Filed by Bowne Pure Compliance



 




EXHIBIT








2007 SALES COMMISSION PLAN




1.0 PURPOSE





1.1 The StarTek Sales Commission Plan (herein referred to as “the Plan”) is written
to describe the manner in which Participants will be eligible and paid for commission
compensation.



2.0 OBJECTIVES





2.1 The Plan is designed to support the following objective:




Generation of revenue at acceptable Customer Margin targets from new clients and from
new programs with current clients.




2.2 Such programs must be defined by an SOW or an amendment to an SOW, be signed by
StarTek and the client during the Plan Period, and generate new revenue for StarTek.



3.0 PLAN EFFECTIVE DATE





3.1 The Plan will be effective January 1, 2007 to December 31, 2007 or until terminated
by StarTek (the “Plan Period”). StarTek reserves the right, in its sole discretion, to
terminate the Plan at any time.



4.0 ELIGIBILITY





4.1 Eligible Participants include:




	 	•	 	Director, National Sales
	 
	 	•	 	Director, Client Business Development
	 
	 	•	 	Vice President, Client Development
	 
	 	•	 	Senior Vice President, Sales & Marketing
	 
	 	•	 	Operations personnel designated by the CEO in writing as Participants in the Plan.




 


 









 





5.0 COMMISSION PAYMENTS





5.1 The Plan rewards Participants by way of commission payments for building revenue at
acceptable margins. Commissions will be calculated monthly. Payment will be due in the
month following the month in which StarTek invoices its client for the revenue on which
the commission is based.




5.2 In the event two or more Participants are otherwise eligible for a commission under
this Plan for a particular program, the commission will be split among them in the
manner determined by the CEO, in consultation with the COO and/or CFO as appropriate, at
the time the requisite SOW or amendment is signed.




5.3 Commissions are calculated monthly during the Plan Period for each qualifying SOW or
amendment to an SOW for which the Participant is responsible (each being a “Qualifying
SOW”). To be a Qualifying SOW, such SOW or amendment must:




	 	•	 	Be signed by both StarTek and its client during the Plan Period,
	 
	 	•	 	Be substantially the result of the Participant’s efforts, and
	 
	 	•	 	Be a source of new revenue for StarTek.






Note: Incremental revenue for a service that StarTek already substantially provides to
the client is not “new revenue.”




5.4 The commission due for a Qualifying SOW for any given month will be calculated by:



Multiplying the net revenue recognized by StarTek for that month from that
Qualifying SOW (its “NetRev”)



Times the Participant’s applicable target incentive percentage (the
“TIP”) for that month for that Qualifying SOW.




The TIP will depend on the customer margin of that Qualifying SOW and the age of that
Qualifying SOW, according to the description in the “Target Incentive Eligibility” for
the Participant’s particular position. For example, if the customer margin of a
particular Qualifying SOW is Y% and closing of that Qualifying SOW occurred:




(a) Within the preceding 12 months, then the TIP for that Qualifying SOW for that
month would be the percentage listed in the column labeled “1st Year
Following Closure of Qualifying SOW” for the row labeled “X% — Z%” under the
heading “Customer Margin % Per Qualifying SOW”;




(b) Within the preceding 13 to 24 months, then the TIP for that Qualifying SOW for
that month would be the percentage listed in the column labeled “2nd
Year Following Closure of Qualifying SOW” for the same row; and


 


 









 






(c) More than 24 months earlier, then the TIP for that Qualifying SOW for that
month would be zero.




NetRev for a Qualifying SOW will be the net revenue recognized by StarTek from its
client for that Qualifying SOW for the month in question, and will include all necessary
and proper deductions for discounts, rebates, returns, credits, penalties, refunds,
adjustments for disputed or compromised payments, and the like that are allocable for
that month to that Qualifying SOW (a “Qualifying Adjustment”).




StarTek will calculate NetRev and customer margin for a Qualifying SOW using procedures
that it applies consistently for the Plan. The determination of NetRev and customer
margin by StarTek, as well as the determination, calculation, and apportionment of any
amounts necessary for determining NetRev and customer margin, shall be final,
conclusive, and binding on the Participant.




5.5 Components of Commission Payment Calculation:




Graphically, the calculation of a commission for a given month for a particular
Qualifying SOW, say the “ith” Qualifying SOW, is shown as follows:



Commi = NetRevi x TIPi





Where “Commi” represents that part of a Participant’s commission for the
month that is based on the revenue and customer margin of the ith Qualifying
SOW. The total commission for the month, then, is the sum of all of the commissions
calculated for each of the Qualifying SOWs.




5.6 If the net revenue recognized by StarTek for a particular Qualifying SOW during a
given month is not known in time to calculate a commission for payment during the
subsequent month, then StarTek will pay the Participant an advance against that
commission. The amount of the advance will be an estimate of the commission based on
accrued revenue for that Qualifying SOW for that month, and will be subject to true up
when the recognized revenue is known.




5.7 Should the revenue on which a commission is paid (an “earlier commission”) become
subject to a Qualifying Adjustment, StarTek will recalculate the earlier commission. If
the recalculated commission is greater than the earlier commission, StarTek will pay the
difference to the Participant at the time of the next, scheduled commission payment. If
the recalculated commission is less than the earlier commission, then the Participant
will refund the difference to StarTek. StarTek may deduct such refund from commissions
that otherwise become due to the Participant in the future. For this purpose, StarTek
may deduct up to one-half of the commissions otherwise due to the Participant each month
until the difference has been refunded in full. This process may be repeated if a
further Qualifying Adjustment occurs, such as but not limited to, the situation in which
StarTek subsequently recognizes revenue on a Qualifying SOW that had previously not been
recognized due to an earlier Qualifying Adjustment.


 


 









 





6.0. ADDITIONAL PLAN INFORMATION





6.1 Commission compensation under this Plan is fully taxable as earned income, and
subject to normal withholding guidelines and applicable taxes and practices.




6.2 Commission compensation under this Plan will be calculated by StarTek in accordance
with established Plan criteria and forwarded for approval to the Executive Vice
President & Chief Financial Officer and the President & Chief Executive Officer. Either
of these officers can designate any Senior Vice President who is not a Participant in
this Plan to act as an approver in their absence.




6.3 If a Participant’s employment with StarTek terminates, commission compensation
earned by that Participant through the end of the month prior to the date of termination
will be calculated and paid promptly when commission amounts are determinable. A
Participant’s right to earn commission compensation under this Plan ceases immediately
upon termination of employment with StarTek, regardless of the reason for such
termination.




6.4 Any recoverable draws or advances of any kind given to a Participant outside of this
Plan will be deducted from the Participant’s first commission payment and will continue
to be deducted from future commission payments until such draws or advances are repaid
in full to StarTek.




6.5 If a dispute arises about who is responsible for a given contract, such
responsibility will be determined by the Chief Executive Officer in his sole discretion.
If it becomes necessary to split or share commission payments or if unique sales
opportunities arise, then determination and authorization for commissions, if any, will
be made by the Chief Financial Officer and the Chief Executive Officer.




6.6 If an extraordinary event contributes to securing a Qualifying SOW or generating an
unexpected amount of revenue recognized on a Qualifying SOW, and as a result, the size
of commission arising under this Plan would be uncommon or dramatic when considering the
contribution of the Participant to securing that Qualifying SOW or generating such
revenue, then such commission shall be subject to review and adjustment by the Chief
Financial Officer, the Chief Executive Officer, and the Chief Operating Officer. Such
adjustment, if applied, will be based in large measure on the actual role of the
involved Participant and/or the unusual nature of the event causing the situation.




6.7 If the invoiced revenue on which a commission is paid proves to be materially
different from the revenue StarTek actually recognizes, then at StarTek’s option:




(a) The relevant commissions shall be recalculated, based on the revenue StarTek
actually recognized,




(b) The Participant will promptly refund to StarTek the difference between the
commissions
previously paid and the recalculated commissions.


 


 









 






The cause for such a material difference may be, by way of example and not limitation,
disputed payments, a client withholding payment, or a client being more than 120 days
late in payment. If StarTek subsequently receives, within the next 12 months, the
disputed, withheld, late, or other payment, then StarTek shall promptly restore to the
Participant the amount of the “clawed back” commission attributable to the subsequently
recovered revenue.




6.8 StarTek reserves the right, in its sole discretion, to modify, suspend, or eliminate
this Plan at any time with or without notice.




6.9 StarTek reserves the right to decide, in its absolute discretion, at any time and
from time to time:




(a) Whether to enter, renew, amend, extend, or terminate any contract, proposed
contract, and/or contract negotiation, with any client or prospective client, as
well as the terms and conditions under which it will do so, and




(b) To whom it will assign responsibility for any such contract, proposed
contract, and/or contract negotiation, which assignment StarTek may change at any
time and from time to time, in its discretion.




If either 6.9(a) or 6.9(b) above occurs, then such decision may affect the amount of a
Participant’s commissions under this Plan. .




6.10 Employment with StarTek is “at will” and may be terminated at any time by either
the Participant or StarTek with or without notice and for any or no reason, unless the
Participant has entered into a written employment agreement with StarTek modifying the
“at will” employment relationship. This Plan is not intended to alter the “at will”
employment relationship.




6.11 Neither this Plan nor participation in it shall:




(a) Affect the “at-will” nature of each Participant’s employment with StarTek,




(b) Provide any assurance of continued employment with StarTek or participation in
the Plan, nor




(c) Provide any assurance that this Plan or another commission plan will be offered
in the future to any Participant.




6.12 StarTek’s SVP-HR shall be responsible for the administration of this Plan and
StarTek’s CEO shall have sole authority and discretion to interpret its provisions and
applicability.



7.0 RELATED FORM





7.1 Appendix A: Target Incentive Eligibility per Position


 


 









 





APPROVALS:




  
Susan L. Morse, SVP Human Resources



  
A. Laurence Jones, Chief Executive Officer



	 	 	 
	 
	 	 
	 

	 	 
	[Employee Name]

	 	Date