Exhibit 10.26    January 5, 2004  Mr. James Zierick
31715 Sea Level Drive
Malibu, CA 90265  Dear Jim:  On behalf of Peregrine
Systems, we are pleased to confirm your acceptance of our offer for the
position of Sr. Vice President, Strategy and Corporate Development reporting to
John Mutch, Chief Executive Officer, effective January 12, 2004.  Your starting salary will be
$11,458.34 per semi-monthly pay period. 
In addition, you will be eligible to participate in the Management
Incentive Compensation Plan (MICP) with an annual target of $150,000.  This bonus is paid semi-annually, prorated
from your hire date.  You will also be entitled to
employment benefits offered to all employees, which currently include medical,
dental, vision and group life insurance benefits, along with a 401(k)
program.  In addition, during your first
twelve (12) months of employment you will be provided a monthly housing
allowance of $2,000, which will be grossed up to cover all applicable federal,
state and local withholding taxes.  Subject to formal approval
by the Compensation Committee of the Board of Directors, you will be granted an
option to purchase up to 35,000 shares of Peregrine Systems, Inc. (PSI) common
stock, subject to execution of this letter agreement and a stock option
agreement consistent with the terms and conditions of the 2003 Equity Incentive
Plan (the Plan).  The Option grant
date will be the later of your employment date or the date of Compensation
Committee approval.  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 right to exercise 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 you have a
Company-initiated Termination without Cause with twelve (12) months after the
occurrence of a Change in Control (as defined in the 2003 Equity Incentive
Plan), 100% of the portion of this Option which would otherwise be unvested as
of the date of your Termination under the provisions set forth in the stock
option grant agreement shall become vested as of the date of your Termination.  
   In compliance
with the Immigration Control and Reform Act, this offer of employment is
contingent upon your showing proof within three days of commencing work of
eligibility and right to work in the United States.  Proof is comprised of original documents that establish your
identity and your eligibility to work in this country.  Peregrine
Systems is an at-will employer, and as such the employer/employee
relationship is subject to termination at anytime by either party at any time with or without cause.  Your employment will not be effective until
we receive an executed Invention and Non-Disclosure, and Arbitration Agreement
(INDA), a copy of which is attached. 
Additionally, this employment offer is contingent upon your execution
and return of all employment documents as well as satisfactory reference and
background checks.  Please confirm
your acceptance by signing below and faxing a copy to Mary Lou OKeefe, SVP
Human Resources, at 858-794-5106.  Jim, we look
forward to having you join the Peregrine Team and to your contributions to the
success of Peregrine.  Sincerely,/s/ John
  MutchJohn MutchChief
  Executive Officer  I accept the
position of Sr. Vice President, Strategy and Corporate Development, as
described above. My start date will be January 12, 2004.  /s/ James
  Zierick
  
  1/15/04James
  Zierick
  Date  2