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                                                                   Exhibit 10.12


                              PEOPLESUPPORT, INC.

                           2004 STOCK INCENTIVE PLAN

                          NOTICE OF STOCK OPTION GRANT

      You have been granted the following Option to purchase Common Stock of
PeopleSupport, Inc. (the "Company") under the Company's 2004 Stock Incentive
Plan (the "Plan"):

      Name of Optionee:                           [Name of Optionee]

      Total Number of Option Shares Granted:      [Total Number of Shares]

      Type of Option:                             [ ] Incentive Stock Option

                                                  [ ] Nonstatutory Stock Option

      Exercise Price Per Share:                   $_________

      Grant Date:                                 [Date of Grant]

      Vesting Commencement Date:                  [Vesting Commencement Date]

      Vesting Schedule:                           This Option becomes
                                                  exercisable with respect to
                                                  the first 1/4th of the shares
                                                  subject to this Option when
                                                  you complete 12 months of
                                                  continuous "Service" (as
                                                  defined in the Plan) from the
                                                  Vesting Commencement Date.
                                                  Thereafter, this Option
                                                  becomes exercisable with
                                                  respect to an additional
                                                  1/48th of the shares subject
                                                  to this Option when you
                                                  complete each additional month
                                                  of Service.

      Expiration Date:                            [Expiration Date] This Option
                                                  expires earlier if your
                                                  Service terminates earlier, as
                                                  described in the Stock Option
                                                  Agreement.


                               PEOPLESUPPORT, INC.
                          NOTICE OF STOCK OPTION GRANT

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      By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
term and conditions of the Plan and the Stock Option Agreement, both of which
are attached to and made a part of this document.

OPTIONEE:                                   PEOPLESUPPORT, INC.



________________________________            By: ________________________________
Optionee's Signature

________________________________            Title: _____________________________
Optionee's Printed Name


                               PEOPLESUPPORT, INC.
                          NOTICE OF STOCK OPTION GRANT

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                              PEOPLESUPPORT, INC.
                           2004 STOCK INCENTIVE PLAN

                             STOCK OPTION AGREEMENT

TAX TREATMENT           This Option is intended to be an incentive stock option
                        under Section 422 of the Internal Revenue Code or a
                        nonstatutory option, as provided in the Notice of Stock
                        Option Grant. Even if this Option is designated as an
                        incentive stock option, it shall be deemed to be an
                        nonstatutory option to the extent required by the
                        $100,000 annual limitation under Section 422(d) of the
                        Internal Revenue Code.

VESTING                 This Option becomes exercisable in installments, as
                        shown in the Notice of Stock Option Grant. This Option
                        will in no event become exercisable for additional
                        shares after your Service has terminated for any reason.

TERM                    This Option expires in any event at the close of
                        business at Company headquarters on the day before the
                        10th anniversary of the Grant Date, as shown on the
                        Notice of Stock Option Grant (fifth anniversary for a
                        more than 10% stockholder as provided under the Plan if
                        this is an incentive stock option). This Option may
                        expire earlier if your Service terminates, as described
                        below.

REGULAR TERMINATION     If your Service terminates for any reason except death
                        or "Total and Permanent Disability" (as defined in the
                        Plan), then this Option will expire at the close of
                        business at Company headquarters on the date three (3)
                        months after the date your Service terminates (or, if
                        earlier, the Expiration Date). The Company has
                        discretion to determine when your Service terminates for
                        all purposes of the Plan and its determinations are
                        conclusive and binding on all persons.

DEATH                   If you die, then this Option will expire at the close of
                        business at Company headquarters on the date 12 months
                        after the date your Service terminates (or, if earlier,
                        the Expiration Date). During that period of up to 12
                        months, your estate or heirs may exercise the Option.

DISABILITY              If your Service terminates because of your Total and
                        Permanent Disability, then this Option will expire at
                        the close of business at Company headquarters on the
                        date 12 months after the date your Service terminates
                        (or, if earlier, the Expiration Date).


                               PEOPLESUPPORT, INC.
                             STOCK OPTION AGREEMENT

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LEAVES OF ABSENCE       For purposes of this Option, your Service does not
                        terminate when you go on a military leave, a sick leave
                        or another bona fide leave of absence, if the leave was
                        approved by the Company in writing and if continued
                        crediting of Service is required by the terms of the
                        leave or by applicable law. But your Service terminates
                        when the approved leave ends, unless you immediately
                        return to active work.

                        If you go on a leave of absence, then the vesting
                        schedule specified in the Notice of Stock Option Grant
                        may be adjusted in accordance with the Company's leave
                        of absence policy or the terms of your leave. If you
                        commence working on a part-time basis, then the vesting
                        schedule specified in the Notice of Stock Option Grant
                        may be adjusted in accordance with the Company's
                        part-time work policy or the terms of an agreement
                        between you and the Company pertaining to your part-time
                        schedule.

RESTRICTIONS ON         The Company will not permit you to exercise this Option
EXERCISE                if the issuance of shares at that time would violate any
                        law or regulation. The inability of the Company to
                        obtain approval from any regulatory body having
                        authority deemed by the Company to be necessary to the
                        lawful issuance and sale of the Company stock pursuant
                        to this Option shall relieve the Company of any
                        liability with respect to the non-issuance or sale of
                        the Company stock as to which such approval shall not
                        have been obtained. However, the Company shall use its
                        best efforts to obtain such approval.

NOTICE OF EXERCISE      When you wish to exercise this Option you must notify
                        the Company by completing the attached "Notice of
                        Exercise of Stock Option" form and filing it with the
                        Human Resources Department of the Company. You notice
                        must specify how many shares you wish to purchase. Your
                        notice must also specify how your shares should be
                        registered. 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 Option exercise price for the
                        shares you are purchasing. Payment may be made in the
                        following form(s):

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


                               PEOPLESUPPORT, INC.
                             STOCK OPTION AGREEMENT

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                        -     Certificates for shares of Company stock that you
                              own, along with any forms needed to effect a
                              transfer of those shares to the Company. The value
                              of the shares, determined as of the effective date
                              of the Option exercise, will be applied to the
                              Option exercise price. Instead of surrendering
                              shares of Company stock, you may attest to the
                              ownership of those shares on a form provided by
                              the Company and have the same number of shares
                              subtracted from the Option shares issued to you.
                              However, you may not surrender, or attest to the
                              ownership of shares of Company stock in payment of
                              the exercise price if your action would cause the
                              Company to recognize a compensation expense (or
                              additional compensation expense) with respect to
                              this Option for financial reporting purposes.

                        -     By delivering on a form approved by the Committee
                              of an irrevocable direction to a securities broker
                              approved by the Company to sell all or part of
                              your Option shares and to deliver to the Company
                              from the sale proceeds in an amount sufficient to
                              pay the Option exercise price and any withholding
                              taxes. The balance of the sale proceeds, if any,
                              will be delivered to you. The directions must be
                              given by signing a special "Notice of Exercise"
                              form provided by the Company.

                        -     Irrevocable directions to a securities broker or
                              lender approved by the Company to pledge Option
                              shares as security for a loan and to deliver to
                              the Company from the loan proceeds an amount
                              sufficient to pay the Option exercise price and
                              any withholding taxes. The directions must be
                              given by signing a special "Notice of Exercise"
                              form provided by the Company.

                        Notwithstanding the foregoing, payment may not be made
                        in any form that is unlawful, as determined by the
                        Company in its sole discretion.

WITHHOLDING TAXES AND   You will not be allowed to exercise this Option unless
STOCK WITHHOLDING       you make arrangements acceptable to the Company to pay
                        any withholding taxes that may be due as a result of the
                        Option exercise. These arrangements may include
                        withholding shares of Company stock that otherwise would
                        be issued to you when you exercise this Option. The
                        value of these shares, determined as of the effective
                        date of the Option exercise, will be applied to the
                        withholding taxes.


                               PEOPLESUPPORT, INC.
                             STOCK OPTION AGREEMENT

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RESTRICTIONS ON RESALE  By signing this Agreement, you agree not to sell any
                        Option shares at a time when applicable laws, Company
                        policies or an agreement between the Company and its
                        underwriters prohibit a sale (e.g., a lock-up period
                        after the Company goes public). This restriction will
                        apply as long as you are an employee, consultant or
                        director of the Company or a subsidiary of the Company.

TRANSFER OF OPTION      In general, only you can exercise this Option prior to
                        your death. You cannot transfer or assign this Option,
                        other than as designated by you by will or by the laws
                        of descent and distribution, except as provided below.
                        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 in any event 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 former spouse, nor is the Company
                        obligated to recognize your former spouse's interest in
                        your Option in any other way.

                        However, if this Option is designated as a nonstatutory
                        stock option in the Notice of Stock Option Grant, then
                        the "Committee" (as defined in the Plan) may, in its
                        sole discretion, allow you to transfer this Option as a
                        gift to one or more family members. For purposes of this
                        Agreement, "family member" means a child, stepchild,
                        grandchild, parent, stepparent, grandparent, spouse,
                        former spouse, sibling, niece, nephew, mother-in-law,
                        father-in-law or sister-in-law (including adoptive
                        relationships), any individual sharing your household
                        (other than a tenant or employee), a trust in which one
                        or more of these individuals have more than 50% of the
                        beneficial interest, a foundation in which you or one or
                        more of these persons control the management of assets,
                        and any entity in which you or one or more of these
                        persons own more than 50% of the voting interest.

                        In addition, if this Option is designated as a
                        nonstatutory stock option in the Notice of Stock Option
                        Grant, then the Committee may, in its sole discretion,
                        allow you to transfer this option to your spouse or
                        former spouse pursuant to a domestic relations order in
                        settlement of marital property rights.

                        The Committee will allow you to transfer this Option
                        only if both you and the transferee(s) execute the forms
                        prescribed by the Committee, which include the consent
                        of the transferee(s) to be bound by this Agreement.


                               PEOPLESUPPORT, INC.
                             STOCK OPTION AGREEMENT

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RETENTION RIGHTS        Neither your Option nor this Agreement gives you the
                        right to be retained by the Company or a subsidiary of
                        the Company in any capacity. The Company and its
                        subsidiaries reserve the right to terminate your Service
                        at any time, with or without cause.

STOCKHOLDER RIGHTS      You, or your estate or heirs, have no rights as a
                        stockholder of the Company until you have exercised this
                        Option by giving the required notice to the Company and
                        paying the exercise price. No adjustments are made for
                        dividends or other rights if the applicable record date
                        occurs before you exercise this Option, except as
                        described in the Plan.

ADJUSTMENTS             In the event of a stock split, a stock dividend or a
                        similar change in Company stock, the number of shares
                        covered by this Option and the exercise price per share
                        may be adjusted pursuant to the Plan.

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

THE PLAN AND OTHER      The text of the Plan is incorporated in this Agreement
AGREEMENTS              by reference. All capitalized terms in the Stock Option
                        Agreement shall have the meanings assigned to them 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.
                        This Agreement may be amended only by another written
                        agreement, signed by both parties.


                 BY SIGNING THE COVER SHEET OF THIS AGREEMENT,
                  YOU AGREE TO ALL OF THE TERMS AND CONDITIONS
                        DESCRIBED ABOVE AND IN THE PLAN.


                               PEOPLESUPPORT, INC.
                             STOCK OPTION AGREEMENT

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                              PEOPLESUPPORT, INC.
                           2004 STOCK INCENTIVE PLAN

                       NOTICE OF EXERCISE OF STOCK OPTION

          YOU MUST SIGN THIS NOTICE ON THE LAST PAGE BEFORE SUBMITTING
                               IT TO THE COMPANY

OPTIONEE INFORMATION:

Name:    ___________________      Social Security Number:

                                  ___________________________


Address: ___________________      Employee Number:

         ___________________      ___________________________

OPTION INFORMATION:

Date of Grant: ____________________, 200_        Type of Stock Option:


Exercise Price per Share: $______________        [ ] Nonstatutory (NSO)

Total number of shares of Common Stock of        [ ] Incentive (ISO)
PeopleSupport, Inc. (the "Company") covered
by option: __________________________


EXERCISE INFORMATION:

Number of shares of Common Stock of the Company for which option is being
exercised now: ______________________. (These shares are referred to below as
the "Purchased Shares.")

Total exercise price for the Purchased Shares: $____________

Form of payment enclosed [CHECK ALL THAT APPLY]:

[ ]    Check for $__________, payable to "PeopleSupport, Inc."

[ ]   Certificate(s) for ______________ shares of Common Stock of the Company
      that I have owned for at least six months or have purchased in the open
      market. (These shares will be valued as of the date when the Company
      receives this notice.)


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[ ]   Attestation Form covering _______________ shares of Common Stock of the
      Company. (These shares will be valued as of the date when the Company
      receives this notice.)

Name(s) in which the Purchased Shares should be registered
[PLEASE CHECK ONE BOX]:

[ ]   In my name only

[ ]   In the names of my spouse and myself   My spouse's name (if applicable):
      as community property
                                             ___________________________________

[ ]   In the names of my spouse and myself
      as joint tenants with the right of
      survivorship

[ ]   In the name of an eligible revocable   Full legal name of revocable trust:
      trust                                  ___________________________________
                                             ___________________________________
                                             ___________________________________
                                             ___________________________________


The certificate for the Purchased Shares     ___________________________________
should be sent to the following address:     ___________________________________
                                             ___________________________________
                                             ___________________________________


ACKNOWLEDGMENTS:

1.    I understand that all sales of Purchased Shares are subject to compliance
      with the Company's policy on securities trades.

2.    I hereby acknowledge that I received and read a copy of the prospectus
      describing the Company's 2004 Stock Incentive Plan and the tax
      consequences of an exercise.

3.    In the case of a nonstatutory option, I understand that I must recognize
      ordinary income equal to the spread between the fair market value of the
      Purchased Shares on the date of exercise and the exercise price. I further
      understand that I am required to pay withholding taxes at the time of
      exercising a nonstatutory option.

4.    In the case of an incentive stock option, I agree to notify the Company if
      I dispose of the Purchased Shares before I have met both of the tax
      holding periods applicable to incentive stock options (that is, if I make
      a disqualifying disposition).

5.    I acknowledge that the Company has encouraged me to consult my own adviser
      to determine the form of ownership that is appropriate for me. In the
      event that I choose to


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      transfer my Purchased Shares to a trust that does not satisfy the
      requirements of the Internal Revenue Service (i.e., a trust that is not an
      eligible revocable trust), I also acknowledge that the transfer will be
      treated as a "disposition" for tax purposes. As a result, the favorable
      ISO tax treatment will be unavailable and other unfavorable tax
      consequences may occur.

SIGNATURE AND DATE:


_____________________________________      _______________________, 200__



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