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                                                                   EXHIBIT 10.31

                               REMEDY CORPORATION
                      1995 STOCK OPTION/STOCK ISSUANCE PLAN
                  (Amended and Restated through March 23, 2000)


                                    ARTICLE I

                               GENERAL PROVISIONS

         I.       PURPOSE OF THE PLAN

                  This 1995 Stock Option/Stock Issuance Plan is intended to
promote the interests of Remedy Corporation, a Delaware corporation, by
providing eligible persons with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Corporation
as an incentive for them to remain in the service of the Corporation.

                  Capitalized terms shall have the meanings assigned to such
terms in the attached Appendix.

         II.      STRUCTURE OF THE PLAN

                  A.       The Plan shall be divided into two separate equity
programs:

                                    (i)      the Option Grant Program under
which eligible persons may, at the discretion of the Plan Administrator, be
granted options to purchase shares of Common Stock, and

                                    (ii)     the Stock Issuance Program under
which eligible persons may, at the discretion of the Plan Administrator, be
issued shares of Common Stock directly, either through the immediate purchase of
such shares or as a bonus for services rendered the Corporation (or any Parent
or Subsidiary).

                  B.       The provisions of Articles One and Four shall apply
to both equity programs under the Plan and shall accordingly govern the
interests of all persons under the Plan.

         III.     ADMINISTRATION OF THE PLAN

                  A.       The Primary Committee shall have sole and exclusive
authority to administer the Option Grant and Stock Issuance Programs with
respect to Section 16 Insiders. No non-employee Board member shall be eligible
to serve on the Primary Committee if such individual has, during the twelve
(12)-month period immediately preceding the date of his or her appointment to
the Committee or (if shorter) the period commencing with the Section 12(g)
Registration Date and ending with the date of his or her appointment to the
Primary Committee, received an option grant or direct stock issuance under the
Plan or any stock option, stock appreciation, stock bonus or other stock plan of
the Corporation (or any Parent or Subsidiary), other than pursuant to the 1995
Non-Employee Directors Stock Option Plan.

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                  B.       Administration of the Option Grant and Stock Issuance
Programs with respect to all other persons eligible to participate in these
programs may, at the Board's discretion, be vested in the Primary Committee or a
Secondary Committee, or the Board may retain the power to administer these
programs with respect to all such persons. The members of the Secondary
Committee may be individuals who are Employees eligible to receive option grants
or direct stock issuances under the Plan or any stock option, stock
appreciation, stock bonus or other stock plan of the Corporation (or any Parent
or Subsidiary).

                  C.       Members of the Primary Committee or any Secondary
Committee shall serve for such period of time as the Board may determine and
shall be subject to removal by the Board at any time. The Board may also at any
time terminate the functions of any Secondary Committee and reassume all powers
and authority previously delegated to such committee.

                  D.       The Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Option Grant and Stock
Issuance Programs and to make such determinations under, and issue such
interpretations of, the provisions of such programs and any outstanding options
or stock issuances thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator within the scope of its administrative functions under
the Plan shall be final and binding on all parties who have an interest in the
Option Grant or Stock Issuance Program under its jurisdiction or any option or
stock issuance thereunder.

                  E.       Service on the Primary Committee or the Secondary
Committee shall constitute service as a Board member, and members of each such
committee shall accordingly be entitled to full indemnification and
reimbursement as Board members for their service on such committee. No member of
the Primary Committee or the Secondary Committee shall be liable for any act or
omission made in good faith with respect to the Plan or any option grants or
stock issuances under the Plan.

         IV.      ELIGIBILITY

                  A.       The persons eligible to participate in the Option
Grant and Stock Issuance Programs are as follows:

                                    (i)      Employees,

                                    (ii)     non-employee members of the board
of directors of any Parent or Subsidiary, and

                                    (iii)    consultants or other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).

                  B.       Non-employee members of the Board shall NOT be
eligible to participate in the Plan.


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                  C.       The Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority to determine,
(i) with respect to the option grants under the Option Grant Program, which
eligible persons are to receive option grants, the time or times when such
option grants are to be made, the number of shares to be covered by each such
grant, the status of the granted option as either an Incentive Option or a
Non-Statutory Option, the time or times at which each option is to become
exercisable, the vesting schedule (if any) applicable to the option shares and
the maximum term for which the option is to remain outstanding and (ii) with
respect to stock issuances under the Stock Issuance Program, which eligible
persons are to receive stock issuances, the time or times when such issuances
are to be made, the number of shares to be issued to each Participant, the
vesting schedule (if any) applicable to the issued shares and the consideration
to be paid by the Participant for such shares.

                  D.       The Plan Administrator shall have the absolute
discretion either to grant options in accordance with the Option Grant Program
or to effect stock issuances in accordance with the Stock Issuance Program.

         V.       STOCK SUBJECT TO THE PLAN

                  A.       The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Corporation on the open market. The maximum number of shares of Common
Stock which may be issued over the term of the Plan shall not exceed 19,410,749
shares.(1)

                  B.       The number of shares of Common Stock available for
issuance under the Plan automatically increased on the first trading day of the
1996 calendar year by an amount equal to five percent (5%) of the shares of
Common Stock outstanding on December 31 of the immediately preceding calendar
year; but in no event could such increase exceed 1,500,000 shares. The number of
shares of Common Stock available for issuance under the Plan automatically
increased on the first trading day of the 1997 and 1998 calendar years, by an
amount equal to ten percent (10%) of the shares of Common Stock outstanding on
December 31 of the immediately preceding calendar year, but in no event could
any such increase exceed 4,000,000 shares. The number of shares of Common Stock
available for issuance under the Plan shall automatically increase on the first
trading day of the 1999 and 2000 calendar years, by an amount equal to six
percent (6%) of the shares of Common Stock outstanding on December 31 of the
immediately preceding calendar year, but in no event shall any such increase
exceed 4,000,000 shares. The number of shares of Common Stock available for
issuance under the Plan shall automatically increase on the first trading day of
the 2001 calendar year, by an amount equal to four and three-quarters percent
(4.75%) of the shares of Common Stock outstanding on December 31 of the
immediately preceding calendar year, but in no event shall any such increase
exceed 4,000,000 shares.


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(1) This share reserve reflects stock dividends approved by the Board on
February 15, 1996 and October 1, 1996 and the addition of 1,459,848, 3,053,932,
3,068,643, 1,751,925, and 1,940,400 shares effective January 1 of each of 1996,
1997, 1998, 1999, and 2000, respectively.


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                  C.       No one person participating in the Plan may receive
options and direct stock issuances for more than 1,200,000 shares of Common
Stock in the aggregate each calendar year over the term of the Plan.

                  D.       Shares of Common Stock subject to outstanding options
shall be available for subsequent issuance under the Plan to the extent (i) the
options (including any options incorporated from the Predecessor Plan) expire or
terminate for any reason prior to exercise in full or (ii) the options are
canceled in accordance with the cancellation-regrant provisions of Article Two.
All shares issued under the Plan (including shares issued upon exercise of
options incorporated from the Predecessor Plan), whether or not those shares are
subsequently repurchased by the Corporation pursuant to its repurchase rights
under the Plan, shall reduce on a share-for-share basis the number of shares of
Common Stock available for subsequent issuance under the Plan. In addition,
should the exercise price of an option under the Plan (including any option
incorporated from the Predecessor Plan) be paid with shares of Common Stock or
should shares of Common Stock otherwise issuable under the Plan be withheld by
the Corporation in satisfaction of the withholding taxes incurred in connection
with the exercise of an option or the vesting of a stock issuance under the
Plan, then the number of shares of Common Stock available for issuance under the
Plan shall be reduced by the gross number of shares for which the option is
exercised or which vest under the stock issuance, and not by the net number of
shares of Common Stock issued to the holder of such option or stock issuance.

                  E.       Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and/or class of securities
issuable under the Plan, (ii) the number and/or class of securities for which
the share reserve is to increase automatically, (iii) the number and/or class of
securities for which any one person may be granted options and direct stock
issuances over the term of the Plan, (iv) the maximum adjustment under Section
V.B, and (v) the number and/or class of securities and the exercise price per
share in effect under each outstanding option (including any option incorporated
from the Predecessor Plan) in order to prevent the dilution or enlargement of
benefits thereunder. The adjustments determined by the Plan Administrator shall
be final, binding and conclusive.


                                   ARTICLE II

                              OPTION GRANT PROGRAM

         I.       OPTION TERMS

                  Each option shall be evidenced by one or more documents in the
form approved by the Plan Administrator; PROVIDED, however, that each such
document shall comply with the terms specified below. Each document evidencing
an Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.


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                  A.       EXERCISE PRICE.

                           1.       The exercise price per share shall be fixed
by the Plan Administrator but shall not be less than eighty-five percent (85%)
of the Fair Market Value per share of Common Stock on the option grant date.

                           2.       The exercise price shall become immediately
due upon exercise of the option and shall, subject to the provisions of Section
I of Article Four and the documents evidencing the option, be payable in one or
more of the forms specified below:

                                    (i)      cash or check made payable to the
Corporation,

                                    (ii)     shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date, or

                                    (iii)    to the extent the option is
exercised for vested shares, through a special sale and remittance procedure
pursuant to which the Optionee shall concurrently provide irrevocable written
instructions to (A) a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by
the Corporation by reason of such exercise and (B) the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.

                  Except to the extent such sale and remittance procedure is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.

                  B.       EXERCISE AND TERM OF OPTIONS. Each option shall be
exercisable at such time or times, during such period and for such number of
shares as shall be determined by the Plan Administrator and set forth in the
documents evidencing the option. However, no option shall have a term in excess
of ten (10) years measured from the option grant date.

                  C.       EFFECT OF TERMINATION OF SERVICE.

                           1.       The following provisions shall govern the
exercise of any options held by the Optionee at the time of cessation of Service
or death:

                                    (i)      Any option outstanding at the time
of the Optionee's cessation of Service for any reason shall remain exercisable
for such period of time thereafter as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option, but no such
option shall be exercisable after the expiration of the option term.

                                    (ii)     Any option exercisable in whole or
in part by the Optionee at the time of death may be subsequently exercised by
the personal representative of the


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Optionee's estate or by the person or persons to whom the option is transferred
pursuant to the Optionee's will or in accordance with the laws of descent and
distribution.

                                    (iii)    During the applicable post-Service
exercise period, the option may not be exercised in the aggregate for more than
the number of vested shares for which the option is exercisable on the date of
the Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares for
which the option has not been exercised. However, the option shall, immediately
upon the Optionee's cessation of Service, terminate and cease to be outstanding
to the extent it is not exercisable for vested shares on the date of such
cessation of Service.

                                    (iv)     Should the Optionee's Service be
terminated for Misconduct, then all outstanding options held by the Optionee
shall terminate immediately and cease to be outstanding.

                                    (v)      In the event of a Corporate
Transaction, the provisions of Section III of this Article Two shall govern the
period for which the outstanding options are to remain exercisable following the
Optionee's cessation of Service and shall supersede any provisions to the
contrary in this section.

                           2.       The Plan Administrator shall have complete
discretion, exercisable either at the time an option is granted or at any time
while the option remains outstanding, to:

                                    (i)      extend the period of time for which
the option is to remain exercisable following the Optionee's cessation of
Service from the period otherwise in effect for that option to such greater
period of time as the Plan Administrator shall deem appropriate, but in no event
beyond the expiration of the option term, and/or

                                    (ii)     permit the option to be exercised,
during the applicable post-Service exercise period, not only with respect to the
number of vested shares of Common Stock for which such option is exercisable at
the time of the Optionee's cessation of Service but also with respect to one or
more additional installments in which the Optionee would have vested had the
Optionee continued in Service.

                  D.       STOCKHOLDER RIGHTS. The holder of an option shall
have no stockholder rights with respect to the shares subject to the option
until such person shall have exercised the option, paid the exercise price and
become a holder of record of the purchased shares.

                  E.       REPURCHASE RIGHTS. The Plan Administrator shall have
the discretion to grant options which are exercisable for unvested shares of
Common Stock. Should the Optionee cease Service while holding such unvested
shares, the Corporation shall have the right to repurchase, at the exercise
price paid per share, any or all of those unvested shares. The terms upon which
such repurchase right shall be exercisable (including the period and procedure
for exercise and the appropriate vesting schedule for the purchased shares)
shall be established by the Plan Administrator and set forth in the document
evidencing such repurchase right.


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                  F.       LIMITED TRANSFERABILITY OF OPTIONS. During the
lifetime of the Optionee, the option shall be exercisable only by the Optionee
and shall not be assignable or transferable other than by will or by the laws of
descent and distribution following the Optionee's death.

         II.      INCENTIVE OPTIONS

                  The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Four shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options when
issued under the Plan shall NOT be subject to the terms of this Section II.

                  A.       ELIGIBILITY. Incentive Options may only be granted to
Employees.

                  B.       EXERCISE PRICE. The exercise price per share shall
not be less than one hundred percent (100%) of the Fair Market Value per share
of Common Stock on the option grant date.

                  C.       DOLLAR LIMITATION. The aggregate Fair Market Value
(determined as of the respective date or dates of grant) of the shares of Common
Stock for which one or more options granted to any Employee under the Plan (or
any other option plan of the Corporation or any Parent or Subsidiary) may for
the first time become exercisable as Incentive Options during any one calendar
year shall not exceed the sum of $100,000. To the extent the Employee holds two
(2) or more such options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability of such options as
Incentive Options shall be applied on the basis of the order in which such
options are granted.

                  D.       10% STOCKHOLDER. If any Employee to whom an Incentive
Option is granted is a 10% Stockholder, then the exercise price per share shall
not be less than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the option grant date, and the option term shall not
exceed five (5) years measured from the option grant date.

         III.     CORPORATE TRANSACTION/CHANGE IN CONTROL

                  A.       In the event of any Corporate Transaction, each
outstanding option shall automatically accelerate so that each such option
shall, immediately prior to the effective date of the Corporate Transaction,
become fully exercisable for all of the shares of Common Stock at the time
subject to such option and may be exercised for any or all of those shares as
fully-vested shares of Common Stock. However, an outstanding option shall NOT so
accelerate if and to the extent: (i) such option is, in connection with the
Corporate Transaction, either to be assumed by the successor corporation (or
parent thereof) or to be replaced with a comparable option to purchase shares of
the capital stock of the successor corporation (or parent thereof), (ii) such
option is to be replaced with a cash incentive program of the successor
corporation which preserves the spread existing on the unvested option shares at
the time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such option or (iii) the
acceleration of such option is subject to other limitations imposed by the Plan
Administrator at the time of the option grant. The determination of option


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comparability under clause (i) above shall be made by the Plan Administrator,
and its determination shall be final, binding and conclusive.

                  B.       All outstanding repurchase rights shall also
terminate automatically, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event of any Corporate
Transaction, except to the extent: (i) those repurchase rights are to be
assigned to the successor corporation (or parent thereof) in connection with
such Corporate Transaction or (ii) such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator at the time the repurchase
right is issued.

                  C.       The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to provide for the automatic acceleration of one or
more outstanding options (and the automatic termination of one or more
outstanding repurchase rights with the immediate vesting of the shares of Common
Stock subject to those rights) upon the occurrence of a Corporate Transaction,
whether or not those options are to be assumed or replaced (or those repurchase
rights are to be assigned) in the Corporate Transaction.

                  D.       Immediately following the consummation of the
Corporate Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).

                  E.       Each option which is assumed in connection with a
Corporate Transaction shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which
would have been issuable to the Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to (i) the number and
class of securities available for issuance under the Plan on both an aggregate
and per Optionee basis following the consummation of such Corporate Transaction
and (ii) the exercise price payable per share under each outstanding option,
PROVIDED the aggregate exercise price payable for such securities shall remain
the same.

                  F.       Any options which are assumed or replaced in the
Corporate Transaction and do not otherwise accelerate at that time, shall
automatically accelerate (and any of the Corporation's outstanding repurchase
rights which do not otherwise terminate at the time of the Corporate Transaction
shall automatically terminate and the shares of Common Stock subject to those
terminated rights shall immediately vest in full) in the event the Optionee's
Service should subsequently terminate by reason of an Involuntary Termination
within eighteen (18) months following the effective date of such Corporate
Transaction. Any options so accelerated shall remain exercisable for
fully-vested shares until the EARLIER of (i) the expiration of the option term
or (ii) the expiration of the one (1)-year period measured from the effective
date of the Involuntary Termination.

                  G.       The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to (i) provide for the automatic acceleration of one
or more outstanding options (and the automatic termination of


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one or more outstanding repurchase rights with the immediate vesting of the
shares of Common Stock subject to those rights) upon the occurrence of a Change
in Control or (ii) condition any such option acceleration (and the termination
of any outstanding repurchase rights) upon the subsequent Involuntary
Termination of the Optionee's Service within a specified period following the
effective date of such Change in Control. Any options accelerated in connection
with a Change in Control shall remain fully exercisable until the expiration or
sooner termination of the option term.

                  H.       The portion of any Incentive Option accelerated in
connection with a Corporate Transaction or Change in Control shall remain
exercisable as an Incentive Option only to the extent the applicable $100,000
limitation is not exceeded. To the extent such dollar limitation is exceeded,
the accelerated portion of such option shall be exercisable as a Non-Statutory
Option under the Federal tax laws.

                  I.       The grant of options under the Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.

         IV.      CANCELLATION AND REGRANT OF OPTIONS

                  The Plan Administrator shall have the authority to effect, at
any time and from time to time, with the consent of the affected option holders,
the cancellation of any or all outstanding options under the Option Grant
Program (including outstanding options incorporated from the Predecessor Plan)
and to grant in substitution new options covering the same or different number
of shares of Common Stock but with an exercise price per share based on the Fair
Market Value per share of Common Stock on the new option grant date.

         V.       LIMITED STOCK APPRECIATION RIGHTS

                  A.       The Plan Administrator shall have full power and
authority to grant to selected Optionees limited stock appreciation rights.

                  B.       The following terms shall govern the grant and
exercise of limited stock appreciation rights:

                                    (i)      One or more Section 16 Insiders may
be granted limited stock appreciation rights with respect to their outstanding
options.

                                    (ii)     Upon the occurrence of a Hostile
Take-Over, each such individual holding one or more options with such a limited
stock appreciation right in effect for at least six (6) months shall have the
unconditional right (exercisable for a thirty (30)-day period following such
Hostile Take-Over) to surrender each such option to the Corporation, to the
extent the option is at the time exercisable for vested shares of Common Stock.
In return for the surrendered option, the Optionee shall receive a cash
distribution from the Corporation in an amount equal to the excess of (A) the
Take-Over Price of the shares of Common Stock which are at the time vested under
each surrendered option (or surrendered portion thereof) over (B) the


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aggregate exercise price payable for such shares. Such cash distribution shall
be paid within five (5) days following the option surrender date.

                                    (iii)    Neither the approval of the Plan
Administrator nor the consent of the Board shall be required in connection with
such option surrender and cash distribution.

                                    (iv)     The balance of the option (if any)
shall continue in full force and effect in accordance with the documents
evidencing such option.


                                   ARTICLE III

                             STOCK ISSUANCE PROGRAM

         I.       STOCK ISSUANCE TERMS

                  Shares of Common Stock may be issued under the Stock Issuance
Program through direct and immediate issuances without any intervening option
grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below.

                  A.       PURCHASE PRICE

                           1.       The purchase price per share shall be fixed
by the Plan Administrator, but shall not be less than eighty-five percent (85%)
of the Fair Market Value per share of Common Stock on the stock issuance date.

                           2.       Subject to the provisions of Section I of
Article Four, shares of Common Stock may be issued under the Stock Issuance
Program for one or both of the following items of consideration which the Plan
Administrator may deem appropriate in each individual instance:

                                    (i)      cash or check made payable to the
Corporation, or

                                    (ii)     past services rendered to the
Corporation (or any Parent or Subsidiary).

                  B.       VESTING PROVISIONS

                           1.       Shares of Common Stock issued under the
Stock Issuance Program may, in the discretion of the Plan Administrator, be
fully and immediately vested upon issuance or may vest in one or more
installments over the Participant's period of Service or upon attainment of
specified performance objectives. The elements of the vesting schedule
applicable to any unvested shares of Common Stock issued under the Stock
Issuance Program, namely:

                                    (i)      the Service period to be completed
by the Participant or the performance objectives to be attained,


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                                    (ii)     the number of installments in which
the shares are to vest,

                                    (iii)    the interval or intervals (if any)
which are to lapse between installments, and

                                    (iv)     the effect which death, Permanent
Disability or other event designated by the Plan Administrator is to have upon
the vesting schedule,

shall be determined by the Plan Administrator and incorporated into the Stock
Issuance Agreement.

                           2.       Any new, substituted or additional
securities or other property (including money paid other than as a regular cash
dividend) which the Participant may have the right to receive with respect to
the Participant's unvested shares of Common Stock by reason of any stock
dividend, stock split, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration shall be issued subject to (i) the
same vesting requirements applicable to the Participant's unvested shares of
Common Stock and (ii) such escrow arrangements as the Plan Administrator shall
deem appropriate.

                           3.       The Participant shall have full stockholder
rights with respect to any shares of Common Stock issued to the Participant
under the Stock Issuance Program, whether or not the Participant's interest in
those shares is vested. Accordingly, the Participant shall have the right to
vote such shares and to receive any regular cash dividends paid on such shares.

                           4.       Should the Participant cease to remain in
Service while holding one or more unvested shares of Common Stock issued under
the Stock Issuance Program or should the performance objectives not be attained
with respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the Corporation for cancellation, and
the Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to such surrendered shares.

                           5.       The Plan Administrator may in its discretion
waive the surrender and cancellation of one or more unvested shares of Common
Stock (or other assets attributable thereto) which would otherwise occur upon
the non-completion of the vesting schedule applicable to such shares. Such
waiver shall result in the immediate vesting of the Participant's interest in
the shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.


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         II.      CORPORATE TRANSACTION/CHANGE IN CONTROL

                  A.       All of the Corporation's outstanding repurchase
rights under the Stock Issuance Program shall terminate automatically, and all
the shares of Common Stock subject to those terminated rights shall immediately
vest in full, in the event of any Corporate Transaction, except to the extent
(i) those repurchase rights are assigned to the successor corporation (or parent
thereof) in connection with such Corporate Transaction or (ii) such accelerated
vesting is precluded by other limitations imposed in the Stock Issuance
Agreement.

                  B.       The Plan Administrator shall have the discretion,
exercisable either at the time the unvested shares are issued or at any time
while the Corporation's repurchase right remains outstanding, to provide for the
automatic termination of one or more outstanding repurchase rights, and the
immediate vesting of the shares of Common Stock subject to those rights, upon
the occurrence of a Corporate Transaction, whether or not those repurchase
rights are assigned in connection with the Corporate Transaction.

                  C.       Any repurchase rights that are assigned in the
Corporate Transaction shall automatically terminate, and all the shares of
Common Stock subject to those terminated rights shall immediately vest in full,
in the event the Optionee's Service should subsequently terminate by reason of
an Involuntary Termination within eighteen (18) months following the effective
date of such Corporate Transaction.

                  D.       The Plan Administrator shall have the discretion,
exercisable either at the time the unvested shares are issued or at any time
while the Corporation's repurchase right remains outstanding, to (i) provide for
the automatic termination of one or more outstanding repurchase rights and the
immediate vesting of the shares of Common Stock subject to those rights upon the
occurrence of a Change in Control or (ii) condition any such accelerated vesting
upon the subsequent Involuntary Termination of the Participant's Service within
a specified period following the effective date of such Change in Control.

         III.     SHARE ESCROW/LEGENDS

                  Unvested shares may, in the Plan Administrator's discretion,
be held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.


                                   ARTICLE IV

                                  MISCELLANEOUS

         I.       FINANCING

                  A.       The Plan Administrator may permit any Optionee or
Participant to pay the option exercise price under the Option Grant Program or
the purchase price of shares issued under the Stock Issuance Program by
delivering a promissory note payable in one or more installments. The terms of
any such promissory note (including the interest rate and the terms of


                                      -12-
<Page>

repayment) shall be established by the Plan Administrator in its sole
discretion. Promissory notes may be authorized with or without security or
collateral. In all events, the maximum credit available to the Optionee or
Participant may not exceed the sum of (i) the aggregate option exercise price or
purchase price payable for the purchased shares plus (ii) any Federal, state and
local income and employment tax liability incurred by the Optionee or the
Participant in connection with the option exercise or share purchase.

                  B.       The Plan Administrator may, in its discretion,
determine that one or more such promissory notes shall be subject to forgiveness
by the Corporation in whole or in part upon such terms as the Plan Administrator
may deem appropriate.

         II.      TAX WITHHOLDING

                  A.       The Corporation's obligation to deliver shares of
Common Stock upon the exercise of options or stock appreciation rights or upon
the issuance or vesting of such shares under the Plan shall be subject to the
satisfaction of all applicable Federal, state and local income and employment
tax withholding requirements.

                  B.       The Plan Administrator may, in its discretion,
provide any or all holders of Non-Statutory Options or unvested shares of Common
Stock under the Plan with the right to use shares of Common Stock in
satisfaction of all or part of the Taxes incurred by such holders in connection
with the exercise of their options or the vesting of their shares. Such right
may be provided to any such holder in either or both of the following formats:

                                    (i)      STOCK WITHHOLDING: The election to
have the Corporation withhold, from the shares of Common Stock otherwise
issuable upon the exercise of such Non-Statutory Option or the vesting of such
shares, a portion of those shares with an aggregate Fair Market Value equal to
the percentage of the Taxes (not to exceed one hundred percent (100%))
designated by the holder.

                                    (ii)     STOCK DELIVERY: The election to
deliver to the Corporation, at the time the Non-Statutory Option is exercised or
the shares vest, one or more shares of Common Stock previously acquired by such
holder (other than in connection with the option exercise or share vesting
triggering the Taxes) with an aggregate Fair Market Value equal to the
percentage of the Taxes (not to exceed one hundred percent (100%)) designated by
the holder.

         III.     EFFECTIVE DATE AND TERM OF THE PLAN

                  A.       The Plan became effective on the Plan Effective Date,
and options may be granted under the Option Grant Program from and after such
date. The Plan was amended on February 25, 1997 to increase the percentage and
duration of the annual share increases provided in Article One, Section V.B, to
change the per person limit to a calendar year limit in lieu of a limit over the
term of the Plan, and to effect certain other changes. The stockholders approved
the amendment on May 21, 1997. The Plan was amended again on January 23, 1998 to
extend the annual share increases provided in Article One, Section V.B at a
reduced percentage and to expand the Board's authority to amend the Plan. The
amendment has been approved by the


                                      -13-
<Page>

Corporation's stockholders at the 1998 Annual Meeting. The Plan was amended
again on March 23, 2000 to extend the annual share increases provided in Article
One, Section V.B at a reduced percentage for 2001. The amendment is subject to
approval of the Corporation's stockholders at the 2000 Annual Meeting.

                  B.       The Plan shall serve as the successor to the
Predecessor Plan, and no further option grants shall be made under the
Predecessor Plan after the Plan Effective Date. All options outstanding under
the Predecessor Plan as of such date shall, immediately upon approval of the
Plan by the Corporation's stockholders, be incorporated into the Plan and
treated as outstanding options under the Plan. However, each outstanding option
so incorporated shall continue to be governed solely by the terms of the
documents evidencing such option, and no provision of the Plan shall be deemed
to affect or otherwise modify the rights or obligations of the holders of such
incorporated options with respect to their acquisition of shares of Common
Stock.

                  C.       The option/vesting acceleration provisions of Article
Two relating to Corporate Transactions and Changes in Control may, in the Plan
Administrator's discretion, be extended to one or more options incorporated from
the Predecessor Plan which do not otherwise provide for such acceleration.

                  D.       The Plan shall terminate upon the EARLIEST of (i)
January 16, 2005, (ii) the date on which all shares available for issuance under
the Plan shall have been issued pursuant to the exercise of the options or the
issuance of shares (whether vested or unvested) under the Plan or (iii) the
termination of all outstanding options in connection with a Corporate
Transaction. Upon such Plan termination, all options and unvested stock
issuances outstanding on such date shall thereafter continue to have force and
effect in accordance with the provisions of the documents evidencing such
options or issuances.

         IV.      AMENDMENT OF THE PLAN

                  A.       The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects. However, no such
amendment or modification shall adversely affect the rights and obligations with
respect to options, stock appreciation rights or unvested stock issuances at the
time outstanding under the Plan unless the Optionee or the Participant consents
to such amendment or modification. The Board shall obtain the approval of the
Corporation's stockholders to the extent required by applicable law or deemed
advisable by the Board.

                  B.       Options to purchase shares of Common Stock may be
granted under the Option Grant Program and shares of Common Stock may be issued
under the Stock Issuance Program that are in each instance in excess of the
number of shares then available for issuance under the Plan, provided any excess
shares actually issued under those programs are held in escrow until there is
obtained stockholder approval of an amendment sufficiently increasing the number
of shares of Common Stock available for issuance under the Plan. If such
stockholder approval is not obtained within twelve (12) months after the date
the first such excess issuances are made, then (i) any unexercised options
granted on the basis of such excess shares shall


                                      -14-
<Page>

terminate and cease to be outstanding and (ii) the Corporation shall promptly
refund to the Optionees and the Participants the exercise or purchase price paid
for any excess shares issued under the Plan and held in escrow, together with
interest (at the applicable Short Term Federal Rate) for the period the shares
were held in escrow, and such shares shall thereupon be automatically canceled
and cease to be outstanding.

         V.       USE OF PROCEEDS

                  Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.

         VI.      REGULATORY APPROVALS

                  A.       The implementation of the Plan, the granting of any
option or stock appreciation right under the Plan and the issuance of any shares
of Common Stock (i) upon the exercise of any option or stock appreciation right
or (ii) under the Stock Issuance Program shall be subject to the Corporation's
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the options and stock appreciation rights
granted under it and the shares of Common Stock issued pursuant to it.

                  B.       No shares of Common Stock or other assets shall be
issued or delivered under the Plan unless and until there shall have been
compliance with all applicable requirements of Federal and state securities
laws, including the filing and effectiveness of the Form S-8 registration
statement for the shares of Common Stock issuable under the Plan, and all
applicable listing requirements of any stock exchange (or the Nasdaq National
Market, if applicable) on which Common Stock is then listed for trading.

         VII.     NO EMPLOYMENT/SERVICE RIGHTS

                  Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.


                                      -15-
<Page>

                                    APPENDIX


                  The following definitions shall be in effect under the Plan:

         A.       BOARD shall mean the Corporation's Board of Directors.

         B.       CHANGE IN CONTROL shall mean a change in ownership or control
of the Corporation effected through either of the following transactions:

                  (i)      the acquisition, directly or indirectly by any person
or related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Corporation), of beneficial ownership (within the meaning of Rule
13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the Corporation's
stockholders which the Board does not recommend such stockholders to accept, or

                  (ii)     a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time such election or nomination was approved by the Board.

         C.       CODE shall mean the Internal Revenue Code of 1986, as amended.

         D.       COMMON STOCK shall mean the Corporation's Common Stock.

         E.       CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:

                  (i)      a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those immediately prior to such transaction;
or

                  (ii)     the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.

         F.       CORPORATION shall mean Remedy Corporation, a Delaware
corporation.

         G.       EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.


                                       A-1
<Page>

         H.       EXERCISE DATE shall mean the date on which the Corporation
shall have received written notice of the option exercise.

         I.       FAIR MARKET VALUE per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:

                  (i)      If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor system. If there is no closing selling price
for the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such quotation
exists.

                  (ii)     If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the Common
Stock, as such price is officially quoted in the composite tape of transactions
on such exchange. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.

                  (iii)    For purposes of option grants made on the date of
execution of the Underwriting Agreement, the Fair Market Value shall be deemed
to be equal to the price per share at which the Common Stock is sold in the
initial public offering pursuant to the Underwriting Agreement.

         J.       HOSTILE TAKE-OVER shall mean a change in ownership of the
Corporation effected through the following transaction:

                  (i)      the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Corporation) of beneficial ownership (within the meaning of Rule 13d-3
of the 1934 Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities pursuant
to a tender or exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept, AND

                  (ii)     more than fifty percent (50%) of the securities so
acquired are accepted from persons other than Section 16 Insiders.

         K.       INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.

         L.       INVOLUNTARY TERMINATION shall mean the termination of the
Service of any individual which occurs by reason of:


                                      A-2
<Page>

                  (i)      such individual's involuntary dismissal or discharge
by the Corporation for reasons other than Misconduct, or

                  (ii)     such individual's voluntary resignation following (A)
a change in his or her position with the Corporation which materially reduces
his or her level of responsibility, (B) a reduction in his or her level of
compensation (including base salary, fringe benefits and any non-discretionary
and objective-standard incentive payment or bonus award) by more than fifteen
percent (15%) or (C) a relocation of such individual's place of employment by
more than fifty (50) miles, provided and only if such change, reduction or
relocation is effected by the Corporation without the individual's consent.

         M.       MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).

         N.       1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.

         O.       NON-STATUTORY OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.

         P.       OPTION GRANT PROGRAM shall mean the option grant program in
effect under the Plan.

         Q.       OPTIONEE shall mean any person to whom an option is granted
under the Option Grant Program.

         R.       PARENT shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

         S.       PARTICIPANT shall mean any person who is issued shares of
Common Stock under the Stock Issuance Program.

         T.       PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more.

         U.       PLAN shall mean the Corporation's 1995 Stock Option/Stock
Issuance Plan, as set forth in this document.


                                       A-3
<Page>

         V.       PLAN ADMINISTRATOR shall mean the particular entity, whether
the Primary Committee, the Board or the Secondary Committee, which is authorized
to administer the Option Grant and Stock Issuance Programs with respect to one
or more classes of eligible persons, to the extent such entity is carrying out
its administrative functions under those programs with respect to the persons
under its jurisdiction.

         W.       PLAN EFFECTIVE DATE shall mean the date on which the
Underwriting Agreement is executed and the initial public offering price of the
Common Stock is established.

         X.       PREDECESSOR PLAN shall mean the Corporation's existing 1991
Stock Option/Stock Issuance Plan.

         Y.       PRIMARY COMMITTEE shall mean the committee of two (2) or more
non-employee Board members appointed by the Board to administer the Option Grant
and Stock Issuance Programs with respect to Section 16 Insiders.

         Z.       SECONDARY COMMITTEE shall mean a committee of one (1) or more
Board members appointed by the Board to administer the Option Grant and Stock
Issuance Programs with respect to eligible persons other than Section 16
Insiders.

         AA.      SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.

         BB.      SECTION 12(g) REGISTRATION DATE shall mean the first date on
which the Common Stock is registered under Section 12(g) of the 1934 Act.

         CC.      SERVICE shall mean the provision of services to the
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided in the
documents evidencing the option grant.

         DD.      STOCK EXCHANGE shall mean either the American Stock Exchange
or the New York Stock Exchange.

         EE.      STOCK ISSUANCE AGREEMENT shall mean the agreement entered into
by the Corporation and the Participant at the time of issuance of shares of
Common Stock under the Stock Issuance Program.

         FF.      STOCK ISSUANCE PROGRAM shall mean the stock issuance program
in effect under the Plan.

         GG.      SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.


                                      A-4
<Page>

         HH.      TAKE-OVER PRICE shall mean the GREATER of (i) the Fair Market
Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share.

         II.      TAXES shall mean the Federal, state and local income and
employment tax liabilities incurred by the holder of Non-Statutory Options or
unvested shares of Common Stock in connection with the exercise of such holder's
options or the vesting of shares.

         JJ.      10% STOCKHOLDER shall mean the owner of stock (as determined
under Code Section 424(d)) possessing ten percent (10%) or more of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).

         KK.      UNDERWRITING AGREEMENT shall mean the agreement between the
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.


                                      A-5
<Page>

                               REMEDY CORPORATION
                             STOCK OPTION AGREEMENT


RECITALS

         A.       The Board has adopted the Plan for the purpose of retaining
the services of selected Employees, non-employee members of the Board or the
board of directors of any Parent or Subsidiary and consultants and other
independent advisors who provide services to the Corporation (or any Parent or
Subsidiary).

         B.       Optionee is to render valuable services to the Corporation (or
a Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.

         C.       All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.

                  NOW, THEREFORE, it is hereby agreed as follows:

                  1.       GRANT OF OPTION. The Corporation hereby grants to
Optionee, as of the Grant Date, an option to purchase up to the number of Option
Shares specified in the Grant Notice. The Option Shares shall be purchasable
from time to time during the option term specified in Paragraph 2 at the Option
Price.

                  2.       OPTION TERM. This option shall have a term of ten
(10) years measured from the Grant Date and shall accordingly expire at the
close of business on the Expiration Date, unless sooner terminated in accordance
with Paragraph 5 or 6.

                  3.       LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee.

                  4.       DATES OF EXERCISE. This option shall become
exercisable for the Option Shares in one or more installments as specified in
the Grant Notice. As the option becomes exercisable for such installments, those
installments shall accumulate and the option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner termination of the
option term under Paragraph 5 or 6.

                  5.       CESSATION OF SERVICE. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date should any of the following provisions become
applicable:

                                    (i)      Should Optionee cease to remain in
Service for any reason (other than death or Permanent Disability) while this
option is outstanding, then Optionee shall have a period of three (3) months
(commencing with the date of such cessation of Service) during which to exercise
this option, but in no event shall this option be exercisable at any time after
the Expiration Date.

                                    (ii)     Should Optionee die while this
option is outstanding, then the personal representative of Optionee's estate or
the person or persons to whom the option is transferred pursuant to Optionee's
will or in accordance with the laws of descent and distribution shall have the
right to exercise this option. Such right shall lapse and this option shall
cease to be outstanding upon the EARLIER of (i) the expiration of the twelve
(12)- month period measured from the date of Optionee's death or (ii) the
Expiration Date.

                                    (iii)    Should Optionee cease Service by
reason of Permanent Disability while this option is outstanding, then Optionee
shall have a period of twelve (12) months (commencing with the date of such
cessation of Service) during which to exercise this option. In no event shall
this option be exercisable at any time after the Expiration Date.

<Page>

                                    (iv)     Should Optionee's Service be
terminated for Misconduct, then this option shall terminate immediately and
cease to remain outstanding.

                                    (v)      During the limited period of
post-Service exercisability, this option may not be exercised in the aggregate
for more than the number of vested Option Shares for which the option is
exercisable at the time of Optionee's cessation of Service. Upon the expiration
of such limited exercise period or (if earlier) upon the Expiration Date, this
option shall terminate and cease to be outstanding for any vested Option Shares
for which the option has not been exercised. To the extent Optionee is not
vested in the Option Shares at the time of Optionee's cessation of Service, this
option shall immediately terminate and cease to be outstanding with respect to
those shares.

                                    (vi)     In the event of a Corporate
Transaction, the provisions of Paragraph 6 shall govern the period for which
this option is to remain exercisable following Optionee's cessation of Service
and shall supersede any provisions to the contrary in this paragraph.

                  6.       SPECIAL ACCELERATION OF OPTION.

                           (a)      In the event of a Corporate Transaction, the
exercisability of this option, to the extent outstanding at such time but not
otherwise fully exercisable, shall automatically accelerate so that this option
shall, immediately prior to the effective date of the Corporate Transaction,
become exercisable for any or all of the Option Shares at the time subject to
this option as fully-vested shares of Common Stock. No such acceleration of this
option, however, shall occur if and to the extent: (i) this option is, in
connection with the Corporate Transaction, either to be assumed by the successor
corporation (or parent thereof) or to be replaced with a comparable option to
purchase shares of the capital stock of the successor corporation (or parent
thereof) or (ii) this option is to be replaced with a cash incentive program of
the successor corporation which preserves the spread existing on the Option
Shares for which this option is not exercisable at the time of the Corporate
Transaction (the excess of the Fair Market Value of such Option Shares over the
aggregate Option Price payable for such shares) and provides for subsequent
pay-out in accordance with the same exercise schedule in effect for the option
pursuant to the option exercise schedule set forth in the Grant Notice. The
determination of option comparability under clause (i) shall be made by the Plan
Administrator, and such determination shall be final, binding and conclusive.

                           (b)      Immediately following the Corporate
Transaction, this option, to the extent not previously exercised, shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the Corporate
Transaction.

                           (c)      If this option is assumed in connection with
a Corporate Transaction, then this option shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the
Option Price, PROVIDED the aggregate Option Price shall remain the same.

                           (d)      Upon an Involuntary Termination of
Optionee's Service within eighteen (18) months following a Corporate Transaction
in which this option is assumed or replaced, the exercisability of this option,
to the extent outstanding at such time but not otherwise fully exercisable,
shall automatically accelerate so that this option shall immediately become
fully exercisable for all the Option Shares at the time subject to this option
as fully-vested shares of Common Stock and may be exercised for any or all of
those shares at any time prior to the earlier of (i) the Expiration Date or (ii)
the expiration of the one (1)-year period measured from the effective date of
the Involuntary Termination.

                           (e)      This Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or assets.

                  7.       ADJUSTMENT IN OPTION SHARES. Should any change be
made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change


                                       2
<Page>

affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration, appropriate adjustments shall be made to (i) the total
number and/or class of securities subject to this option and (ii) the Option
Price in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.

                  8.       STOCKHOLDER RIGHTS. The holder of this option shall
not have any stockholder rights with respect to the Option Shares until such
person shall have exercised the option, paid the Option Price and become a
holder of record of the purchased shares.

                  9.       MANNER OF EXERCISING OPTION.

                           (a)      In order to exercise this option with
respect to all or any part of the Option Shares for which this option is at the
time exercisable, Optionee (or any other person or persons exercising the
option) must take the following actions:

                                    (i)      Execute and deliver to the
Corporation a Notice of Exercise for the Option Shares for which the option is
exercised.

                                    (ii)     Pay the aggregate Option Price for
the purchased shares in one or more of the following forms:

                                            (A)      cash or check made payable
to the Corporation;

                                            (B)      a promissory note payable
to the Corporation, but only to the extent approved by the Plan Administrator in
accordance with Paragraph 13;

                                            (C)      shares of Common Stock held
by Optionee (or any other person or persons exercising the option) for the
requisite period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date; or

                                            (D)      through a special sale and
remittance procedure pursuant to which Optionee (or any other person or persons
exercising the option) shall concurrently provide irrevocable written
instructions (a) to a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
aggregate Option Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by
the Corporation by reason of such exercise and (b) to the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.

                  Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Option Price
must accompany the Notice of Exercise delivered to the Corporation in connection
with the option exercise.

                                    (iii)    Furnish to the Corporation
appropriate documentation that the person or persons exercising the option (if
other than Optionee) have the right to exercise this option.

                                    (iv)     Make appropriate arrangements with
the Corporation (or Parent or Subsidiary employing or retaining Optionee) for
the satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.

                           (b)      As soon as practical after the Exercise
Date, the Corporation shall issue to or on behalf of Optionee (or any other
person or persons exercising this option) a certificate for the purchased Option
Shares, with the appropriate legends affixed thereto.

                           (c)      In no event may this option be exercised for
any fractional shares.

                  10.      COMPLIANCE WITH LAWS AND REGULATIONS.


                                       3
<Page>

                           (a)      The exercise of this option and the issuance
of the Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market if applicable) on which the Common Stock may be listed for
trading at the time of such exercise and issuance.

                           (b)      The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation, however, shall use its best efforts to
obtain all such approvals.

                  11.      SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraphs 3 and 6, the provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its successors
and assigns and Optionee, Optionee's assigns and the legal representatives,
heirs and legatees of Optionee's estate.

                  12.      NOTICES. Any notice required to be given or delivered
to the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address Optionee last provided the Corporation. All notices
shall be deemed effective upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.

                  13.      FINANCING. The Plan Administrator may, in its
absolute discretion and without any obligation to do so, permit Optionee to pay
the Option Price for the purchased Option Shares by delivering a promissory
note. The terms of any such promissory note (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion.(1)

                  14.      CONSTRUCTION. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects limited
by and subject to the terms of the Plan. All decisions of the Plan Administrator
with respect to any question or issue arising under the Plan or this Agreement
shall be conclusive and binding on all persons having an interest in this
option.

                  15.      NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
Stock Option Agreement or the Plan shall confer upon Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining Optionee) or of Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's Service at any time
for any reason, with or without cause.

                  16.      GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.


--------
(1) Authorization of payment of the Exercise Price by a promissory note under
such provisions may, under currently proposed Treasury Regulations, result in
the loss of incentive stock option treatment under the Federal tax laws.


                                       4
<Page>

                                    APPENDIX


                  The following definitions shall be in effect under the
Agreement:

                  A.       AGREEMENT shall mean this Stock Option Agreement.

                  B.       BOARD shall mean the Corporation's Board of
Directors.

                  C.       CODE shall mean the Internal Revenue Code of 1986, as
amended.

                  D.       COMMON STOCK shall mean the Corporation's common
stock.

                  E.       CORPORATE TRANSACTION shall mean either of the
following stockholder-approved transactions to which the Corporation is a party:

                           (i)      a merger or consolidation in which
                  securities possessing more than fifty percent (50%) of the
                  total combined voting power of the Corporation's outstanding
                  securities are transferred to a person or persons different
                  from the persons holding those securities immediately prior to
                  such transaction, or

                           (ii)     the sale, transfer or other disposition of
                  all or substantially all of the Corporation's assets in
                  complete liquidation or dissolution of the Corporation.

                  F.       CORPORATION shall mean Remedy Corporation, a Delaware
corporation.

                  G.       EMPLOYEE shall mean an individual who is in the
employ of the Corporation (or any Parent or Subsidiary), subject to the control
and direction of the employer entity as to both the work to be performed and the
manner and method of performance.

                  H.       EXERCISE DATE shall mean the date on which the option
shall have been exercised in accordance with Paragraph 9 of the Agreement.

                  I.       EXPIRATION DATE shall mean the date on which the
option expires as specified in the Grant Notice.

                  J.       FAIR MARKET VALUE per share of Common Stock on any
relevant date shall be determined in accordance with the following provisions:

                           (i)      If the Common Stock is at the time traded on
                  the Nasdaq National Market, then the Fair Market Value shall
                  be the closing selling price per share of Common Stock on the
                  date in question, as the price is reported by the National
                  Association of Securities Dealers on the Nasdaq National
                  Market or any successor system. If there is no closing selling
                  price for the Common Stock on the date in question, then the
                  Fair Market Value shall be the closing selling price on the
                  last preceding date for which such quotation exists.

                           (ii)     If the Common Stock is at the time listed on
                  any Stock Exchange, then the Fair Market Value shall be the
                  closing selling price per share of Common Stock on the date in
                  question on the Stock Exchange determined by the Plan
                  Administrator to be the primary market for the Common Stock,
                  as such price is officially quoted in the composite tape of
                  transactions on such exchange. If there is no closing selling
                  price for the Common Stock on the date in question, then the
                  Fair Market Value shall be the closing selling price on the
                  last preceding date for which such quotation exists.


                                      A-1
<Page>

                  K.       GRANT DATE shall mean the date of grant of the option
as specified in the Grant Notice.

                  L.       GRANT NOTICE shall mean the Notice of Grant of Stock
Option accompanying the Agreement, pursuant to which Optionee has been informed
of the basic terms of the option evidenced hereby.

                  M.       INVOLUNTARY TERMINATION shall mean the termination of
Optionee's Service which occurs by reason of:

                           (i)      Optionee's dismissal or discharge by the
                  Corporation for reasons other than Misconduct, or

                           (ii)     Optionee's voluntary resignation following
                  (A) a change in Optionee's position with the Corporation (or
                  Parent or Subsidiary employing Optionee) which materially
                  reduces Optionee's level of responsibility, (B) a reduction in
                  Optionee's level of compensation (including base salary,
                  fringe benefits and any non-discretionary and
                  objective-standard incentive payment or bonus award) by more
                  than fifteen percent (15%) or (C) a relocation of Optionee's
                  place of employment by more than fifty (50) miles, provided
                  and only if such change, reduction or relocation is effected
                  by the Corporation without Optionee's consent.

                  N.       MISCONDUCT shall mean the commission of any act of
fraud, embezzlement or dishonesty by Optionee, any unauthorized use or
disclosure by Optionee of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by Optionee adversely affecting the business or affairs of the Corporation (or
any Parent or Subsidiary) in a material manner. The foregoing definition shall
not be deemed to be inclusive of all the acts or omissions which the Corporation
(or any Parent or Subsidiary) may consider as grounds for the dismissal or
discharge of Optionee or any other individual in the Service of the Corporation
(or any Parent or Subsidiary).

                  O.       1934 ACT shall mean the Securities Exchange Act of
1934, as amended.

                  P.       NON-STATUTORY OPTION shall mean an option not
intended to satisfy the requirements of Code Section 422.

                  Q.       NOTICE OF EXERCISE shall mean the notice of exercise
in the form attached hereto as Exhibit I.

                  R.       OPTION PRICE shall mean the exercise price per share
as specified in the Grant Notice.

                  S.       OPTION SHARES shall mean the number of shares of
Common Stock subject to the option as specified in the Grant Notice.

                  T.       OPTIONEE shall mean the person to whom the option is
granted as specified in the Grant Notice.

                  U.       PARENT shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

                  V.       PERMANENT DISABILITY shall mean the inability of
Optionee to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which is expected to result
in death or has lasted or can be expected to last for a continuous period of
twelve (12) months or more.

                  W.       PLAN shall mean the Corporation's 1995 Stock
Option/Stock Issuance Plan.


                                      A-2
<Page>

                  X.       PLAN ADMINISTRATOR shall mean either the Board or a
committee of Board members, to the extent the committee is at the time
responsible for the administration of the Plan.

                  Y.       SERVICE shall mean the provision of services to the
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent advisor.

                  Z.       STOCK EXCHANGE shall mean the American Stock Exchange
or the New York Stock Exchange.

                  AA.      SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.


                                      A-3
<Page>

                               REMEDY CORPORATION
                         NOTICE OF GRANT OF STOCK OPTION

                  Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of Remedy Corporation (the
"Corporation"):

                  OPTIONEE: ((1))

                  GRANT DATE: ((2))

                  VESTING COMMENCEMENT DATE: ((3))

                  EXERCISE PRICE:  $((4)) per share

                  NUMBER OF OPTION SHARES:  ((5)) shares

                  EXPIRATION DATE: ((6))

                  TYPE OF OPTION:      X     Incentive Stock Option
                                     -----

                                             Non-Statutory Stock Option
                                     -----

                  EXERCISE SCHEDULE: The Option shall become exercisable with
                  respect to (i) twenty-five percent (25%) of the Option Shares
                  upon Optionee's completion of one (1) year of Service measured
                  from the Vesting Commencement Date and (ii) the balance of the
                  Option Shares in successive equal monthly installments upon
                  Optionee's completion of each of the next thirty-six (36)
                  months of Service measured from and after the first
                  anniversary of the Vesting Commencement Date. In no event
                  shall the Option become exercisable for any additional Option
                  Shares after Optionee's cessation of Service.

                  Optionee understands and agrees that the Option is granted
subject to and in accordance with the terms of the Remedy Corporation 1995 Stock
Option/Stock Issuance Plan (the "Plan"). Optionee further agrees to be bound by
the terms of the Plan and the terms of the Option as set forth in the Stock
Option Agreement attached hereto as Exhibit A.

                  Optionee hereby acknowledges receipt of a copy of the official
prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the
Plan is available upon request made to the Corporate Secretary at the
Corporation's principal offices.

<Page>

                  NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Notice or
in the Plan shall confer upon Optionee any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Parent or Subsidiary employing or
retaining Optionee) or of Optionee, which rights are hereby expressly reserved
by each, to terminate Optionee's Service at any time for any reason, with or
without cause.

                  DEFINITIONS. All capitalized terms in this Notice shall have
the meaning assigned to them in this Notice or in the attached Stock Option
Agreement.




____________________, 199
Date



                                    REMEDY CORPORATION



                                    By:
                                       -----------------------------------------

                                    Title:
                                          --------------------------------------



                                    --------------------------------------------
                                    OPTIONEE

                                    Address:
                                            ------------------------------------

                                    --------------------------------------------




ATTACHMENTS
Exhibit A - Stock Option Agreement
Exhibit B - Plan Summary and Prospectus

<Page>

                                    EXHIBIT A

                             STOCK OPTION AGREEMENT

<Page>

                                    EXHIBIT B

                           PLAN SUMMARY AND PROSPECTUS