<PAGE>
As filed with the Securities and Exchange Commission on July 31, 1998
Registration No. 333-______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PEREGRINE SYSTEMS, INC.
(Exact name of issuer as specified in its charter)
DELAWARE 95-3773312
(State of incorporation) (I.R.S. Employer
Identification No.)
12670 HIGH BLUFF DRIVE
SAN DIEGO, CALIFORNIA 92130
(619) 481-5000
(Address of principal executive offices)
----------------------------------
INNOVATIVE TECH SYSTEMS, INC. 1994 STOCK OPTION PLAN
INNOVATIVE TECH SYSTEMS, INC. NONSTATUTORY STOCK OPTION AGREEMENT
(Full title of the plans)
----------------------------------
RICHARD T. NELSON
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
PEREGRINE SYSTEMS, INC.
12670 HIGH BLUFF DRIVE
SAN DIEGO, CALIFORNIA 92130
(619) 481-5000
(Name, address and telephone number of agent for service)
-----------------------------------
COPY TO:
DOUGLAS H. COLLOM, ESQ.
WILSON SONSINI GOODRICH & ROSATI, P.C.
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
(650) 493-9300
-----------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED(1) SHARE PRICE FEE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($0.001 par value)
issuable under:
1994 Stock Option Plan................. 485,629 shares $ 6.6591(1) $ 3,233,852.07(2) $ 953.99
Nonstatutory Stock Option Agreement.... 23,410 shares $ 10.6800(2) $ 250,018.80(2) $ 73.76
TOTAL............................. 509,039 shares $ 3,483,870.87 $1,027.75
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated in accordance with Rule 457(h) promulgated under the Securities
Act of 1933, as amended (the "Securities Act"), solely for the purpose of
computing the amount of the registration fee based on the weighted average
exercise price of $6.6591 per share covering authorized but unissued shares
under the Innovative Tech Systems, Inc. 1994 Stock Option Plan.
(2) Computed in accordance with Rule 457(h) of the Securities Act. Such
computation is based on the exercise price of $10.68 per share covering
23,410 shares of Common Stock issuable upon exercise of non-statutory stock
option grant.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Peregrine Systems, Inc. (the "Company") hereby incorporates by
reference in this registration statement the following documents:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1998 filed pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(b) The Company's Annual Report on Form 10-K/A for the fiscal year
ended March 31, 1998 filed pursuant to Section 13 of the Exchange Act.
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed March 7, 1997 pursuant to
Section 12(g) of the Exchange Act.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment to this registration statement which indicates that
all securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits a
corporation to include in its charter documents and in agreements between the
corporation and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by current law.
Article IX of the Registrant's Amended and Restated Certificate of
Incorporation provides for the indemnification of directors o the fullest extent
permissible under Delaware law.
Article VI of the Registrant's Bylaws provides for the indemnification
of officers, directors and third parties acting on behalf of the corporation to
the fullest extent permissible under General Corporation Law of Delaware.
II-2
<PAGE>
The Registrant has entered into indemnification agreements with its
directors and executive officers, in addition to the indemnification provided
for in the Registrant's Bylaws, and intends to enter into indemnification
agreements with any new directors and executive officers in the future.
In addition, pursuant to the terms of the Agreement and Plan of
Reorganization by and among the Registrant, Homer Acquisition Corporation, a
Delaware corporation and a wholly-owned subsidiary of the Registrant ("Merger
Sub"), and Innovative Tech Systems, Inc., an Illinois corporation ("ITS") dated
as of May 7, 1998 (the "Merger Agreement"), whereby Merger Sub will merge with
and into ITS (the "Merger") with ITS continuing as the surviving corporation as
a wholly-owned subsidiary of the Registrant (the "Surviving Corporation"), the
Registrant has agreed to fulfill and honor in all respects the obligations of
ITS pursuant to any indemnification agreements between ITS and its directors and
officers as of the Effective Time (as defined in the Merger Agreement) (the
"Indemnified Parties") and any indemnification provisions under ITS's
Certificate of Incorporation or Bylaws as in effect immediately prior to the
merger. The Certificate of Incorporation and Bylaws of the Surviving
Corporation will contain provisions with respect to exculpation and
indemnification that are at least as favorable to the Indemnified Parties as
those contained in the Certificate of Incorporation and Bylaws of ITS as in
effect immediately prior to the merger, which provisions will not be amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would adversely affect the rights thereunder of individuals
who, immediately prior to the Effective Time, were directors, officers,
employees or agents of ITS, unless such modification is required by law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions, the Registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ---------------------------------------------------
<S> <C>
5.1 Opinion of counsel as to legality of securities
being registered.
10.24 Innovative Tech Systems, Inc. 1994 Stock Option
Plan and form of Incentive Stock Option Agreement
thereunder
23.1 Consent of Arthur Andersen LLP, Independent
Accountants for Peregrine Systems, Inc.
23.2 Consent of Counsel (contained in Exhibit 5.1)
24.1 Power of Attorney (see page II-4)
</TABLE>
II-3
<PAGE>
ITEM 9. UNDERTAKINGS
(a) RULE 415 OFFERING The undersigned registrant hereby undertakes:
(l) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) FILING INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) REQUEST FOR ACCELERATION OF EFFECTIVE DATE OR FILING OF REGISTRATION
STATEMENT ON FORM S-8
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement on Form S-8 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of San
Diego, State of California, on this 31st day of July, 1998.
PEREGRINE SYSTEMS, INC.
By: /s/ David A. Farley
--------------------------------------------
David A. Farley
Vice President, Finance, and Chief Financial
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE
APPEARS BELOW CONSTITUTES AND APPOINTS STEPHEN P. GARDNER AND DAVID A. FARLEY,
AND EACH OF THEM, AS HIS OR HER ATTORNEY-IN-FACT, WITH FULL POWER OF
SUBSTITUTION IN EACH, FOR HIM OR HER IN ANY AND ALL CAPACITIES TO SIGN ANY
AMENDMENTS TO THIS REGISTRATION STATEMENT ON FORM S-8, AND TO FILE THE SAME,
WITH EXHIBITS THERETO AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE
SECURITIES AND EXCHANGE COMMISSION, HEREBY RATIFYING AND CONFIRMING ALL THAT
SAID ATTORNEY-IN-FACT, OR HIS SUBSTITUTES, MAY DO OR CAUSE TO BE DONE BY VIRTUE
HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
Signature Title Date
- -------------------------------- ----------------------- -------------
President and Chief July 31, 1998
/s/ Stephen P. Gardner Executive Officer
- -------------------------------- (Principal Executive
Stephen P. Gardner Officer) and Director
/s/ David A. Farley Vice President, July 31, 1998
- -------------------------------- Finance, and Chief
David A. Farley Financial Officer
(Principal Financial
and Accounting Officer)
and Director
/s/ John J. Moores Chairman of the Board July 31, 1998
- -------------------------------- of Directors
John J. Moores
/s/ Christopher A. Cole Director July 31, 1998
- --------------------------------
Christopher A. Cole
/s/ Richard A. Hosley II Director July 31, 1998
- --------------------------------
Richard A. Hosley II
/s/ Charles E. Noell III Director July 31, 1998
- --------------------------------
Charles E. Noell III
/s/ Norris van den Berg Director July 31, 1998
- --------------------------------
Norris van den Berg
II-5
<PAGE>
EXHIBIT 5.1
[Letterhead of Wilson Sonsini Goodrich & Rosati]
July 31, 1998
Peregrine Systems, Inc.
12670 High Bluff Drive
San Diego, California 92130
RE: REGISTRATION STATEMENT ON FORM S-8: INNOVATIVE TECH SYSTEMS, INC.
1994 STOCK PLAN
Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by you
with the Securities and Exchange Commission on or about July 31, 1998 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of 509,039 shares of your Common Stock (the
"Shares") reserved for issuance under the Innovative Tech Systems, Inc. 1994
Stock Option Plan (the "Plan") or a certain non-statutory stock option agreement
with a consultant to the Company. As your legal counsel, we have examined the
proceedings taken and are familiar with the proceedings proposed to be taken by
you in connection with the sale and issuance of such Common Stock under the
Plan.
It is our opinion that the Shares, as or when issued and sold in the manner
described in the Registration Statement and sold in the manner referred to in
the Plan and pursuant to the agreement which accompanies the Plan, are or will
be legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including any Prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
II-6
<PAGE>
EXHIBIT 10.24
INNOVATIVE TECH SYSTEMS, INC.
1994 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Innovative Tech Systems Inc. (the "Company") Stock
Option Plan (referred to herein as the "Plan") is to provide a means by which
certain employees and directors of, and others providing services to or
having a relationship with, the Company and its subsidiaries (as such term is
defined in Section 424(f) of the Internal Revenue Code of 1986, as amended
(the "Code") may be given an opportunity to purchase common stock of the
Company ("Common Stock"). The Plan is intended to promote the interests of
the Company by encouraging stock ownership on the part of such individuals,
by enabling the Company and its subsidiaries to secure and retain the
services of highly qualified persons, and by providing such individuals with
an additional incentive to advance the success of the Company and its
subsidiaries.
2. ADMINISTRATION
The Plan shall be administered by a Committee consisting of not less
than two directors (the "Committee") to be appointed from time to time by the
Board of Directors. Membership on the Committee shall in any event be
limited to those members of the Board who are "disinterested persons" as
defined in the regulations promulgated by the Securities Exchange Commission
pursuant to Section 16(b) of the Securities Exchange Act of 1934. The
Committee shall have the
<PAGE>
power to select optionees, to establish the number of shares and other terms
applicable to each such option, to construe the provisions of the Plan, and
to adopt rules and regulations governing the administration of the Plan. The
members of the Board of Directors or the Committee shall not be liable for
any action or determination made in good faith with respect to the Plan or to
any option granted pursuant thereto.
3. ELIGIBILITY
The persons who shall be eligible to participate in this Plan and
receive options hereunder shall be the Company's directors and such employees
and other individuals who provide services to or otherwise have a
relationship with the Company or its subsidiaries as the Committee shall from
time to time determine to be key individuals to the success of the Company.
4. ALLOTMENT OF SHARES
A maximum of 325,000 authorized but unissued shares of the Common Stock
of the Company will be allotted to the Plan, subject to the required approval
by the stockholders. Shares that by reason of the expiration of an option or
otherwise are no longer subject to purchase pursuant to an option granted
under the Plan may be reoptioned under the Plan. The Company shall not be
required upon the exercise of any option to issue or deliver any shares of
stock prior to the completion of such registration or other qualification of
such shares under any state or federal law, rule or regulation as the Company
shall determine to be necessary or desirable.
<PAGE>
5. EFFECTIVE DATE AND TERM OF PLAN
The effective date of the Plan is the date on which it is approved by
the shareholders of the Company. The Plan shall terminate on the tenth
anniversary of its effective date; but the Board of Directors may terminate
the Plan at any time prior thereto. Termination of the Plan shall not alter
or impair, without the consent of the optionee, any of the rights or
obligations of any option theretofore granted under the Plan.
6. TERMS AND CONDITIONS
A. All Options
Stock options granted pursuant to this Plan shall be evidenced by
agreements in such form as the Committee shall from time to time approve.
Nothing in this Plan or any option granted hereunder shall govern the
employment rights and duties between the optionee and the Company or
subsidiary. Neither this Plan, nor any grant or exercise pursuant thereto,
shall constitute an employment agreement among such parties. The following
shall also apply to all options granted under the Plan:
(i) Option Price
Except as otherwise set forth herein, the option price per
share for each stock option shall be determined by the Committee and shall
not be less than the fair market value on the date the option is granted.
The fair market value shall be determined as prescribed by the Internal
Revenue Code and Regulations thereunder.
(ii) Time of Exercise of Option
Except as otherwise set forth herein, the Committee shall
establish the option period and time or times within the option period when
the stock option may be exercised in whole
<PAGE>
or in such parts as may be specified from time to time by the Committee.
With respect to an optionee who is about to retire, the Committee may in its
discretion accelerate the time or times when any particular stock option held
by said optionee may be so exercised so that such time or times are earlier
than those originally provided in said option. In all cases exercise of a
stock option shall be subject to the provisions of Section 6A(vi).
(iii) Payment and Manner of Exercise
The entire option price shall be paid at the time the option
is exercised. To the extent that the right to purchase shares has accrued
hereunder, options may be exercised from time to time by written notice to
the Company stating the full number of shares with respect to which the
option is being exercised and the time of delivery thereof, which shall be at
least fifteen days after the giving of such notice unless an earlier date
shall have been mutually agreed upon. Such notice of exercise shall be
accompanied by full payment for the shares by certified or official bank
check or the equivalent thereof acceptable to Company. Upon exercise, the
Company shall, without transfer or issue tax to the optionee (or other person
entitled to exercise the option), deliver to the optionee (or such other
person) at the principal office of the Company, or such other place as shall
be mutually agreed upon, a certificate or certificates for such shares;
provided, however, that the time of delivery may be postponed by the Company
for such periods as may be required for it with reasonable diligence to
comply with any requirements of law; and provided further that in the event
the Common Stock issuable upon exercise is not registered under the
Securities Act of 1933 (the "Act"), then the Company may require that the
registered owner deliver an investment representation in form acceptable to
the Company and its counsel and the Company will place a legend on the
certificate for such Common Stock restricting the transfer of same. There
shall be no obligation or duty for the Company to register under the Act at
any time the Common Stock
<PAGE>
issuable upon exercise of the options. If the optionee (or other person
entitled to exercise the option) fails to accept delivery, the optionee's
payment shall be returned and the right to exercise the option with respect
to such undelivered shares shall be terminated.
(iv) Non-Transferability of Option
An option by its terms shall not be transferable by the
optionee otherwise than by will or by the laws of descent and distribution.
(v) Adjustment in Event of Recapitalization of the Company
In the event of a reorganization, recapitalization, stock
split, stock dividend, combination of shares, merger, consolidation, rights
offering, or any other change in the corporate structure or shares of the
Company, the Board of Directors shall make such adjustment as it may deem
equitably required, in the number and kind of shares authorized by and for
the Plan, in the number and kind of shares covered by the options granted,
and in the option price.
(vi) Rights after Termination of Employment
In the event of termination of employment due to any cause
other than death or disability, rights to exercise the stock option shall
terminate three months following cessation of employment. In the event of
termination of employment due to disability (within the meaning of
Section 22 (e) (3) of the Code) or death, such optionee or executor,
administrator or devisee of an optionee, shall have the right to exercise
such option (to the extent otherwise exercisable) at any time within one year
after cessation of employment by reason of such disability or death.
B. Non-Qualified Stock Options
The Committee may, in its discretion, grant options under the Plan
which, in whole or in part, do not qualify as incentive stock options under
Section 422 of the Code ("Non-
<PAGE>
Qualifying Options"). The terms and conditions of the Non-Qualifying options
shall be governed by Section 6A above.
C. Incentive Stock Options
The Committee may, in its discretion, grant options under the Plan
which qualify, in whole or in part, as incentive stock options under
Section 422 of the Code. In addition to the terms and conditions set forth
in Section 6A above, the following terms and conditions shall govern any
incentive stock option issued under the Plan:
(i) Maximum Fair Market Value of Incentive Stock Options
No optionee may have incentive stock options which become
exercisable for the first time in any calendar year (under all incentive
stock option plans of the Company and its subsidiary corporations) with an
aggregate fair market value (determined as of the time such option is
granted) in excess of one Hundred Thousand Dollars ($100,000).
(ii) Option Price
The option price per share for each stock option shall be
100% of the fair market value of the Common Stock on the date the option is
granted; except, in the case of the grant to an optionee who owns Common
Stock of the Company possessing more than 10% of the total combined voting
power of all classes of stock of the Company or its subsidiaries, the option
price of such option shall be at least 110% of the fair market value of the
Common Stock on the date the option is granted. The fair market value shall
be determined as prescribed by the Internal Revenue Code and Regulations.
(iii) Period of Option
<PAGE>
Each option shall expire ten years from the date it is
granted or at the end of such shorter period as may be designated by the
Committee on the date of grant; except, in the case of the grant of an
incentive stock option to an optionee who owns Common Stock of the Company
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or its subsidiaries, such option shall not be
exercisable after the expiration of five years from the date it is granted.
(iv) Purpose for which Option may be Granted
Each option may be issued to an otherwise eligible individual
only for reasons connected with his employment by the Company or its parent
or subsidiary corporation (or corporations).
7. AMENDMENT OF PLAN
The Board, within its discretion, shall have authority to
amend the Plan and the terms of any option issued hereunder without the
necessity of obtaining further approval of the stockholders, unless such
approval is required by law.
<PAGE>
EXHIBIT A
INNOVATIVE TECH SYSTEMS, INC.
INCENTIVE STOCK OPTION AGREEMENT
Incentive Stock Option Agreement, dated as of __________________, and
delivered by INNOVATIVE TECH SYSTEMS, INC., an Illinois corporation (the
"Corporation"), to ____________________, an employee of the Corporation (the
"Optionee").
WHEREAS, the Board of Directors of the Corporation had adopted a stock
option plan designated the "Innovative Tech Systems, Inc. 1994 Stock Option
Plan" (the "Plan"), a copy of which is available at the Corporation's
offices; and
WHEREAS, the Stock Option Committee (the "Committee") appointed by the
Board of Directors of the Corporation has determined that the Optionee is a
key individual as contemplated by the Plan, and has determined that it would
be to the advantage and interest of the Corporation to grant the option
provided for herein to the Optionee as an inducement to remain in the service
of the Corporation and as an incentive for increased effort during such
service.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. All capitalized terms used herein, and not otherwise defined, shall
have the meanings indicated in the Plan.
2. Subject to the terms and conditions of the Plan and those
hereinafter set forth, the Corporation hereby grants to the Optionee an
option (the "Option") to purchase an aggregate of __________ shares (the
"Shares") of the Corporation's common stock, $.0185 par value (the "Common
Stock"), subject to adjustment as provided in Article 6 of the Plan, at a
price of
<PAGE>
$__________ per Share, exercisable in whole or in part, in three (3) equal
annual installments, with the first such installment exercisable twelve
(12) months from the date of the grant of this Option, but any such exercise
must occur within ten (10) years from the date first above written. To the
extent not exercised, installments shall accumulate and be exercisable, in
whole or in part, in any subsequent period until the expiration date of this
Option.
3. Notwithstanding anything to the contrary contained herein, in the
event of the termination of the Optionee's employment by the Corporation due
to any cause other than death or disability, the Optionee's rights to
exercise the Option (to the extent otherwise exercisable) shall terminate
three (3) months following the cessation of employment. In the event of
termination of the Optionee's employment due to disability (within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
(the "Code")), or death, the Optionee, or any executor, administrator, or
devisee of the Optionee, shall have the right to exercise the Option (to the
extent otherwise exercisable) at any time within one (1) year after the
cessation of the Optionee's employment by the Corporation by reason of the
Optionee's disability or death. Notwithstanding any of the foregoing
provisions, (a) in no event shall the Option be exercisable after the
expiration of the period for which it was granted; and (b) at the end of the
applicable exercise period specified in this paragraph 2 during which the
Option may be exercised, it shall be terminated in full.
4. The Committee has determined that the fair market price of the
Common Stock on this date is $__________.
5. The Option is intended to qualify as an Incentive Stock Option under
Section 422A of the Code.
-2-
<PAGE>
6. The Optionee may exercise the Option with respect to all or any part
of the Shares then subject to the Option (but solely to the extent the Option
is then exercisable pursuant to paragraph 2 above), by giving the Corporation
written notice of such exercise, which notice shall be in such form as may
from time to time be specified by the Committee. Such notice shall specify
the number of shares as to which the Option is being exercised and shall be
accompanied by full payment for all Shares being purchased. Payment of the
option price shall be made by delivery to the Corporation of a certified or
official bank check made payable in U.S. Dollars, or the equivalent thereof
acceptable to the Corporation. Upon receipt of such notice of exercise and
the full payment therefor, the Corporation will cause a stock certificate or
certificates, in the name of the Optionee and representing the amount of
Shares so acquired, to be delivered to the Optionee.
7. The Option shall during the Optionee's lifetime be exercisable only
by the Optionee, and neither the Option or any right thereunder shall be
transferable, except by will or the laws of descent and distribution, or
(except to the extent required by law) be subject to attachment, execution,
or other similar process. In case of the judicially declared incompetence or
disability of the Optionee, the Option, to the extent exercisable, may be
exercised by the legally appointed guardian or conservator of the Optionee's
estate. In the event of any attempt by the Optionee to alienate, assign,
pledge, hypothecate, or otherwise dispose of the Option or of any right
thereunder, except as provided for herein, or in the event of any levy or any
attachment, execution or similar process upon the rights or interests hereby
conferred, the Corporation may terminate the Option by notice to the Optionee
and it shall thereupon become null and void.
-3-
<PAGE>
8. Neither the granting of the Option nor the exercise thereof shall be
construed as conferring upon the Optionee any right with respect to
continuance of employment by the Corporation.
9. Neither the Optionee nor any person entitled to exercise his rights
hereunder shall have any of the rights of a stockholder with respect to the
Shares subject to the Option, except to the extent that certificates for such
Shares shall have been issued upon the exercise of the Option as provided for
herein.
10. Any notice to the Corporation provided for in this instrument shall
be addressed to it in care of its Secretary, at the office of the
Corporation, 444 Jacksonville Road, Suite 200, Warminster, Pennsylvania
18974, and any notice to the Optionee shall be addressed to him at his
address at the time as it is shown on the payroll of the Corporation or to
such other address as either may designate to the other in writing. Any such
notice shall be in writing and shall be deemed to be fully given if delivered
by hand or sent by telegram, or by registered or certified mail, postage
prepaid, addressed as stated above.
11. The Option and this Agreement are subject to all the terms and
conditions of the Plan, and specifically to the power of the Committee to
interpret the Plan and options granted thereunder, and of the Board of
Directors of the Corporation to alter, amend, suspend, or discontinue the
Plan subject to the limitations contained in the Plan. By acceptance of this
Agreement, the Optionee acknowledges receipt of a copy of the Plan and
recognizes and agrees that all determinations, interpretations or other
actions respecting the Plan may be made by a majority of the Board of
Directors of the Corporation or a majority of the members of the Committee,
and that such actions are final, conclusive and binding upon all parties,
including the Optionee.
-4-
<PAGE>
12. The validity, construction, interpretation, and effect of this
instrument shall exclusively be governed by and determined in accordance with
the laws of the Commonwealth of Pennsylvania.
INNOVATIVE TECH SYSTEMS, INC.
By:
-------------------------------------
Name:
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Title:
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The Optionee named herein hereby acknowledges receipt of a copy of this
Option Agreement and agrees to be bound by the terms thereof.
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<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated April 22, 1998
appearing in the Peregrine Systems, Inc. Form 10-K for the year ended March 31,
1998 and to all references to our firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
San Diego, California
July 31, 1998
