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                                                                    EXHIBIT 10.1

                                PEOPLESOFT, INC.

                      AMENDED AND RESTATED 1989 STOCK PLAN
                          (AS AMENDED ON MAY 26, 1998)


     1.   Purposes of the Plan. The purposes of this Stock Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or non-statutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. Stock purchase rights may also be granted
under the Plan.

     2.   Definitions. As used herein, the following definitions shall apply:

          (a)  "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

          (b)  "Applicable Laws" means the legal requirements relating to the
administration of stock plans under state corporate and securities laws and the
Code.

          (c)  "Board" means the Board of Directors of the Company.

          (d)  "Code" means the Internal Revenue Code of 1986, as amended.

          (dd) "Contingent Worker"describes any person during the period in
which the person renders services to, for or on behalf of the Company, Parent or
Subsidiary under one or more of the following categories or classifications:

               a.   Independent Contractor. An "independent contractor" is an
individual (a) whose services are engaged by the Company, Parent or Subsidiary
under a written or oral contract, between the individual and the Company, Parent
or Subsidiary, to perform specialized tasks, for or on behalf of the Company,
Parent or Subsidiary, which require substantial skill and independent judgement
and (b) whose compensation is not subject to the withholding of employment or
income taxes by the Company, Parent or Subsidiary under Sections 3121 or 3401 of
the Code (other than back-up withholding under Code Section 3406) but is subject
to reporting by the Company, Parent or Subsidiary, under Code Section 6041, on
IRS Form 1099-MISC or other form for the reporting of nonemployee compensation.

               b.   Leased Worker. A "leased worker" is an individual hired by
an employee leasing company and made available to the Company, Parent or
Subsidiary by the leasing company, under a written or oral contract between the
Company, Parent or Subsidiary and the leasing company, in an arrangement in
which the compensation paid to the individual is subject to the withholding of

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employment or income taxes by the leasing company under Sections 3121 or 3401 of
the Code. The term "leased worker" includes but is not limited to persons who
provide services to the Company, Parent or Subsidiary in a joint employment
relationship with the leasing company. Similarly, the term "leased worker"
includes but is not limited to a leased employee within the meaning of Section
414(n) of the Code.

               c.   Technical Contractor. A "technical contractor" is an
individual who is a skilled technical worker, such as an engineer or computer
specialist and who is hired by a technical services firm and made available to
the Company, Parent or Subsidiary by the technical services firm, in an
arrangement in which the compensation paid to the individual is subject to the
withholding of employment or income taxes by the technical services firm under
Sections 3121 or 3401 of the Code or is subject to reporting by the technical
services firm, under Code Section 6041, on IRS Form 1099-MISC or other form for
the reporting of nonemployee compensation. The term "technical contractor"
includes but is not limited to independent contractors and leased workers. The
term "technical services firm" includes but is not limited to a leasing company,
as described above, or a firm distinct from the Company, Parent or Subsidiary
under a master vendor program or outsourcing arrangement, as described below.

               d.   Master Vendor Worker. A "master vendor worker" is an
individual who renders services to the Company, Parent or Subsidiary under a
master vendor program. A master vendor program is an arrangement in which a
personnel agency or other human resources firm supplies the Company, Parent or
Subsidiary with some or all of the individuals who, at any time or from time to
time, constitute the temporary work force of the Company, Parent or Subsidiary,
either directly or through other temporary help services, with or without
consolidated billing or invoicing. The compensation paid to the master vendor
worker is subject to the withholding of employment or income taxes by the
personnel agency or human resources firm under Sections 3121 or 3401 of the Code
or is subject to reporting by the personnel agency or human resources firm,
under Code Section 6041, on IRS Form 1099-MISC or other form for the reporting
of nonemployee compensation. The term "master vendor worker" includes but is not
limited to independent contractors, leased workers and technical contractors.

               e.   Outsourcing Organization Worker. An "outsourcing
organization worker" is an individual who renders services to the Company,
Parent or Subsidiary under an outsourcing or managed services arrangement. An
outsourcing or managed services arrangement exists when a firm, distinct from
the Company, Parent or Subsidiary and with specialized expertise, contracts with
the Company, Parent or Subsidiary not only to provide personnel but also to
assume responsibility for functions not at the core of the business of the
Company, Parent or Subsidiary. Non-core functions include but are not 

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limited to mail room, reception, food service, landscaping, and building
security or maintenance. The compensation paid to an outsourcing organization
worker is subject to the withholding of employment or income taxes by the
outsourcing organization or managed services firm under Sections 3121 or 3401 of
the Code or is subject to reporting by the outsourcing organization or managed
services firm, under Code Section 6041, on IRS Form 1099-MISC or other form for
the reporting of nonemployee compensation. The term "outsourcing organization
worker" includes but is not limited to independent contractors, leased workers,
technical contractors and master vendor workers.

               f.   Consistent with the terms of the Plan and relevant laws, the
Administrator shall have discretionary authority to determine which persons who
provide services to, for or on behalf of the Company, Parent or Subsidiary are
Contingent Workers excluded from the categories of Consultant and Employee under
the Plan.


          (e)  "Committee" means the Committee appointed by the Board of
Directors in accordance with Section 4 of the Plan.

          (f)  "Common Stock" means the Common Stock of the Company.

          (g)  "Company" means PeopleSoft, Inc., a Delaware corporation.

          (h)  "Consultant" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any Director of the Company whether
compensated for such services or not provided that if and in the event the
Company registers any class of any equity security pursuant to the Exchange Act,
the term Consultant shall thereafter not include Directors who are not
compensated for their services or are paid only a director's fee by the Company.

          (i)  "Continuous Status as an Employee or Consultant" means the
absence of any interruption or termination of the employment or consulting
relationship by the Company or any Parent or Subsidiary. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of: (i)
sick leave; (ii) military leave; (iii) any other leave of absence approved by
the Board, provided that such leave is for a period of not more than ninety (90)
days, unless reemployment upon the expiration of such leave is guaranteed by
contract or statute, or unless provided otherwise pursuant to Company policy
adopted from time to time; or (iv) in the case of transfers between locations of
the Company or between the Company, its Subsidiaries or its successor.

          (j)  "Director" means a member of the Board.

          (k)  "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

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          (l)  "Employee" shall mean any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company. The term "Employee" does not include any
Contingent Worker even if such contingent workers are reclassified as common-law
employees of the Company, Parent or Subsidiary unless the Administrator selects
the Contingent Worker as a Consultant, within the meaning of Section 2(h)
herein, who shall participate in the Plan. Consistent with the terms of the Plan
and relevant laws, the Administrator shall have discretionary authority to
determine the identity of reclassified Contingent Workers who shall be treated
as Consultants under the Plan and the manner and extent to which such
reclassified Contingent Workers shall participate in the Plan.


          (m)  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

          (n)  "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

               (i)  If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported, as quoted on such system or exchange or the exchange with the greatest
volume of trading in Common Stock for the last market trading day prior to the
time of determination) as reported in the Wall Street Journal or such other
source as the Administrator deems reliable;

               (ii) If the Common Stock is quoted on the Nasdaq System (but not
on the Nasdaq National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high and low asked prices for the Common Stock; or

               (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.

          (o)  "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.

          (p)  "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

          (q)  "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

          (r)  "Option" means a stock option granted pursuant to the Plan.

          (s)  "Optioned Stock" means the Common Stock subject to an Option.

          (t)  "Optionee" means an Employee or Consultant who receives an
Option.

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          (u)  "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.

          (v)  "Plan" means this Amended and Restated 1989 Stock Plan.

          (w)  "Public Company" means the Company when the Company has a class
of equity securities registered under Section 12 of the Exchange Act.

          (x)  "Purchaser" means an Employee or Consultant who exercises a Stock
Purchase Right.

          (y)  "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Section 10 below.

          (z)  "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

          (aa) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

          (bb) "Stock Purchase Right" means a right to purchase Common Stock
pursuant to the Plan or the right to receive a bonus of Common Stock for past
services.

          (cc) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 425(f) of the Code.

     3.   Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 104,600,000 Shares, plus an annual increase to be added on the
first day of each of the Company's fiscal years beginning in 1999 equal to the
lesser of (i) 20,000,000 shares or (ii) 5 % of the outstanding shares on the
last day of the immediately preceding fiscal year. The Shares may be authorized,
but unissued, or reacquired Common Stock.

          If an Option or Stock Purchase Right expires or becomes unexercisable 
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.

     4.   Administration of the Plan.

          (a)  Procedure.

               (i)  Multiple Administrative Bodies. If (A) the Company is not a
Public Company, or (B) the Company is a Public Company and it is permitted by
Rule 16b-3 and by the Applicable Laws, the Plan may (but need not) be
administered by different administrative bodies

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with respect to Directors, non-Director Officers, and Employees who are neither
Directors nor Officers.

               (ii) Administration With Respect to Directors and Officers
Subject to Section 16(b). With respect to Option and Stock Purchase Rights
grants made to Employees or Consultants who are also Officers or Directors when
the Company has a class of equity securities registered under Section 12 of the
Exchange Act (in which case the Company shall be referred to herein as a "Public
Company"), the Plan shall be administered by (A) the Board, if the Board may
administer the Plan in compliance with Rule 16b-3 as it applies to a plan
intended to qualify thereunder as a discretionary plan, or (B) a Committee
designated by the Board to administer the Plan, which Committee shall be
constituted (I) in such a manner as to permit the Plan to comply with Rule 16b-3
as it applies to a plan intended to qualify thereunder as a discretionary plan
and (II) in such a manner as to satisfy the Applicable Laws.

               (iii) Administration With Respect to Other Persons. With respect
to Option and Stock Purchase Rights grants made to Employees or Consultants who
are neither Directors nor Officers of the Company and Option grants made when
the Company is not a Public Company, the Plan shall be administered by (A) the
Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws.

               (iv) General. Once a Committee has been appointed pursuant to
subsection (ii) or (iii) of this Section 4(a), such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of any Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies (however caused) and remove
all members of a Committee and thereafter directly administer the Plan, all to
the extent permitted by the Applicable Laws, and, in the case of a Committee
appointed under subsection (ii), to the extent permitted by Rule 16b-3 as it
applies to a plan intended to qualify thereunder as a discretionary plan.

          (b)  Powers of the Administrator. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:

               (i)  to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(m) of the Plan; (ii) to select the Consultants and
Employees to whom Options and Stock Purchase Rights may from time to time be
granted hereunder;

               (iii) to determine whether and to what extent Options and Stock
Purchase Rights or any combination thereof, are granted hereunder;

               (iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;

               (v)  to approve forms of agreement for use under the Plan;

               (vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation of any Option or
other award and/or the shares of Common Stock relating thereto, based in each
case on such factors as the Administrator shall determine, in its sole
discretion); and


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               (vii) to determine the terms and restrictions applicable to Stock
Purchase Rights and the Restricted Stock purchased by exercising such Stock
Purchase Rights.

          (c)  Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees, Purchasers and any other holders of any Options or Stock Purchase
Rights.

     5.   Eligibility.

          (a)  Options and Stock Purchase Rights may be granted to Employees and
Consultants, provided that Incentive Stock Options may be granted only to
Employees. An Employee or Consultant who has been granted an Option or Stock
Purchase Right may, if he is otherwise eligible, be granted additional Option(s)
or Stock Purchase Rights.

          (b)  Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.

          (c)  For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.

          (d)  The Plan shall not confer upon any Optionee or holder of a Stock
Purchase Right any right with respect to continuation of employment or
consulting relationship with the Company, nor shall it interfere in any way with
his or her right or the Company's right to terminate his or her employment or
consulting relationship at any time, with or without cause.

          (e)  The following limitations shall apply to grants of Options and
Stock Purchase Rights to Employees:

               (i)  No Employee shall be granted, in any fiscal year of the
Company, Options and Stock Purchase Rights to purchase more than 250,000 Shares.

               (ii) The foregoing limitation shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 12.

               (iii) If an Option or Stock Purchase Right is cancelled (other
than in connection with a transaction described in Section 12), the cancelled
Option or Stock Purchase Right will be counted against the limit set forth in
Section 5(e)(i). For this purpose, if the exercise price of an Option or Stock
Purchase Right is reduced, the transaction will be treated as a cancellation of
the Option or Stock Purchase Right and the grant of a new Option or Stock
Purchase Right.

     6.   Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company as described in Section 18 of the Plan. It shall
continue in effect until March 17, 2008 unless sooner terminated under Section
14 of the Plan.

     7.   Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that in the case of an Incentive Stock
Option or a Nonstatutory Stock 

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Option, the term shall be no more than ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
However, in the case of an Option granted to an Optionee who, at the time the
Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.

     8.   Option Exercise Price and Consideration.

          (a)  Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is determined by
the Board, but shall be subject to the following:

               (i)  In the case of an Incentive Stock Option

                    (A)  granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

                    (B)  granted to any Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.

               (ii) In the case of a Nonstatutory Stock Option

                    (A)  granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of the grant.

                    (B)  granted to any person, the per Share exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant.

          (b)  Form of Consideration. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely of
(1) cash, (2) check, (3) promissory note, (4) other Shares which (x) in the case
of Shares acquired upon exercise of an Option either have been owned by the
Optionee for more than six months on the date of surrender or were not acquired,
directly or indirectly, from the Company, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) authorization for the Company to
retain from the total number of Shares as to which the Option is exercised that
number of Shares having a Fair Market Value on the date of exercise equal to the
exercise price for the total number of Shares as to which the Option is
exercised, (6) delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company the
amount of sale or loan proceeds required to pay the exercise price, (7) delivery
of an irrevocable subscription agreement for the Shares which irrevocably
obligates the option holder to take and pay for the Shares not more than twelve
months after the date of delivery of the subscription agreement, (8) any
combination of the foregoing methods of payment, or (9) such other consideration
and method of payment for the issuance of Shares to the extent permitted under
Applicable Laws. In making its determination as to the type of consideration to
accept, the Board shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.

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     9.   Exercise of Option.

          (a)  Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan.

          An Option may not be exercised for a fraction of a Share.

          An Option shall be deemed to be exercised when notice of such exercise
has been given to the Company in accordance with the terms of the Option by the
person entitled to exercise the Option and full payment for the Shares with
respect to which the Option is exercised has been received by the Company. Full
payment may, as authorized by the Administrator, consist of any consideration
and method of payment allowable under Section 8(b) of the Plan. Until the
issuance (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 12 of the Plan.

          Exercise of an Option in any manner shall result in a decrease in the 
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

          (b)  Termination of Employment or Consulting Relationship. In the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant with the Company (as the case may be), such Optionee may, but only
within ninety (90) days (or such other period of time of not less than thirty
(30) days as is determined by the Board, with such determination in the case of
an Incentive Stock Option being made at the time of grant of the Option and not
exceeding ninety (90) days) after the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise his Option to the extent that Optionee was entitled
to exercise it at the date of such termination. To the extent that Optionee was
not entitled to exercise the Option at the date of such termination, or if
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.

          (c)  Disability of Optionee. Notwithstanding the provisions of Section
9(b) above, in the event of termination of an Optionee's Continuous Status as an
Employee or Consultant as a result of Optionee's total and permanent disability.
Optionee may, but only within twelve (12) months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. To the extent
that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

          (d)  Death of Optionee. In the event of the death of an Optionee, the
Option may be exercised, at any time within twelve (12) months following the
date of death (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), by the Optionee's estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, 

<PAGE>   10

or if Optionee does not exercise such Option to the extent so entitled within
the time specified herein, the Option shall terminate.

          (e)  Rule 16b-3. Options granted to persons subject to Section 16(b)
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.

     10.  Stock Purchase Rights.

          (a)  Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid (which price shall not be less than 85% of the
Fair Market Value of the Shares as of the date of the offer), and the time
within which such person must accept such offer, which shall in no event exceed
thirty (30) days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a stock purchase agreement in the form determined by the
Administrator.

          (b)  Repurchase Option. Unless the Administrator determines otherwise,
the stock purchase agreement shall grant the Company a repurchase option
exercisable upon the voluntary or involuntary termination of the Purchaser's
employment or consulting relationship with the Company for any reason (including
death or disability). The purchase price for Shares repurchased pursuant to the
stock purchase agreement shall be the original price paid by the Purchaser or
the Fair Market Value as of the date of bonus in the case of a stock bonus and
may be paid by cancellation of any indebtedness of the Purchaser to the Company.
The repurchase option shall lapse at such rate as the Administrator may
determine.

          (c)  Other Provisions. The stock purchase agreement shall contain such
other terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion. In addition, the
provisions of stock purchase agreements need not be the same with respect to
each Purchaser.

          (d)  Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the Purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 12
of the Plan.

     11.  Non-Transferability of Options and Stock Purchase Rights. An Option or
Stock Purchase Right may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee or Purchaser, only by the Optionee or Purchaser.

     12.  Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option and Stock Purchase Right, and
the number of shares of Common Stock which have been authorized for issuance
under the Plan but as to which no Options or Stock Purchase Rights have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option or Stock Purchase Right, as well as the price per share of Common
Stock covered by 

<PAGE>   11

each such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.

          In the event of the proposed dissolution or liquidation of the 
Company, the Board shall notify the Optionee at least fifteen (15) days prior to
such proposed action. To the extent it has not been previously exercised, the
Option will terminate immediately prior to the consummation of such proposed
action. In the event of a merger of the Company with or into another
corporation, the Option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. With respect to any Option granted prior to January 4,
1992, in the event that such successor corporation refuses to assume such Option
or to substitute an equivalent option, the Board shall, in lieu of such
assumption or substitution, provide for the Optionee to have the right to
exercise such Option as to all of the Optioned Stock, including Shares as to
which such Option would not otherwise be exercisable. If the Board makes an
Option fully exercisable in lieu of assumption or substitution in the event of a
merger, the Board shall notify the Optionee that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the Option confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares).

     13.  Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.

     14.  Amendment and Termination of the Plan.

          (a)  Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
or Purchaser under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act or with Section 422 of the Code (or any other applicable law or
regulation, including the requirements of the NASD or an established stock
exchange), the Company shall obtain stockholder approval of any Plan amendment
in such a manner and to such a degree as required.

          (b)  Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not adversely affect Options or Stock Purchase
Rights already granted and such Options or Stock Purchase Rights shall remain in
full force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee or Purchaser and the 

<PAGE>   12

Board, which agreement must be in writing and signed by the Optionee or
Purchaser and the Company.

     15.  Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Rights unless the
exercise of such Option or Stock Purchase Rights and the issuance and delivery
of such Shares pursuant thereto shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

          As a condition to the exercise of an Option or Stock Purchase Rights, 
the Company may require the person exercising such Option or Stock Purchase
Rights to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any of the aforementioned relevant
provisions of law.

     16.  Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

          The inability of the Company to obtain authority from any regulatory 
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

     17.  Agreements. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Board shall approve from time to time.

     18.  Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under applicable state and federal law.

     19.  Information to Optionees. The Company shall provide to each Optionee
and Purchaser, during the period for which such Optionee or Purchaser has one or
more Options or Stock Purchase Rights outstanding, copies of all annual reports
and other information which are provided to all stockholders of the Company. The
Company shall not be required to provide such information to key employees whose
duties in connection with the Company assure their access to equivalent
information.
<PAGE>   13
Prepared for:
SSN:
                                PeopleSoft, Inc.
                        Incentive Stock Option Agreement

     Subject to the terms, definitions and provisions of the Amended and
Restated 1989 Stock Plan ("the Plan"), even if conflicting herewith,
PEOPLESOFT, INC. (the "Company"), hereby grants to ____________ (the
"Optionee"), the following option (the "Option") to purchase shares of
PeopleSoft's common stock:

Grant ID   Grant Date   Shares Granted   Exercise Price   Expiration Date

Subject to Optionee maintaining Continuous Status as an Employee as of such
dates, the Option shall vest and become exercisable as follows:

                   Vesting Date     Shares Vested/Exercisable

     In the event of termination of Optionee's Continuous Status as an
Employee, Optionee may exercise this Option only to the extent that Optionee
was vested at the date of termination. If termination resulted from the death
of the Optionee, the Optionee's estate or person who acquired the right to
exercise the option by bequest or inheritance will be entitled to exercise the
Option as if the termination had occurred one (1) year from the date of death.
To the extent that Optionee was not vested at the date of termination the
Option shall terminate. In addition, the Option shall terminate, even as to
vested shares, if the Optionee does not exercise the Option within ninety (90)
days from termination or within twelve (12) months in the event of the
Optionee's death or Disability. In no event may this Option be exercised after
the Term/Expiration date.

     The Option may be exercised by properly completing a Lotus Notes exercise
form or its equivalent. The Lotus Notes form or its equivalent will be
irrevocable and deemed executed upon receipt by the Stock Plan Administrator of
a signed (electronically or otherwise) Lotus Notes form or its equivalent. The
exercise notice must be accompanied by payment of the appropriate exercise
price. Such payment may be made by i) cash or check, ii) a "cashless exercise"
(irrevocable instructions to a broker to deliver promptly to the Company the
amount of the sale or loan proceeds required to pay the exercise price), or
iii) surrender or other shares of Common Stock of the Company (which, if such
shares were acquired from PeopleSoft, have been held by the Optionee for more
than six months) and with a value equal to the exercise price. This Option may
not be exercised for a fraction of a share.

     The Option is intended to qualify as an Incentive Stock Option as defined
in Section 422 of the Code. However, to the extent that it exceeds the
US$100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory
Option. Optionee understands that Optionee may suffer adverse tax consequences
as result of Optionee's exercise of the Option or disposition of the shares
acquired under the Option. OPTIONEE SHOULD READ THE PLAN AND PROSPECTUS AND
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
If Optionee sells or otherwise disposes of any of the Shares on or before the
later of i) two years after the Grant Date, or ii) one year after the Option is
exercised, the Optionee shall immediately notify the Company in writing of such
disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the
Optionee from the early disposition.

     Optionee acknowledges and agrees that the vesting of shares pursuant to
the Option hereof is earned only by continuing employment at the will of the
Company. Optionee further acknowledges and agrees that nothing in this
Agreement, nor in the Company's Stock Option Plan shall confer upon Optionee
<PAGE>   14
any right with respect to continuation of employment by the Company,
nor shall interfere in any way with Optionee's right or the Company's right to
terminate Optionee's employment at anytime, with or without cause.

     This Option may not be transferred in any manner otherwise than by will or
by laws of descent or distribution and may be exercised during the lifetime of
the Optionee only by the Optionee. The terms of the Plan and this Option
Agreement shall be binding upon the executors, administrators, heirs,
successors and assignees of the Option.

     It is the Optionee's responsibility to read and understand the terms of the
Company's Stock Option Plan. The Plan and related Prospectus are available
on-line in Lotus Notes in the Media Library database (CLICK HERE TO ACCESS THE
ESOP PLAN AND ESOP PROSPECTUS IMMEDIATELY. CLICK HERE FOR ISO INFORMATION).
Optionee is familiar with the terms and provisions of the Plan, and hereby
accepts this option subject to all of the terms and provisions of the Plan.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Company's Board of Directors upon any questions
arising under the Plan or this Option.

     The Plan and the Option Agreement constitute the entire agreement of the
parties and supersede in their entirety all prior undertakings and agreements
of the Company and Optionee with respect to the subject matter hereof and may
only be changed by means of a writing signed by both parties. AGREED AND
EXECUTED AS FOLLOWS:

PeopleSoft, Inc.                        
A Delaware Corporation                  ----------------------------------------
By:                                     Employee

/s/ RONALD E.F. CODD
-------------------------------------
  Ronald E.F. Codd
  Senior Vice President and
  Chief Financial Officer

THE OPTION SHALL TERMINATE IF THIS AGREEMENT IS NOT ACCEPTED WITHIN THIRTY (30)
DAYS AFTER THE DELIVERY DATE. SIGN PROMPTLY BUT NO LATER THAN ____.