##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                      to
 Commission file number 1-12793
 
 StarTek, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    84-1370538(State or other jurisdiction of
    
    (I.R.S. employerincorporation or organization)
    
    Identification No.)44 Cook Street, 4thFloor
    
    80206Denver, Colorado
    
    (Zip code)(Address of principal executive offices)
 (303) 262-4500  (Registrants telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, $.01 par value
    
    New York Stock Exchange, Inc.
 Securities registered pursuant to Section 12(g) of the Act:
None
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



STARTEK, INC. AND SUBSIDIARIES
 FORM 10-Q
 INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited):
    
    
    4Condensed Consolidated Statements of Operations for the
three months ended March 31, 2008 and 2007
    
    
    4Condensed Consolidated Balance Sheets as of March 31, 2008
and December 31, 2007
    
    
    5Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 2008 and 2007
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 4. Controls and Procedures
    
    
    20PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    21Item 1a. Risk Factors
    
    
    21Item 6. Exhibits
    
    
    22SIGNATURES
    
    
    23Exhibit 10.5Exhibit 10.6Exhibit 10.7Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




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##### Table of Contents



CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
  
    
    certain statements, including possible or assumed future results of operations, in
Managements Discussion and Analysis of Financial Condition and Results of Operations;
    
    any statements contained herein regarding the prospects for our business or any of
our services;
    
    any statements preceded by, followed by or that include the words may, will,
should, seeks, believes, expects, anticipates, intends, continue,
estimate, plans, future, targets, predicts, budgeted, projections,
outlooks, attempts, is scheduled, or similar expressions; and
    
    other statements contained herein regarding matters that are not historical facts.
   3




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##### Table of Contents



Part I. Financial Information
 
 ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
 STARTEK, INC. AND SUBSIDIARIES
 
  
 Three Months Ended March 31,2008
    
    
    2007Revenue
    
    $
    64,745
    
    
    $
    57,647Cost of services
    
    
    55,162
    
    
    
    48,737Gross profit
    
    
    9,583
    
    
    
    8,910Selling, general and administrative expenses
    
    
    10,090
    
    
    
    9,392Restructuring charges
    
    
    108
    
    
    
    Operating loss
    
    
    (615
    )
    
    
    (482
    )Net interest and other income
    
    
    310
    
    
    
    188Loss before income taxes
    
    
    (305
    )
    
    
    (294
    )Income tax expense (benefit)
    
    
    26
    
    
    
    (105
    )Net loss
    
    $
    (331
    )
    
    $
    (189
    )Net loss per share:Basic
    
    $
    (0.02
    )
    
    $
    (0.01
    )Diluted
    
    $
    (0.02
    )
    
    $
    (0.01
    )
 See notes to condensed consolidated financial statements.
  4




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STARTEK, INC. AND SUBSIDIARIES
 
 
 As ofMarch 31, 2008
    
    
    December 31, 2007(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    15,349
    
    
    $
    23,026Investments
    
    
    16,667
    
    
    
    16,349Trade accounts receivable, less allowance for
doubtful accounts of $0 and $0, respectively
    
    
    56,497
    
    
    
    48,887Income tax receivable
    
    
    1,609
    
    
    
    2,502Short-term deferred tax assets
    
    
    120
    
    
    
    165Prepaid expenses and other current assets
    
    
    1,739
    
    
    
    2,243Total current assets
    
    
    91,981
    
    
    
    93,172Property, plant and equipment, net
    
    
    56,999
    
    
    
    57,532Long-term deferred income tax assets
    
    
    3,865
    
    
    
    3,686Other assets
    
    
    966
    
    
    
    1,068Total assets
    
    $
    153,811
    
    
    $
    155,458LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    4,472
    
    
    $
    5,908Accrued liabilities:Accrued payroll
    
    
    7,745
    
    
    
    7,902Accrued compensated absences
    
    
    5,192
    
    
    
    5,072Other accrued liabilities
    
    
    1,836
    
    
    
    1,494Amount outstanding on line of credit
    
    
    1,672
    
    
    
    Current portion of long-term debt
    
    
    3,586
    
    
    
    3,975Short-term deferred income tax liabilities
    
    
    579
    
    
    
    1,274Other current liabilities
    
    
    773
    
    
    
    1,358Total current liabilities
    
    
    25,855
    
    
    
    26,983Long-term debt, less current portion
    
    
    6,660
    
    
    
    7,380Long-term deferred rent liability
    
    
    3,605
    
    
    
    2,731Other liabilities
    
    
    141
    
    
    
    150Total liabilities
    
    
    36,261
    
    
    
    37,244Commitments and contingenciesStockholders equity:Common stock, 32,000,000 non-convertible shares, $0.01 par value,
authorized; 14,735,791 and 14,735,791
shares issued and outstanding at March 31,
2008 and December 31, 2007, respectively
    
    
    147
    
    
    
    147Additional paid-in capital
    
    
    63,148
    
    
    
    62,776Cumulative translation adjustment
    
    
    2,180
    
    
    
    2,553Unrealized loss on investments available for sale
    
    
    (249
    )
    
    
    (29
    )Unrealized (loss) gain on derivative instruments
    
    
    (92
    )
    
    
    20Retained earnings
    
    
    52,416
    
    
    
    52,747Total stockholders equity
    
    
    117,550
    
    
    
    118,214Total liabilities and stockholders equity
    
    $
    153,811
    
    
    $
    155,458
 See notes to condensed consolidated financial statements.
  5




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STARTEK, INC. AND SUBSIDIARIES
 
 
 Three Months EndedMarch 31,2008
    
    
    2007Operating ActivitiesNet loss
    
    $
    (331
    )
    
    $
    (189
    )Adjustments to reconcile net loss to net cash (used in) provided by operating activitiesDepreciation
    
    
    4,400
    
    
    
    4,227Non-cash compensation cost
    
    
    373
    
    
    
    189Deferred income taxes
    
    
    (453
    )
    
    
    (127
    )Realized loss on investments
    
    
    
    
    
    
    1Loss on sale of assets
    
    
    16
    
    
    
    Changes in operating assets and liabilities:Trade accounts receivable, net
    
    
    (7,504
    )
    
    
    (2,681
    )Prepaid expenses and other assets
    
    
    570
    
    
    
    368Accounts payable
    
    
    (1,592
    )
    
    
    (2,283
    )Income taxes receivable, net
    
    
    899
    
    
    
    (531
    )Accrued and other liabilities
    
    
    638
    
    
    
    1,151Net cash (used in) provided by operating activities
    
    
    (2,984
    )
    
    
    125Investing ActivitiesPurchases of investments available for sale
    
    
    (5,624
    )
    
    
    (11,250
    )Proceeds from disposition of investments available for sale
    
    
    4,954
    
    
    
    1,090Purchases of property, plant and equipment
    
    
    (3,946
    )
    
    
    (2,567
    )Net cash used in investing activities
    
    
    (4,616
    )
    
    
    (12,727
    )Financing ActivitiesPrincipal payments on borrowings
    
    
    (1,308
    )
    
    
    (1,381
    )Principal payments on line of credit
    
    
    (9,290
    )
    
    
    (18,639
    )Proceeds from line of credit
    
    
    10,962
    
    
    
    18,639Principal payments on capital lease obligations
    
    
    (11
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    353
    
    
    
    (1,381
    )Effect of exchange rate changes on cash
    
    
    (430
    )
    
    
    (77
    )Net decrease in cash and cash equivalents
    
    
    (7,677
    )
    
    
    (14,060
    )Cash and cash equivalents at beginning of period
    
    
    23,026
    
    
    
    33,437Cash and cash equivalents at end of period
    
    $
    15,349
    
    
    $
    19,377Supplemental Disclosure of Cash Flow InformationCash paid for interest
    
    $
    161
    
    
    $
    215Income taxes paid
    
    $
    503
    
    
    $
    548Unrealized loss on investments available for sale, net of tax
    
    $
    (220
    )
    
    $
    (14
    )Property, plant and equipment acquired or refinanced under long-term debt
    
    $
    385
    
    
    $
    
 See notes to condensed consolidated financial statements.
  6




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STARTEK, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. BASIS OF PRESENTATION
     Fair Value of Financial Instruments
   Level 1
    
    Valuation is based upon quoted prices for identical instruments traded in
active marketsLevel 2
    
    Valuation is based upon quoted prices for similar instruments in active
markets, quoted prices for identical or similar instruments in markets that are not
active, and model-based valuation techniques for which all significant assumptions are
observable in the marketLevel 3
    
    Valuation is generated from model-based techniques that use significant
assumptions not observable in the market. These unobservable assumptions reflect our
own estimates of assumptions that market participants would use in pricing the asset or
liability. Valuation techniques include use of option pricing models, discounted cash
flow models and similar techniques.
   7




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Recently Issued Accounting Pronouncements
    8




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2. RESTRUCTURING CHARGES
   Facility-Related CostsBalance as of January 1, 2008
    
    $
    502Expense
    
    
    108Payments
    
    
    (219
    )Balance as of March 31, 2008
    
    $
    391
  3. NET LOSS PER SHARE
  Three Months EndedMarch 31,2008
    
    
    2007Net loss
    
    $
    (331
    )
    
    $
    (189
    )Weighted average shares of common stock
    
    
    14,705
    
    
    
    14,695Dilutive effect of stock options
    
    
    
    
    
    
    Common stock and common stock equivalents
    
    
    14,705
    
    
    
    14,695Net loss per basic share
    
    $
    (0.02
    )
    
    $
    (0.01
    )Net loss per diluted share
    
    $
    (0.02
    )
    
    $
    (0.01
    )
   9




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4. PRINCIPAL CLIENTS
  Three Months EndedMarch 31,2008
    
    
    2007AT&T, Inc.
    
    
    49.4
    %
    
    
    53.0
    %T-Mobile, a subsidiary of Deutsche Telekom
    
    
    27.8
    %
    
    
    19.5
    %
   5. FAIR VALUE OF FINANCIAL INSTRUMENTS
   As ofMarch 31, 2008
    
    
    December 31, 2007Assets
    
    
    Liabilities
    
    
    Assets
    
    
    LiabilitiesCash and cash equivalents
    
    $
    15,349
    
    
    $
    
    
    
    $
    23,026
    
    
    $
    Investments
    
    
    16,667
    
    
    
    
    
    
    
    16,349
    
    
    
    Derivative instruments
    
    
    
    
    
    
    151
    
    
    
    27Total
    
    $
    32,016
    
    
    $
    151
    
    
    $
    39,402
    
    
    $
    
 Cash and Cash Equivalents
   10




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Investments
  Gross
    
    
    GrossUnrealized
    
    
    UnrealizedBasis
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueCommercial paper
    
    $
    2,880
    
    
    $
    
    
    
    $
    
    
    
    $
    2,880Corporate debt securities
    
    
    13,859
    
    
    
    11
    
    
    
    (385
    )
    
    
    13,485Mortgage backed securities
    
    
    301
    
    
    
    1
    
    
    
    
    
    
    
    302$
    17,040
    
    
    $
    12
    
    
    $
    (385
    )
    
    $
    16,667
   Derivative Instruments and Hedging Activities
   Fair Value Hierarchy
  Assets and Liabilities at Fair Value as of March 31, 2008Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalFinancial assets:Commercial paper
    
    $
    
    
    
    $
    14,831
    
    
    $
    
    
    
    $
    14,831Corporate debt securities
    
    
    13,485
    
    
    
    100
    
    
    
    
    
    
    
    13,585Mortgage backed securities
    
    
    302
    
    
    
    
    
    
    
    
    
    
    
    302Total financial assets
    
    $
    13,787
    
    
    $
    14,931
    
    
    $
    
    
    
    $
    28,718Financial liabilities:Derivative instruments
    
    
    
    
    
    
    151
    
    
    
    
    
    
    
    151Total financial liabilities
    
    $
    
    
    
    $
    151
    
    
    $
    
    
    
    $
    151
  11




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6. COMPREHENSIVE (LOSS) INCOME
  Three Months EndedMarch 31,2008
    
    
    2007Net loss
    
    $
    (331
    )
    
    $
    (189
    )Other comprehensive (loss) income:Foreign currency translation adjustments, net of tax
    
    
    (373
    )
    
    
    124Change in fair value of derivative instruments, net of tax
    
    
    (112
    )
    
    
    237Unrealized loss on available for sale securities, net of tax
    
    
    (220
    )
    
    
    (14
    )Comprehensive (loss) income
    
    $
    (1,036
    )
    
    $
    158
 7. SHARE-BASED COMPENSATION
  Stock Options
  Weighted Average
    
    
    AggregateWeighted Average
    
    
    Remaining
    
    
    Intrinsic ValueShares
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    (000s)Outstanding as of January 1, 2008
    
    
    1,620,342
    
    
    $
    12.50Granted
    
    
    8,000
    
    
    
    9.34Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (20,177
    )
    
    
    15.85Outstanding as of March 31, 2008
    
    
    1,608,165
    
    
    $
    12.44
    
    
    
    8.4
    
    
    $
    26Exercisable as of March 31, 2008
    
    
    421,121
    
    
    $
    18.74
    
    
    
    6.6
    
    
    $
    
   Three Months Ended March 31,2008
    
    2007Risk-free interest rate
    
    2.76%
    
    4.66% - 4.74%Dividend yield
    
    0%
    
    0%Expected volatility
    
    43.81%
    
    44.41% - 44.86%Expected life in years
    
    4.0
    
    4.7
   12




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Restricted Shares
  Restricted Shares
    
    
    Grant Date Fair ValueNonvested balance as of January 1, 2008
    
    
    40,000
    
    
    $
    12.37Granted
    
    
    
    
    
    
    Vested
    
    
    (10,000
    )
    
    
    13.14Forfeited
    
    
    
    
    
    
    Nonvested balance as of March 31, 2008
    
    
    30,000
    
    
    $
    12.11
 8. INCOME TAXES
   Three Months Ended March 31,2008
    
    
    2007U.S. statutory tax rate
    
    
    35.0
    %
    
    
    35.0
    %Effect of state taxes (net of Federal benefit)
    
    
    0.3
    %
    
    
    1.8
    %Work opportunity credits
    
    
    (7.8
    %)
    
    
    (3.1
    %)Effect of change in Canadian tax rate
    
    
    (33.0
    %)
    
    
    0.0
    %Other, net
    
    
    (3.0
    %)
    
    
    2.0
    %Total
    
    
    (8.5
    %)
    
    
    35.7
    %
 9. LITIGATION
   13




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   BUSINESS DESCRIPTION AND OVERVIEW
   SIGNIFICANT DEVELOPMENTS DURING THE THREE MONTHS ENDED MARCH 31, 2008
   14




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RESULTS
OF OPERATIONS  THREE MONTHS ENDED MARCH 31, 2008 AND MARCH 31, 2007
 Three Months
    
    
    
    
    
    
    Three Months
    
    
    
    
    
    
    % change Q1Ended March 31,
    
    
    
    
    
    
    Ended March 31,
    
    
    
    
    
    
    2007 to Q12008
    
    
    % of Revenue
    
    
    2007
    
    
    % of Revenue
    
    
    2008Revenue
    
    $
    64,745
    
    
    
    100.0
    %
    
    $
    57,647
    
    
    
    100.0
    %
    
    
    12.3
    %Cost of services
    
    
    55,162
    
    
    
    85.2
    %
    
    
    48,737
    
    
    
    84.5
    %
    
    
    13.2
    %Gross profit
    
    
    9,583
    
    
    
    14.8
    %
    
    
    8,910
    
    
    
    15.5
    %
    
    
    7.6
    %Selling, general and
administrative expenses
    
    
    10,090
    
    
    
    15.6
    %
    
    
    9,392
    
    
    
    16.3
    %
    
    
    7.4
    %Restructuring charges
    
    
    108
    
    
    
    0.2
    %
    
    
    
    
    
    
    0.0
    %
    
    
    100.0
    %Operating loss
    
    
    (615
    )
    
    
    -1.0
    %
    
    
    (482
    )
    
    
    -0.8
    %
    
    
    27.6
    %Net interest and other income
    
    
    310
    
    
    
    0.5
    %
    
    
    188
    
    
    
    0.3
    %
    
    
    64.9
    %Loss before income taxes
    
    
    (305
    )
    
    
    -0.5
    %
    
    
    (294
    )
    
    
    -0.5
    %
    
    
    3.7
    %Income tax expense (benefit)
    
    
    26
    
    
    
    0.0
    %
    
    
    (105
    )
    
    
    0.2
    %
    
    
    -124.8
    %Net loss
    
    $
    (331
    )
    
    
    -0.5
    %
    
    $
    (189
    )
    
    
    -0.3
    %
    
    
    75.1
    %
 Revenue
  Cost of Services and Gross Profit
  Selling, General and Administrative Expenses
   15




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Operating Loss
  Net Interest and Other Income
  Income Tax
  Net Loss
  LIQUIDITY AND CAPITAL RESOURCES
  Three Months Ended March 31,2008
    
    
    2007Net cash (used in) provided by:Operating activities
    
    $
    (2,984
    )
    
    $
    125Investing activities
    
    
    (4,616
    )
    
    
    (12,727
    )Financing activities
    
    
    353
    
    
    
    (1,381
    )Effect of foreign exchange rates on cash
    
    
    (430
    )
    
    
    (77
    )Net decrease in cash and cash equivalents
    
    $
    (7,677
    )
    
    $
    (14,060
    )
   16




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Operating Activities.
 Investing Activities.
  Financing Activities.
 Contractual Obligations.
 Less Than
    
    
    One to Three
    
    
    Three to Five
    
    
    More ThanOne Year
    
    
    Years
    
    
    Years
    
    
    Five Years
    
    
    TotalOperating leases (1)
    
    $
    6,119
    
    
    $
    11,783
    
    
    $
    7,260
    
    
    $
    2,387
    
    
    $
    27,549Capital leases (2)
    
    
    67
    
    
    
    150
    
    
    
    157
    
    
    
    
    
    
    
    374Purchase obligations (3)
    
    
    1,396
    
    
    
    47
    
    
    
    
    
    
    
    
    
    
    
    1,443Long-term debt(4)
    
    
    3,519
    
    
    
    6,352
    
    
    
    
    
    
    
    
    
    
    
    9,871Total contractual obligations
    
    $
    11,101
    
    
    $
    18,332
    
    
    $
    7,417
    
    
    $
    2,387
    
    
    $
    39,237
 (1)
    
    We lease facilities and equipment under various non-cancelable operating leases.(2)
    
    We lease equipment under certain capital lease agreements.(3)
    
    Purchase obligations include commitments to purchase goods and services that in some
cases may include provisions for cancellation.(4)
    
    Our outstanding debt obligations as of March 31, 2008 are described below.  17




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Line of Credit
  Canadian Dollar Secured Equipment Loan
  Secured Promissory Note
  Other Factors Impacting Liquidity.
    18




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Variability of Operating Results.
  CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Managements
Discussion and Analysis of Financial Condition and Results of Operations
 Recently Adopted Accounting Pronouncements
    
 ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   19




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Interest Rate Risk
 Managements Discussion and Analysis of Financial Condition and Results of
Operations.
  Foreign Currency Exchange Risks
   
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of disclosure controls and procedures.
 Changes in internal controls over financial reporting.
  20




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Part II  Other Information
 
 ITEM 1. LEGAL PROCEEDINGS
    
 ITEM 1A. RISK FACTORS
   21




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ITEM 6. EXHIBITS
 Index of Exhibits
  22




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SIGNATURES
  STARTEK, INC.
(REGISTRANT)By:
    
    /s/ A. LAURENCE JONES

A. Laurence Jones
    
    Date: May 6, 2008President and Chief Executive OfficerBy:
    
    /s/ DAVID G. DURHAM

David G. Durham
    
    Date: May 6, 2008Executive Vice President, Chief FinancialOfficer and Treasurer
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##### Table of Contents



EXHIBIT INDEX
 Incorporated Herein by ReferenceExhibit No.
    
    Exhibit Description
    
    Form
    
    Exhibit
    
    Filing Date3.1
    
    
    Restated Certificate of Incorporation of the Company.
    
    S-1
    
    
    3.1
    
    
    1/29/19973.2
    
    
    Restated Bylaws of the Company.
    
    8-K
    
    
    3.2
    
    
    8/2/20073.3
    
    
    Certificate of Amendment to the Certificate of
Incorporation of StarTek, Inc. filed with the
Delaware Secretary of State on May 21, 1999.
    
    10-K
    
    
    3.3
    
    
    3/8/20003.4
    
    
    Certificate of Amendment to the Certificate of
Incorporation of StarTek, Inc. filed with the
Delaware Secretary of State on May 23, 2000.
    
    10-Q
    
    
    3.4
    
    
    8/14/20004.1
    
    
    Specimen Common Stock certificate.
    
    10-Q
    
    
    4.2
    
    
    11/6/200710.1
    
    
    2008 Sales Commission Plan.
    
    10-K
    
    
    10.24
    
    
    2/29/200810.2
    
    
    2008 Incentive Bonus Plan.
    
    10-K
    
    
    10.25
    
    
    2/29/200810.3
    
    
    Amendment effective March 1, 2008 to Provider Master
Services Agreement effective January 1, 2002 between
StarTek, Inc. and AT&T Mobility, LLC for certain call center services.
    
    10-K
    
    
    10.43
    
    
    2/29/200810.4
    
    
    Amendment effective March 1, 2008 to Statement of
Work dated April 1, 2004 under the Provider Master
Services Agreement effective January 1, 2002 between
StarTek, Inc. and AT&T Mobility, LLC for certain call center services.
    
    10-K
    
    
    10.44
    
    
    2/29/200810.5*
    
    
    Amendment effective April 1, 2008 to the Master
Service Agreement effective March 21, 2002 between
StarTek, Inc. and AT&T Mobility LLC for certain call center services.10.6*
    
    
    Amendment effective April 1, 2008 to Amendment No.
001 dated April 1, 2004 to the Master Service
Agreement incorporating a Statement of Work between
StarTek, Inc. and AT&T Mobility, LLC for certain call center services.10.7*&
    
    
    Amendment effective February 24, 2008 to services
agreement and statement of work by and between
StarTek, Inc. and T-Mobile USA, Inc. for certain
call center services dated effective October 1,
2007.31.1*
    
    
    Certification of A. Laurence Jones pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    
    Certification of David G. Durham pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    
    Written Statement of the Chief Executive Officer and
Chief Financial Officer furnished pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Filed with this Form 10-Q.
    
    Management contract or compensatory plan or arrangement.&
    
    Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment and have been filed
separately with the Securities and Exchange Commission.  24