    Payment in Respect of Issued Units.    

        Payment of an amount per Issued Unit or Pro-Rated Issued Unit equal to
the Per Share Consideration shall be made by PSI, at its sole election, in cash,
shares of PSI common stock (the aggregate fair market value of which shall be
equivalent to the aggregate Per Share Consideration of all Issued Units or
Pro-Rated Issued Units with respect to which payment is made in PSI common
stock), or a combination of cash and PSI common stock, at the closing of the
Sale Event or within a reasonable time thereafter; provided that (i) PSI may
only elect to pay all or a portion of the payment in shares of PSI common stock
if such PSI common stock remains registered under Section 12 of the Securities
Exchange Act of 1934, as amended, and is traded on an established stock
exchange, quoted on a national market system or quoted regularly by a recognized
securities dealer immediately following the closing of the Sale Event and
(ii) if PSI elects to make all or a portion of the payment in shares of PSI
common stock, such shares shall be issued pursuant to an effective registration
statement permitting immediate resale thereof by Awardee without any volume
limitations.

        6.    "Sale Event" Defined.    

        For purposes hereof, a "Sale Event" shall mean a sale of all or
substantially all of (i) the assets of PSI or (ii) the equity securities of PSI,
in each case pursuant to a merger, consolidation, recapitalization, tender
offer, exchange offer or other transaction or series of related transactions;
provided, however, that a "Sale Event" shall not be deemed to have occurred if
more than 50% of the outstanding voting securities of the surviving or resulting
entity (including, without limitation, an entity which as a result of such
transaction owns PSI or all or substantially all of PSI's assets either directly
or through one or more subsidiaries) are, or are to be, beneficially owned,
directly or indirectly, by the PSI stockholders who were the beneficial owners
of the outstanding voting securities of PSI immediately prior to such
transaction (excluding, for such purposes, any such stockholder who is or,
within two years prior to the consummation date of such transaction, was, an
"affiliate" or "associate" (as each are defined in Rule 12b-2 promulgated under
the Securities Exchange Act of 1934, as amended) of a party to the transaction)
in substantially the same proportions as their beneficial ownership, immediately
prior to such transaction, of the outstanding voting securities of PSI.

        7.    Vesting.    

        The Award shall be fully vested as of August 16, 2004 (the "Date of
Grant").

        8.    Limitations on Transfer.    

        Only Awardee may receive any Issued Units under the Award. In addition
to any other limitation on transfer created by applicable securities laws,
Awardee agrees not to sell, assign, hypothecate, donate, encumber or otherwise
dispose of any interest in the Award until such time as the Units become Issued
Units pursuant to the Employment Agreement.

        9.    Restrictive Legends.    

        The stock certificates evidencing any Shares issued under the Award
shall bear appropriate legends determined by PSI.

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        10.    Award not a Service Contract.    

        The Award is not an employment or service contract, and nothing in the
Award shall be deemed to create in any way whatsoever any obligation on PSI or
an affiliate to continue Awardee's employment or service. In addition, nothing
in the Award shall obligate PSI or an affiliate, their respective stockholders,
Boards of Directors, officers or employees to continue any relationship that
Awardee may have as an employee or director of, or consultant to, PSI or an
affiliate.

        11.    Withholding Obligations.    

        11.1. At the time the Units become Issued Units, and at any time after
the date this Award is granted as is reasonably requested by PSI, Awardee
authorizes withholding from payroll and any other amounts payable to him or her,
and otherwise agrees to make adequate provision for, any sums required to
satisfy the federal, state, local and foreign tax withholding obligations of PSI
or an affiliate, if any, which arise in connection with the Award, subject to
Section 8 (280G Payment) of the Employment Agreement.

        11.2. Unless the tax withholding obligations of PSI or any affiliate are
satisfied, PSI shall have no obligation to make a payment in respect of the
Award (but subject to Section 8 (280G Payment) of the Employment Agreement).

        12.    Representations.    

        Awardee has reviewed with his or her own tax advisors the federal,
state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement. Awardee is relying solely on such
advisors and not on any statements or representations of PSI or any of its
agents. Awardee understands that he (and not PSI) shall be responsible for any
tax liability that may arise as a result of this investment or the transactions
contemplated by this Agreement.

        13.    Notices.    

        Any notices provided for in the Award or the Employment Agreement shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by mail by PSI to Awardee, five days after deposit
in the United States mail, postage prepaid, addressed to Awardee at the last
address provided by Awardee to PSI.

        14.    Survival of Terms.    

        This Agreement shall apply to and bind Awardee and PSI and their
respective permitted assignees and transferees, heirs, legatees, executors,
administrators and legal successors.

        15.    Failure to Enforce not a Waiver.    

        The failure of PSI to enforce at any time any provision of this
Agreement shall in no way be construed to be a waiver of such provision or of
any other provision hereof.

        16.    Amendments.    

        This Agreement may be amended or modified at any time only by an
instrument in writing signed by each of the parties hereto.

        17.    Authority of the Committee.    

        The committee of the Board of Directors appointed to administer PSI's
2003 Equity Incentive Plan (the "Committee") shall have full authority to
interpret and construe the terms of this Agreement.

        18.    Miscellaneous.    

        18.1. The rights and obligations of PSI under the Award shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by PSI's
successors and assigns.

        18.2. Awardee agrees upon request to execute any further documents or
instruments necessary or desirable in the sole determination of PSI to carry out
the purposes or intent of the Award.

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        18.3. Awardee acknowledges and agrees that he or she has reviewed the
Award in its entirety, has had an opportunity to obtain the advice of counsel
prior to executing and accepting such Award and fully understands all provisions
of the Award.

        19.    Employment Agreement Governs.    

        The Award is subject to all the provisions of the Employment Agreement,
the provisions of which are hereby made a part of Awardee's Award, and is
further subject to all amendments which may from time to time be adopted in
relation to the Employment Agreement. In the event of any conflict between the
provisions of the Award and those of the Employment Agreement, the provisions of
the Employment Agreement shall control.

        Awardee represents that he has read this Agreement and is familiar with
its terms and provisions.

        20.    Community Property.    

        Without prejudice to the actual rights of the spouses as between each
other, for all purposes of this Agreement, Awardee shall be treated as agent and
attorney-in-fact for that interest held or claimed by his or her spouse with
respect to this Award and any Shares issued under this Award and the parties
hereto shall act in all matters as if the Awardee was the sole owner of the
same. This appointment is coupled with an interest and is irrevocable.

        21.    Governing Law.    

        This Agreement will be governed by the internal laws of the State of
California without reference to its conflict of laws provisions.

        22.    Arbitration.    

        22.1. General.    Any controversy, dispute, or claim between the parties
to this Agreement, including any claim arising out of, in connection with, or in
relation to the formation, interpretation, performance or breach of this
Agreement shall be settled exclusively by binding arbitration, before a single
arbitrator, in accordance with these provisions and the then most applicable
rules of the American Arbitration Association. Judgment upon any award rendered
by the arbitrator may be entered by any state or federal court having
jurisdiction thereof. Such arbitration shall be administered by the American
Arbitration Association. Arbitration shall be the exclusive remedy for
determining any such dispute, regardless of its nature. Notwithstanding the
foregoing, either party may in an appropriate matter apply to a court for
provisional relief, including a temporary restraining order or a preliminary
injunction, on the ground that the award to which the applicant may be entitled
in arbitration may be rendered ineffectual without provisional relief. Unless
mutually agreed by the parties otherwise, any arbitration shall take place in
the City of San Diego, California.

        22.2. Selection of Arbitrator.    In the event the parties are unable to
agree upon an arbitrator, the parties shall select a single arbitrator from a
list of nine arbitrators drawn by the parties at random from the "Independent"
(or "Gold Card") list of retired judges or, at Awardee's option, from a list of
nine persons (which shall be retired judges or corporate or litigation attorneys
experienced in stock options and buy-sell agreements) provided by the office of
the American Arbitration Association having jurisdiction over San Diego,
California. If the parties are unable to agree upon an arbitrator from the list
so drawn, then the parties shall each strike names alternately from the list,
with the first to strike being determined by lot. After each party has used four
strikes, the remaining name on the list shall be the arbitrator. If such person
is unable to serve for any reason, the parties shall repeat this process until
an arbitrator is selected.

        22.3. Applicability of Arbitration; Remedial Authority.    This
agreement to resolve any disputes by binding arbitration shall extend to claims
against any parent, subsidiary or affiliate of each party, and, when acting
within such capacity, any officer, director, shareholder, employee or agent of
each party, or of any of the above, and shall apply as well to claims arising
out of state and federal statutes and local ordinances as well as to claims
arising under the common law. In the event of a dispute subject to this

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paragraph the parties shall be entitled to reasonable discovery subject to the
discretion of the arbitrator. The remedial authority of the arbitrator (which
shall include the right to grant injunctive or other equitable relief) shall be
the same as, but no greater than, would be the remedial power of a court having
jurisdiction over the parties and their dispute. The arbitrator shall, upon an
appropriate motion, dismiss any claim without an evidentiary hearing if the
party bringing the motion establishes that he or it would be entitled to summary
judgment if the matter had been pursued in court litigation. In the event of a
conflict between the applicable rules of the American Arbitration Association
and these procedures, the provisions of these procedures shall govern.

        22.4. Fees and Costs.    The costs and fees of the arbitrator and the
arbitration proceeding shall be borne 50% by you and PSI. Each of you and PSI
shall bear their own attorneys' fees and expenses.

        22.5. Award Final and Binding.    The arbitrator shall render an award
and written opinion, and the award shall be final and binding upon the parties.
If any of these arbitration provisions, or of this Agreement, are determined to
be unlawful or otherwise unenforceable, in whole or in part, such determination
shall not affect the validity of the remainder of this Agreement, and this
Agreement shall be reformed to the extent necessary to carry out its provisions
to the greatest extent possible and to insure that the resolution of all
conflicts between the parties, including those arising out of statutory claims,
shall be resolved by neutral, binding arbitration. If a court should find that
the arbitration provisions of this Agreement are not absolutely binding, then
the parties intend any arbitration decision and award to be fully admissible in
evidence in any subsequent action, given great weight by any finder of fact, and
treated as determinative to the maximum extent permitted by law.

        [signature page follows]

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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.

Peregrine Systems, Inc.
By:
 
 
 
By:
 
     

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    Signature       Kenneth Saunders
Name:
 
 
 
 
 
     

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Title:
 
 
 
 
 
     

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        CONSENT OF SPOUSE

        The undersigned spouse of the Awardee hereby acknowledges that: I have
read the foregoing Performance Stock Unit Agreement and that I understand its
contents. I am aware that the Agreement imposes restrictions on the transfer of
the Award and on any Shares issued thereunder. I agree that my spouse's interest
in the Award and any Shares issued under the Award is subject to this Agreement
and any interest I may have in such Award or in such Shares shall be irrevocably
bound by this Agreement and further that my community property interest, if any,
shall be similarly bound by this Agreement.

        I am aware that the legal, financial and other matters contained in this
Agreement are complex and I am free to seek advice with respect thereto from
independent counsel. I have either sought such advice or determined after
carefully reviewing this Agreement that I will waive such right.

Dated: As of                        , 2004        

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PEREGRINE SYSTEMS, INC. PERFORMANCE STOCK UNIT AGREEMENT