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                                                                  EXHIBIT 10.2.1

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE,
AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE
RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS
PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION
AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.

                              PEOPLESUPPORT, INC.
                           1998 STOCK INCENTIVE PLAN

                        INCENTIVE STOCK OPTION AGREEMENT
             (Monthly Vesting Over Four Years with One-Year Cliff)

INCENTIVE STOCK OPTION   This Option is intended to be an incentive stock option
                         under section 422 of the Internal Revenue Code and will
                         be interpreted accordingly.

VESTING                  Your right to exercise this Option shall commence
                         twelve months after the Vesting Start Date, as shown on
                         the cover sheet, and shall vest on a monthly basis
                         thereafter until fully vested on the fourth anniversary
                         of the Vesting Start Date, provided your employment
                         with the Company and its Subsidiaries has not been
                         terminated prior thereto. The number of Shares which
                         may be purchased under this Option by you at the
                         Exercise Price shall be equal to the difference between
                         (i) the product (rounded to the nearest integer) of the
                         number of full months of your continuous status as an
                         Employee of the Company (including all days of any
                         approved leaves of absence) from the Vesting Start Date
                         times the number of Shares covered by this Option times
                         0.0208333, minus (ii) the number of Shares purchased
                         pursuant to this Option prior to such exercise. The
                         resulting number of Shares will be rounded to the
                         nearest whole number. No additional Shares will vest
                         after your employment by the Company and its
                         Subsidiaries has terminated for any reason.

TERM                     Your Option will expire no later than the close of
                         business at Company headquarters on the day before the
                         tenth anniversary (fifth anniversary for a 10% owner)
                         of the Date of Grant, as shown on the cover sheet. (It
                         will expire earlier if your employment by the Company
                         and its Subsidiaries terminates, as described below.)

REGULAR TERMINATION      If your employment with the Company and its
                         Subsidiaries terminates for any reason except Cause,
                         death or Disability, your Option will expire at the
                         close of business at Company headquarters on the 30th
                         day after your termination date.

CAUSE                    If your employment with the Company and its
                         Subsidiaries is terminated for Cause, your Option shall
                         immediately expire.

                         "Cause" means: (1) conviction of a felony involving
                         moral turpitude; (2) commission of any act of criminal
                         fraud, misappropriation of funds or embezzlement in
                         connection with your employment by the Company or a
                         Subsidiary; or (3) material breach of any provision of
                         any employment agreement between you and the Company or
                         a Subsidiary.

DEATH                    If your employment with the Company and its
                         Subsidiaries terminates because of your death, your
                         Option will expire at the close of business at Company
                         headquarters on the date six months after the date of
                         death. During that six-month period, your estate or
                         heirs may exercise the vested portion of your Option.

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DISABILITY          If your employment with the Company and its Subsidiaries
                    terminates because of your Disability, your Option will
                    expire at the close of business at Company headquarters on
                    the date six months after your termination date. (However,
                    if your Disability is not expected to result in death or
                    last for a continuous period of at least 12 months, your
                    Option will be eligible for ISO tax treatment only if it is
                    exercised within three months following the termination of
                    your employment with the Company and its Subsidiaries.)

                    "Disability" means that you are unable to engage in any
                    substantial gainful activity by reason of any medically
                    determinable physical or mental impairment.

LEAVES OF ABSENCE   For purposes of this Option, your employment does not
                    terminate when you go on a bona fide leave of absence that
                    was approved by the Company in writing, if the terms of the
                    leave provide for continued service crediting, or when
                    continued service crediting is required by applicable law.
                    The Company determines which leaves count for this purpose,
                    and when your employment terminates for all purposes under
                    the Plan.

NOTICE OF EXERCISE  When you wish to exercise this Option, you must notify the
                    Company by filing the proper "Notice of Exercise" form at
                    the address given on the form. Your Notice must specify how
                    many Shares you wish to purchase. Your Notice must also
                    specify how your Shares should be registered (for example,
                    in your name only or in your and your spouse's names as
                    community property or as joint tenants with right of
                    survivorship). The Notice will be effective when it is
                    received by the Company. If someone else wants to exercise
                    this Option after your death, that person must prove to the
                    Company's satisfaction that he or she is entitled to do so.

FORM OF PAYMENT     When you submit your Notice of Exercise, you must include
                    payment of the Exercise Price for the Shares you are
                    purchasing. Payment may be made in one (or a combination) of
                    the following forms:

                    -   Your personal check, a cashier's check or a money order.

                    -   Shares which have already been owned by you for more
                        than twelve months and which are surrendered to the
                        Company. The value of the Shares, determined as of the
                        effective date of the option exercise, will be applied
                        to the Exercise Price.

                    -   To the extent that a public market for the Shares exists
                        as determined by the Company, by delivery (on a form
                        prescribed by the Committee) of an irrevocable direction
                        to a securities broker to sell Shares and to deliver all
                        or part of the sale proceeds to the Company in payment
                        of the aggregate Exercise Price.

WITHHOLDING TAXES   You agree to make any arrangements required by the Company
                    to pay any withholding or other taxes that may be due as a
                    result of the Option exercise or the sale of Shares acquired
                    upon exercise of this Option.



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RESTRICTIONS ON EXERCISE      By signing this Agreement, you agree not to
AND RESALE                    exercise this Option or sell any Shares acquired
                              upon exercise of this Option at a time when
                              applicable laws, regulations or Company or
                              underwriter trading policies prohibit exercise or
                              sale. In connection with any underwritten public
                              offering by the Company of its equity securities
                              pursuant to an effective registration statement
                              filed under the 1933 Act, including the Company's
                              initial public offering, you shall not exercise
                              this Option nor sell, make any short sale of,
                              loan, hypothecate, pledge, grant any option for
                              the purchase of, or otherwise dispose or transfer
                              for value or agree to engage in any of the
                              foregoing transactions with respect to any shares
                              without the prior written consent of the Company
                              or its underwriters, for such period of time after
                              the effective date of such registration statement
                              as may be requested by the Company or such
                              underwriters. In order to enforce the provisions
                              of this paragraph, the Company may impose
                              stop-transfer instructions with respect to the
                              shares until the end of the applicable stand-off
                              period. Such limitation on exercise shall not
                              alter the vesting schedule set forth in this
                              Agreement other than to limit the periods during
                              which this Option shall be exercisable.

                              If the sale of Shares under the Plan is not
                              registered under the Securities Act of 1933, but
                              an exemption is available which requires an
                              investment or other representation, you shall
                              represent and agree at the time of exercise that
                              the Shares being acquired upon exercise of this
                              Option are being acquired for investment, and not
                              with a view to the sale or distribution thereof,
                              and shall make such other representations as are
                              deemed necessary or appropriate by the Company and
                              its counsel.

THE COMPANY'S RIGHT OF        In the event that you propose to sell, pledge or
FIRST REFUSAL                 otherwise transfer to a third party any Shares
                              acquired under this Agreement, or any interest in
                              such Shares, the Company shall have the "Right of
                              First Refusal" with respect to all (and not less
                              than all) of such Shares. If you desire to
                              transfer Shares acquired under this Agreement, you
                              must give a written "Transfer Notice" to the
                              Company describing fully the proposed transfer,
                              including the number of Shares proposed to be
                              transferred, the proposed transfer price and the
                              name and address of the proposed transferee. The
                              Transfer Notice shall be signed both by you and by
                              the proposed transferee and must constitute a
                              binding commitment of both parties to the transfer
                              of the Shares. The Company shall have the right to
                              purchase all, and not less than all, of the Shares
                              on the terms described in the Transfer Notice
                              (subject, however, to any change in such terms
                              permitted in the next paragraph) by delivery of a
                              Notice of Exercise of the Right of First Refusal
                              within 30 days after the date when the Transfer
                              Notice was received by the Company. The Company's
                              rights under this Subsection shall be freely
                              assignable, in whole or in part.

                              If the Company fails to exercise its Right of
                              First Refusal within 30 days after the date when
                              it received the Transfer Notice, you may, not
                              later than 90 days following receipt of the
                              transfer of the Shares subject to the Transfer
                              Notice on the terms and conditions described in
                              the Transfer Notice. Any proposed transfer on
                              terms and conditions different from those
                              described in the Transfer Notice, as well as any
                              subsequent proposed transfer by you, shall again
                              be subject to the Right of First Refusal and shall
                              require compliance with the procedure described in
                              the paragraph above. If the Company exercises its
                              Right of First Refusal, the parties shall
                              consummate the sale of the Shares on the terms set
                              forth in the Transfer Notice within 60 days after
                              the date the Company received the Transfer Notice
                              (or within such longer period as may have been
                              specified in the Transfer Notice); provided,
                              however, that in the event the Transfer Notice
                              provided that payment for the Shares was to be
                              made in a form other than lawful money paid at the
                              time of transfer, the Company shall have the
                              option of paying for the Shares with lawful money
                              equal to the present value of the consideration
                              described in the Transfer Notice.

                              The Company's Right of First Refusal shall inure
                              to the benefit of its successors and assigns and
                              shall be binding upon any transferee of the
                              Shares.

                              The Company's Right of First Refusal shall
                              terminate in the event that Stock is

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                      listed or traded on an established stock exchange.

TRANSFER OF OPTION    Prior to your death, only you may exercise this Option.
                      You cannot transfer or assign this Option. For instance,
                      you may not sell this Option or use it as security for a
                      loan. If you attempt to do any of these things, this
                      Option will immediately become invalid. You may, however,
                      dispose of this Option in your will.

                      Regardless of any marital property settlement agreement,
                      the Company is not obligated to honor a Notice of Exercise
                      from your spouse or former spouse, nor is the Company
                      obligated to recognize such individual's interest in your
                      Option in any other way.

RETENTION RIGHTS      This Agreement does not give you the right to be retained
                      by the Company (or any Subsidiaries) in any capacity. The
                      Company (or Subsidiary) reserves the right to terminate
                      your employment at any time and for any reason.

SHAREHOLDER RIGHTS    You, or your estate or heirs, have no rights as a
                      shareholder of the Company until a certificate for the
                      Shares acquired upon exercise of this Option has been
                      issued. No adjustments are made for dividends or other
                      rights if the applicable record date occurs before your
                      stock certificate is issued, except as described in the
                      Plan.

ADJUSTMENTS           In the event of a stock split, a stock dividend, a
                      subdivision of the outstanding stock, a combination or
                      consolidation of an the outstanding stock into a lesser
                      number of shares, a recapitalization, reclassification or
                      a similar change in the Company Stock, the number of
                      Shares covered by this Option and the Exercise Price per
                      share may be adjusted pursuant to the Plan. Your Option
                      shall be subject to the terms of the agreement of merger,
                      liquidation or reorganization in the event the Company is
                      subject to such corporate activity.

LEGENDS               All certificates representing the Shares issued upon
                      exercise of this Option shall, where applicable, have
                      endorsed thereon the following legends:

                         THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
                         TO CERTAIN RESTRICTIONS ON TRANSFER, INCLUDING RIGHTS
                         OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE
                         SHARES, SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY
                         AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN
                         INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
                         PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED
                         UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY
                         THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS
                         CERTIFICATE.

                         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
                         BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
                         OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
                         STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED
                         AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF
                         FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS
                         PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE
                         COMPANY THAT REGISTRATION AND QUALIFICATION UNDER
                         FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.

APPLICABLE LAW        This Agreement will be interpreted and enforced under the
                      laws of the State of California (without regard to their
                      choice of law provisions).

THE PLAN AND OTHER    The text of the Plan is incorporated in this Agreement by
AGREEMENTS            reference. Certain capitalized terms used in this
                      Agreement are defined in the Plan.

                      This Agreement and the Plan constitute the entire
                      understanding between you and the Company regarding this
                      Option. Any prior agreements, commitments or negotiations
                      concerning this Option are superseded.


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By signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan.

























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                       NOTICE OF EXERCISE OF STOCK OPTION


PeopleSupport, Inc.
Attn: Chief Financial Officer


     Re: Exercise of Stock Option to Purchase Shares of Company Stock

Ladies and Gentlemen:

     Pursuant to the Stock Option Agreement dated ___________________ (the
"Stock Option Agreement"), between PeopleSupport, Inc., a Delaware corporation
(the "Company"), and the undersigned, I hereby elect to purchase ___________
shares of the common stock of the Company (the "Shares"), at the price of
$________ per Share. My check in the amount of $_____________ is enclosed.

     The undersigned understands there may be tax consequences as a result of
the purchase or disposition of the Shares. The undersigned represents that
he/she has received and reviewed the Plan's federal income tax information and
consulted with any tax consultants he/she deems advisable in connection with the
purchase or disposition of the Shares and the undersigned is not relying on the
Company for any tax advice.

     The undersigned acknowledges that he/she has received, read and understood
the Stock Option Agreement and agrees to abide by and be bound by their terms
and conditions. The undersigned represents that the Shares are being acquired
solely for its own account and not as a nominee for any other party, or for
investment, and that the undersigned purchaser will not offer, sell or otherwise
dispose of any such Shares except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws.


Dated: _______________


                                        __________________________________
                                                   (Signature)


                                        __________________________________
                                                (Please Print Name)


                                        Social Security No. ______________

                                        __________________________________


                                        __________________________________

                                        __________________________________
                                        (Full Address)




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