United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-27560
ACT TELECONFERENCING, INC.
(Exact name of small business issuer as specified in its charter)
COLORADO 84-1132665
(State or other jurisdiction of (IRS Employer
incorporated or organization) Identification No.)
1658 Cole Blvd., Suite 162, Golden, Colorado 80401
(Address of principle executive offices) (Zip Code)
303-233-3500 FAX 303-238-0096
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes _X_. No ___.
As of May 3, 1996, 3,030,497 shares of the issuer's common stock were
outstanding.
This report contains 37 pages.
ACT TELECONFERENCING, INC.
FORM 10-QSB
Table of Contents
PART I. Financial Information Page No.
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statement of Shareholders' Equity 5
Consolidated Statements of Cash Flow 6
Notes to Consolidated Financial Statements 7
Item 2. Management Discussion and Analysis
of Financial Condition and Results of
Operations 8
PART II.
Item 6. Exhibit Index 10
Item 1.
ACT TELECONFERENCING, INC.
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1996 1995
----------- -----------
ASSETS (unaudited)
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,783,462 $ 288,345
Accounts Receivable, net allowance for doubtful
accounts of $32,724 and $6,224 1,090,413 658,722
Inventory 103,478 111,347
Prepaid Expenses and other 60,052 29,968
----------- -----------
Total Current Assets 3,037,405 1,088,382
Equipment:
Furniture and Equipment 1,560,216 1,363,051
Less accumulated depreciation (512,118) (447,886)
----------- -----------
Total 1,048,098 915,165
OTHER ASSETS:
Deferred Offering Costs -- 125,742
Excess of purchase price over fair value of
tangible assets acquired 523,349 533,515
----------- -----------
Total 523,349 659,257
TOTAL ASSETS $ 4,608,852 $ 2,662,804
=========== ===========
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Notes Payable $ -- $ 75,000
Accounts Payable 549,106 608,282
Accrued Liabilities 337,871 196,180
Deferred income and other liabilities 25,344 3,950
Current portion of long term debt 51,721 53,139
Income tax payable 169,529 127,628
----------- -----------
Total Current Liabilities 1,133,571 1,064,179
LONG-TERM DEBT 174,950 168,272
DEFERRED TAXES 18,551 18,551
MINORITY INTEREST 246,803 213,016
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 1,000,000 shares
authorized; none issued -- --
Common stock, no par value; 10,000,000 shares
authorized; 3,030,497 and 2,318,000 shares
issued and outstanding 4,273,730 2,282,940
Accumulated deficit (1,238,753) (1,084,154)
----------- -----------
Shareholders' equity 3,034,977 1,198,786
----------- -----------
TOTAL Liabilities & Shareholder's Equity $ 4,608,852 $ 2,662,804
=========== ===========
ACT TELECONFERENCING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
1996 1995
----------- -----------
REVENUE:
Conferencing Services $ 1,251,189 $ 811,601
Equipment Sales 121,251 15,390
----------- -----------
TOTAL REVENUE 1,372,440 826,991
COSTS AND EXPENSES:
Cost of conferencing services 669,474 437,921
Equipment Sales 102,109 12,216
Marketing, general and administration 679,766 311,317
----------- -----------
Total costs and expenses 1,451,349 761,454
----------- -----------
(Loss) Income before income taxes and
minority interest (78,909) 65,537
Taxes on income 41,901 30,811
----------- -----------
(Loss) Income before minority interest (120,810) 34,726
Minority interest 33,787 28,757
----------- -----------
NET (LOSS) Income $ (154,597) $ 5,969
=========== ===========
NET (LOSS) INCOME PER SHARE $ (0.06) $ 0.00
=========== ===========
Weighted average shares outstanding 2,520,385 1,782,589
=========== ===========
ACT TELECONFERENCING, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
--------------------------
Accumulated
Shares Amount Deficit Total
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1994 1,729,050 $ 952,747 $ (660,094) $ 292,653
Shares issued for cash 388,950 830,193 830,193
Shares issued in connection with
acquisition (Note 9) 200,000 375,000 375,000
Net loss (424,060) (424,060)
----------- ----------- ----------- -----------
BALANCE, December 31, 1995 2,318,000 2,157,940 (1,084,154) 1,073,786
Shares issued for cash 712,497 1,990,790 1,990,790
Shares issued in connection with
acquisition (Note 9) - 125,000 125,000
Net loss (154,599) (154,599)
----------- ----------- ----------- -----------
BALANCE, March 31, 1996 3,030,497 $ 4,273,730 ($1,238,753) $ 3,034,977
=========== =========== =========== ===========
</TABLE>
ACT TELECONFERENCING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Three Months Ended March 31,
1996 1995
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (154,597) $ 5,968
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 74,398 36,531
Provision for income taxes 41,901 30,811
Changes in assets and liabilities:
Increase in accounts receivable (431,691) (284,924)
Increase in inventory (7,869) --
Decrease (increase) in other assets 111,396 (3,239)
(Decrease) increase in accounts payable (59,176) 49,179
Increase in other liabilities and
deferred income 163,083 11,775
----------- -----------
Net cash used by operating activities (262,555) (153,899)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment purchases (197,165) (47,082)
----------- -----------
Net cash used in investing activities (197,165) (47,082)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable and capital leases 20,488 53,105
Payments on notes payable and capital leases (90,228) (58,056)
Net proceeds from issuance of common stock 1,990,790 258,346
Increase in minority interests 33,787 28,757
----------- -----------
Net cash provided by financing activities 1,954,837 282,152
----------- -----------
Increase in cash and cash equivalents 1,495,117 81,171
Cash and cash equivalents, beginning of period 288,345 120,703
----------- -----------
Cash and cash equivalents, end of period $ 1,783,462 $ 201,874
=========== ===========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
NOTE 1 - BASIS OF PRESENTATION
Reference is made to Note 1 of the Consolidated Financial Statements included in
the Special Financial Report for the year ended December 31, 1995, which
describes the accounting policies of the Company for annual reporting purposes.
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the Company's financial position as of
March 31, 1996 and the results of its operations and changes in its
shareholders' equity, and its cash flows for the three-month periods ended March
31, 1996 and March 31, 1995.
NOTE 2 - INCOME (LOSS) PER SHARE
Income (loss) per share is based on the weighted average number of common shares
outstanding during each period. Shares issuable upon the exercise of outstanding
warrants and options are not included in the calculation since their inclusion
would be anti-dilutive.
Item 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net revenues increased 66 percent to $1,372,440 for the three months ended March
31,1996, compared to $826,991 for the same period in 1995, primarily due to
increased sales of teleconferencing services, and additional revenue from the
Company's two new business units, ACT VideoConferencing, Inc. and ACT
Teleconferencing B.V. Revenue growth during the three months ended March 31,
1996, resulted from repeat sales to established customers and increased sales of
higher priced premium services as well as from sales to new customers. During
the three months ended March 31, 1996, teleconferencing services, including both
bridging and premium services, comprised 50 percent of net revenue, long
distance rebilling comprised 41 percent of net revenue, and equipment sales
comprised of 9 percent of net revenue. For the three months ended March 31,
1995, these percentages were 53 percent, 45 percent and 2 percent respectively.
During the three months ended March 31, 1996, domestic operations accounted for
52 percent of net revenues, compared to 54 percent for the prior three month
period. Domestic net revenues for the three months ended March 31, 1996,
increased by 89 percent over such net revenues for the prior year, while foreign
net revenues for the three months ended March 31, 1996, increased by 45 percent
over such net revenues for the comparable prior period in 1995. The difference
in revenue growth for domestic operations compared to foreign operations is
primarily due to the addition of revenue from ACT VideoConferencing, Inc., a
domestic operation.
Cost of sales increased 71 percent to $771,583 for the three months ended March
31, 1996, compared to $450,137 for the prior period, reflecting commensurate
increases in sales of teleconferencing services and equipment. Cost of sales
represented 56 percent of net revenues for the three months ended March 31,
1996, compared to 54 percent of net revenues for the same period in 1995. This
increase can be attributed to additional costs from the Company's two new
business units. Cost of sales for the two existing business units decreased to
51 percent for the first quarter 1996 from 54 percent for the same period in
1995. Gross margin (net revenues less costs of sales divided by net revenues)
for the three months ended March 31, 1996, was 44 percent, versus 46 percent
during the prior period. Future variations in gross margin can be expected as
the Company adds new locations and increases capacity.
Marketing, general, and administrative expenses for the three months ended March
31, 1996 were $679,766, or 50 percent of revenue, compared to $311,317 or 38
percent of revenue, for the same period in 1995. Of this increase, seven percent
represents additional costs in connection with the start up of the Company's two
new business units. The remaining five percentage points increase is primarily a
result of increased marketing in existing business units.
Loss before taxes and minority interest was $78,909 for the three months ended
March 31, 1996, compared to income before taxes and minority interest of $65,537
for the same period in 1995. Loss before taxes and minority interest for the
three months ended March 31, 1996 includes a loss of approximately $151,000 from
the start up of ACT VideoConferencing, Inc. and ACT Teleconferencing B.V. These
start-up subsidiaries are expected to continue to incur losses before taxes
during 1996.
Taxes on income increased to $41,901 for the three months ended March 31, 1996,
compared to $30,811 for the same period 1995, due to increased income earned by
the Company's majority-owned United Kingdom subsidiary. The Company paid no
United States income tax due to losses incurred in its United States operations.
Deduction for minority interest increased to $33,787 for the three months ended
March 31, 1996, compared to $28,757 for the comparable prior period in 1995, due
to increased income earned by the Company's majority-owned United Kingdom
subsidiary.
LIQUIDITY AND CAPITAL RESOURCES
The Company had, until 1996, financed its operations primarily through private
placements of its equity securities and had raised approximately $2.1 million
through December 31, 1995. In March of 1996 the Company completed its Initial
Public Offering, issuing 712,497 "units" which netted approximately $1,990,000
after offering costs. Working capital at March 31, 1996 was $1,903,834, which
represents a current ratio of 2.7 to 1. This compares to working capital of
$24,203 at December 31, 1995, a current ratio of 1.0 to 1. The Company believes
that funds on hand are sufficient to support its existing and planned operations
for at least the next twelve months.
Item 6. Exhibits
Exhibit Index
Exhibit No. Description
3.1 Restated Articles of Incorporation of the Company dated April
15, 1996
3.2 Bylaws of the Company, amended as of April 15, 1996
4.1* Form of specimen certificate for Common Stock of the Company
4.2* Form of Unit Purchase Option to be issued by the Company to
the Underwriter
4.3* Impound Agreement
4.4* Lock-up Letter Agreement
10.1* Stock Option Plan of 1992, as amended, authorizing 400,000
shares of Common Stock for issuance pursuant to the Plan
10.2* Form of Stock Option Agreement
10.3* Form of Common Stock Purchase Warrant
10.4* Form of Placement Agent Warrant
10.5* Denver West Office Building Lease dated April 1, 1993, by and
between Denver West Office Building No. 6 Venture and the
Company, as amended
10.6* Leases for United Kingdom facilities (First floor of Howard
House) dated September 29, 1993 and April 17, 1995, between
Garfunkel & Wanderer Limited and Reichwald Brothers Limited,
Landlord, and ACT Teleconferencing Limited, Tenant
10.7* Letter agreement dated May 31, 1995 with Worldcom regarding
lease of Amsterdam facilities
10.8* Sublease Agreement with Integraf Corporation dated August 1995
for ACT VideoConferencing, Inc. premises
10.9* Term Loan Agreement dated August 11, 1994, between the Company
and Norwest Bank, N.A., Boulder, Colorado
10.10* Split Dollar Insurance Agreement dated March 1, 1990, between
the Company and Gerald D. Van Eeckhout
10.11* Service Agreement dated April 10, 1992 between David Holden
and ACT Teleconferencing Limited
10.12* Stock Purchase Agreement dated July 13, 1995, between the
Company and Paul Clifford for acquisition of NBS, Inc.
10.13* Employment Agreement dated July 14, 1995, between the Company
and Paul Clifford
10.14* Agreement between Company and Gerald D. Van Eeckhout limiting
his compensation in 1996 and 1997
10.15* Memorandum dated December 22, 1995 from director Seifert
amending Mr. Van Eeckhout's compensation
10.16* Terms of employment of Harry Walls, president-designate of ACT
Teleconferencing Services, Inc. per Company's letter dated
December 13, 1995
10.17* Agreement to Exchange Stock between Apogee Robotics, Inc. and
Company
10.18* Agreement between Company and Ronald J. Bach to borrow
proceeds from sale of Apogee Robotics common stock
27 Financial Data Schedule
* Exhibit incorporated by reference to the Company's Registration Statement on
Form SB-2, filed with the Securities and Exchange Commission on October 10,
1995, and amendments thereto. Exhibits incorporated by reference carry
exhibit numbers identical to those in the Registration Statement.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ACT Teleconferencing, Inc.
Date: May 13, 1996 by /s/ Pamela S. Van Eeckhout
Pamela S. Van Eeckhout, CFO
Date: May 13, 1996 by /s/ Gerald D. Van Eeckhout
Gerald D. Van Eeckhout, CEO
Exhibit 3.1
RESTATED ARTICLES OF INCORPORATION
OF
ACT TELECONFERENCING, INC.
The Board of Directors of ACT Teleconferencing, Inc. (the
"Corporation"), pursuant to Section 7-110-107(1) of the Colorado Business
Corporation Act, adopts the following as its Restated Articles of Incorporation
to integrate and replace the Corporation's original Articles of Incorporation
and all prior amendments:
ARTICLE I
The name of this Corporation is ACT Teleconferencing, Inc.
ARTICLE II
The Corporation is authorized to issue an aggregate total of 10,000,000
shares, all of which shall be designated Common Stock, with no par value.
ARTICLE III
No shareholder of this Corporation shall have any cumulative voting
rights in the election of directors.
ARTICLE IV
No shareholder of this Corporation shall have any preemptive rights to
subscribe for, purchase or acquire any shares of the Corporation of any class,
whether unissued or now or hereafter authorized, or any obligations or other
securities convertible into or exchangeable for any such shares.
ARTICLE V
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty by such director as a director; provided, however, that this Article shall
not eliminate or limit the liability of a director to the extent provided by
applicable law (i) for any breach of the director's duty of loyalty to the
Corporation or its shareholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
acts specified in Section 7-108-403 of the Colorado Statutes, (iv) for any
transaction from which the director derived an improper personal benefit or (v)
for any act or omission occurring prior to the effective date of this Article.
No amendment to or repeal of this Article shall apply to or have any effect on
the liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
ARTICLE VI
The Corporation shall indemnify directors, officers, and others for
liabilities and expenses incurred in connection with their corporate duties to
the fullest extent permitted by the Colorado Business Corporation Act or its
amended or successor provisions.
ARTICLE VII
Whenever the statutes of Colorado, as amended, require the holders of
two-thirds of the outstanding shares entitled to vote to approve certain
proposals and to approve amendments to the Articles of Incorporation, the
affirmative vote of holders of a majority of shares entitled to vote thereon
shall be sufficient for approval, except the affirmative vote of holders of
two-thirds of the outstanding shares entitled to vote shall be necessary
whenever specifically required by these Articles.
ARTICLE VIII
The Board of Directors shall consist of not more than nine (9) members,
none of whom need be shareholders. The exact number of directors within the
maximum limitation of nine (9) shall be fixed from time to time by the Board of
Directors pursuant to a resolution adopted by a majority of the entire Board of
Directors from time to time; however, no decrease in the number of directors
shall change the term of any director. The Board of Directors shall be divided
into three classes, as nearly equal in number of directors as possible, as
determined by the Board of Directors. Each class shall be elected for a term
expiring at the Annual Meeting of the Shareholders held in the third year
thereafter; provided, however, that at the 1994 Annual Meeting of Shareholders,
one class shall be elected for a term expiring at the 1995 annual meeting, one
class for a term expiring at the 1996 annual meeting, and one class for a term
expiring at the 1997 annual meeting. Each director shall continue in office
until the Annual Meeting of Shareholders in the year in which the director's
term expires, and thereafter until the director's successor is duly elected and
qualified, unless a prior vacancy shall occur by reason of the director's death,
resignation, or removal from office.
Newly created directorships resulting from an increase in the
authorized number of directors within the approved maximum and any vacancies in
directorships may be filled by the affirmative vote of a majority of directors
then in office, even though less than a quorum, or by the affirmative vote of
the holders of a majority of the shares present and entitled to vote at a
meeting called for the purpose of electing directors. Directors so chosen by the
Board of Directors of the shareholders to fill a vacancy or newly created
directorship shall hold office for a term expiring at the Annual Meeting of
Shareholders at which the term of class to which the director or directors have
been appointed or elected expires.
Any director, or the entire Board of Directors, may be removed from
office at any time, with or without cause, but only by the affirmative vote of
the holders of at least two-thirds of the outstanding common stock of the
Corporation entitled to vote for the election of directors.
The affirmative vote of the holders of at least two-thirds of the
outstanding shares of common stock of the Corporation entitled to vote for the
election of directors shall be required to amend or repeal, or to adopt any
provision inconsistent with, this Article VIII.
ARTICLE IX
A. In addition to the requirements of any applicable statute, the
affirmative vote of shareholders holding not less than two-thirds of the
outstanding shares of the Corporation's common stock shall be required for the
approval of any "Business Combination" (as defined herein) involving this
Corporation and for the approval or authorization by this Corporation, in its
capacity as a shareholder, of any Business Combination involving a subsidiary of
this Corporation which requires the approval or authorization of the
shareholders of the subsidiary, provided, however, that the two-thirds voting
requirement shall not be applicable if:
1. A majority of all the "Continuing Directors" (as defined
herein) by vote have expressly approved the Business Combination; or
2. The Business Combination is a merger, consolidation, exchange
of shares or sale of all or substantially all of the assets of this
Corporation and the cash to be received per share in the Business
Combination by holders of the common stock of this Corporation (other
than the "Related Person" as hereinafter defined) is not less than the
highest per share price (including brokerage commissions, transfer
taxes, soliciting dealers' fees and dealer-management compensation)
paid by the Related Person in acquiring any of its holdings of this
Corporation's common stock (with appropriate adjustments for
recapitalizations, stock splits, stock dividends and other changes to
the Corporation's capital structure).
B. For purposes of this Article:
1. The term "Business Combination" shall mean:
i. any merger or consolidation of this Corporation or a
subsidiary of this Corporation with or into a Related Person;
ii. any sale, lease, exchange, transfer, mortgage, or other
disposition to a Related Person (in one transaction or in a series of
related transactions), of all or any "Substantial Part" (as hereinafter
defined) of the assets of this Corporation (including, without
limitation, any voting securities of a subsidiary of this Corporation)
or a subsidiary of this Corporation;
iii. any sale, lease, exchange, transfer or other disposition (in
one transaction or in a series of related transactions) of all or any
Substantial Part of the assets of a Related Person to this Corporation
or a subsidiary of this Corporation;
iv. any issuance, sale, exchange, transfer or other disposition of
any securities of this Corporation or a subsidiary of this Corporation
to a Related Person (except common stock issuable pursuant to the
exercise of options to purchase, during any twelve-month period, not
more than one percent of the common stock outstanding during such
period), including, without limitation, any exchange of shares of this
Corporation or a subsidiary of this Corporation for shares of a Related
Person which, in the absence of this Article, would have required the
affirmative vote of at least a majority of the voting power of the
outstanding shares of this Corporation entitled to vote or the
affirmative vote of this Corporation in its capacity as a shareholder
of the subsidiary;
v. any acquisition by this Corporation or a subsidiary of this
Corporation of any securities of a Related Person or any securities of
this Corporation or a subsidiary of this Corporation from a Related
Person;
vi. any recapitalization or reclassification of the securities of
this Corporation which would have the effect of increasing the voting
power of the Related Person;
vii. any plan or proposal for the liquidation of this Corporation
proposed by or on behalf of a Related Person; and
viii. any agreement, contract or other arrangement providing for
any of the transactions described in this definition of Business
Combination.
2. The term "Related Person" shall mean and include any "Person" (as
defined herein) which, together with its "Affiliates" and "Associates" (as
defined herein), beneficially owns in the aggregate 20 percent or more of the
voting power of the voting stock, and any Affiliate or Associate of any such
Person. Beneficial ownership shall be determined under Rule 13d-3 of the
Securities Exchange Act of 1934, as amended, as in effect on August 9, 1993;
provided, however, a Person shall also be deemed to be the beneficial owner of
(i) any shares of common stock which such Person or any of its Affiliates or
Associates has the right to acquire at any time pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights, warrants or
options or otherwise, and (ii) any shares of common stock beneficially owned by
any other Person with which such Person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of the shares of common stock.
3. The term "Person" shall mean any individual, corporation,
partnership or other person or entity.
4. The term "Affiliate," used to indicate a relationship to a
specified person, shall mean a person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such specified person.
5. The term "Associate," used to indicate a relationship with a
specified person, shall mean (i) any corporation or organization (other than
this Corporation or a majority-owned subsidiary of this Corporation) of which
such specified person is an officer or partner or is, directly or indirectly,
the beneficial owner of 10 percent of more of any class of equity securities,
(ii) any trust or other estate in which such specified person has a substantial
beneficial interest or as to which such specified person serves as trustee or in
a similar fiduciary capacity, and (iii) any relative or spouse of such specified
person, or any relative of such spouse, who has the same home as such specified
person or who is a director or officer of this Corporation or any of its parents
or subsidiaries.
6. The term "Continuing Director" shall mean any person then serving
as a director of this Corporation (i) who was a member of the Board of Directors
of this Corporation on August 9, 1993, or (ii) who became a director after
August 9, 1993, and whose election, or nomination for election by this
Corporation's shareholders, was approved by a majority of all of the Continuing
Directors, either by a specific vote or by issuance of a proxy statement
authorized by the Board of Directors in which such person is named as nominee
for director; provided, however, that in no event shall a director who announces
that he has a conflict of interest with respect to, and refrains from voting on,
the Business Combination in question be deemed to be a Continuing Director for
purposes of such vote.
7. The term "Substantial Part" shall mean more than 25 percent of the
fair market value of the total assets of the corporation in question, as of the
end of its most recent fiscal year ending prior to the time the determination is
being made.
C. For the purpose of this Article, the Continuing Directors by a
majority vote shall have the power to make a binding determination as to: (i)
the number of shares of common stock of this Corporation that any person or
entity beneficially owns; (ii) whether a person or entity is an Affiliate or
Associate of another; (iii) whether the assets subject to any Business
Combination is one in which a Related Person has an interest; (iv) whether the
cash to be received per share by holders of common stock of this Corporation
other than the Related Person in a Business Combination is an amount at least
equal to the highest per share price paid by the Related Person; and (v) such
other matters with respect to which a determination is required under this
Article.
D. The affirmative vote of the holders of at least two-thirds of the
outstanding shares of common stock of this Corporation shall be required to
amend or repeal, or to adopt any provision inconsistent with, this Article.
ARTICLE X
This Corporation is authorized to issue, in addition to the Common
Stock, no par value, authorized in Article II, an aggregate of 1,000,000 shares
of nonvoting Preferred Stock, subject to the following:
A. The Board of Directors is authorized, subject to limitations
prescribed by the statutes of Colorado and by these Articles of Incorporation,
to provide for the issuance of shares of the Preferred Stock in series. The
Board of Directors shall establish the number of shares to be included in each
series and determine the designations, preferences, limitations, and relative
rights of shares of each series. When such a determination has been made, the
Corporation shall deliver Articles of Amendment to these Articles of
Incorporation to the Secretary of State for filing, which shall be effective
without Shareholder action, specifying the designations, preferences,
limitations, and relative rights of such class as required by statute.
B. The authority of the Board of Directors with respect to the
designation of each series shall include, without limitation, the authority to
establish and define the number of shares initially constituting each series;
the distinctive designation of each series; dividend rights; redemption rights,
if any; the establishment of a sinking fund, if appropriate; liquidation rights;
conversion privileges, if any; and other matters appropriate to each series to
the extent deemed necessary by the Board of Directors or as required or allowed
by the Colorado Business Corporation Act and not otherwise limited by said Act
or by these Articles of Incorporation.
C. To the extent holders of nonvoting Preferred Stock are entitled by
statute to vote on certain matters, the Board may determine such matters
attendant to such voting rights within the limitations established by statute.
D. Shares of Preferred Stock of any series that have been redeemed or
otherwise canceled or that have been converted into shares of any other class of
the Corporation's authorized securities shall be restored to the status of
authorized and unissued Preferred Stock and shall thereafter be eligible for
reissuance as part of any series of Preferred Stock.
IN WITNESS WHEREOF, I, as Secretary of ACT Teleconferencing, Inc.,
certify under penalty of perjury, that the foregoing comprises the Restated
Articles of Incorporation of ACT Teleconferencing, Inc., as adopted by the Board
of Directors on April 15, 1996.
Date: April 15, 1996 ACT Teleconferencing, Inc.
by /s/ Pamela S. Van Eeckhout
Pamela S. Van Eeckhout, Secretary
Exhibit 3.2
BYLAWS OF
ACT TELECONFERENCING, INC.
AMENDED APRIL 15, 1996
ARTICLE I
OFFICES
1. PRINCIPAL AND OTHER OFFICES. The principal office of the Corporation
shall be at 1658 Cole Boulevard, Suite 162, Golden, Colorado 80401. The
Corporation may also have offices at such other places as the Board of Directors
may, from time to time, appoint or the business of the Corporation requires.
2. REGISTERED OFFICE. The registered office shall be as designated by the
Corporation with the Secretary of State.
ARTICLE II
SHAREHOLDERS
1. ANNUAL SHAREHOLDERS' MEETING. The annual shareholders' meeting shall be
held on the date and at the time and place fixed from time to time by the board
of directors; provided, however, that the first annual meeting shall be held on
a date that is within six months after the close of the first fiscal year of the
Corporation, and each successive annual meeting shall be held on a date that is
within the earlier of six months after the close of the last fiscal year or
fifteen months after the last annual meeting.
2. SPECIAL SHAREHOLDERS' MEETING. A special shareholders' meeting for any
purpose or purposes, may be called by the board of directors or the president.
The Corporation shall also hold a special shareholders' meeting in the event it
receives, in the manner specified in Section VIII.3, one or more written demands
for the meeting, stating the purpose or purposes for which it is to be held,
signed and dated by the holders of shares representing not less than one-tenth
of all of the votes entitled to be cast on any issue at the meeting. Special
meetings shall be held at the principal office of the Corporation or at such
other place as the board of directors or the president may determine.
3. RECORD DATE FOR DETERMINATION OF SHAREHOLDERS.
a. In order to make a determination of shareholders (1) entitled
to notice of or to vote at any shareholders' meeting or at any
adjournment of a shareholders' meeting, (2) entitled to demand a
special shareholders' meeting, (3) entitled to take any other action,
(4) entitled to receive payment of a share dividend or a distribution,
or (5) for any other purpose, the board of directors may fix a future
date as the record date for such determination of shareholders. The
record date may be fixed not more than seventy days before the date of
the proposed action.
b. Unless otherwise specified when the record date is fixed, the
time of day for determination of shareholders shall be as of the
Corporation's close of business on the record date.
c. A determination of shareholders entitled to be given notice of
or to vote at a shareholders' meeting is effective for any adjournment
of the meeting unless the board of directors fixes a new record date,
which the board shall do if the meeting is adjourned to a date more
than one hundred twenty days after the date fixed for the original
meeting.
d. If no record date is otherwise fixed, the record date for
determining shareholders entitled to be given notice of and to vote at
an annual or special shareholders' meeting is the day before the first
notice is given to shareholders.
e. The record date for determining shareholders entitled to take
action without a meeting pursuant to Section II.10 or II.11 is the date
a writing upon which the action is taken is first received by the
Corporation.
4. VOTING LIST.
a. After a record date is fixed for a shareholders' meeting, the
secretary shall prepare a list of the names of all its shareholders who
are entitled to be given notice of the meeting. The list shall be
arranged by voting groups and within each voting group by class or
series of shares, shall be alphabetical within each class or series,
and shall show the address of, and the number of shares of each such
class and series that are held by, each shareholder.
b. The shareholders' list shall be available for inspection by
any shareholder, beginning the earlier of ten days before the meeting
for which the list was prepared or two business days after notice of
the meeting is given and continuing through the meeting, and any
adjournment thereof, at the Corporation's principal office or at a
place identified in the notice of the meeting in the city where the
meeting will be held.
c. The secretary shall make the shareholders' list available at
the meeting, and any shareholder or agent or attorney of a shareholder
is entitled to inspect the list at any time during the meeting or any
adjournment.
5. NOTICE TO SHAREHOLDERS.
a. The secretary shall give notice to shareholders of the date,
time, and place of each annual and special shareholders' meeting no
fewer than ten nor more than sixty days before the date of the meeting;
except that, if the articles of incorporation are to be amended to
increase the number of authorized shares, at least thirty days' notice
shall be given. Except as otherwise required by the Colorado Business
Corporation Act, the secretary shall be required to give such notice
only to shareholders entitled to vote at the meeting.
b. Notice of an annual shareholders' meeting need not include a
description of the purpose or purposes for which the meeting is called
unless a purpose of the meeting is to consider an amendment to the
articles of incorporation, a restatement of the articles of
incorporation, a plan of merger or share exchange, disposition of
substantially all of the property of the Corporation, consent by the
Corporation to the disposition of property by another entity, or
dissolution of the Corporation.
c. Notice of a special shareholders' meeting shall include a
description of the purpose or purposes for which the meeting is called.
d. Notice of a shareholders' meeting shall be in writing and
shall be given
1. by deposit in the United States mail, properly
addressed to the shareholder's address shown in the
Corporation's current record of shareholders, first class
postage prepaid, and, if so given, shall be effective when
mailed; or
2. by telegraph, teletype, electronically transmitted
facsimile, electronic mail, mail, or private carrier or by
personal delivery to the shareholder, and, if so given, shall
be effective when actually received by the shareholder.
e. If an annual or special shareholders' meeting is adjourned to
a different date, time, or place, notice need not be given of the new
date, time, or place if the new date, time, or place is announced at
the meeting before adjournment; provided, however, that, if a new
record date for the adjourned meeting is fixed pursuant to Section
II.3.(c), notice of the adjourned meeting shall be given to persons who
are shareholders as of the new record date.
f. If three successive notices are given by the Corporation,
whether with respect to a shareholders' meeting or otherwise, to a
shareholder and are returned as undeliverable, no further notices to
such shareholder shall be necessary until another address for the
shareholder is made known to the Corporation.
6. QUORUM. Shares entitled to vote as a separate voting group may take
action on a matter at a meeting only if a quorum of those shares exists with
respect to that matter. A majority of the votes entitled to be cast on the
matter by the voting group shall constitute a quorum of that voting group for
action on the matter. If a quorum does not exist with respect to any voting
group, the president or any shareholder or proxy that is present at the meeting,
whether or not a member of that voting group, may adjourn the meeting to a
different date, time, or place, and (subject to the next sentence) notice need
not be given of the new date, time, or place if the new date, time, or place is
announced at the meeting before adjournment. If a new record date for the
adjourned meeting is or must be fixed pursuant to Section II.3.(c), notice of
the adjourned meeting shall be given pursuant to Section II.5 to persons who are
shareholders as of the new record date. At any adjourned meeting at which a
quorum exists, any matter may be acted upon that could have been acted upon at
the meeting originally called; provided, however, that if new notice is given of
the adjourned meeting, then such notice shall state the purpose or purposes of
the adjourned meeting sufficiently to permit action on such matters. Once a
share is represented for any purpose at a meeting, including the purpose of
determining that a quorum exists, it is deemed present for quorum purposes for
the remainder of the meeting and for any adjournment of that meeting unless a
new record date is or shall be set for that adjourned meeting.
7. VOTING ENTITLEMENT OF SHARES. Except as stated in the articles of
incorporation, each outstanding share, regardless of class, is entitled to one
vote, and each fractional share is entitled to a corresponding fractional vote,
on each matter voted on at a shareholders' meeting.
8. PROXIES; ACCEPTANCE OF VOTES AND CONSENTS.
a. A shareholder may vote either in person or by proxy.
b. An appointment of a proxy is not effective against the
Corporation until the appointment is received by the Corporation. An
appointment is valid for six months unless a different period is
expressly provided in the appointment form.
c. The Corporation may accept or reject any appointment of a
proxy, revocation of appointment of a proxy, vote, consent, waiver, or
other writing purportedly signed by or for a shareholder, if such
acceptance or rejection is in accordance with the provisions of
Sections 7-107-203 and 7-107-205 of the Colorado Business Corporation
Act.
9. WAIVER OF NOTICE.
a. A shareholder may waive any notice required by the Colorado
Business Corporation Act, the articles of incorporation or these
bylaws, whether before or after the date or time stated in the notice
as the date or time when any action will occur or has occurred. The
waiver shall be in writing, be signed by the shareholder entitled to
the notice, and be delivered to the Corporation for inclusion in the
minutes or filing with the corporate records, but such delivery and
filing shall not be conditions of the effectiveness of the waiver.
b. A shareholder's attendance at a meeting waives objection to
lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting objects to holding the
meeting or transacting business at the meeting because of lack of
notice or defective notice, and waives objection to consideration of a
particular matter at the meeting that is not within the purpose or
purposes described in the meeting notice, unless the shareholder
objects to considering the matter when it is presented.
10. MEETINGS BY TELECOMMUNICATIONS. Any or all of the shareholders may
participate in an annual or special shareholders' meeting by, or the meeting may
be conducted through the use of, any means of communication by which all persons
participating in the meeting may hear each other during the meeting. A
shareholder participating in a meeting by this means is deemed to be present in
person at the meeting.
ARTICLE III
DIRECTORS
1. AUTHORITY OF THE BOARD OF DIRECTORS. The corporate powers shall be
exercised by or under the authority of, and the business and affairs of the
Corporation shall be managed under the direction of, a board of directors.
2. NUMBER. The board of directors shall consist of not more than nine (9)
members, none of whom need be shareholders. The exact number of directors within
the maximum limitation of nine (9) shall be established by the board of
directors from time to time; however, no decrease in the number of directors
shall change the term of any director.
3. QUALIFICATION. Directors shall be natural persons at least eighteen
years old but need not be residents of the State of Colorado or shareholders of
the Corporation.
4. ELECTION. The board of directors shall be elected at the annual meeting
of the shareholders or at a special meeting called for that purpose.
5. TERM. The board of directors shall be divided into three classes, as
nearly equal in number of directors as possible, as determined by the board of
directors. Each class of directors shall be elected for a term expiring at the
annual meeting of the shareholders held in the third year thereafter. Each
director shall continue in office until the annual meeting of shareholders in
the year in which the director's term expires, and thereafter until the
director's successor is duly elected and qualified, unless a prior vacancy shall
occur by reason of the director's death, resignation, or removal from office.
6. RESIGNATION. A director may resign at any time by giving written notice
of his or her resignation to any other director or (if the director is not also
the secretary) to the secretary. The resignation shall be effective when it is
received by the other director or secretary, as the case may be, unless the
notice of resignation specifies a later effective date. Acceptance of such
resignation shall not be necessary to make it effective unless the notice so
provides.
7. REMOVAL. Any director may be removed by the shareholders, with or
without cause, at a meeting called for that purpose. The notice of the meeting
shall state that the purpose, or one of the purposes, of the meeting is removal
of the director. A director may be removed only if the number of votes cast in
favor of removal equals or exceeds two-thirds of the shares entitled to voted
for the election of directors.
8. VACANCIES.
a. If a vacancy occurs on the board of directors, including a
vacancy resulting from an increase in the number of directors:
1. The shareholders may fill the vacancy at the next
annual meeting or at a special meeting called for that
purpose;
2. The board of directors may fill the vacancy; or
3. If the directors remaining in office constitute fewer
than a quorum of the board, they may fill the vacancy by the
affirmative vote of a majority of all the directors remaining
in office.
b. Notwithstanding Section III.8.(a), if the vacant office was
held by a director elected by a voting group of shareholders, then, if
one or more of the remaining directors were elected by the same voting
group, only such directors are entitled to vote to fill the vacancy if
it is filled by directors, and they may do so by the affirmative vote
of a majority of such directors remaining in office; and only the
holders of shares of that voting group are entitled to vote to fill the
vacancy if it is filled by the shareholders.
c. A vacancy that will occur at a specific later date, by reason
of a resignation that will become effective at a later date under
Section III.6 or otherwise, may be filled before the vacancy occurs,
but the new director may not take office until the vacancy occurs.
9. MEETINGS. The board of directors may hold regular or special meetings
in or out of Colorado. The annual regular meeting of the board of directors
shall be held immediately following the annual shareholders meeting without
notice of the date, time, place, or purpose of the meeting. The board of
directors may, by resolution, establish other dates, times and places for
additional regular meetings, which may thereafter be held without further
notice. Special meetings may be called by the president or by any two directors
and shall be held by audio or video teleconference or at the principal office of
the Corporation unless another place is consented to by every director. At any
time when the board consists of a single director, that director may act at any
time, date, or place without notice.
10. NOTICE OF SPECIAL MEETING. Notice of a special meeting shall be given
to every director at least twenty-four hours before the time of the meeting,
stating the date, time, and place of the meeting. The notice need not describe
the purpose of the meeting. Notice may be given orally to the director,
personally or by telephone or other wire or wireless communication. Notice may
also be given in writing by telegraph, teletype, electronically transmitted
facsimile, electronic mail, mail, or private carrier. Notice shall be effective
at the earliest of the time it is received; five days after it is deposited in
the United States mail, properly addressed to the last address for the director
shown on the records of the Corporation, first-class postage prepaid; or the
date shown on the return receipt if mailed by registered or certified mail,
return receipt requested, postage prepaid, in the United States mail and if the
return receipt is signed by the director to which the notice is addressed.
11. QUORUM. Except as provided in Section III.8, a majority of the number
of directors fixed in accordance with these Bylaws shall constitute a quorum for
the transaction of business at all meetings of the board of directors. The act
of a majority of the directors present at any meeting at which a quorum is
present shall be the act of the board of directors, except as otherwise
specifically required by law.
12. WAIVER OF NOTICE.
a. A director may waive any notice of a meeting before or after
the time and date of the meeting stated in the notice. Except as
provided by Section III.12.(b), the waiver shall be in writing and
shall be signed by the director. Such waiver shall be delivered to the
secretary for filing with the corporate records, but such delivery and
filing shall not be conditions of the effectiveness of the waiver.
b. A director's attendance at or participation in a meeting
waives any required notice to him or her of the meeting unless, at the
beginning of the meeting or promptly upon his or her later arrival, the
director objects to holding the meeting or transacting business at the
meeting because of lack of notice or defective notice and does not
thereafter vote for or assent to action taken at the meeting.
13. ATTENDANCE BY AUDIO OR VIDEO TELECONFERENCE. One or more directors may
participate in a regular or special meeting by, or conduct the meeting through
the use of, any means of audio or video teleconference or by other method of
communication by which all directors participating may hear each other during
the meeting. A director participating in a meeting by this means is deemed to be
present in person at the meeting.
14. DEEMED ASSENT TO ACTION. A director who is present at a meeting of the
board of directors when corporate action is taken shall be deemed to have
assented to all action taken at the meeting unless:
1. The director objects at the beginning of the meeting, or
promptly upon his or her arrival, to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to
any action taken at the meeting;
2. The director contemporaneously requests that his or her
dissent or abstention as to any specific action taken be entered in the
minutes of the meeting; or
3. The director causes written notice of his or her dissent or
abstention as to any specific action to be received by the presiding
officer of the meeting before adjournment of the meeting or by the
secretary (or, if the director is the secretary, by another director)
promptly after adjournment of the meeting.
The right of dissent or abstention pursuant to this Section III.14. as to a
specific action is not available to a director who votes in favor of the action
taken.
15. ACTION BY DIRECTORS WITHOUT A MEETING. Any action required or permitted
by law to be taken at a board of directors' meeting may be taken without a
meeting if all members of the board consent to such action in writing. Action
shall be deemed to have been so taken by the board at the time the last director
signs a writing describing the action taken, unless, before such time, any
director has revoked his or her consent by a writing signed by the director and
received by the secretary or any other person authorized by the bylaws or the
board of directors to receive such a revocation. Such action shall be effective
at the time and date it is so taken unless the directors establish a different
effective time or date. Such action has the same effect as action taken at a
meeting of directors and may be described as such in any document.
ARTICLE IV
COMMITTEES OF THE BOARD OF DIRECTORS
1. COMMITTEES OF THE BOARD OF DIRECTORS.
a. SUBJECT TO THE PROVISIONS OF SECTION 7-109-106 OF THE COLORADO
BUSINESS CORPORATION ACT, the board of directors may create one or more
committees and appoint one or more members of the board of directors to
serve on them. The creation of a committee and appointment of members
to it shall require the approval of a majority of all the directors in
office when the action is taken, whether or not those directors
constitute a quorum of the board.
b. The provisions of these bylaws governing meetings, action
without meeting, notice, waiver of notice, and quorum and voting
requirements of the board of directors apply to committees and their
members as well.
c. To the extent specified by resolution adopted from time to
time by a majority of all the directors in office when the resolution
is adopted, whether or not those directors constitute a quorum of the
board, each committee shall exercise the authority of the board of
directors with respect to the corporate powers and the management of
the business and affairs of the Corporation; except that a committee
shall not:
1. Authorize distributions;
2. Approve or propose to shareholders action that the
Colorado Business Corporation Act requires to be approved by
shareholders;
3. Fill vacancies on the board of directors or on any of
its committees;
4. Amend the articles of incorporation pursuant to
Section 7-110-102 of the Colorado Business Corporation Act;
5. Adopt, amend, or repeal bylaws;
6. Approve a plan of merger not requiring shareholder
approval;
7. Authorize or approve reacquisition of shares, except
according to a formula or method prescribed by the board of
directors; or
8. Authorize or approve the issuance or sale of shares,
or a contract for the sale of shares, or determine the
designation and relative rights, preferences, and limitations
of a class or series of shares; except that the board of
directors may authorize a committee or an officer to do so
within limits specifically prescribed by the board of
directors.
d. The creation of, delegation of authority to, or action by, a
committee does not alone constitute compliance by a director with
applicable standards of conduct.
ARTICLE V
OFFICERS
1. GENERAL. The Corporation shall have as officers a president, a
secretary, and a treasurer, who shall be appointed by the board of directors.
The board of directors may appoint as additional officers a chairman and other
officers of the board. The board of directors, the president, and such other
subordinate officers as the board of directors may authorize from time to time,
acting singly, may appoint as additional officers one or more vice presidents,
assistant secretaries, assistant treasurers, and such other subordinate officers
as the board of directors, the president, or such other appointing officers deem
necessary or appropriate. The officers of the Corporation shall hold their
offices for such terms and shall exercise such authority and perform such duties
as shall be determined from time to time by these Bylaws, the board of
directors, or (with respect to officers who are appointed by the president or
other appointing officers) the persons appointing them; provided, however, that
the board of directors may change the term of offices and the authority of any
officer appointed by the president or other appointing officers. Any two or more
offices may be held by the same person. The officers of the Corporation shall be
natural persons at least eighteen years old.
2. TERM. Each officer shall hold office from the time of appointment until
the time of removal or resignation pursuant to Section V.3 or until the
officer's death.
3. REMOVAL AND RESIGNATION. Any officer appointed by the board of
directors may be removed at any time by the board of directors. Any officer
appointed by the president or other appointing officer may be removed at any
time by the board of directors or by the person appointing the officer. Any
officer may resign at any time by giving written notice of resignation to any
director (or to any director other than the resigning officer if the officer is
also a director), to the president, to the secretary, or to the officer who
appointed the officer. Acceptance of such resignation shall not be necessary to
make it effective, unless the notice so provides.
4. PRESIDENT. The president shall preside at all meetings of shareholders,
and the president shall also preside at all meetings of the board of directors
unless the board of directors has appointed a chairman, vice chairman, or other
officer of the board and has authorized such person to preside at meetings of
the board of directors instead of the president. Subject to the direction and
control of the board of directors, the president shall be the chief executive
officer of the Corporation and as such shall have general and active management
of the business of the Corporation and shall see that all orders and resolutions
of the board of directors are carried into effect. The president may negotiate,
enter into, and execute contracts, deeds, and other instruments on behalf of the
Corporation as are necessary and appropriate to the conduct of the business and
affairs of the Corporation or as are approved by the board of directors. The
president shall have such additional authority and duties as are appropriate and
customary for the office of president and chief executive officer, including the
authority to hire and discharge employees, except as the same may be expanded or
limited by the board of directors from time to time.
5. VICE PRESIDENT. The vice president, if any, or if there are more than
one, the vice presidents in the order determined by the board of directors or
the president (or, if no such determination is made, in the order of their
appointment), shall be the officer or officers next in seniority after the
president. Each vice president shall have such authority and duties as are
prescribed by the board of directors or president. Upon the death, absence, or
disability of the president, the vice president, if any, or, if there are more
than one, the vice presidents in the order determined by the board of directors
or the president, shall have the authority and duties of the president.
6. SECRETARY. The secretary shall be responsible for the preparation and
maintenance of minutes of the meetings of the board of directors and of the
shareholders and of the other records and information required to be kept by the
Corporation under Section 7-116-101 of the Colorado Business Corporation Act and
for authenticating records of the Corporation. The secretary shall also give, or
cause to be given, notice of all meetings of the shareholders and special
meetings of the board of directors, keep the minutes of such meetings, have
charge of the corporate seal and have authority to affix the corporate seal to
any instrument requiring it (and, when so affixed, it may be attested by the
secretary's signature), be responsible for the maintenance of all other
corporate records and files and for the preparation and filing of reports to
governmental agencies (other than tax returns), and have such other authority
and duties as are appropriate and customary for the office of the secretary,
except as the same may be expanded or limited by the board of directors from
time to time.
7. ASSISTANT SECRETARY. The assistant secretary, if any, or, if there are
more than one, the assistant secretaries in the order determined by the board of
directors or the secretary (or, if no such determination is made, in the order
of their appointment) shall, under supervision of the secretary, perform such
duties and have such authority as may be prescribed from time to time by the
board of directors or the secretary. Upon the death, absence or disability of
the secretary, the assistant secretary, if any, or, if there are more than one,
the assistant secretaries in the order designated by the board of directors or
the secretary (or, if no such determination is made, in the order of their
appointment), shall have the authority and duties of the secretary.
8. TREASURER. The treasurer shall have control of the funds and the care
and custody of all stocks, bonds, and other securities owned by the Corporation,
and shall be responsible for the preparation and filing of tax returns. The
treasurer shall receive all moneys paid to the Corporation and, subject to any
limits imposed by the board of directors, shall have authority to give receipts
and vouchers, to sign and endorse checks and warrants in the Corporation's name
and on the Corporation's behalf, and give full discharge for the same. The
treasurer shall also have charge of disbursement of funds of the Corporation,
shall keep full and accurate records of the receipts and disbursements, and
shall deposit all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as shall be designated by the
board of directors. The treasurer shall have such additional authority and
duties as are appropriate and customary for the office of treasurer, except as
the same may be expanded or limited by the board of directors from time to time.
9. ASSISTANT TREASURER. The assistant treasurer, if any, or, if there are
more than one, the assistant treasurers in the order determined by the board of
directors or the treasurer (or, if no such determination is made, in the order
of their appointment) shall, under the supervision of the treasurer, have such
authority and duties as may be prescribed from time to time by the board of
directors or the treasurer. Upon the death, absence or disability of the
treasurer, the assistant treasurer, if any, or, if there are more than one, the
assistant treasurers in the order determined by the board of directors or the
treasurer (or, if no such determination is made, in the order of their
appointment), shall have the authority and duties of the treasurer.
10. COMPENSATION. Officers shall receive such compensation for their
services as may be authorized or ratified by the board of directors. Election or
appointment of an officer shall not of itself create a contractual right to
compensation for services performed as such officer.
ARTICLE VI
INDEMNIFICATION
1. DEFINITIONS. As used in this article:
a. "Corporation" includes any domestic or foreign entity that is
a predecessor of the Corporation by reason of a merger or other
transaction in which the predecessor's existence ceased upon
consummation of the transaction.
b. "Director" means an individual who is or was a director of the
Corporation or an individual who, while a director of the Corporation,
is or was serving at the Corporation's request as a director, officer,
partner, trustee, employee, fiduciary, or agent of another domestic or
foreign corporation or other person or of an employee benefit plan. A
director is considered to be serving an employee benefit plan at the
Corporation's request if his or her duties to the Corporation also
impose duties on, or otherwise involve services by, the director to the
plan or to participants in or beneficiaries of the plan. "Director"
includes, unless the context requires otherwise, the estate or personal
representative of a director.
c. "Expenses" includes counsel fees.
d. "Liability" means the obligation incurred with respect to a
proceeding to pay a judgment, settlement, penalty, fine, including an
excise tax assessed with respect to an employee benefit plan, or
reasonable expenses.
e. "Official capacity" means, when used with respect to a
director, the office of director in the Corporation and, when used with
respect to a person other than a director as contemplated in Section
VI.1.(a), the office in the Corporation held by the officer or the
employment, fiduciary, or agency relationship undertaken by the
employee, fiduciary, or agent on behalf of the Corporation. "Official
capacity" does not include service for any other domestic or foreign
corporation or other person or employee benefit plan.
f. "Party" includes a person who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
g. "Proceeding" means any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative,
or investigative and whether formal or informal.
2. AUTHORITY TO INDEMNIFY DIRECTORS.
a. Except as provided in Section VI.2.(d), the Corporation may
indemnify a person made a party to a proceeding because the person is
or was a director against liability incurred in the proceeding if:
1. The person conducted himself or herself in good
faith; and
2. The person reasonably believed:
a. In the case of conduct in an official capacity
with the Corporation, that his or her conduct was in the
Corporation's best interests; and
b. In all other cases, that his or her conduct was
at least not opposed to the Corporation's best interests; and
3. In the case of any criminal proceeding, the person
had no reasonable cause to believe his or her conduct was
unlawful.
b. A director's conduct with respect to an employee benefit plan
for a purpose the director reasonably believed to be in the interests
of the participants in or beneficiaries of the plan is conduct that
satisfies the requirement of Section VI.2.(a)(2)(B). A director's
conduct with respect to an employee benefit plan for a purpose that the
director did not reasonably believe to be in the interests of the
participants in or beneficiaries of the plan shall be deemed not to
satisfy the requirements of Section VI.2.(a)(1).
c. The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent is not, of itself, determinative that the director did not
meet the standard of conduct described in this Section VI.2.
d. The Corporation may not indemnify a director under this
Section VI.2:
1. In connection with a proceeding by or in the right of
the Corporation in which the director was adjudged liable to
the Corporation; or
2. In connection with any other proceeding charging that
the director derived an improper personal benefit, whether or
not involving action in an official capacity, in which
proceeding the director was adjudged liable on the basis that
he or she derived an improper personal benefit.
e. Indemnification permitted under this Section VI.2 in
connection with a proceeding by or in the right of the Corporation is
limited to reasonable expenses incurred in connection with the
proceeding.
3. MANDATORY INDEMNIFICATION OF DIRECTORS. The Corporation shall indemnify
a person who was wholly successful, on the merits or otherwise, in the defense
of any proceeding to which the person was a party because the person is or was a
director, against reasonable expenses incurred by him or her in connection with
the proceeding.
4. ADVANCE OF EXPENSES TO DIRECTORS.
a. The Corporation may pay for or reimburse the reasonable
expenses incurred by a director who is a party to a proceeding in
advance of final disposition of the proceeding if:
1. The director furnishes to the Corporation a written
affirmation of the director's good faith belief that he or she
has met the standard of conduct described in Section VI.2;
2. The director furnishes to the Corporation a written
undertaking, executed personally or on the director's behalf,
to repay the advance if it is ultimately determined that he or
she did not meet the standard of conduct; and
3. A determination is made that the facts then known to
those making the determination would not preclude
indemnification under this article.
b. The undertaking required by Section VI.4.(a)(2) shall be an
unlimited general obligation of the director but need not be secured
and may be accepted without reference to financial ability to make
repayment.
c. Determinations and authorizations of payments under this
Section VI.4 shall be made in the manner specified in Section VI.6.
5. COURT-ORDERED INDEMNIFICATION OF DIRECTORS. A director who is or was a
party to a proceeding may apply for indemnification to the court conducting the
proceeding or to another court of competent jurisdiction. On receipt of an
application, the court, after giving any notice the court considers necessary,
may order indemnification in the following manner:
1. If it determines that the director is entitled to mandatory
indemnification under Section VI.3, the court shall order
indemnification, in which case the court shall also order the
Corporation to pay the director's reasonable expenses incurred to
obtain court-ordered indemnification.
2. If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances,
whether or not the director met the standard of conduct set forth in
Section VI.2.(a) or was adjudged liable in the circumstances described
in Section VI.2.(d), the court may order such indemnification as the
court deems proper; except that the indemnification with respect to any
proceeding in which liability shall have been adjudged in the
circumstances described in Section VI.2.(d) is limited to reasonable
expenses incurred in connection with the proceeding and reasonable
expenses incurred to obtain court-ordered indemnification.
6. DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION OF DIRECTORS.
a. The Corporation may not indemnify a director under Section
VI.2 unless authorized in the specific case after a determination has
been made that indemnification of the director is permissible in the
circumstances because the director has met the standard of conduct set
forth in Section VI.2. The Corporation shall not advance expenses to a
director under Section VI.4 unless authorized in the specific case
after the written affirmation and undertaking required by Sections
VI.4.(a)(1) and VI.4.(a)(2) are received and the determination required
by Section VI.4.(a)(3) has been made.
b. The determinations required by Section VI.6.(a) shall be made:
1. By the board of directors by a majority vote of those
present at a meeting at which a quorum is present, and only
those directors not parties to the proceeding shall be counted
in satisfying the quorum; or
2. If a quorum cannot be obtained, by a majority vote of
a committee of the board of directors designated by the board
of directors, which committees shall consist of two or more
directors not parties to the proceeding; except that directors
who are parties to the proceeding may participate in the
designation of directors for the committee.
c. If a quorum cannot be obtained as contemplated in Section
VI.6.(b)(1), and a committee cannot be established under Section
VI.6.(b)(2) if a quorum is obtained or a committee is designated, if a
majority of the directors constituting such quorum or such committee so
directs, the determination required to be made by Section VI.6.(a)
shall be made:
1. By independent legal counsel selected by a vote of
the board of directors or the committee in the manner
specified in Section VI.6.(b)(1) or VI.6.(b)(2), or, if a
quorum of the full board cannot be obtained and a committee
cannot be established, by independent legal counsel selected
by a majority vote of the full board of directors; or
2. By the shareholders.
d. Authorization of indemnification and advance of expenses shall
be made in the same manner as the determination that indemnification or
advance of expenses is permissible; except that, if the determination
that indemnification or advance of expenses is permissible is made by
independent legal counsel, authorization of indemnification and advance
of expenses shall be made by the body that selected such counsel.
7. INDEMNIFICATION OF OFFICERS, EMPLOYEES, FIDUCIARIES, AND AGENTS.
a. An officer is entitled to mandatory indemnification under
Section VI.3. and is entitled to apply for court-ordered
indemnification under Section VI.5, in each case to the same extent as
a director;
b. The Corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent of the Corporation to the same
extent as to a director; and
c. The Corporation may also indemnify and advance expenses to an
officer, employee, fiduciary, or agent who is not a director to a
greater extent than is provided in these bylaws, if not inconsistent
with public policy, and if provided for by general or specific action
of its board of directors or shareholders or by contract.
8. INSURANCE. The Corporation may purchase and maintain insurance on
behalf of a person who is or was a director, officer, employee, fiduciary, or
agent of the Corporation, or who, while a director, officer, employee,
fiduciary, or agent of the Corporation, is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee, fiduciary, or
agent of another domestic or foreign corporation or other person or of an
employee benefit plan, against liability asserted against or incurred by the
person in that capacity or arising from his or her status as a director,
officer, employee, fiduciary, or agent, whether or not the Corporation would
have power to indemnify the person against the same liability under Section
VI.2, VI.3, or VI.7. Any such insurance may be procured from any insurance
company designated by the board of directors, whether such insurance company is
formed under the laws of this state or any other jurisdiction of the United
States or elsewhere, including any insurance company in which the Corporation
has an equity or any other interest through stock ownership or otherwise.
9. NOTICE TO SHAREHOLDERS OF INDEMNIFICATION OF DIRECTOR. If the
Corporation indemnifies or advances expenses to a director under this article in
connection with a proceeding by or in the right of the Corporation, the
Corporation shall give written notice of the indemnification or advance to the
shareholders with or before the notice of the next shareholders' meeting. If the
next shareholder action is taken without a meeting at the instigation of the
board of directors, such notice shall be given to the shareholders at or before
the time the first shareholder signs a writing consenting to such action.
ARTICLE VII
SHARES
1. CERTIFICATES. Certificates representing shares of the capital stock of
the Corporation shall be in such form as is approved by the board of directors
and shall be signed by the chairman or vice chairman of the board of directors
(if any), or the president or any vice president, and by the secretary or an
assistant secretary or the treasurer or an assistant treasurer. All certificates
shall be consecutively numbered, and the names of the owners, the number of
shares, and the date of issue shall be entered on the books of the Corporation.
Each certificate representing shares shall state upon its face:
a. That the Corporation is organized under the laws of the State
of Colorado;
b. The name of the person to whom issued;
c. The number and class of the shares and the designation of the
series, if any, that the certificate represents;
d. The par value, if any, of each share represented by the
certificate;
e. A conspicuous statement, on the front or the back, that the
Corporation will furnish to the shareholder, on request in writing and
without charge, information concerning the designations, preferences,
limitations, and relative rights applicable to each class, the
variations in preferences, limitations, and rights determined for each
series, and the authority of the board of directors to determine
variations for future classes or series; and
f. Any restrictions imposed by the Corporation upon the transfer
of the shares represented by the certificate.
2. FACSIMILE SIGNATURES. Where a certificate is signed
a. By a transfer agent other than the Corporation or its
employee, or
b. By a registrar other than the Corporation or its employee, any
or all of the officers' signatures on the certificate required by
Section VII.1 may be facsimile. If any officer, transfer agent or
registrar who has signed, or whose facsimile signature or signatures
have been placed upon any certificate, shall cease to be such officer,
transfer agent, or registrar, whether because of death, resignation, or
otherwise, before the certificate is issued by the Corporation, it may
nevertheless be issued by the Corporation with the same effect as if he
or she were such officer, transfer agent or registrar at the date of
issue.
3. TRANSFERS OF SHARES. Transfers of shares shall be made on the books of
the Corporation only upon presentation of the certificate or certificates
representing such shares properly endorsed by the person or persons appearing
upon the face of such certificate to be the owner, or accompanied by a proper
transfer or assignment separate from the certificate, except as may otherwise be
expressly provided by the statutes of the State of Colorado or by order of a
court of competent jurisdiction. The officers or transfer agents of the
Corporation may, in their discretion, require a signature guaranty before making
any transfer. The Corporation shall be entitled to treat the person in whose
name any shares are registered on its books as the owner of those shares for all
purposes and shall not be bound to recognize any equitable or other claim or
interest in the shares on the part of any other person, whether or not the
Corporation shall have notice of such claim or interest.
4. SHARES HELD FOR ACCOUNT OF ANOTHER. The board of directors may adopt by
resolution a procedure whereby a shareholder of the Corporation may certify in
writing to the Corporation that all or a portion of the shares registered in the
name of such shareholder are held for the account of a specified person or
persons. The resolution shall set forth
a. The classification of shareholders who may certify;
b. The purpose or purposes for which the certification may be
made;
c. The form of certification and information to be contained
herein;
d. If the certification is with respect to a record date or
closing of the stock transfer books, the time after the record date or
the closing of the stock transfer books within which the certification
must be received by the Corporation; and
e. Such other provisions with respect to the procedure as are
deemed necessary or desirable. Upon receipt by the Corporation of a
certification complying with the procedure, the persons specified in
the certification shall be deemed, for the purpose or purposes set
forth in the certification, to be the holders of record of the number
of shares specified in place of the shareholder making the
certification.
ARTICLE VIII
MISCELLANEOUS
1. CORPORATE SEAL. The board of directors may adopt a seal, circular in
form and bearing the name of the Corporation and the words "SEAL" and
"COLORADO," which, when adopted, shall constitute the seal of the Corporation.
The seal may be used by causing it or a facsimile of it to be impressed,
affixed, manually reproduced, or rubber stamped with indelible ink.
2. FISCAL YEAR. The board of directors may, by resolution, adopt a fiscal
year for the Corporation.
3. RECEIPT OF NOTICES BY THE CORPORATION. Notices, shareholder writings
consenting to action, and other documents or writings shall be deemed to have
been received by the Corporation when they are received
a. At the registered office of the Corporation in the State of
Colorado;
b. At the principal office of the Corporation (as that office is
designated in the most recent document filed by the Corporation with
the Secretary of State for the State of Colorado designating a
principal office) addressed to the attention of the secretary of the
Corporation;
c. By the secretary of the Corporation wherever the secretary may
be found; or
d. By any other person authorized from time to time by the board
of directors, the president, or the secretary to receive such writings,
wherever such person is found.
4. AMENDMENT OF BYLAWS. These Bylaws may at any time and from time to time
be amended, supplemented, or repealed by the board of directors, or by the
shareholders. The form of Bylaws, or any portion thereof, adopted by the
shareholders shall govern in the event of any conflict with all or any portion
of the Bylaws adopted by the Board of Directors.
The Board of Directors adopted the foregoing as the Amended Bylaws of
ACT Teleconferencing, Inc., effective April 15, 1996.
Date: April 15, 1996 ACT Teleconferencing, Inc.
by /s/ Pamela S. Van Eeckhout
Pamela S. Van Eeckhout, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27
This schedule contains summary financial information extracted from the
Company's unaudited March 31, 1996 financial statements and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 206,541
<SECURITIES> 1,576,921
<RECEIVABLES> 1,123,137
<ALLOWANCES> 32,724
<INVENTORY> 103,478
<CURRENT-ASSETS> 3,037,405
<PP&E> 1,560,216
<DEPRECIATION> 512,118
<TOTAL-ASSETS> 4,608,852
<CURRENT-LIABILITIES> 1,133,571
<BONDS> 0
0
0
<COMMON> 4,273,730
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,608,852
<SALES> 121,251
<TOTAL-REVENUES> 1,372,440
<CGS> 102,109
<TOTAL-COSTS> 771,583
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 26,500
<INTEREST-EXPENSE> (126)
<INCOME-PRETAX> (78,909)
<INCOME-TAX> 41,901
<INCOME-CONTINUING> (154,597)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (154,597)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
