UNITED STATES
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):
July 3, 2018
StarTek, Inc.
(Exact name of registrant as specified in 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)
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(Commission File Number)
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(IRS Employer
Identification No.)
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8200 E. Maplewood Ave., Suite 100
Greenwood Village, CO 80111
(Address of Principal Executive Offices) (Zip Code)
(303) 262-4500
(Registrant’s telephone number, including area code)
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)
x
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01.
Entry into a Material Definitive Agreement.
Amendment to Transaction Agreement
On July 3, 2018, StarTek, Inc., a Delaware corporation (the “
Company
”), entered into an amendment (the “
Amendment
”) to the Transaction Agreement dated as of March 14, 2018 (as may be further amended from time to time, the “
Transaction Agreement
”) between the Company, CSP Alpha Midco Pte Ltd, a Singapore private limited company (“
Aegis
”), and CSP Alpha Holdings Parent Pte Ltd, a Singapore private limited company (the “
Aegis Stockholder
”). The Transaction Agreement remains unchanged with respect to the Company’s acquisition of all of the outstanding capital stock of Aegis from the Aegis Stockholder in exchange for the issuance of 20,600,000 shares of the Company’s common stock. However, pursuant to the Amendment, the number of shares of the Company's common stock that the Aegis Stockholder will purchase pursuant to the Transaction Agreement has been reduced from 833,333 to 166,667 and the amount of the total cash payment to the Company has been reduced from $10,000,000 to $2,000,000, which continues to represent a purchase price of $12 per share of common stock. The number of shares of the Company’s common stock issued pursuant to the Transaction Agreement and the amount of the additional cash payment remain subject to adjustment as set forth in the Transaction Agreement, including based on the relative net debt of the parties as of the closing. The Amendment also reduces the Aegis net debt target from $150,000,000 to $145,000,000.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 2.1 hereto and which is incorporated herein by reference.
Item 8.01. Other Events.
In connection with the Amendment, the Company’s board of directors has rescheduled the Company’s annual meeting of stockholders. The annual meeting of stockholders, which was originally scheduled for Monday, July 9, 2018, will now be held on Thursday, July 19, 2018 at 8:00 a.m. Mountain time at the offices of STARTEK: 8200 East Maplewood Ave., Suite 100, Greenwood Village, CO 80111.
Item 9.01. Financial Statements and Exhibits.
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Exhibit Number
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Exhibit Description
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Additional Information about the Transactions and Where to Find It
This communication is being made in respect of the transactions between the Company, Aegis, and the Aegis Stockholder and the related issuance of the common stock described herein. The Company has filed a definitive proxy statement with the Securities and Exchange Commission (the “
SEC
”) and may file other documents with the SEC regarding the transactions, including supplemental disclosures relating to the Amendment. The definitive proxy statement includes proposals relating to the issuance of common stock to the Aegis Stockholder and amendments of the Company’s certificate of incorporation relating to the transaction. This communication does not constitute a solicitation of any vote or proxy from any of the Company’s stockholders. Investors are urged to read the definitive proxy statement and any other relevant documents or materials filed or to be filed with the SEC carefully and in their entirety, because they contain or will contain important information about the transactions between the Company, Aegis and the Aegis Stockholder, the issuance of common stock and the proposals to be submitted to the Company’s stockholders. The proxy statement and other documents or materials will be available free of charge at the SEC’s website, www.sec.gov. The proxy statement and other documents or materials may also be obtained free of charge at the Investor Relations section of the Company’s website, www.startek.com, by directing a request to StarTek Investor Relations, 8200 E. Maplewood Ave., Suite 100, Greenwood Village, Colorado 80111 or at tel: (303) 262-4500 or email:
investor@startek.com
or by contacting Saratoga Proxy Consulting, LLC, the Company’s proxy solicitor.
Participants in the Solicitation
The Company and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the Company’s stockholders in connection with the proposed transaction.
Information about the Company’s directors and executive officers is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 16, 2018, and in other documents filed with the SEC by the Company and its officers and directors.
Cautionary Note on Forward-Looking Statements
Any statements in this Current Report on Form 8-K about future expectations, plans and prospects for the Company, including statements about the expected timing, consummation and benefits of the strategic transactions described herein, future management of the Company, approval of the transactions by the Company’s stockholders, the ability of the parties to satisfy other closing conditions, the Company’s strategy and future operations and other statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These risks and uncertainties include, but are not limited to: failure to obtain the required vote of the Company’s stockholders; the timing to consummate the proposed transaction; the risk that a condition to closing of the proposed transaction may not be satisfied or that the closing of the proposed transaction might otherwise not occur; the risk that a regulatory approval that may be required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated; the diversion of management time on transaction-related issues; and risk that the transaction and its announcement could have an adverse effect on the Company’s ability to retain customers and retain and hire key personnel. Additional information concerning these and other risk factors can be found in the Company’s filings with the SEC and available through the SEC’s Electronic Data Gathering and Analysis Retrieval system at http://www.sec.gov, including the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The foregoing list of important factors is not exclusive. The Company’s forward-looking statements are based on assumptions that the Company believes to be reasonable but that may not prove to be accurate. The Company assumes no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as may be required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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STARTEK, INC.
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Date: July 5, 2018
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By:
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/s/ Don Norsworthy
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Don Norsworthy
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Senior Vice President, Chief Financial Officer and Treasurer
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Exhibit 2.1
FIRST AMENDMENT TO TRANSACTION AGREEMENT
This FIRST AMENDMENT TO TRANSACTION AGREEMENT, dated as of July 3, 2018 (this “
Amendment
”), is made by and among StarTek, Inc., a Delaware corporation (“
Public Company
”), CSP Alpha Midco Pte Ltd, a Singapore private limited company (“
Private Company
”) and CSP Alpha Holdings Parent Pte Ltd, a Singapore private limited company (the “
Stockholder
”).
W I T N E S S E T H:
WHEREAS, Public Company, Private Company and the Stockholder are parties to the Transaction Agreement, dated as of March 14, 2018, (the “
Transaction Agreement
”); and
WHEREAS, pursuant to and in accordance with Sections 8.4 and 8.6 of the Transaction Agreement, the parties hereto desire to amend the Transaction Agreement, as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows (all capitalized terms used but not defined herein shall have the meanings specified in the Transaction Agreement):
Section 1.
Amendments to the Purchase Agreement
.
(a)
Clause (iv) of the second “WHEREAS” clause is hereby amended and restated to read in its entirety as follows:
“in addition to the Sale (as defined herein) and Issuance (as defined herein), the Stockholder shall purchase, for two million US dollars (US$2,000,000) (as may be adjusted pursuant to
Section 1.6(c)
and further adjusted for stock splits, consolidation and other similar corporate events, the “
Additional Cash Payment
”), additional shares of Public Company Common Stock at a price of $12.00 per share of Public Company Common Stock;”
(b)
Section 1.3 of the Transaction Agreement is hereby amended and restated to read in its entirety as follows:
“1.3
Additional Cash Payment and Additional Shares
. In addition to the Sale and Issuance, at the Closing, the Stockholder shall purchase from Public Company for the Additional Cash Payment, and the Public Company shall issue and deliver to the Stockholder or its designee, one hundred and sixty-six thousand, six hundred and sixty-seven (166,667) shares of Public Company Common Stock (as may be adjusted pursuant to
Section 1.6(c)
and further adjusted for stock splits, consolidation and other similar corporate events, the “
Additional Shares
”).”
(c)
The first sentence of Section 1.4 of the Transaction Agreement is hereby amended and restated to read in its entirety as follows:
“Subject to the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in
Article VII
, the closing of the Transactions (the “
Closing
”) will take place on July 20, 2018 at the offices of Jenner & Block LLP, 353 N. Clark St., Chicago, Illinois 60654, unless another date, place or time is agreed to in writing by Public Company and Private Company.”
(d)
Section 1.6(c) of the Transaction Agreement is hereby amended and restated to read in its entirety as follows:
“If the Public Company Net Debt Excess less the Private Company Net Debt Excess is a positive number (the “
Positive Debt Amount
”), the Base Number of Shares shall be increased by a number of shares (rounded up or down to the nearest whole share) equal to the Positive Debt Amount
divided
by
the Public Company Common Stock Reference Price;
provided
that if, as a result of such adjustment, the Base Number of Shares would be increased by more than 866,666 shares (as may be adjusted for stock splits, consolidation and other similar corporate events) (the “
Base Number Increase Cap
”), then the parties hereto shall proceed in the following order: (i) Public Company shall use its reasonable best efforts to obtain any waiver or consent of any relevant third party to allow, without requiring any material amendment to any existing agreement with any such relevant third party, an increase in the Base Number Increase Cap to permit the full adjustment and increase to the Base Number of Shares, in which case, the adjustment to the Base Number of Shares in this
Section 1.6(c)
shall be made without the limitation of the Base Number Increase Cap; (ii) Public Company may, in its sole discretion, waive the application of the Base Number Increase Cap and issue a number of additional shares of Public Company Common Stock in respect of all or part of the Positive Debt Amount, with each share of Public Company Common Stock being valued at the Public Company Common Stock Reference Price (
provided
that such waiver shall not conflict with, or result in any violation or breach of, constitute a default, or give rise to the vesting of any right by any third party or the acceleration of any material benefit for any third party, pursuant to any of the terms, conditions or provisions of any contract or other agreement, instrument or obligation of Public Company); and (iii) if such consent or waiver referenced in
sub-clause (i)
is not obtained on or prior to the Closing Date contemplated by
Section 1.4
and the waiver contemplated by
sub-clause (ii)
, if made, does not result in the issuance of an additional number of shares of Public Company Common Stock equal to the Positive Debt Amount
divided
by
the Public Company Common Stock Reference Price, then (x) the Additional Cash Payment shall be reduced to an amount (but not less than zero) equal to two million US dollars (US$2,000,000)
minus
the difference between the Positive Debt Amount and the Cap Value, and the number of Additional Shares shall equal the Additional Cash Payment as so reduced
divided
by
the Public Company Common Stock Reference Price, and (y) the Base Number of Shares shall be adjusted to equal 21,466,666 (as may be adjusted for stock splits, consolidation and other similar corporate events)
plus
the number of shares obtained by dividing the Adjusted Debt Amount by the Public Company Common Stock Reference Price (with any fractional shares rounded up or down to the nearest whole share);
provided
,
however
, that, for the avoidance of doubt, the total number of shares of Public Company Common Stock to be issued to the Stockholder or its designee at Closing shall not exceed 21,633,333 (as may be adjusted for stock splits, consolidation and other similar corporate events). “
Public Company Common Stock Reference Price
” shall mean $12.00 per share of Public Company Common Stock, as may be adjusted for stock splits, consolidation and other similar corporate events. “
Cap Value
” shall be an amount equal to ten million three hundred ninety-nine thousand, nine hundred ninety-two US dollars (US$10,399,992), which, for the avoidance of doubt, shall equal the product of the Base Number Increase Cap and the Public Company Common Stock Reference Price (not
accounting for stock splits, consolidation and other similar corporate events);
provided
,
however
, that if Public Company waives the application of the Base Number Increase Cap pursuant to
sub-clause (ii)
, the Cap Value shall be increased to equal the Public Company Common Stock Reference Price
multiplied
by
the number of shares of Public Company Common Stock to be issued pursuant to
sub-clause (ii)
. “
Adjusted Debt Amount
” means an amount equal to the Positive Debt Amount
minus
the Cap Value;
provided
,
however
, that if the amount so calculated exceeds two million US dollars (US$2,000,000), then the Adjusted Debt Amount shall be deemed to equal two million US dollars (US$2,000,000).”
(e)
Section 1.6(e) of the Transaction Agreement is hereby amended and restated to read in its entirety as follows:
“[Reserved].”
(f)
Section 1.6(f)(v) of the Transaction Agreement is hereby amended and restated to read in its entirety as follows:
““
Private Company Net Debt Target
” shall mean an amount equal to one hundred forty-five million US dollars (US$145,000,000)
plus
the Net Debt Threshold Amount.”
Section 2.
Effectiveness of Amendment
. Upon the execution and delivery hereof, the Transaction Agreement shall thereupon be deemed to be amended and/or restated as hereinabove set forth as fully and with the same effect as if the amendments and/or restatements made hereby were originally set forth in the Transaction Agreement, and this Amendment and the Transaction Agreement shall henceforth respectively be read, taken and construed as one and the same instrument, but such amendments and/or restatements shall not operate so as to render invalid or improper any action heretofore taken under the Transaction Agreement.
Section 3.
General Provisions
.
(a)
Miscellaneous
. This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto. This Amendment may be executed by facsimile signature. The terms of Article VII of the Transaction Agreement are incorporated herein by reference and shall apply to the terms and provisions of this Amendment and the parties hereto,
mutatis mutandis
. The Transaction Agreement (as amended by this Amendment) constitutes the entire agreement among the parties hereto and supersedes any prior understandings, agreements or representations by or among the parties hereto, or any of them, written or oral, with respect to the subject matter hereof, and the parties hereto specifically disclaim reliance on any such prior understandings, agreements or representations to the extent not embodied in the Transaction Agreement. Notwithstanding the foregoing, the Confidentiality Agreement shall remain in effect in accordance with its terms.
(b)
Transaction Agreement Ratification
. Except as specifically provided for in this Amendment, this Amendment shall not by implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Transaction Agreement, all of which shall continue to be in full force and effect. Unless the context otherwise requires, after the execution and delivery hereof, any reference to the
Transaction Agreement, including “hereof,” “hereunder,” and similar terms shall mean the Transaction Agreement as amended hereby.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed as of the date first written above.
PUBLIC COMPANY:
STARTEK, INC.
By: /s/ Chad Carlson
Name: Chad Carlson
Title: President and Chief Executive Officer
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed as of the date first written above.
PRIVATE COMPANY:
CSP ALPHA MIDCO PTE LTD
By: /s/ Sanjay Chakrabarty
Name: Sanjay Chakrabarty
Title: Director
By: /s/ Mukesh Sharda
Name: Mukesh Sharda
Title: Director
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed as of the date first written above.
STOCKHOLDER:
CSP ALPHA HOLDINGS PARENT PTE LTD
By: /s/ Sanjay Chakrabarty
Name: Sanjay Chakrabarty
Title: Director
By: /s/ Mukesh Sharda
Name: Mukesh Sharda
Title: Director