CORIO INC
1998 STOCK PLAN STOCK OPTION AGREEMENT
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<TYPE>EX-10.29
<SEQUENCE>14
<FILENAME>exh10-29.htm
<DESCRIPTION>1998 STOCK PLAN STOCK OPTION AGREEMENT
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<TITLE>Q3 2004 Exhibit 10.27</TITLE>
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<FONT SIZE=2><B><P ALIGN="RIGHT">                                           EXHIBIT 10.27 </P></B>


<B><FONT SIZE=2><P ALIGN="CENTER">CORIO, INC.<BR>
                  1998 STOCK PLAN<BR>
                  STOCK OPTION AGREEMENT</P>
<P>CORIO, Inc.<BR>
   959 Skyway Road, Suite 100<BR>
   San Carlos, CA 94070<BR>
   Attn: Stock Plan Administration</P>
</B>
<P>&#9;Unless otherwise defined herein, the terms defined in the Company's 1998
Stock Plan (the "Plan") shall have the same defined meanings in the Option
Agreement.</P><DIR>

<B><P>I.&#9;<U>NOTICE OF STOCK OPTION GRANT</P></DIR>
</B></U></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=683>
<TR><TD WIDTH="14%" VALIGN="TOP">
<B><FONT SIZE=1><P>Name:</B></FONT></TD>
<TD WIDTH="42%" VALIGN="TOP">
<B><FONT SIZE=1><P>{{FirstName}} {{LastName}}</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><FONT SIZE=1><P>ID:</B></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<B><FONT SIZE=1><P>{{ID}}</B></FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="TOP">
<B><FONT SIZE=1><P>Address:</B></FONT></TD>
<TD WIDTH="42%" VALIGN="TOP">
<B><FONT SIZE=1><P>{{AddressLine1}}</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><FONT SIZE=1><P>SS#:</B></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<B><FONT SIZE=1><P>{{SS}}</B></FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">
<B><FONT SIZE=1><P>{{AddressLine2}}</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="42%" VALIGN="TOP">
<B><FONT SIZE=1><P>{{City}}, {{State}} {{ZipCode}}</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<FONT SIZE=1><P>&nbsp;</P>
<P>&#9;</P>
<P>&#9;The undersigned Optionee has been granted an Option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE BORDER CELLSPACING=1 CELLPADDING=7 WIDTH=432>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>Grant Number:</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>{{Option}}</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>Date of Grant:</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>{{Grant_Date}}</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>Vesting Commencement Date:</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>{{Vest_Commence_Date}}</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>Total Number of Shares Granted:</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>{{Shrs_Granted}}</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>Exercise Price per share:</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>{{Price}}</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>Total Exercise Price:</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>{{TotalOptionPrice}}</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>Type of Option:</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>{{OptionType}}</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>Term/Expiration Date:</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>{{ExpirationDatePeriod1}}</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;</P>
</FONT><FONT SIZE=1><P>&#9;</P>
<P>&#9;<U>Vesting Schedule:</P>
</U><P>This Option shall be exercisable, in whole or in part, according to the
following vesting schedule:</P>
<B><P>&#9;[[25% of the Shares subject to the Option shall vest twelve months
after the Vesting Commencement Date, and 1/48 of the Shares subject to the
Option shall vest each month thereafter, subject to Optionee's continuing to be
a Service Provider on such dates.]] [[Note: vesting subject to change depending
on terms of grant.]]</P>
</B><P>&#9;<U>Termination Period.</P>
</U><P>&#9;This Option shall be exercisable for three months after Optionee
ceases to be a Service Provider. Upon Optionee's death or Disability, this
Option may be exercised for one year after Optionee ceases to be a Service
Provider. In no event may Optionee exercise this Option after the
Term/Expiration Date as provided above.</P><DIR>

<B><P>II.&#9;<U>AGREEMENT</P></DIR>

</B></U><P>&#9;&#9;<U>Grant of Option.</U> The Plan Administrator of the Company
hereby grants to the Optionee named in the Notice of Grant (the
"<U>Optionee</U>") an option (the "<U>Option</U>") to purchase the number of
Shares set forth in the Notice of Grant, at the exercise price per Share set
forth in the Notice of Grant (the "<U>Exercise Price</U>") and subject to the
terms and conditions of the Plan, which is incorporated herein by reference.
Subject to Section 14(c) of the Plan, in the event of a conflict between the
terms and conditions of the Plan and this Option Agreement, the terms and
conditions of the Plan shall prevail.</P>
<P>&#9;If designated in the Notice of Grant as an Incentive Stock Option
("<U>ISO</U>"), this Option is intended to qualify as an Incentive Stock Option
as defined in Section 422 of the Code. Nevertheless, to the extent that it
exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated
as a Nonstatutory Stock Option ("<U>NSO</U>").</P>
<P>&#9;&#9;<U>Exercise of Option.</P>
</U><P>&#9;&#9;<U>Right to Exercise</U>. This Option shall be exercisable during
its term in accordance with the Vesting Schedule set out in the Notice of Grant
and with the applicable provisions of the Plan and this Option Agreement.</P>
<P>&#9;&#9;<U>Method of Exercise.</U> This Option shall be exercisable by
delivery of an exercise notice in the form attached as <U>Exhibit A</U> (the
"<U>Exercise Notice</U>") which shall state the election to exercise the Option,
the number of Shares with respect to which the Option is being exercised, and
such other representations and agreements as may be required by the Company. The
Exercise Notice shall be accompanied by payment of the aggregate Exercise Price
as to all Exercised Shares. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied by the
aggregate Exercise Price.</P>
<P>&#9;&#9;No Shares shall be issued pursuant to the exercise of an Option
unless such issuance and such exercise complies with Applicable laws. Assuming
such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date of which the Option is exercised with
respect to such Shares.</P>
<P>&#9;&#9;<U>Lock-Up Period.</U> Optionee hereby agrees that, if so requested
by the Company or any representative of the underwriters (the "<U>Managing
Underwriter</U>") in connection with any registration of the offering of any
securities of the Company under the Securities Act, Optionee shall not sell or
otherwise transfer any Shares or other securities of the Company during the 180-
day period (or such other period as may be requested in writing by the Managing
Underwriter and agreed to in writing by the Company) (the "Market Standoff
Period") following the effective date of the registration statement of the
Company filed under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.</P>
<P>&#9;&#9;<U>Method of Payment.</U> Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the election of
the Optionee:</P>
<P>&#9;&#9;Cash or check;</P>
<P>&#9;&#9;Consideration received by the Company under a formal cashless
exercise program adopted by the Company in connection with the Plan; or</P>
<P>&#9;&#9;surrender of other Shares which, (i) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
(6) months on the date of surrender, and (ii) have a Fair Market Value on the
date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.</P>
<P>&#9;&#9;<U>Restrictions on Exercise.</U> This Option may not be exercised
until such time as the Plan has been approved by the shareholders of the
Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
Applicable Law.</P>
<P>&#9;&#9;<U>Non-Transferability of Option.</U> This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by
Optionee. The terms of the Plan and this Option Agreement shall be binding upon
the executors, administrators, heirs, successors and assigns of the
Optionee.</P>
<P>&#9;&#9;<U>Term of Option.</U> This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option.</P>
<P>&#9;&#9;<U>Tax Consequences.</U> Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.</P>
<P>&#9;&#9;<U>Exercise of ISO</U>. If this Option qualifies as an ISO, there
will be no regular federal income tax liability upon the exercise of the Option,
although the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject the Optionee to
the alternative minimum tax in the year of exercise.</P>
<P>&#9;&#9;<U>Exercise of Nonstatutory Stock Option.</U> There may be a regular
federal income tax liability upon the exercise of a Nonstatutory Stock Option.
The Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price. If Optionee is an
Employee or a former Employee, the Company will be required to withhold from
Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise, and may refuse to honor the exercise and refuse
to deliver Shares if such withholding amounts are not delivered at the time of
exercise.</P>
<P>&#9;&#9;<U>Disposition of Shares.</U> In the case of an NSO, if Shares are
held for at least one year, any gain realized on disposition of the Shares will
be treated as long-term capital gain for federal income tax purposes. In the
case of an ISO, if Shares transferred pursuant to the Option are held for at
least one year after exercise and of at least two years after the Date of Grant,
any gain realized on disposition of the Shares will also be treated as long-term
capital gain for federal income tax purposes. If Shares purchased under an ISO
are disposed of within one year after exercise or two years after the Date of
Grant, any gain realized on such disposition will be treated as compensation
income (taxable at ordinary income rates) to the extent of the difference
between the Exercise Price and the lesser of (1) the Fair Market Value of the
Shares on the date of exercise, or (2) the sale price of the Shares. Any
additional gain will be taxed as capital gain, short-term or long-term depending
on the period that the ISO Shares were held.</P>
<P>&#9;&#9;<U>Notice of Disqualifying Disposition of ISO Shares.</U> If the
Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.</P>
<P>&#9;&#9;<U>Entire Agreement; Governing Law.</U> The Plan is incorporated
herein by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee. This agreement is governed by the internal substantive
laws but not the choice of law rules of California.</P>
<P>&#9;&#9;<U>No Guarantee of Continued Service.</U> OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.</P>
<P>&#9;Optionee acknowledges receipt of a copy of the Plan and represents that
he or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option. Optionee
further agrees to any questions arising under the Plan or this Option. Optioinee
further agrees to notify the Company upon any change in the residence address
indicated above.</P>
<P>&nbsp;</P>
<P>OPTIONEE:</P>
<P>&nbsp;</P>
<P>Signature: _______________________________________________________</P>
<P>&#9;&#9; &#9;&#9;{{FirstName}} {{LastName}}</P>
</FONT><FONT SIZE=2><P>Grant Number {{Option}}</P>
</FONT><FONT SIZE=1><P>CORIO, INC.</P>
<P>&nbsp;</P>
<P>&#9;&#9;&#9;&#9;Chief Executive Officer</P>

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