Exhibit 10.60

August 20,
2004

Mr. John
Mutch
P.O. Box 1590
Rancho Santa Fe, CA 92067



Dear
John:

On
behalf of the Board of Directors (the "Board") of Peregrine Systems, Inc. ("PSI"), we are pleased to amend and restate the terms of your Original Agreement with PSI as set
forth in this letter agreement (the "Employment Agreement"). This Employment Agreement amends and restates in its entirety the Original Agreement, effective as of May 25, 2004. By executing a
copy of this Employment Agreement, you will agree to continue to serve as President and Chief Executive Officer of PSI, and to the restatement of the terms of your Original Agreement as follows:

1.TITLE; BASE SALARY.You will continue to be employed as President and Chief Executive Officer of PSI and to
report to the Board. Your base salary will continue at the rate of $400,000 annually through July 31, 2004. From and after August 1, 2004, your base salary will be increased to the rate
of $450,000 annually. Your base salary will be payable in accordance with PSI's standard payroll practices. So long as you serve as PSI's Chief Executive Officer, PSI shall include you on the slate of
directors nominated for election at each annual meeting of PSI stockholders.

2.EMPLOYMENT TERM.The term of your employment as President and Chief Executive Officer under this Employment
Agreement (the "Employment Term") will end when it is terminated in accordance with Section 6.

3.BONUS.You will be eligible to receive bonuses as set forth below.



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 Employment Agreement and will receive such other benefits as PSI
generally provides to its other employees of comparable position and experience. However, you will in any event

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be
eligible for at least three weeks of PTO from the commencement of your employment through August 17, 2004, and at least four weeks of PTO during each subsequent year of employment.

5.EQUITY-BASED AWARDS.



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



For
purposes of this Employment Agreement, the term "Disability" shall mean your inability 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 Employment 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 upon receiving specific written notice of such failure from PSI; (iii) commission of any act
of fraud 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; provided,
however, that clause (i) of this definition of the term "Cause" shall not apply following a Change in Control. No act or failure to act by you shall be considered "willful" if done or

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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 Employment Agreement, "Good Reason" shall mean (i) a
significant reduction of your duties, title, position or responsibilities, including a material change in your reporting structure, which shall include, but not be limited to, (A) your no
longer reporting to the Board, or (B) your no longer serving as President and Chief Executive Officer of PSI, that is effected without your written consent; (ii) a substantial reduction,
without good business reasons, of the facilities or perquisites available to you immediately prior to such reduction if such reduction is effected without your written consent; (iii) a
reduction of your base salary and target bonus as in effect immediately prior to such reduction if such reduction is effected without your written consent (other than any such reduction that is
effected on substantially a company-wide basis in order to reduce PSI's operating expenses); (iv) a material reduction in the aggregate level of employee benefits made available to
you when compared to the employee benefits made available to you immediately prior to such reduction if such reduction is effected without your written consent (other than any such reduction that is
effected on substantially a company-wide basis in order to reduce PSI's operating expenses); or (v) 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 written consent.

7.SEPARATION BENEFITS; CHANGE OF CONTROL PAYMENT.Upon termination of your employment with PSI for any reason,
you will receive payment for all salary and earned but unused paid time off ("PTO") accrued to the date of your termination of employment in addition to any payment that you are entitled to receive in
respect of your Units. 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. You will also be entitled to the payments set forth in Section 7(e) upon a Change of Control (as defined in Section 7(e)).



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8.280G PAYMENT.



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9.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 (i) you and PSI have each executed a mutual general release (in a form
determined by PSI) of all known and unknown claims that either you or PSI may then have against the other and/or persons or entities affiliated with you or PSI, as applicable, other than payments by
PSI under the Employment Agreement, the Options, the Restricted Stock Agreement or the PSU Agreement to the extent such payments are required to be performed after the date of the release,
(ii) you and PSI have agreed not to prosecute or bring any legal action or other proceeding based upon any of such claims and (iii) you have agreed to provide reasonable transition
assistance to PSI (or the
surviving corporation) as requested and without further compensation for three (3) months following the termination of employment. Notwithstanding anything in this Employment Agreement to the
contrary, in no event shall the payments provided for in Sections 7(b) and 7(e) of this Employment Agreement that are otherwise due and payable be delayed as a result of PSI's request that you perform
Transition Services.

10.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 and that therefore you would necessarily use confidential information if you
were to compete with PSI, 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 of the following entities: Altiris; BMC Software, Inc.; Computer
Associates; Hewlett Packard Company; International Business Machines Corporation; MRO Software; and USU Software AG (each a "Competitor") (except that, in the case of any Competitor whose equity
securities are publicly-held, you may beneficially own up to 2% of the outstanding equity securities of such Competitor or any mutual fund holding securities of such Competitor). 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 President and Chief Executive Officer of PSI. Notwithstanding the foregoing, such restrictions shall not preclude you from providing any services to a

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distinct
business unit of a Competitor if such unit does not compete 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.

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

12.VENUE; SERVICE OF PROCESS.Any legal action, arbitration or other legal proceeding relating to this
Employment Agreement or the enforcement of any provision of this Employment Agreement may be brought or otherwise commenced in any state or federal court located in the County of San Diego,
California. Each party to this Employment Agreement: (i) expressly and irrevocably consents and submits to the jurisdiction of each state and federal court located in the County of San Diego,
California (and each appellate court located in the State of California) in connection with any such legal proceeding or arbitration; (ii) agrees that each state and federal court located in
the County of San Diego, California shall be deemed to be a convenient forum; and (iii) agrees not to assert (by way of motion, as a defense or otherwise), in any such legal proceeding or
arbitration commenced in any state of federal court located in the County of San Diego, California, any claim that such party is not subject personally to the jurisdiction of such court, that such
legal proceeding or arbitration has been brought in an inconvenient forum, that the venue of such proceeding is improper or that this Employment Agreement or the subject matter of this Employment
Agreement may not be enforced in or by such court. Process in any action or proceeding referred to in this section may be served on any party anywhere in the world.

13ENTIRE AGREEMENT.This Employment Agreement, the Restricted Stock Agreement, your stock option agreement
entered into in connection with the Original Agreement, the PSU 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 mature hereof. Except as provided in this Employment Agreement, no other agreements, representations or understandings (whether oral or written and whether
expressed or implied) which are not expressly set forth in this Employment Agreement have been made or entered into by either party with respect to the subject matter hereof.

14.SUCCESSORS AND ASSIGNS.This Employment 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 Employment Agreement, the term "PSI" shall include any successor to PSI's business and/or asserts which becomes bound by this Employment Agreement.

15.LEGAL FEES.PSI will reimburse you for legal fees and costs up to $40,000 that you incur in connection with
the negotiation and drafting of this Employment Agreement, the Restricted Stock Agreement and the PSU Agreement.

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

|                                                    |  |  |  | Sincerely yours,     
|--------------------------------------------------- |  |  |  | ---------------------
|                                                    |  |  |  | Chairman of the Board
|By signing this letter, I am agreeing to the above:
|Signature:                                          |  |  |  |                      
|                                                    |  |  |  |                      

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