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Exhibit 10.59

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August 4, 2004

Mr. Russell C. Clark
3251 Avenida La Cima
Carlsbad, CA 92009

Dear Russ:

        On behalf of Peregrine Systems, Inc. ("Peregrine" or "PSI") we would
like to offer you the position, effective August 23, 2004 (the "Commencement
Date"), of Vice President, Controller, and Chief Accounting Officer reporting to
Ken Saunders, Executive Vice President, subject to the terms and conditions
described below.

        1.    BASE SALARY.    Your starting salary will be $9,375 per
semi-monthly pay period effective with your Commencement Date.

        2.    EMPLOYMENT TERM.    The term of your employment under this letter
agreement (the "Employment Term") will begin on your Commencement Date and end
when it is terminated in accordance with Section 6.

        3.    BONUS. (a) MICP.    You will be eligible to participate in
Peregrine's Management Incentive Compensation Plan (MICP) with an annual target
for fiscal year 2005 of $100,000. A copy of the summary plan description is
attached; however, your MICP for FY 2005 targets will be 50% for the first half
of fiscal 2005 prorated from your Commencement Date and 50% for the second half
of fiscal 2005 (the period October 1, 2004 through March 31, 2005).

        (a)    Sign On.    In addition, a one-time signing bonus in the amount
of $50,000 will be paid to you during your first payroll period with PSI,
provided that this signing bonus must be repaid by you to Peregrine if you have
a Voluntary Termination (as defined in Section 6(a) below) prior to August 23,
2005. Such repayment shall be made concurrent with your Voluntary Termination.
Peregrine will have the right to offset any amounts otherwise payable to you by
the amount of the signing bonus should you fail to make the repayment required
hereby.

        (b)    Process Improvement Bonus.    You will be entitled to a one-time
bonus in the amount of $75,000 in the event the finance department is successful
in concluding a "soft" close for the month ending November, 2004 and a "hard"
close for the quarter ending December 31, 2004, as determined in good faith by
the Audit Committee of the Board of Directors, and PSI files its Quarterly
Report on Form 10-Q for the quarter ending December 31, 2004 (the "December 2004
Form 10-Q") on a timely basis in accordance with applicable rules and
regulations of the Securities and Exchange Commission ("SEC"), or, if such
filing is not timely made, the financial statements and Management's Discussion
and Analysis of Financial Condition and Results of Operations for the
December 2004 Form 10-Q, each in form and substance as required by the
applicable rules and regulations of the SEC, were completed in time to permit a
timely filing. Such bonus, if payable, will be paid by March 15, 2005, if you
have completed all of the foregoing performance obligations in the specified
time period.

        4.    BENEFITS.    You will be eligible to participate in PSI's employee
benefit plans of general application, including, without limitation, those plans
covering medical, disability and life insurance in accordance with the rules
established for individual participation in any such plan and under applicable
law. You will be eligible for vacation and sick leave ("PTO") in accordance with
PSI polices in effect during the term of this letter agreement and will receive
such other benefits as PSI generally provides to its other employees of
comparable position and experience.

        5.    STOCK OPTIONS.    Subject to formal approval by the Compensation
Committee of the Board of Directors, you will be granted options to purchase up
to 60,000 shares of PSI common stock, subject

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to execution of this letter agreement and your executing a stock option
agreement consistent with the terms and conditions of the 2003 Equity Incentive
Plan (the "Plan"). The date of grant of the options will be the Commencement
Date or date of formal approval by the Compensation Committee, whichever is
later (the "Grant Date"), and the exercise price per share of the options will
be the fair market value of PSI's common stock on the Grant Date as determined
under the Plan. The options will vest 25% after the first 12 months, and in 36
equal monthly installments thereafter. Notwithstanding any provisions of the
2003 Equity Incentive Plan or the stock option grant agreement evidencing the
options to the contrary, if a Change in Control or Fundamental Transaction (as
defined in the Plan) occurs, then 100% of the portion of the options that are
otherwise unvested as of the date of the Change of Control shall become vested
as of the date of the Change of Control.

        6.    TERMINATION.    Your employment with PSI may be terminated by you
or by PSI at any time for any reason as follows:

        (a)   You may terminate your employment upon sixty (60) days' prior
written notice to PSI at any time in your discretion ("Voluntary Termination");

        (b)   PSI may terminate your employment upon written notice to you at
any time following a determination by PSI that there is "Cause" as defined
below, for such termination ("Termination for Cause");

        (c)   PSI may terminate your employment upon written notice to you at
any time in the sole discretion of PSI without a determination that there is
Cause for such termination ("Termination without Cause");

        (d)   Your employment will automatically terminate upon your death or
upon your Disability (as defined below) ("Termination for Death or Disability");
or

        (e)   You may terminate your employment upon thirty (30) days' prior
written notice (the "Notice Period") to PSI following a determination by you
that there is "Good Reason" (as defined below) for such termination
("Termination for Good Reason"). Such termination will be effective at the end
of the Notice Period if PSI has not substantially remedied the Good Reason for
such termination.

        For purposes of this letter agreement, the term "Disability" shall mean
a condition qualifying as a disability under PSI's disability insurance policy
that renders you unable to perform your job responsibilities for a period of 180
consecutive days or 180 days in the aggregate in any 12-month period.

        For purposes of this letter agreement, "Cause" means (i) gross
negligence or willful misconduct in the performance of your duties to PSI (other
than as a result of a Disability); (ii) repeated and continued failure to
perform your duties and responsibilities as a PSI employee (including but not
limited to your compliance with any written policy of PSI) in good faith after
having a reasonable opportunity to cure such failure following written notice of
such failure; (iii) commission of any act of fraud or violation of any federal
or state securities laws or any SEC rules and regulations with respect to PSI;
or (iv) conviction of a felony or a crime involving moral turpitude if such
felony or crime caused material harm to the business and affairs of PSI in the
reasonable determination of PSI's Board of Directors. No act or failure to act
by you shall be considered "willful" if done or omitted by you in good faith
with reasonable belief that your action or omission was in the best interests of
PSI.

        For purposes of this letter agreement, "Good Reason" shall mean (i) a
significant reduction of your duties, title, position or responsibilities
relative to your duties, title, position or responsibilities in effect
immediately prior to such reduction that is effected without your consent or
agreement; (ii) a substantial reduction, without a reasonable business reason,
of the facilities or perquisites available to you immediately prior to such
reduction if such reduction is effected without your consent or

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agreement; (iii) a reduction by PSI of your base salary and target bonus as in
effect immediately prior to such reduction if such reduction is effected without
your consent or agreement (other than any such reduction that is effected on
substantially a company-wide basis in order to reduce PSI's operating expenses);
or (iv) the relocation of your primary office at PSI to a facility or location
that is more than fifty (50) miles away from your primary office location
immediately prior to such relocation, if such relocation is effected without
your consent or agreement.

        7.    SEPARATION BENEFITS.    Upon termination of your employment with
PSI for any reason, you will receive payment for all salary and earned but
unused PTO accrued to the date of your termination of employment. Your benefits
will be continued under PSI's then existing benefit plans and policies for so
long as provided under the terms of such plans and policies and as required by
applicable law. Under certain circumstances, you will also be entitled to
receive severance benefits as set forth below, but you will not be entitled to
any other compensation, award or damages with respect to your employment or
termination.

        (a)   In the event of your Voluntary Termination or Termination for
Cause, you will not be entitled to any cash severance benefits or additional
vesting of shares or stock options.

        (b)   Subject to your compliance with Section 8, in the event of your
Termination for Good Reason or Termination without Cause in a circumstance in
which Section 7(c) is not applicable, you will be entitled to a severance
payment equal to your annual base salary paid in 24 semi-monthly installments,
plus 12 months of COBRA coverage, reimbursed by the Company, for medical,
dental, and vision insurance subject to the same coverage levels and employee
contribution rates as in effect prior to termination.

        PSI may discontinue reimbursement of COBRA expenses if you obtain
substantially equal coverage through another employer within 12 months following
your termination.

        For purposes of this letter agreement, the term "COBRA" shall mean the
provisions of Section 4980B of the Internal Revenue Code of 1986, as amended
(the "Code"), adopted as part of the Consolidated Omnibus Budget Reconciliation
Act, which allow former employees of an employer to continue to receive health
and medical benefits, at their expense, for a specified time period.

        (c)   Subject to your compliance with Section 8, in the event of a
Change of Control (as defined below), you will be entitled to a payment equal to
your annual base salary plus an amount equal to your target annual bonus under
the MICP for fiscal 2005 (or, if higher, your MICP target bonus at the effective
date of the Change of Control), provided you do not have a Voluntary Termination
within 180 days of the effective date of the Change of Control. Such payment, if
payable, will be paid on the 181st day following the effective date of the
Change of Control. In the event of your termination by PSI or any successor
corporation for any reason within 12 months following the effective date of a
Change of Control, you will only be entitled to the payment set forth in this
Subsection (c) (for purposes of clarity, you will not be entitled to any
additional severance payment pursuant to Subsection (b)). A "Change of Control"
means:

          (i)  the consummation of a merger or consolidation of PSI with or into
another entity or any other corporate reorganization, if persons who were not
stockholders of PSI immediately prior to such merger, consolidation or other
reorganization own immediately after such merger, consolidation or other
reorganization 50% or more of the voting power of the outstanding securities of
each of (i) the continuing or surviving entity and (ii) any direct or indirect
parent corporation of such continuing or surviving entity;

         (ii)  the sale, transfer or other disposition of all or substantially
all of the assets of PSI;

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        (iii)  a change in the composition of the Board, as a result of which
fewer than 50% of the incumbent directors (or persons whose nomination for
election as director has been approved by incumbent directors) are directors; or

        (iv)  any transaction as a result of which any person is the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of PSI representing at least 35%
of the total voting power represented by PSI's then outstanding voting
securities. For purposes of this Subsection (d), the term "person" shall have
the same meaning as when used in sections 13(d) and 14(d) of such Act but shall
exclude (i) a trustee or other fiduciary holding securities under an employee
benefit plan of PSI or of a parent or subsidiary of PSI and (ii) a corporation
owned directly or indirectly by the stockholders of PSI in substantially the
same proportions as their ownership of the common stock of PSI.

        8.    RELEASE.    You agree that the severance payments you may be
entitled to upon Termination without Cause or Termination for Good Reason or the
payments you may be entitled to upon a Change of Control will not apply unless
you (i) have executed a general release (in a form customarily used by PSI) of
all known and unknown claims that you may then have against PSI and/or persons
or entities affiliated with PSI, (ii) have agreed not to prosecute or bring any
legal action or other proceeding based upon any of such claims and (iii) have
agreed to provide transition assistance to PSI (or the surviving corporation) as
requested and without further compensation for 3 months following the
termination of employment.

        9.    CONFIDENTIALITY; NONSOLICITATION.    In light of the fact that the
confidential information that you have acquired, and will acquire, is
inextricably bound with your knowledge regarding the conduct of PSI's business
activities, you agree that during the Employment Term, and for a period of one
year thereafter, you will not provide any services, whether as an officer,
director, proprietor, employee, partner, consultant, advisor, agent, sales
representative or otherwise, nor will you own beneficially securities of any
entity (except that, in the case of any entity whose equity securities are
publicly-held, you may beneficially own up to 2% of the outstanding equity
securities of such entity or any mutual fund holding securities of such entity)
that, directly, competes with any of PSI's "Business" activities through the
date of your termination of employment. PSI's Business is defined as service or
asset management software solutions. You further agree that in light of the
nature of PSI's business, and the life-cycle of product development, the
one-year period provided for above shall apply regardless of the nature or
reason for your termination and that it is reasonable and necessary in order to
protect the confidential, proprietary and trade-secret information that you will
acquire as a result of being the Vice President, Controller, and Chief
Accounting Officer of PSI. Notwithstanding the foregoing, such restrictions
shall not preclude you from providing any services to a distinct business unit
of an entity if such unit does not compete with PSI's business activities,
regardless of whether any other distinct business unit of such entity competes
with PSI's business activities. You also, further and independently, agree that
during your employment with PSI, and for a period of one (1) year after
termination of your employment with PSI, you will not for any reason, whether
directly or indirectly: (a) solicit, recruit, take away or attempt to take away,
any employee or consultant of PSI or any of its affiliates, or induce (or
attempt to induce) any employee or consultant of PSI or any of its affiliates to
terminate his or its employment or services with PSI or any of PSI's affiliates;
or (b) use any confidential or proprietary information of PSI or any of its
affiliates to, directly or indirectly, solicit any customer of PSI or any of its
affiliates or induce any customer of PSI or its affiliates to terminate its
relationship with PSI or any PSI affiliate; provided, however, that this
non-solicitation provision shall not prevent you from hiring any employee or
consultant of PSI or any of its affiliates that you can demonstrate either
(i) approached you independently without any prior direct or indirect
solicitation or encouragement by you or on your part, or (ii) replied to a
solicitation made to the general public without any direct or indirect
solicitation or encouragement by you or on your part.

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        10.    WITHHOLDING TAXES.    All compensation that is payable to you by
PSI shall be subject to applicable withholding taxes. The Compensation
Committee, in its discretion, may either withhold such taxes from any amount
payable to you or may require you to pay such amount by cash or certified
cashiers' check.

        11.    GOVERNING LAW.    This letter agreement will be governed by the
internal laws of the State of California without reference to its conflict of
laws provisions.

        12.    ARBITRATION    

        (a)    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 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.

        (b)    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 your 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.

        (c)    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
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.

        (d)    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.

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        (e)    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 other provision 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 ensure 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.

        13.    ENTIRE AGREEMENT.    This letter agreement, your stock option
agreement, your performance stock unit agreement and your employee invention
assignment and confidentiality agreement with PSI contain the entire agreement
and understanding of the parties with respect to the subject matter hereof.
Except as provided in this letter agreement, no other agreements,
representations or understandings (whether oral or written and whether expressed
or implied) which are not expressly set forth in this letter agreement have been
made or entered into by either party with respect to the subject matter hereof.

        14.    SUCCESSORS AND ASSIGNS.    This letter agreement will be binding
upon you (and your successors, heirs and assigns) and any successor (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of PSI's business and/or
assets. For all purposes of this letter agreement, the term "PSI" shall include
any successor to PSI's business and/or asserts which becomes bound by this
letter agreement.

        We look forward to your continued contributions as part of the PSI team.

        Sincerely yours,
 
 
 
 
Mary Lou O'Keefe
Sr. Vice President, Human Resources
By signing this letter, I am agreeing to the above:
Signature:
 
 
 
Date:
 
     

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Russell C. Clark                  

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Exhibit 10.59