U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 2005
(Exact name of Registrant as specified in its charter) }
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| DELAWARE
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1-12793
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84-1370538 |
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| (State or other jurisdiction of incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.) |
100 Garfield Street, Denver, Colorado 80206
(Address of principal executive offices; zip code)
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2 below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. Entry Into a Material Definitive Agreement
New Facility Leases
On December 29, 2005, StarTek Canada Services, Ltd. (StarTek Canada), a subsidiary of StarTek,
Inc., entered into a facility lease agreement with The Corporation of the City of Thunder Bay
(Thunder Bay Corp.) to lease approximately 33,000 square feet of space in Thunder Bay, Ontario,
Canada. Base rental payments of approximately $182 thousand Canadian per year plus taxes and other
fees, currently estimated to total approximately $143 thousand Canadian per year, are due monthly
in equal installments. StarTek, Inc. has guaranteed the payments under this lease agreement in the
event of default by StarTek Canada. The lease provides for an initial term of seven years
commencing April 1, 2006 and StarTek Canada has the option to extend the lease term for two
additional periods of three years each under the same terms and conditions as the original lease
except that the base rent will be adjusted to approximately $139 thousand Canadian plus taxes and
other fees.
Also on December 29, 2005, StarTek Canada entered into a facility lease agreement with Agers
Holdings, Ltd. (Agers Holdings), to lease approximately 41,000 square feet of space in Hawkesbury,
Ontario, Canada for base fixed rent of approximately $277 thousand Canadian plus taxes and other
fees of $84 thousand Canadian per year, payable in equal monthly installments. The lease commences
on April 1, 2006, for a term of 6 years. StarTek Canada has the option to extend the lease term
for two additional periods of three years each under the same terms and conditions as the original
lease except that the base rent will be adjusted to approximately $185 thousand Canadian.
StarTek will use the leased premises under both new leases as call centers to provide business
process management services.
Accelerated Vesting of Stock Options
The Board of Directors of StarTek, Inc. (the “Board of Directors”) has approved the amendment of
certain options outstanding under the StarTek, Inc. Stock Option Plan wherein all options with an
exercise price of $21.80 and above were accelerated and vested immediately, effective December 30,
2005. This action resulted in accelerating the vesting on 143,860 previously unvested employee
stock options with a weighted average exercise price of $28.92 per share. Of the 143,860 options
that were accelerated on December 30, 2005, 112,500 options with a weighted average exercise price
of $28.34 per share were held by executive officers of StarTek, Inc. The purpose of this action
was to eliminate future compensation expense that StarTek, Inc. would otherwise have recognized
upon implementation of Statement of Financial Accounting Standards Number 123R (SFAS 123R),
Share-Based Payment, which would require the company to expense the fair value of employee stock
options over the period during which employees are required to provide services in exchange for
equity instruments. The Board of Directors believe that it is in the best interest of shareholders
to minimize future compensation expense associated with stock options upon the adoption of SFAS
123R.
ITEM 9.01 Financial Statements and Exhibits
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10.63
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Facility lease agreement between StarTek Canada Services, Ltd. and The Corporation of the
City of Thunder Bay |
10.64
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Facility lease agreement between StarTek Canada Services, Ltd. and Agers Holdings, Ltd. |