EXHIBIT 10.4
StarTek, Inc.
2008 Equity Incentive Plan
Incentive Stock Option Agreement

     
Name of Participant:
   
 
   
Number of Shares Covered:
  Date of Grant:
 
   
Exercise Price Per Share:
  Expiration Date:
 
   
Exercise Schedule (Cumulative):
   
 
   
Date(s) of
Exercisability
  Number of Shares as to Which
Option Becomes Exercisable
 
   
 
   

This is an Incentive Stock Option Agreement (the “Agreement”), effective as of
the Date of Grant specified above, between StarTek, Inc., a Delaware corporation
(the “Company”), and you, the Participant identified above.
Background*
A. The Company maintains the StarTek, Inc. 2008 Equity Incentive Plan (the
“Plan”).
B. Under the Plan, the Committee appointed by the Board administers the Plan and
has the authority to determine the Awards to be granted under the Plan.
C. The Committee has determined that you are eligible to receive an Award under
the Plan in the form of an Incentive Stock Option.
 

      *  
Any capitalized term used in this Agreement shall have the meaning set forth in
this Agreement (including in the table at the beginning of this Agreement) or,
if not defined in this Agreement, set forth in the Plan as it currently exists
or as it is amended in the future.

 

 

--------------------------------------------------------------------------------

 

D. The Company hereby grants such an option to you subject to the following
terms and conditions:
Terms and Conditions
1. Grant. You are granted an option to purchase the number of Shares specified
in the table at the beginning of this Agreement (the “Option”).
2. Exercise Price. The purchase price to you of each Share subject to the Option
will be the Exercise Price specified in the table at the beginning of this
Agreement.
3. Incentive Stock Option. The Option is intended to be an “incentive stock
option” within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”), and shall not be an incentive stock option to the
extent it does not so qualify. The terms of this Agreement and the Plan shall be
interpreted and administered so as to satisfy the requirements of the Code.
4. Exercise Schedule. The Option will vest and become exercisable as to the
number of Shares and on the dates specified in the Exercise Schedule in the
table at the beginning of this Agreement. The Exercise Schedule is cumulative,
meaning that to the extent the Option has not already been exercised and has not
expired, terminated or been cancelled, you (or the person otherwise entitled to
exercise the Option as provided herein) may exercise it and purchase all or any
portion of the Shares that may then be purchased under the Exercise Schedule.
The Option may also be exercised on an accelerated basis (notwithstanding the
Exercise Schedule) as and to the extent described in Section 8 of this
Agreement, if it has not expired prior thereto.
5. Expiration. The Option will expire at 5:00 p.m. Mountain Time on the earliest
of:
(a) The Expiration Date specified in the table at the beginning of this
Agreement (which date shall not be later than ten years after the Date of
Grant);
(b) The last day of the period after the termination of your Service during
which the Option can be exercised (as specified in Section 7 of this Agreement);
(c) The date your Service is terminated for Cause; or
(d) The date (if any) the Option is cancelled pursuant to Section 14 of the
Plan.
No one may exercise the Option, in whole or in part, after it has expired,
notwithstanding any other provision of this Agreement.
6. Procedure to Exercise Option.
(a) Notice of Exercise. The Option may be exercised by delivering written or
electronic notice of exercise, in a form prescribed by the Committee, to the
Company’s Secretary at the Company’s headquarters, or to the Company’s outside
Plan administrator if one has been appointed. The notice shall state the number
of Shares to be purchased, and shall be signed (or authenticated if in
electronic form) by the person exercising the Option. If you are not the person
exercising the Option, the person exercising must also submit appropriate proof
of his/her right to exercise the Option.

 

2

--------------------------------------------------------------------------------

 

(b) Tender of Payment. Upon giving notice of any exercise hereunder, you shall
provide for payment of the purchase price of the Shares being purchased through
one or a combination of the following methods:
(1) Cash (including check, bank draft or money order);
(2) To the extent permitted by law, through a broker-assisted cashless exercise
in which you irrevocably instruct a broker to deliver to the Company proceeds of
a sale of all or a portion of the Shares to be issued pursuant to the exercise
in payment of the purchase price of such Shares;
(3) By delivery to the Company of unencumbered Shares having an aggregate Fair
Market Value on the date of exercise equal to the purchase price of such Shares
(or in lieu of such delivery, by tender through attestation of such Shares in
accordance with such procedures as the Committee may permit); or
(4) By authorizing the Company to retain, from the total number of Shares as to
which the Option is exercised, that number of Shares having an aggregate Fair
Market Value on the date of exercise equal to the purchase price for the total
number of Shares as to which the Option is exercised.
Notwithstanding the foregoing, you shall not be permitted to pay any portion of
the purchase price with Shares, or by authorizing the Company to retain Shares
upon exercise of the Option, if the Committee, in its sole discretion,
determines that payment in such manner is undesirable.
(c) Delivery of Shares. Subject to Section 22(c) of the Plan, as soon as
practicable after the Company receives the notice and payment provided for
above, it shall deliver to the person exercising the Option, in the name of such
person, the Shares being purchased (net of the number of Shares sold or
withheld, if any, to pay the exercise price), as evidenced by issuance of a
stock certificate or certificates, electronic delivery of such Shares to a
brokerage account designated by such person, or book-entry registration of such
Shares with the Company’s transfer agent. The Company shall pay any original
issue or transfer taxes with respect to the issue or transfer of the Shares and
all fees and expenses incurred by it in connection therewith. All Shares so
issued shall be fully paid and nonassessable.
7. Continuous Service Requirement. Except as otherwise provided in this
Section 7, the Option may be exercised only if you have been continuously
employed by the Company or a Parent or Subsidiary thereof since the Date of
Grant and continue to be employed on the exercise date. However, the Option may
be exercised after termination of your employment (but in no event after the
expiration of the Option) in the following situations:

 

3

--------------------------------------------------------------------------------

 

(a) The Option may be exercised for six months after termination of your
employment because of death or Disability, but only to the extent that it was
exercisable immediately prior to the termination of employment.
(b) The Option may be exercised for three months after termination of your
employment for any reason other than death, Disability or Cause, but only to the
extent that it was exercisable immediately prior to the termination of
employment.
(c) If your employment terminates after a declaration made pursuant to
Section 14 of the Plan in connection with a Corporate Transaction, the Option
may be exercised at any time permitted by such declaration.
8. Acceleration of Vesting.
(a) Change in Control. If a Change in Control shall occur, then this Option
shall immediately become exercisable with respect to 50% of the Shares as to
which such Option was not yet exercisable immediately prior to the Change in
Control. The number of Shares scheduled to become vested and exercisable on each
date specified in the Exercise Schedule after the date of the Change in Control
will be correspondingly reduced by 50%.
(b) Termination After Change in Control. If, in connection with a Change in
Control, this Option is either (i) continued in effect by the Company, or
(ii) assumed or replaced by the surviving or successor corporation or its
Parent, and if within two years after the Change in Control you experience an
involuntary termination of Service for reasons other than Cause, then this
Option shall immediately become exercisable in full and shall remain exercisable
for three months (but not beyond the Expiration Date).
(c) Corporate Transaction. In the event of a Corporate Transaction, at the time
of any declaration pursuant to Section 14(b) of the Plan, this Option, if not
already exercised in full or otherwise terminated, expired or cancelled, shall
become immediately exercisable in full and shall remain exercisable during the
period preceding the time of cancellation of the Option pursuant to such
declaration.
9. Limitation on Transfer. During your lifetime, only you or your guardian or
legal representative may exercise the Option. You may not assign or transfer the
Option other than by will or the laws of descent and distribution.
10. No Stockholder Rights Before Exercise. No person shall have any rights as a
stockholder with respect to any Shares subject to the Option until the Shares
actually are issued to such person upon exercise of the Option.
11. Changes in Capitalization. If an “equity restructuring” (as defined in
Section 18 of the Plan) occurs that causes the per share value of the Shares to
change, the Committee shall make such equitable adjustments to the Option as are
contemplated by Section 18 of the Plan in order to avoid dilution or enlargement
of your rights hereunder. The Committee may make such equitable adjustments to
this Option as and to the extent provided in Section 18 of the Plan in
connection with other changes in the Company’s capitalization contemplated by
Section 18 of the Plan.

 

4

--------------------------------------------------------------------------------

 

12. Tax Matters. If any Shares received upon the exercise of this Option are
sold within two years from the Date of Grant or within one year from the date of
exercise of the Option, you shall immediately notify the Company in writing of
such sale and the amount you realized as a result of the sale. To the extent any
portion of this Option does not qualify as an incentive stock option, delivery
of Shares upon exercise of this Option shall be subject to payment of any
required withholding taxes and you shall be required to pay to the Company, in
accordance with the provisions of Section 16 of the Plan, an amount equal to the
amount of any required tax withholdings.
13. Interpretation of This Agreement. All decisions and interpretations made by
the Committee with regard to any question arising hereunder or under the Plan
shall be binding and conclusive upon you and the Company. If there is any
inconsistency between the provisions of this Agreement and the Plan, the
provisions of the Plan shall govern.
14. Discontinuance of Service. Neither this Agreement nor the Option shall
confer on you any right with respect to continued Service with the Company or
any of its Affiliates, nor interfere in any way with the right of the Company or
any Affiliate to terminate such Service. Nothing in this Agreement shall be
construed as creating an employment contract for any specified term between you
and the Company or any Affiliate.
15. Option Subject to Plan. The Option evidenced by this Agreement is granted
pursuant to the Plan, the terms of which are hereby made a part of this
Agreement. This Agreement shall in all respects be interpreted in accordance
with the terms of the Plan. If any terms of this Agreement conflict with the
terms of the Plan, the terms of the Plan shall control, except as the Plan
specifically provides otherwise.
16. Obligation to Reserve Sufficient Shares. The Company shall at all times
during the term of the Option reserve and keep available a sufficient number of
Shares to satisfy this Agreement.
17. Binding Effect. This Agreement shall be binding in all respects on your
heirs, representatives, successors and assigns.
18. Choice of Law. This Agreement is entered into under the laws of the State of
Delaware and shall be construed and interpreted thereunder (without regard to
its conflict of law principles).

 

5

--------------------------------------------------------------------------------

 

You and the Company have executed this Agreement as of the  _____  day of
 _____  , 20_.

              PARTICIPANT
 
             
 
            STARTEK, INC.
 
       
 
  By    
 
       
 
  Its    
 
       

 

6