##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K/A
 (Amendment No. 1)
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended January 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                      to
 Commission file number: 000-21287
 Peerless Systems Corporation
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    95-3732595(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)2381 Rosecrans Avenue, El Segundo, CA(Address of Principal Executive Offices)
    
    90245(Zip Code)
 (310) 536-0908  Registrants telephone number, including area code
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange on which RegisteredCommon Stock, $.001 par value
    
    The NASDAQ Stock Market LLC
 Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer oNon-accelerated filer o (Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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EXPLANATORY NOTE
     2




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TABLE OF CONTENTS  PART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEXHIBIT INDEXEXHIBIT 31.1EXHIBIT 31.2    Table of Contents  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
 DIRECTORS AND EXECUTIVE OFFICERS
  Name
    
    Age
    
    PositionRichard L. Roll.
    
    
    59
    
    
    President, Chief Executive Officer and DirectorJohn V. Rigali.
    
    
    52
    
    
    Vice President, Finance and Chief Financial OfficerEdward M. Gaughan.
    
    
    39
    
    
    Vice President, Sales & MarketingRobert T. Westervelt.
    
    
    49
    
    
    Vice President, Engineering and Chief Technology OfficerElliot M. Shirwo.
    
    
    40
    
    
    General Counsel and Corporate SecretaryAndrew Lombard.
    
    
    44
    
    
    Vice President, Corporate Development and President of
Cue Imaging Corporation, a wholly owned subsidiary of
the CompanyWilliam B. Patton Jr.
    
    
    72
    
    
    Chairman of the Board of DirectorsSteven J. Pully.
    
    
    48
    
    
    DirectorJohn C. Reece.
    
    
    70
    
    
    DirectorJohn Thomas Zender.
    
    
    68
    
    
    DirectorTimothy E. Brog.
    
    
    44
    
    
    DirectorSteven M. Bathgate (1)
    
    
    53
    
    
    Director
 
 (1)
    
    Mr. Bathgate was appointed as a director effective May 22, 2008, to fill the vacancy created by
the resignation of our former director Louis C. Cole effective May 22, 2008. Richard L. Roll
 John V. Rigali
 Edward M. Gaughan
 3




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Robert T. Westervelt
 Elliot M. Shirwo,
 Andrew Lombard
 William B. Patton, Jr.
 4




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Steven J. Pully
 John C. Reece
 John Thomas Zender
 Timothy E. Brog 2
 Steven M. Bathgate
 5




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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  CODE OF BUSINESS CONDUCT AND ETHICS
 www.peerless.com. www.peerless.com
 AUDIT COMMITTEE
  
 Item 11. Executive Compensation
 COMPENSATION DISCUSSION AND ANALYSIS
  Compensation Objectives and Philosophy
  
    
    a compensation program should stress the Companys annual performance and increase in
value;
 6




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
    
    a compensation program should strengthen the relationship between pay and performance
by providing variable, at risk compensation based on predetermined objective performance
measures;
    
    a compensation program should attract, motivate and retain high quality employees who
will enable the Company to achieve its strategic and financial performance goals; and
    
    a compensation program should provide an incentive plan that supports a
performance-oriented environment, with superior performance resulting in total annual
compensation above median levels.
  The Compensation Committee
 Committee Members
  Role of Committee
 www.peerless.com
 Compensation Committee Process
 Annual Evaluation
  Managements Role in Determining Executive Compensation
  7




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##### Table of Contents



Decision Support
  Decision Framework
  Elements of Executive Compensation
  
    
    Company performance:The Companys achievement of a certain amount of target revenue
and profit; and the performance goals and objectives for the Company in fiscal 2008
established by the Committee.
    
    Individual performance:The contribution of each executive officer; the expertise of
each executive officer; and the performance goals and objectives to be performed by each
executive officer in fiscal 2008.
    
    Allocation between cash and non-cash component:The number and vesting of outstanding
options; the increase in the value of share-based compensation granted to each executive
officer in prior years; each element of the compensation of each executive officer for fiscal
2007 compared to fiscal 2008; the reasons the Committee had established the amount of each
element of such compensation; and the allocation of bonuses for services rendered in fiscal
2008.
    
    Other factors:The deductibility of the compensation; the results of Radford
Surveys; and the terms of the executives employment or employment letter agreements, if any.
 Base Salaries
  Base
    
    
    
    
    
    EquitySalaries
    
    Bonus
    
    Awards
    
    All OtherName
    
    Title
    
    (%)
    
    (%)(4)
    
    (%)(5)
    
    Compensation(%)Richard L. Roll (1)
    
    President and Chief
Executive Officer
    
    
    38.9
    %
    
    
    9.2
    %
    
    
    51.6
    
    
    
    0.3
    %John V. Rigali
    
    Chief Financial
Officer and Vice
President of
Finance
    
    
    71.3
    
    
    
    14.4
    
    
    
    13.7
    
    
    
    0.6Edward M. Gaughan
    
    Vice President, Sales & Marketing
    
    
    62.5
    
    
    
    7.7
    
    
    
    6.8
    
    
    
    22.8Robert T. Westervelt (2)
    
    Vice President of
Engineering and
Chief Technology
Officer
    
    
    74.7
    
    
    
    9.8
    
    
    
    14.6
    
    
    
    0.9Alan D. Curtis (3)
    
    Former Vice President,
Corporate
Development
    
    
    69.6
    
    
    
    16.8
    
    
    
    3.8
    
    
    
    9.8
 8




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##### Table of Contents



(1)
    
    Richard L. Roll was appointed as President and Chief Executive Officer effective December 15,
2006. Mr. Roll also was appointed as a director of the Board, effective April 17, 2007.(2)
    
    Upon Eric Randoms resignation on June 12, 2007, the Company appointed Robert T. Westervelt
as its Vice President of Engineering, effectively immediately.(3)
    
    On November 30, 2007, Alan Curtis resigned from his position as Vice President of Corporate
Development, effective December 3, 2007.(4)
    
    The amounts reflect bonuses paid under the Companys annual management cash incentive bonus
plan.(5)
    
    The amounts reflect the dollar amount recognized for financial statement reporting purposes
for the fiscal year ended January 31, 2008, in accordance with SFAS 123(R). See Note 2 to the
Companys audited financial statements for the fiscal year ended January 31, 2008, included in
the Companys Annual Report on Form 10-K filed with the Securities and Exchange Commission on
May 12, 2008 for a discussion of the relevant assumptions used in calculating grant date fair
value pursuant to SFAS 123(R).   Bonuses
   9




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
    
    Mr. Roll (his ability to identify strategic joint ventures and relationships with
potential partners in line with the Companys strategy to focus on the solution software
application area and the all-in-one or AIO market place, identify possible acquisition
targets, execute a new development and sublicensing agreement with Adobe and facilitate
the renewal of an agreement with Kyocera-Mita Corporation);
    
    Mr. Rigali (his ability to complete due diligence on possible acquisition targets or
joint venture partners in the AIO market place, control expenses, maintain an
unqualified opinion with respect to the Companys financial statements and maintain no
adjustments);
    
    Mr. Gaughan (his ability to identify and meet with potential AIO joint venture
partnerships, manage customer revenue concentration risk, obtain new business and
control expenses); and
    
    Mr. Curtis (his ability to identify and meet with potential acquisition targets,
develop business plans for any potential acquisitions, control expenses and coordinate
with the Vice President of Sales to communicate product offerings to customers).
   Equity Incentives
   10




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Post-Termination and Change in Control payments
   Tax and Accounting Implications
 Deductibility of Compensation
  Accounting for Share-Based Compensation
  Conclusion
  11




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SUMMARY COMPENSATION TABLE
  Change inPension ValueandNon-Equity
    
    Nonqualified
    
    All OtherOption
    
    Incentive Plan
    
    Deferred
    
    Compen-Name and
    
    
    
    
    
    Salary
    
    Bonus
    
    Stock
    
    Awards
    
    Compensation
    
    Compensation
    
    sationPrincipal Position
    
    Year
    
    ($)
    
    ($)
    
    Awards ($)(1)
    
    ($)(1)
    
    ($)
    
    Earnings ($)
    
    ($)(2)(3)
    
    Total ($)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h)
    
    (i)
    
    (j)Richard L. Roll
    
    
    2008
    
    
    
    340,000
    
    
    
    80,490
    
    
    
    50,179
    
    
    
    400,175
    
    
    
    
    
    
    
    
    
    
    
    2,365
    
    
    
    873,210President and Chief
    
    
    2007
    
    
    
    40,538
    
    
    
    
    
    
    
    
    
    
    
    45,796
    
    
    
    
    
    
    
    
    
    
    
    34,020
    
    
    
    120,354Executive OfficerJohn V. Rigali
    
    
    2008
    
    
    
    178,308
    
    
    
    35,981
    
    
    
    
    
    
    
    34,252
    
    
    
    
    
    
    
    
    
    
    
    1,446
    
    
    
    249,987Chief Financial Officer and
    
    
    2007
    
    
    
    123,231
    
    
    
    
    
    
    
    
    
    
    
    14,413
    
    
    
    
    
    
    
    
    
    
    
    3,765
    
    
    
    141,409Vice
President of
FinanceEdward M. Gaughan
    
    
    2008
    
    
    
    200,000
    
    
    
    24,500
    
    
    
    
    
    
    
    22,494
    
    
    
    
    
    
    
    
    
    
    
    73,232
    
    
    
    320,226Vice President,
    
    
    2007
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    11,735
    
    
    
    
    
    
    
    
    
    
    
    57,919
    
    
    
    269,654Sales & MarketingBob Westervelt
    
    
    2008
    
    
    
    188,183
    
    
    
    24,830
    
    
    
    
    
    
    
    36,740
    
    
    
    
    
    
    
    
    
    
    
    2,216
    
    
    
    257,969Vice President,
    
    
    2007
    
    
    
    181,922
    
    
    
    30,500
    
    
    
    
    
    
    
    39,519
    
    
    
    
    
    
    
    
    
    
    
    1,506
    
    
    
    253,447Engineering and
Chief Technology
OfficerAlan D. Curtis (4)
    
    
    2008
    
    
    
    196,734
    
    
    
    47,850
    
    
    
    
    
    
    
    10,360
    
    
    
    
    
    
    
    
    
    
    
    27,823
    
    
    
    282,497Vice President,
    
    
    2007
    
    
    
    197,692
    
    
    
    30,500
    
    
    
    
    
    
    
    10,120
    
    
    
    
    
    
    
    
    
    
    
    89,570
    
    
    
    327,882Corporate
Development
 
 (1)
    
    The amounts in column (e) and (f) reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended January 31, 2007 and 2008, in
accordance with SFAS 123(R). See Note 2 to the Companys audited financial statements for the
fiscal year ended January 31, 2008, included in the Companys Annual Report on Form 10-K filed
with the Securities and Exchange Commission on May 12, 2008, for a discussion of the relevant
assumptions used in calculating grant date fair value pursuant to SFAS 123(R).(2)
    
    The bonuses paid under the Companys annual management incentive cash bonus plan is reflected
in column (d).(3)
    
    Certain of the Companys executive officers receive personal benefits in addition to salary
and cash bonuses, including, but not limited to, consulting services, accrued health
insurance, non-qualified stock option exercise, and paid vacation. The amount shown in column
(i) for All Other Compensation consists of the following:(4)
    
    On November 30, 2007, Alan Curtis resigned from his position as Vice President of Corporate
Development, effective December 3, 2007. 12




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Year
    
    Mr. Roll
    
    Mr. Rigali
    
    Mr. Gaughan
    
    Mr. Westervelt
    
    Mr. CurtisConsulting Services
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    14,385
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Employer 401K
Contribution
    
    
    2008
    
    
    
    2,365
    
    
    
    1,446
    
    
    
    
    
    
    
    2,216
    
    
    
    1,2312007
    
    
    
    1,635
    
    
    
    3,765
    
    
    
    
    
    
    
    1,506
    
    
    
    2,087Non-Qualified Stock
Option Exercise
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87,483Commissions
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    
    73,232
    
    
    
    
    
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
    57,919
    
    
    
    
    
    
    
    Accrued Bonus
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    18,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Paid Vacation
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,5922007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Board of Director
Fees
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    2008
    
    
    
    2,365
    
    
    
    1,446
    
    
    
    73,232
    
    
    
    2,216
    
    
    
    27,8232007
    
    
    
    34,020
    
    
    
    3,765
    
    
    
    57,919
    
    
    
    1,506
    
    
    
    89,570
 Narrative to Summary Compensation Table
 Employment Agreements
 Employment Agreement with Richard L. Roll
  13




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Time-Vested Option for Mr. Roll
  Restricted Stock for Mr. Roll
  Employment Letter Agreement with John Rigali
  14




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Indemnification Agreements
  Employee Benefit Plans
  Salary and Bonus in Proportion to Total Compensation
  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
  Option Awards
    
    Stock AwardsEquityEquity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity
    
    Incentive PlanIncentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Inventive Plan
    
    Awards:Number of
    
    
    
    
    
    Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Awards:
    
    Market orSecurities
    
    
    
    
    
    Awards:
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market
    
    Number of
    
    Payout ValueUnderlying
    
    Number of
    
    Number of
    
    
    
    
    
    
    
    
    
    Number of
    
    Value of
    
    Unearned
    
    of UnearnedUnexer-
    
    Securities
    
    Securities
    
    
    
    
    
    
    
    
    
    Shares or
    
    Shares or
    
    Shares, Units
    
    Shares, Unitscised
    
    Underlying
    
    Underlying
    
    
    
    
    
    
    
    
    
    Units of
    
    Units of
    
    or Other
    
    or OtherOptions (#)
    
    Options (#)
    
    Unexercised
    
    Option
    
    Option
    
    Stock That
    
    Stock That
    
    Rights That
    
    Rights ThatExercis-
    
    Unexercis-
    
    Unearned
    
    Exercise
    
    Expiration
    
    Have Not
    
    Have Not
    
    Have Not
    
    Have NotName
    
    able
    
    able
    
    Options (#)
    
    Price ($)
    
    Date
    
    Vested (#)
    
    Vested ($)
    
    Vested (#)
    
    Vested ($)Richard L. Roll (1)
    
    
    162,798
    
    
    
    437,502
    
    
    
    437,502
    
    
    
    2.84
    
    
    
    12/15/2016
    
    
    
    200,000
    
    
    
    476,000
    
    
    
    200,000
    
    
    
    476,000John V. Rigali (2)
    
    
    6,250
    
    
    
    18,750
    
    
    
    18,750
    
    
    
    6.13
    
    
    
    6/6/2016
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    10,000
    
    
    
    2.43
    
    
    
    2/12/2017
    
    
    
    25,000
    
    
    
    25,000
    
    
    
    2.34
    
    
    
    4/9/2017
 15




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Option Awards
    
    Stock AwardsEquityEquity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity
    
    Incentive PlanIncentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Inventive Plan
    
    Awards:Number of
    
    
    
    
    
    Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Awards:
    
    Market orSecurities
    
    
    
    
    
    Awards:
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market
    
    Number of
    
    Payout ValueUnderlying
    
    Number of
    
    Number of
    
    
    
    
    
    
    
    
    
    Number of
    
    Value of
    
    Unearned
    
    of UnearnedUnexer-
    
    Securities
    
    Securities
    
    
    
    
    
    
    
    
    
    Shares or
    
    Shares or
    
    Shares, Units
    
    Shares, Unitscised
    
    Underlying
    
    Underlying
    
    
    
    
    
    
    
    
    
    Units of
    
    Units of
    
    or Other
    
    or OtherOptions (#)
    
    Options (#)
    
    Unexercised
    
    Option
    
    Option
    
    Stock That
    
    Stock That
    
    Rights That
    
    Rights ThatExercis-
    
    Unexercis-
    
    Unearned
    
    Exercise
    
    Expiration
    
    Have Not
    
    Have Not
    
    Have Not
    
    Have NotName
    
    able
    
    able
    
    Options (#)
    
    Price ($)
    
    Date
    
    Vested (#)
    
    Vested ($)
    
    Vested (#)
    
    Vested ($)Edward M. Gaughan (2)
    
    
    61,000
    
    
    
    25,000
    
    
    
    25,000
    
    
    
    1.28
    
    
    
    6/1/2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Robert Westervelt (2)
    
    
    7,000
    
    
    
    
    
    
    
    
    
    
    
    6.625
    
    
    
    4/12/2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    1.21
    
    
    
    7/22/2012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    938
    
    
    
    
    
    
    
    
    
    
    
    1.15
    
    
    
    8/27/2012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    1.29
    
    
    
    11/25/2012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,812
    
    
    
    938
    
    
    
    938
    
    
    
    1.63
    
    
    
    8/4/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,250
    
    
    
    3,750
    
    
    
    3,750
    
    
    
    1.33
    
    
    
    9/30/2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    25,000
    
    
    
    25,000
    
    
    
    3.59
    
    
    
    7/20/2015
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    15,000
    
    
    
    2.43
    
    
    
    2/12/2017
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    25,000
    
    
    
    2.34
    
    
    
    4/9/2017
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Alan D. Curtis (2)
    
    
    8,000
    
    
    
    
    
    
    
    
    
    
    
    4.88
    
    
    
    3/3/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,750
    
    
    
    
    
    
    
    
    
    
    
    12.63
    
    
    
    3/3/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,000
    
    
    
    
    
    
    
    
    
    
    
    13.63
    
    
    
    3/3/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    1.63
    
    
    
    3/3/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    1.22
    
    
    
    3/3/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    1.21
    
    
    
    3/3/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    2.10
    
    
    
    3/3/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,500
    
    
    
    12,500
    
    
    
    12,500
    
    
    
    1.33
    
    
    
    3/3/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    15,000
    
    
    
    2.43
    
    
    
    3/3/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Mr. Rolls options and restricted stock vest in accordance with the vesting schedule
described under Compensation Discussion and Analysis  Time Vested Option for Mr. Roll, and
"- Restricted Stock for Mr. Roll, respectively.(2)
    
    The options for the Named Executive Officer vest 25% over four years, on each anniversary of
the date of grant. OPTION EXERCISES AND STOCK VESTED
  Option Awards
    
    Stock AwardsNumber of Shares
    
    Value
    
    Number of Shares
    
    ValueAcquired on Exercise
    
    Realized on
    
    Acquired on Vesting
    
    Realized onName
    
    (#)
    
    Exercise ($)
    
    (#)
    
    Vesting ($)Richard L. Roll
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    John V. Rigali
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Edward M. Gaughan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Robert Westervelt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Alan D. Curtis
    
    
    30,000
    
    
    
    36,300
    
    
    
    
    
    
    
    
 16




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##### Table of Contents



POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
  Potential Payments Upon Termination or Change in Control for Richard L. Roll
 Voluntary Termination
  Payment Upon Termination With Cause
  
    
    willful and continued failure by him to perform his duties other than failure
resulting from incapacity (due to physical or mental illness) or disability;
    
    willful commission of an act of fraud or dishonesty resulting in economic or
financial injury to the Company;
    
    conviction of, or entry by him of a guilty or no contest plea to, the commission of a
felony or a crime involving moral turpitude;
    
    a willful breach by him of his fiduciary duty to the Company which results in
economic or other injury to the Company, or
    
    willful and material breach of his confidentiality obligations.
 Payment Upon Termination Without Cause
  Payment Upon Termination Due to Death or Disability
  Payment Upon a Change in Control
  17




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##### Table of Contents



Potential Payments Upon Termination or Change in Control for Messrs. Gaughan, Westervelt and
Rigali
 Payment Upon a Change in Control
  
    
    A lump sum payment equal to one times base salary.
    
    A lump sum payment equal to one times bonus at expected value.
    
    Full vesting of unvested stock options.
    
    Continued medical and dental insurance benefits substantially similar to those
provided to the executive and his eligible family members for one year.
  
    
    willful and continued failure by the executive to perform his duties (other than due
to incapacity due to physical or mental illness or disability);
    
    willful commission of an act of fraud or dishonesty resulting in economic or
financial injury to the Company;
    
    conviction of, or entry by the executive of a guilty or no contest plea to, the
commission of a felony or a crime involving moral turpitude;
    
    willful breach by the executive of his fiduciary duty to the Company which results in
economic or other injury to the Company; or
    
    willful and material breach of the executives confidentiality and non-solicitation
covenants.
   
    
    the assignment to the executive of any duties materially inconsistent with the
executives position, authority, duties and responsibilities;
 18




---



##### Table of Contents




    
    reduction in the executives salary or targeted bonus opportunity;
    
    relocation of the Companys offices to more than 30 miles from the prior location;
    
    the Companys failure to obtain a satisfactory agreement from any successor to assume
and agree to perform the agreement; or
    
    the Companys failure to cure a material breach of its obligations under the
agreement.
   
    
    the acquisition by any person of 50% of more of the combined voting power of the
Companys then outstanding securities;
    
    a change, during any period of two consecutive years, in a majority or more of the
Board, if the new members have not been approved by at least two-thirds of the incumbent
Board;
    
    the consummation by the Company of a merger, consolidation, reorganization or
business combination of the Company, a sale of all or substantially all of the Companys
assets or the acquisition of assets or stock of another entity, in each case other than
a transaction in which the voting securities of the Company immediately prior thereto
continue to represent at least 50% of the combined voting power of the outstanding
securities of the surviving entity; or
    
    a liquidation or dissolution of the Company.
    19




---



##### Table of Contents



TerminationVoluntary
    
    Termination
    
    Without
    
    Change inTermination
    
    With Cause
    
    Cause
    
    Control
    
    Death (1)
    
    Disability (1)Name
    
    (1)(6)
    
    (1)(6)
    
    (1)(2)(6)
    
    (3)(6)
    
    (4)(6)
    
    (5)(6)Richard L. Roll
    
    
    28,843
    
    
    
    28,843
    
    
    
    374,634
    
    
    
    525,791
    
    
    
    28,843
    
    
    
    28,843John V. Rigali
    
    
    22,017
    
    
    
    22,017
    
    
    
    22,017
    
    
    
    287,022
    
    
    
    22,017
    
    
    
    22,017Edward M. Gaughan
    
    
    55,602
    
    
    
    55,602
    
    
    
    55,602
    
    
    
    275,736
    
    
    
    55,602
    
    
    
    55,602Robert Westervelt
    
    
    22,676
    
    
    
    22,676
    
    
    
    22,676
    
    
    
    263,736
    
    
    
    22,676
    
    
    
    22,676Alan D. Curtis
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    274,777
    
    
    
    
    
    
    
    
 
 (1)
    
    Excludes the value of vested options and accelerated unvested options as of January 31, 2008,
calculated by multiplying the number of underlying vested options and accelerated unvested
options by the difference between the exercise price and the closing price of our Common Stock
on January 31, 2008 ($2.38). Options held by Mr. Roll and Mr. Rigali were underwater as of
January 31, 2008 and were excluded from the calculation. The table below summarizes these
potential values:
 Aggregate Accelerated UnvestedName
    
    Aggregate Vested Value
    
    Value (Change in Control)Richard L. Roll
    
    
    
    
    
    
    476,000John V. Rigali
    
    
    
    
    
    
    1,000Edward M. Gaughan
    
    
    67,100
    
    
    
    27,850Robert Westervelt
    
    
    44,909
    
    
    
    5,969Alan D. Curtis
    
    
    150,975
    
    
    
    13,125
 20




---



##### Table of Contents



(2)
    
    The table below reflects the estimate of the payments and benefits that each Named Executive
Officer would receive assuming each of the Named Executive Officers employment was terminated
without cause on January 31, 2008. These disclosed amounts are estimates only and do not
necessarily reflect the actual amounts that would be paid to the Named Executive Officers, which
would only be known at the time they become eligible for such payments.
 Medical BenefitsName
    
    Base Salary
    
    Bonus
    
    Vacation Payout
    
    Other
    
    Continuation (a)Richard L. Roll
    
    
    340,000
    
    
    
    
    
    
    
    23,612
    
    
    
    5,231
    
    
    
    5,791John V. Rigali
    
    
    
    
    
    
    
    
    
    
    19,248
    
    
    
    2,769
    
    
    
    Edward M. Gaughan
    
    
    
    
    
    
    
    
    
    
    52,525
    
    
    
    3,077
    
    
    
    Robert Westervelt
    
    
    
    
    
    
    
    
    
    
    19,676
    
    
    
    3,000
    
    
    
    Alan D. Curtis
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (a)
    
    Reflects the estimated lump sum value of premiums to be paid on
behalf of the executive under the medical benefit plans for the relevant periods.
 (3)
    
    This amount includes the value of the accelerated vesting of unvested options of 25,000
shares for Mr. Rigali, 48,750 shares for Mr. Gaughan, 69,688 shares for Mr. Westervelt, and
37,500 shares for Mr. Curtis assuming a change in control occurs on January 31, 2008.(4)
    
    Includes the estimated present value of the proceeds payable to the executives beneficiaries
upon his death.(5)
    
    Includes the estimated lump sum present value of all future payments which the executive
would be entitled to receive under the Companys disability program.(6)
    
    Includes the estimated present value of the proceeds payable to the executives vacation
payouts and unpaid earned salary as of January 31, 2008, and amounts payable under change in
control severance agreements or employment agreements, as applicable.
 DIRECTOR COMPENSATION
  Changes inPension ValueFees
    
    
    
    
    
    
    
    
    
    
    
    
    
    andEarned
    
    
    
    
    
    
    
    
    
    Non-Equity
    
    Nonqualifiedor Paid
    
    Stock
    
    Option
    
    Incentive Plan
    
    Deferred
    
    All Otherin Cash
    
    Awards
    
    Awards
    
    Compensation
    
    Compensation
    
    Compensation
    
    TotalName
    
    ($)
    
    ($) (1)
    
    ($)(1)
    
    ($)
    
    Earnings ($)
    
    ($)
    
    ($)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h)Robert G. Barrett (2)
    
    
    35,703
    
    
    
    
    
    
    
    11,497
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,200Timothy Brog
    
    
    35,000
    
    
    
    
    
    
    
    5,966
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,966Louis C. Cole (3)
    
    
    61,500
    
    
    
    
    
    
    
    8,506
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,006William B. Patton, Jr.
    
    
    50,142
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,142John C. Reece
    
    
    25,134
    
    
    
    
    
    
    
    5,496
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,630John Thomas Zender
    
    
    24,918
    
    
    
    
    
    
    
    5,492
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,410
 21




---



##### Table of Contents



(1)
    
    The amounts in column (c) and (d) reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended January 31, 2008, in accordance with
the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123
(revised 2004), Share-Based Payment(SFAS 123(R)). See Note 2 to the Companys audited
financial statements for the fiscal year ended January 31, 2008, included in the Companys
Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 12, 2008, for a discussion of
the relevant assumptions used in calculating grant date fair value pursuant to SFAS 123(R).(2)
    
    On June 25, 2007, Robert G. Barrett notified the Company that he did not intend to stand for
re-election at the Companys annual meeting of stockholders held on July 9, 2007.(3)
    
    Louis C. Cole resigned as a director of the Company effective May 22, 2008.  1 th
 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  22




---



##### Table of Contents



Right toAcquireBeneficialShares of
    
    OwnershipCommon
    
    Within 60
    
    Percent ofName and Address of Beneficial Owner
    
    Stock
    
    Days
    
    TotalDirectors and Named Executive OfficersTimothy E. Brog
    
    
    1,056,760
    
    
    
    7,500
    
    
    
    5.9
    %Steven M. Bathgate(1)
    
    
    20,000
    
    
    
    
    
    
    
    *Alan D. Curtis
    
    
    
    
    
    
    
    
    
    
    *Edward M. Gaughan
    
    
    
    
    
    
    98,500
    
    
    
    *William B. Patton, Jr.
    
    
    
    
    
    
    9,375
    
    
    
    *Steven J. Pully
    
    
    1,000
    
    
    
    
    
    
    
    *John C. Reece
    
    
    
    
    
    
    
    
    
    
    *John V. Rigali
    
    
    
    
    
    
    21,250
    
    
    
    *Richard L. Roll
    
    
    200,000
    (2)
    
    
    237,486
    
    
    
    2.4
    %Robert T. Westervelt
    
    
    875
    
    
    
    95,438
    
    
    
    *Thomas J. Zender
    
    
    5,000
    
    
    
    
    
    
    
    *All directors and executive officers
as a group (11 persons)
    
    
    1,283,635
    
    
    
    469,549
    
    
    
    9.4
    %5% Beneficial Holders(3)State of Wisconsin Investment
Board(4)
PO Box 7842
Madison, WI 53707
    
    
    1,629,975
    
    
    
    
    
    
    
    9.1
    %E2 Investment Partners LLC (5)
551 Madison Avenue
New York, NY 10022
    
    
    1,011,460
    
    
    
    
    
    
    
    5.6
    %Diker Management, LLC(6)
745 Fifth Avenue Suite 1409
New York, NY 10151
    
    
    1,177,057
    
    
    
    
    
    
    
    6.5
    %Value Fund Advisors, LLC(7)
415 South Boston, 9th Floor
Tulsa, Oklahoma 74103
    
    
    1,195,982
    
    
    
    
    
    
    
    6.6
    %**Boston Avenue Capital, LLC(7)
415 South Boston, 9th Floor
Tulsa, Oklahoma 74103
    
    
    1,195,982
    
    
    
    
    
    
    
    6.6
    %**Yorktown Avenue Capital, LLC(7)
415 South Boston, 9th Floor
Tulsa, Oklahoma 74103
    
    
    1,195,982
    
    
    
    
    
    
    
    6.6
    %**Charles M. Gillman(7)
415 South Boston, 9th Floor Tulsa,
Oklahoma 74103
    
    
    1,195,982
    
    
    
    
    
    
    
    6.6
    %**
 
 *
    
    Represents beneficial ownership of less than one percent.**
    
    Represents beneficial ownership of the aggregate number of shares of common stock that are
held by the reporting persons collectively as a group, based on a Schedule 13D/A jointly filed
by the group on December 17, 2007 with the SEC.This table is based upon information supplied by officers, directors, principal stockholders and
Schedules 13D and 13G, if any, filed with the SEC. Unless otherwise indicated in the footnotes to
this table and subject to community property laws, where applicable, we believe that each of the
stockholders named in this table has sole voting and investment power with respect to the shares
indicated as beneficially owned. Applicable percentages are based on 18,008,031shares of common
stock outstanding on May 22, 2008, adjusted as required by rules promulgated by the SEC. Under
Rule 13d-3 of the Exchange Act, certain shares may be deemed to be beneficially owned by more
than one person (if, for example, a person shares the power to vote or the power to dispose of
the shares). In addition, under Rule 13d-3(d)(1) of the Exchange Act, shares which the person (or
group) has the right to acquire within 60 days after May 22, 2008, are deemed to be outstanding
in calculating the beneficial ownership and the percentage ownership of the person (or group) but
are not deemed to be outstanding as to any other person or group. As a result, the percentage of
outstanding shares of any person as shown in this table does not necessarily reflect the persons
actual ownership of voting power with respect to the number of shares of common stock actually
outstanding at May 22, 2008. The address of each of our director and executive officer is 2381
Rosecrans Avenue, El Segundo, CA 90245. 23




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##### Table of Contents



(1)
    
    Mr. Bathgate was appointed as director effective May 22, 2008, to fill the vacancy created
by the resignation of our former director Louis C. Cole effective May 22, 2008.(2)
    
    Consists of 200,000 shares of restricted stock acquired on September 24, 2007. The restricted
stock vests upon the earlier of September 24, 2011 or the date the Company undergoes a
transaction where there is a sale of the Companys assets or a merger, business transaction or
such other similar transaction, the consummation of which requires the approval of the
Companys stockholders under Delaware law.(3)
    
    Except as set forth herein, our management knows of no person who is the beneficial owner of
more than 5% of our issued and outstanding common stock.(4)
    
    Based upon a Schedule 13G/A filed February 13, 2007 with the SEC, the State of Wisconsin
Investment Board, a Public Pension
Fund, reports they have sole voting power and sole dispositive power as to all 1,629,975
shares.(5)
    
    Based upon a Schedule 13D/A filed November 15, 2007 with the SEC by E2 Investment Partners
LLC, an investment company. Timothy E. Brog, as the investment manager of E2 Investment
Partners LLC, maintains that he has sole voting and dispositive
power as to all 1,011,460 shares.(6)
    
    Based upon a Schedule 13G filed February 12, 2007 with the SEC. Charles M. Diker and Mark N.
Diker are the managing members of each of Diker GP and Diker Management. Diker GP, LLC, Diker
Management, LLC, Charles M. Diker and Mark N. Diker maintain that they have shared voting
power and dispositive power as to 1,077,596 shares. Diker Management, LLC, Charles M. Diker
and Mark N. Diker maintain that they have shared voting power and dispositive power as to
1,177,057shares.(7)
    
    Based upon a Schedule 13D/A filed December 17, 2007. Boston Avenue Capital, LLC directly owns
625,332 shares and Yorktown Avenue Capital, LLC directly owns 570,650 shares. Value Fund
Advisors, LLC, as general manager of Boston Avenue Capital, LLC and Yorktown Avenue Capital,
LLC, and Charles M. Gillman, as manager of Value Fund Advisors, LLC, are deemed to
beneficially own the 1,195,982 shares held by Boston Avenue Capital, LLC and Yorktown Avenue
Capital, LLC. Charles M. Gillman maintains that he has sole voting and dispositive power as to
all 1,195,982 shares. EQUITY COMPENSATION PLAN INFORMATION
  Number of
    
    
    
    
    
    Number of SecuritiesSecurities to
    
    
    
    
    
    Remaining Available forbe Issued Upon
    
    
    
    
    
    Future Issuance UnderExercise
    
    Weighted-Average
    
    Equity Compensationof Outstanding
    
    Exercise Price of
    
    Plans (ExcludingOptions,
    
    Outstanding Options,
    
    Securities Reflected inWarrants and Rights
    
    Warrants and Rights
    
    Column (a))Plan Category
    
    (a)
    
    (b)
    
    (c)Equity Compensation
Plans Approved by
Security Holders
    
    
    3,072,401
    (1)
    
    
    2.85
    
    
    
    360,752
    (2)Equity Compensation
Plans Not Approved
by Security Holders
    
    
    600,000
    
    
    
    2.84
    
    
    
    Total
    
    
    3,672,401
    
    
    
    2.85
    
    
    
    360,752
 
 (1)
    
    Shares issuable pursuant to outstanding options under the 2005 Plan as of January 31, 2008.(2)
    
    Represents 360,752 shares of Common Stock that may be issued pursuant to future awards under
the 2005 Plan. 24




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##### Table of Contents



Item 13. Certain Relationships and Related Transactions, and Director Independence
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
    
    the Audit Committee shall review any proposed agreement or arrangement
relating to a related person transaction or series of related person
transactions, and any proposed amendment to any such agreement or arrangement;
    
    the Audit Committee shall establish standards for determining whether the
transactions covered by such proposed agreement or arrangement, are on terms no
less favorable to the Company than could be obtained from an unrelated third
party (fair to the Company);
    
    before the Company enters into any such proposed agreement or arrangement, and
at least annually thereafter, the Companys internal audit function shall report
to the Audit Committee whether the
transactions covered by such agreement or arrangement are fair to the Company
under the standards established by the Audit Committee;
    
    the Audit Committee shall not pre-approve, and shall make all reasonable
efforts (taking into account the cost thereof to the Company) to cancel or cause
to be renegotiated, any such agreement or arrangement which is not so determined
to be fair to the Company; and
    
    the Company shall disclose any related person transactions required to be
disclosed by the rules promulgated by the SEC, in the manner so required.
  DIRECTOR INDEPENDENCE
  
 Item 14. Principal Accountant Fees and Services
  Audit Fees.
 Audit-Related Fees.
 25




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##### Table of Contents



Tax Fees.
  Pre-Approval Policy.
  26




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
  (3)
    
    Exhibits
  Exhibits:
  ExhibitNumber24.1
    
    Power of Attorney. Previously filed with Registrants Annual Report on Form 10-K for the year ended
January 31, 2008 filed on May 12, 2008.31.1
    
    Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 27




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##### Table of Contents



SIGNATURES
 th
 Peerless Systems CorporationBy:
    /s/ JOHN V. RIGALIJohn V. RigaliVice President of Finance and
Chief Financial Officer  Signature
    
    Title
    
    Date/s/ RICHARD L. ROLL*

Richard L. Roll
    
    Chief Executive Officer & President
(Principal Executive Officer)
    
    May 30, 2008/s/ Timothy E. Brog

Timothy E. Brog
    
    Director
    
    May 30, 2008/s/ Steven M. Bathgate

Steven M. Bathgate
    
    Director
    
    May 30, 2008/s/ William B. Patton, Jr.*

William B. Patton, Jr.
    
    Director
    
    May 30, 2008/s/ Steven J. Pully*

Steven J. Pully
    
    Director
    
    May 30, 2008/s/ John C. Reece*

John C. Reece
    
    Director
    
    May 30, 2008/s/ John Thomas Zender*

John Thomas Zender
    
    Director
    
    May 30, 2008/s/ JOHN V. RIGALI*

John V. Rigali
    
    Vice President of Finance & Chief Financial
Officer
(Principal Financial and Accounting Officer)
    
    May 30, 2008*By:
    /s/ JOHN V. RIGALI

John V. Rigali
    
    Attorney-in-fact
    
    May 30, 2008
 28




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber24.1
    
    Power of Attorney. Previously filed with Registrants Annual Report on Form 10-K for the year ended
January 31, 2008 filed on May 12, 2008.31.1
    
    Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.