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                                                                     EXHIBIT 4.2

                                 CERTIFICATE OF
                                AMENDMENT OF THE
                           FIFTH AMENDED AND RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                                WEBMETHODS, INC.

                (Under Section 242 of the General Corporation
                       Law of the State of Delaware)

      WEBMETHODS, INC. (the "Corporation"), a corporation duly organized and
existing under the General Corporation Law of the State of Delaware (the
"DGCL"), does, by Phillip Merrick, its President, attested by Jack L. Lewis, its
Secretary, under its corporate seal, hereby certify that:

      I. The original Certificate of Incorporation of the Corporation
(previously known as "TransactNet, Inc.") was filed with the Secretary of State
of the State of Delaware on June 12, 1996. Certificates of Amendment of the
Certificate of Incorporation of the Corporation were filed with the Secretary
of State of the State of Delaware on January 21, 1997 and October 9, 1997. A
Certificate of Designation of the Corporation was filed with the Secretary of
State of the State of Delaware on October 21, 1997, and a Certificate of
Amendment and Restatement of the Certificate of Incorporation of the
Corporation was filed with the Secretary of State of the State of Delaware on
December 12, 1997. A Certificate of Amendment was filed with the Secretary of
the State of Delaware on March 18, 1998. A Certificate of Second Amendment and
Restatement of the Certificate of Incorporation was filed with the Secretary of
the State of Delaware on September 18, 1998. A Certificate of Third Amendment
and Restatement of the Certificate of Incorporation was filed with the
Secretary of the State of Delaware on April 28, 1999. A Certificate of Fourth
Amendment and Restatement of the Certificate of Incorporation was filed with
the Secretary of the State of Delaware on November 3, 1999. A Certificate of
Fifth Amendment and Restatement of the Certificate of Incorporation was filed
with the Secretary of the State of Delaware on February 15, 2000.

      II. This Certificate of Amendment of the Fifth Amended and Restated
Certificate of Incorporation further amends the Fifth Amended and Restated
Certificate of Incorporation by deleting from such Fifth Amended and Restated
Certificate of Incorporation Article FOURTH and substituting in lieu of such
provisions the text of the following paragraphs:

                           ARTICLE IV

            The Corporation is authorized to issue two classes of stock to be
      designated common stock ("Common Stock") and preferred stock ("Preferred
      Stock"). The number of shares of Common Stock authorized to be issued is
      five hundred million (500,000,000), par value $.01 per share, and the
      number of shares of preferred stock authorized to be issued is fifty
      million (50,000,000), par value $.01 per share.

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            The board of directors is authorized, subject to any limitations
      prescribed by law, to provide for the issuance of shares of preferred
      stock in series, and by filing a certificate pursuant to the applicable
      law of the State of Delaware (such certificate being hereinafter referred
      to as a "Preferred Stock Designation"), to establish from time to time the
      number of shares to be included in each such series, and to fix the
      designation, powers, preferences, and rights of the shares of each such
      series and any qualifications, limitations or restrictions thereof. The
      number of authorized shares of Preferred Stock may be increased or
      decreased (but not below the number of shares thereof then outstanding) by
      the affirmative vote of the holders of a majority of the Common Stock
      without a vote of the holders of the Preferred Stock, or of any series
      thereof, unless a vote of any such holders is required pursuant to the
      terms of any Preferred Stock Designation.

            Except as otherwise expressly provided in any Preferred Stock
      Designation, any new series of Preferred Stock may be designated, fixed
      and determined as provided herein by the board of directors without
      approval of the holders of the Common Stock or the holders of Preferred
      Stock, or any series thereof, and any such new series may have powers,
      preferences and rights, including, without limitation, voting rights,
      dividend rights, liquidation rights, redemption rights and conversion
      rights, senior to, junior to or pari passu with the rights of the Common
      Stock, or any future class or series of Preferred Stock or Common Stock.

      III. Pursuant to Sections 141 and 242 of the DGCL, at a meeting of the
Board of Directors of the Corporation held on July 7, 2000, the Board of
Directors of the Corporation deemed it advisable and in the best interests of
the Corporation to amend the Fifth Amended and Restated Certificate of
Incorporation as set forth in this Certificate of Amendment of the Fifth Amended
and Restated Certificate of Incorporation and directed that this Certificate of
Amendment of the Fifth Amended and Restated Certificate of Incorporation be
submitted for consideration and action thereon by the Stockholders of the
Corporation.

      IV. Pursuant to Sections 211 and 242 of the DGCL, the holders of a
majority of the outstanding shares of capital stock of the Corporation entitled
to vote thereon voted in favor of, approved and adopted this Certificate of
Amendment of the Fifth Amended and Restated Certificate of Incorporation,
including the text set forth in Article II hereof.

      V. The text of the Certificate of Amendment of the Fifth Amended and
Restated Certificate of Incorporation set forth in Article II hereof was duly
adopted by the Board of Directors and by the holders of two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote thereon
in accordance with the provisions of Sections 141, 211 and 242 of the General
Corporation Law of the State of Delaware.

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      IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment of the Fifth Amended and Restated Certificate of Incorporation to be
signed and executed in its corporate name by Phillip Merrick, its President, and
attested to by Jack L. Lewis, its Secretary, who declare, affirm, acknowledge
and certify under the penalties of perjury, that this is their free act and deed
and that the facts stated herein are true, as of the 15th day of August, 2000.

ATTEST:                                   WEBMETHODS, INC.

/s/ Jack L. Lewis                         By:/s/ Phillip Merrick
------------------------------------         -------------------
Jack L. Lewis, Secretary                     Phillip Merrick, President

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                                                                     EXHIBIT 4.3

                                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.

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.

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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.

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.

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

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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.

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 20,731,000, which number may be
increased 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

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the Participant unless the Stock Option Agreement permits such Option to be
transferred by will or the laws of descent and distribution.

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 Stock Option Agreement 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 a Stock Option Agreement (in such form and number as the officer or officers
of the Corporation shall direct) by such date and time as shall be specified in
such notice (unless waived by the Corporation).

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).

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.

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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 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

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

                                     - oOo -

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