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                                                                  EXHIBIT 10.2
                               WEBMETHODS, INC.
                    AMENDED AND RESTATED STOCK OPTION PLAN

1.      PURPOSE.

This Stock Option Plan (hereinafter referred to as this "Plan") is intended to
promote the best interests of the Corporation and its stockholders by (a)
enabling the Corporation and any Parent or Subsidiary to attract and retain
persons of ability as employees, directors, consultants and advisers, (b)
providing an incentive to such persons by affording them an equity
participation in the Corporation and (c) rewarding those employees, directors,
consultants and advisers who contribute to the operating progress and earning
power of the Corporation or any Parent or Subsidiary.

2. DEFINITIONS.

The following terms shall have the following meanings when used herein unless
the context clearly otherwise requires:

A. "BOARD OF DIRECTORS" means the Board of Directors of the Corporation.

B. "CODE" means the Internal Revenue Code of 1986, as amended, or any
   successor provisions.

C. "COMMON STOCK" means the Common Stock of the Corporation, par value One
   Cent ($0.01) per share.

D. "CONTROLLING PARTICIPANT" means any Eligible Person who, immediately
   before any Option is granted to that particular Eligible Person, directly
   or indirectly possesses more than ten percent (10%) of the total combined
   voting power of all classes of stock of the Corporation (or any Parent or
   Subsidiary).

E. "COMMITTEE" means any committee to which the Board of Directors delegates
   any responsibility for the implementation, interpretation or administration
   of this Plan.

F. "CORPORATION" means webMethods, Inc. a Delaware corporation.

G. "ELIGIBLE PERSON" means any employee or director of, or consultant or
   adviser to, the Corporation or any Parent or Subsidiary.

H. "EXERCISE PRICE" means the price at which a share of Incentive Stock may be
   purchased by a particular Participant pursuant to the exercise of an
   Option.

I. "FAIR MARKET VALUE" means the value of a share of Incentive Stock as
   determined by the Board of Directors in a manner that the Board of
   Directors believes to be in accordance with the Code.


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J. "INCENTIVE STOCK" means shares of Common Stock issued pursuant to this
   Plan.

K. "ISO" means an Option (or a portion thereof) intended to qualify as an
   "incentive stock option" within the meaning of Section 422 of the Code, or
   any successor provision.

L. "NQSO" means an Option (or a portion thereof) which is not intended to, or
   does not, qualify for any reason as an "incentive stock option" within the
   meaning of Section 422 of the Code, or any successor provision.

M. "OPTION" means the right of a Participant to purchase shares of Incentive
   Stock in accordance with the terms of this Plan and the Stock Option
   Agreement between such Participant and the Corporation.

N. "PARENT" means any corporation (other than the Corporation) in an unbroken
   chain of corporations ending with the Corporation if, at the time of
   granting of an Option, each of the corporations (other than the
   Corporation) owns stock possessing at least fifty percent (50%) of the
   total combined voting power of all classes of stock in one of the other
   corporations in such chain.

O. "PARTICIPANT" means any Eligible Person to whom an Option has been granted
   pursuant to this Plan and who is a party to a Stock Option Agreement.

P. "SAR" means the right of a Participant to receive cash or other
   consideration equal to the difference between the Fair Market Value of the
   Incentive Stock covered by all or any unexercised portion of an Option on
   the date of exercise of the SAR and the Fair Market Value of such Incentive
   Stock on the date of grant of the SAR.

Q. "STOCK OPTION AGREEMENT" means an agreement by and between a Participant
   and the Corporation setting forth the specific terms and conditions of an
   Option and/or SAR, which shall establish the specific terms and conditions
   under which Incentive Stock may be purchased by such Participant pursuant
   to the exercise of such Option. Such Stock Option Agreement shall be
   subject to the provisions of this Plan (which shall be incorporated by
   reference therein) and shall contain such provisions as the Board of
   Directors, in its sole discretion, may authorize. If such notice so states,
   written notice delivered to an Eligible Person pursuant to Section 5D
   hereof shall constitute a Stock Option Agreement for purposes of this Plan.

R. "SUBSIDIARY" means any corporation (other than the Corporation) in an
   unbroken chain of corporations beginning with the Corporation if, at the
   time of granting of an Option, each of the corporations (other than the
   last corporation in the unbroken chain) owns stock possessing at least
   fifty percent (50%) of the total combined voting power of all classes of
   stock in one of the other corporations in such chain.

3. ADOPTION AND ADMINISTRATION OF PLAN.



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A. This Plan shall become effective upon its adoption by the Board of
Directors; provided, however, that if the stockholders of the Corporation
shall not approve this Plan, in accordance with applicable state law, within
twelve (12) months before or after the adoption of this Plan by the Board of
Directors, this Plan shall expire by its terms. No Option, SAR or other award
hereunder shall be exercisable or payable in any respect prior to such
approval of this Plan by the stockholders of the Corporation.

B. Any Option granted pursuant to this Plan shall be granted within ten (10)
years from the date that this Plan is adopted by the Board of Directors or the
date that this Plan is approved by the stockholders of the Corporation,
whichever is earlier.

C. The Board of Directors shall implement, interpret (except as expressly
provided in this Plan) and administer this Plan. Without limiting the powers
and authority of the Board of Directors in any respect, the Board of Directors
shall have authority (i) to construe and interpret this Plan and any Stock
Option Agreement entered into hereunder; (ii) to determine the Fair Market
Value of Incentive Stock; (iii) to select Eligible Persons to whom Options may
from time to time be granted hereunder; (iv) to determine whether any Option
or any portion thereof shall be an ISO or a NQSO; (v) to determine the number
of shares of Incentive Stock to be covered by any Option and the Exercise
Price applicable to any Option; (vi) to determine the terms and conditions,
not inconsistent with the terms of this Plan, of any Option and to approve
forms of Stock Option Agreement; (vii) to determine whether, and under what
circumstances, an Option may be settled or paid in cash or other
consideration; (viii) to amend, cancel, accept the surrender of, modify or
accelerate the vesting of all or any portion of an Option, including
amendments or modifications that may cause an ISO to become a NQSO; (ix) to
authorize and implement any amendment, as required by the Code or with the
consent of the Participant, to any Stock Option Agreement and the terms of any
Option evidenced thereby; and (x) to establish policies and procedures for the
exercise of Options and the satisfaction of withholding or other obligations
arising in connection therewith.

D. To the extent not prohibited by the General Corporation Law of the State of
Delaware or the charter or bylaws of the Corporation, the Board of Directors
may delegate any or all of its responsibilities hereunder to the Committee,
and all references herein or in any Stock Option Agreement to the Board of
Directors shall, to the extent applicable, be deemed to refer to and include
the Committee.

E. The Committee shall consist solely of two (2) or more persons who qualify
as Outside Directors (within the meaning of Treasury Regulations under Section
162(m) of the Code); provided, however, that the Board of Directors may
delegate administrative authority with respect to Eligible Persons who are not
reasonably expected to become covered employees within the meaning of Section
162(m) of the Code to a committee of other than Outside Directors.

F. Any action taken by the Board of Directors (or the Committee) with respect
to the implementation, interpretation or administration of this Plan shall be
final, conclusive and binding.




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4. TOTAL NUMBER OF SHARES OF INCENTIVE STOCK.

The number of shares of Incentive Stock which (a) may be issued in the
aggregate by the Corporation under this Plan pursuant to the exercise of
Options granted hereunder and (b) may be covered by SARs granted hereunder
which have not expired unexercised shall not be more than the total of (x)
20,731,000 plus (y) an annual increase equal to five percent (5%) of the
shares of Common Stock outstanding on each April 1, or such lesser number of
shares as may be determined by the Board of Directors, commencing on April 1,
2002. Such number of shares of Incentive Stock may be increased, except as
provided in the preceding sentence, only by a resolution adopted by the Board
of Directors and approved within twelve (12) months after such adoption by the
Stockholders of the Corporation in accordance with applicable state law. Such
shares of Incentive Stock may be issued out of the authorized and unissued or
reacquired Common Stock of the Corporation. Any shares subject to an Option,
SAR or portion thereof which expires or is terminated unexercised (unless by
virtue of the exercise of an Option or SAR granted in tandem therewith) as to
such shares may again be subject to an Option or SAR under this Plan. To the
extent there shall be any adjustment pursuant to the provisions of Article 9
hereof, the aforesaid number of shares shall be appropriately so adjusted.

5. ELIGIBILITY AND AWARDS.

A. The Board of Directors shall determine, at any time and from time to time,
(i) any Eligible Person to whom the award of an Option or SAR may further the
purposes of this Plan in the view of the Board of Directors, (ii) whether any
Option to be awarded to an Eligible Person shall be intended as an ISO or as a
NQSO, the number of shares of Incentive Stock to be covered by such Option or
a SAR, the Exercise Price of such Option or SAR, whether such Option contains
a SAR and all other terms and conditions of such Option, (iii) the Fair Market
Value on the date of grant of the Option or SAR and (iv) the terms and
conditions of the Stock Option Agreement to evidence such Option or SAR,
including the restrictions, if any, applicable to the shares of Incentive
Stock that may be acquired upon exercise of any portion of such Option. The
Board of Directors may delegate to the appropriate officer or officers of the
Corporation the authority to prepare, execute and deliver any Stock Option
Agreement evidencing any Option or SAR granted under this Plan; provided,
however, that any such Stock Option Agreement shall be consistent with the
terms and conditions of this Plan.

B. For any Option intended to qualify as an ISO, in whole or in part, (i) the
Eligible Person shall then be an employee of the Corporation or a Parent or
Subsidiary, as provided in the Code, (ii) the term during which such Option
shall be in effect shall not be greater than ten (10) years provided, however,
that the term shall not be greater than five (5) years for any Option granted
to a Controlling Participant, (iii) the Exercise Price shall not be less than
one hundred percent (100%) of the Fair Market Value on the date that such
Option is granted provided, however, that, if an ISO shall be granted to a
Controlling Participant, the Exercise Price shall not be less than one hundred
ten percent (110%) of the Fair Market Value on the date that such Option is
granted and (iv) such Option is exercisable only by the Participant during his
or her lifetime and shall be nontransferable by the Participant unless the
Stock Option Agreement permits such Option to be transferred by will or the
laws of descent and distribution.


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C. Subject to adjustment in accordance with Section 9 hereof, no employee
shall during any calendar year be granted Options or SARs for more than
1,000,000 shares of Common Stock.

D. As soon as practicable after the Board of Directors determines to award an
Option or SAR pursuant to Section 5A hereof, the appropriate officer or
officers of the Corporation shall give notice (written or oral) to such effect
to each Eligible Person designated to be awarded an Option or SAR, which
notice shall be accompanied by a copy or copies of the separate Stock Option
Agreement, if any, to be executed by such Eligible Person.

E. Upon receipt of the notice specified in Section 5D hereof, an Eligible
Person shall have an Option or SAR, and shall thereby become and be a
Participant, only after the due execution and delivery by such Eligible Person
and the Corporation of the separate Stock Option Agreement described in
Section 5D, if any, by such date and time as shall be specified in such notice
(unless waived by the Corporation). In the event that no separate Stock Option
Agreement is required to be executed by an Eligible Person, such Eligible
Person shall have an Option or SAR, and become and be a Participant, pursuant
to the terms and conditions of the notice specified in Section 5D, which
notice shall constitute the Stock Option Agreement.

F. In the event that the Corporation or any Parent or Subsidiary assumes an
option granted by another entity, which option is to be covered by this Plan
and upon the exercise of which shares of Incentive Stock are to be issued, the
terms and conditions of such option shall remain unchanged (except the
exercise price and the number and nature of shares issuable upon exercise
thereof, which shall be adjusted appropriately in accordance with the Code,
and references to such other entity, which shall be deemed to refer to the
Corporation). In the event that the Board of Directors elects to grant an
Option or SAR under this Plan to replace an option or SAR granted by another
entity (rather than assume such option or SAR), the holder of such option or
SAR shall be eligible to receive such replacement Option or SAR, which may be
granted with a similarly-adjusted Exercise Price.

6. EXERCISE AND TERMINATION OF OPTIONS.

A. An Option of a Participant may be exercised during the period such Option
is in effect and as set forth herein and in the Stock Option Agreement, and
only if compliance with all applicable Federal and state securities laws can
be effected. An Option may be exercised only by (i) the Participant's
completion, execution and delivery to the Corporation of a notice of such
Participant's exercise of such Option and an "investment letter" (if required
by the Corporation) as supplied by the Corporation and (ii) the payment to the
Corporation of the aggregate Exercise Price, in accordance with Section 6
hereof and the Stock Option Agreement, for the shares of Incentive Stock to be
purchased pursuant to such exercise (as shall be specified by such Participant
in such notice). Except as specifically provided by a duly executed Stock
Option Agreement or unless waived by the Board of Directors, an Option or any
of the rights thereunder may be exercised by such Participant only, and may
not be transferred or assigned, voluntarily, involuntarily or by operation of
law (including, without limitation, the laws of bankruptcy, intestacy, descent
and distribution and succession).



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B. Payment by each Participant for the shares of Incentive Stock purchased
hereunder upon the exercise of an Option shall be made by good check or in
accordance with the terms of any Stock Option Agreement executed by such
Participant.

C. The Board of Directors at any time or from time to time may offer to buy
out for a payment in cash or Incentive Stock all or a portion of an
outstanding Option held by a Participant, based on such terms and conditions
as the Board of Directors shall establish and communicate to the Participant
at the time that such offer is made. The Board of Directors may provide for
the surrender of all or any portion of an Option in satisfaction of specified
obligations of a Participant, including tax withholding obligations.

D. As a condition to the exercise of any Option or SAR (for non-cash
consideration), the Corporation shall have the right to require that the
Participant (or the recipient of any shares of Incentive Stock or noncash
consideration) remit to the Corporation or any Parent or Subsidiary an amount
calculated by the Corporation to be sufficient to satisfy applicable Federal,
state, foreign or local withholding tax requirements prior to the delivery of
any stock certificate evidencing shares of Incentive Stock or other form of
non-cash consideration; in lieu thereof, the Participant may satisfy
applicable withholding tax requirements by electing to have the Corporation
withhold from the Incentive Stock issuable upon exercise of an Option a number
of whole shares having a Fair Market Value (determined on the date that the
amount of tax to be withheld is to be fixed) at least equal to the aggregate
amount required to be withheld. Whenever any payments are to be made in cash
(upon the exercise of a SAR or otherwise), the Corporation shall be entitled,
in its sole discretion, to deduct from such payment such amount calculated by
the Corporation to be sufficient to satisfy applicable Federal, state, foreign
or local withholding tax requirements thereon.

7. COSTS AND EXPENSES.

All costs and expenses with respect to the adoption, implementation,
interpretation and administration of this Plan shall be borne by the
Corporation; provided, however, that, except as otherwise specifically
provided in this Plan or the applicable Stock Option Agreement between the
Corporation and a Participant, the Corporation shall not be obligated to pay
any costs or expenses (including legal fees) incurred by any Participant in
connection with any Stock Option Agreement, this Plan or any Option, SAR or
Incentive Stock held by any Participant.

8. NO PRIOR RIGHT OF AWARD.

Nothing in this Plan shall be deemed to give any director, officer or employee
of, or advisor or consultant to, the Corporation or any Parent or Subsidiary,
or such person's legal representatives or assigns, or any other person or
entity claiming under or through such person, any contract or other right to
participate in the benefits of this Plan. Nothing in this Plan shall be
construed as constituting a commitment, guarantee, agreement or understanding
of any kind or nature that the Corporation or any Parent or Subsidiary shall
continue to employ, retain or engage any individual (whether or not a
Participant). This Plan shall not affect in any way the right of the
Corporation and any Parent or Subsidiary to terminate the employment or
engagement of any individual (whether or not a Participant) at any time and
for any reason whatsoever and to



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remove any individual (whether or not a Participant) from any position as a
director or officer. No change of a Participant's duties as an employee of the
Corporation or any Parent or Subsidiary shall result in a modification of the
terms of any rights of such Participant under this Plan or any Stock Option
Agreement executed by such Participant.

9. CHANGES IN CAPITAL STRUCTURE.

Subject to any required action by the stockholders of the Corporation and the
provisions of the General Corporation Law of the State of Delaware, the number
of shares of Incentive Stock represented by the unexercised portion of an
Option or SAR and the number of shares of Incentive Stock which has been
authorized or reserved for issuance hereunder (whether such shares are
unissued, reacquired or subject to an Option or SAR that expired, was
cancelled, surrendered or terminated unexercised as to such shares), as well
as the Exercise Price under the unexercised portion of an Option or SAR, shall
be proportionately adjusted for (a) a division, combination or
reclassification of any of the shares of Common Stock of the Corporation or
(b) a dividend payable in shares of Common Stock of the Corporation.

10. AMENDMENT OR TERMINATION OF PLAN.

Except as otherwise provided herein, this Plan may be amended or terminated in
whole or in part by the Board of Directors (in its sole discretion), but no
such action shall adversely affect or alter any right or obligation with
respect to any Option, SAR or Stock Option Agreement then in effect, except to
the extent that any such action shall be required or desirable (in the opinion
of the Corporation or its counsel) so that any Option intended to qualify as
an ISO complies with the Code or any rule or regulation promulgated or
proposed thereunder.

11. BURDEN AND BENEFIT.

The terms and provisions of this Plan shall be binding upon, and shall inure
to the benefit of, each Participant and such Participant's executors and
administrators, estate, heirs and personal and legal representatives.

12. HEADINGS.

The headings and other captions contained in this Plan are for convenience and
reference only and shall not be used in interpreting, construing or enforcing
any of the provisions of this Plan.

13. INTERPRETATION.

Notwithstanding any provision of this Plan or any provision of any Stock
Option Agreement evidencing an Option that is intended, in whole or in part,
to qualify as an ISO, this Plan and each such Stock Option Agreement are
intended to comply with all requirements for qualification under the Code and
with any rule or regulation promulgated or proposed thereunder, and shall be
interpreted and construed in a manner which is consistent with this Plan and
each such Stock Option Agreement being so qualified. This Plan shall be
governed by, and



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construed in accordance with, the substantive laws of the State of Delaware
(other than rules of conflicts-of-law or choice-of-law).