UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Inter-Tel, Incorporated
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
458372109
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(CUSIP Number)
Steven G. Mihaylo
P.O. Box 19790 Reno, Nevada
89511
(775) 338-4699
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
Copies to:
Brian J. McCarthy, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, California 90071
(213) 687-5000
April 10, 2006
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 458372 109
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1. Names of Reporting Persons. Steven G. Mihaylo
I.R.S. Identification Nos. of above persons (entities only). Not
applicable.
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2. Check the Appropriate Box if a Member of a Group (see Instructions)
(A) [___]
(B) [___]
Not applicable.
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3. SEC Use Only
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4. Source of Funds (see Instructions)
Not applicable.
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [__]
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6. Citizenship or Place of Organization
Nevada
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Number of Shares 7. Sole Voting Power
Beneficially Owned by
Each Reporting Person 5,179,498
With
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8. Shared Voting Power
None
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9. Sole Dispositive Power
5,179,498
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10. Shared Dispositive Power
None
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
5,179,498
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12. Check if the Aggregate Amount In Row (11) Excludes Certain Shares (See
Instructions) [__]
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13. Percent of Class Represented by Amount in Row 11
19.8%
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14. Type Of Reporting Person (See Instructions)
IN
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This Amendment No. 1 amends and supplements the Schedule 13D, dated March
3, 2006 (the "Original Schedule 13D"), and filed by Steven G. Mihaylo ("Mr.
Mihaylo") with the Securities and Exchange Commission (the "SEC") on March 6,
2006, with respect to the common stock, no par value per share ("Common
Stock"), of Inter-Tel, Incorporated, an Arizona corporation ("Inter-Tel").
Capitalized terms used but not defined herein shall have the respective
meanings set forth in the Original Schedule 13D.
Item 4. Purpose of Transaction.
The response to Item 4 of the Original Schedule 13D is hereby amended and
supplemented by adding the following paragraphs at the end of such Item 4:
On April 3, 2006, Mr. Mihaylo sent a letter (the "April 3
Letter") to the Board of Directors of Inter-Tel (the "Inter-Tel Board")
proposing a meeting with the Inter-Tel Board to discuss a possible
all-cash acquisition of Inter-Tel. Mr. Mihaylo stated in his letter
that in connection with his review of alternatives, as described above
in this Item 4, he has been discussing a possible arrangement between
himself and Vector Capital (together with its affiliates, "Vector"), a
technology-focused private equity fund with substantial experience
investing in and acquiring technology companies, and that he and Vector
have been meeting to discuss the possibility of together pursuing an
acquisition of Inter-Tel and the manner in which that might best be
effected. A copy of the April 3 Letter is filed as Exhibit 1 hereto and
is incorporated herein by this reference.
On April 7, 2006, in accordance with the advance notice bylaw
provisions that Inter-Tel adopted on March 29, 2006, Mr. Mihaylo
delivered to Inter-Tel an advance notice of business and an advance
notice of director nominations (such notices, the "Bylaw Advance
Notices") to be brought before the Annual Meeting. In the Bylaw
Advance Notices, Mr. Mihaylo informed Inter-Tel that he intended (1) to
nominate a slate of three directors (including himself) for election at
the Annual Meeting (the "Director Nominations") and (2) to introduce at
the Annual Meeting several resolutions to be submitted to the vote of
the shareholders (the "Shareholder Proposals"). The Shareholder
Proposals include a resolution urging the Inter-Tel Board to arrange
for the prompt sale of Inter-Tel to the highest bidder and resolutions
to repeal recent amendments to Inter-Tel's bylaws that could have the
effect of discouraging offers to acquire Inter-Tel . Mr. Mihaylo
delivered to Inter-Tel the Bylaw Advance Notices in order to preserve
his ability to communicate directly with Inter-Tel's shareholders and
to solicit their support for his proposal to seek a prompt sale of
Inter-Tel.
The Shareholder Proposals and the respective reasons therefor
are set forth below:
Proposal 1: RESOLVED, that the shareholders of
Inter-Tel, Incorporated ("Inter-Tel") urge
the Inter-Tel Board of Directors to arrange
for the prompt sale of Inter-Tel to the
highest bidder.
The reason for proposal 1 (the "Sell the
Company Resolution" proposal) is to give all
shareholders the opportunity to send a
message to the Inter-Tel Board that the
shareholders support the sale of Inter-Tel
to the highest bidder.
Proposal 2: RESOLVED, that the amendments to Section
2.5 ("Special Meetings of Shareholders") of
the Bylaws of Inter-Tel, Incorporated
adopted by the Board of Directors on
February 21, 2006 relating to the calling of
a special meeting of shareholders for the
purpose of considering any action to
directly or indirectly facilitate a
"business combination" are hereby repealed.
Proposal 3: RESOLVED, that Section 2.12 ("Advance
Notice of Shareholder Business") of the
Bylaws of Inter-Tel, Incorporated adopted by
the Board of Directors on March 29, 2006 is
hereby repealed in its entirety.
Proposal 4: RESOLVED, that Section 2.13 ("Advance
Notice of Director Nominations") of the
Bylaws of Inter-Tel, Incorporated adopted by
the Board of Directors on March 29, 2006 is
hereby repealed in its entirety.
The reason for proposals 2, 3 and 4
(collectively, the "Repeal the Bylaw
Amendments Resolutions") is to give all
shareholders the opportunity to repeal the
amendments to Section 2.5 and to repeal in
their entireties Sections 2.12 and 2.13 of
the Inter-Tel Bylaws recently adopted by the
Board of Directors. The recent amendments to
Section 2.5 and the adoption of Sections
2.12 and 2.13 of the Bylaws could have the
effect of discouraging offers to acquire
Inter-Tel. Together with the Sell the
Company Resolution, the Repeal the Bylaw
Amendments Resolutions would send a strong
message to the Inter-Tel Board that the
shareholders support the sale of Inter-Tel
to the highest bidder and that the Board of
Directors should not adopt amendments to the
Bylaws that could discourage offers to
acquire Inter-Tel.
Proposal 5: RESOLVED, that the Bylaws of Inter-Tel,
Incorporated are hereby amended to require
the unanimous vote of all members of the
Board of Directors in order to adopt any
amendment to the Bylaws that could have an
anti-takeover effect, including, without
limitation, any advance notice requirements
for the election of directors or the conduct
of business at shareholder meetings or any
change in the ability of shareholders to
call a special meeting of shareholders.
The reason for proposal 5 (the "Unanimous
Vote Resolution") is to prevent the Inter-Tel
Board from amending the Bylaws after the
Annual Meeting to create new obstacles to the
sale of Inter-Tel to the highest bidder or
overturning the vote of the shareholders on
the Repeal the Bylaw Amendments Resolutions
without the unanimous vote of all members of
the Inter-Tel Board. If any of the director
nominees proposed by Mr. Mihaylo are elected
at the Annual Meeting, then the Inter-Tel
Board may not be able to obtain a unanimous
vote on any such amendments, although the
result of any such vote would depend upon the
exercise of each such director's fiduciary
duty at the time of the vote. Based upon the
number of shares that Mr. Mihaylo
beneficially owns and cumulative voting under
Arizona law, Mr. Mihaylo will be able to
elect at least one director at the Annual
Meeting.
Proposal 6: RESOLVED, that each and every provision
of the Bylaws of Inter-Tel, Incorporated
adopted by the Board of Directors after
March 29, 2006, and prior to the adoption of
this resolution is hereby repealed.
The reason for proposal 6 (the "No Amendments
Resolution") is to prevent the Inter-Tel
Board from taking actions to amend the Bylaws
to attempt to nullify or delay the actions to
be taken by the shareholders at the Annual
Meeting or to create new obstacles to the
sale of Inter-Tel to the highest bidder.
According to publicly available information,
the most recent amendments to the Bylaws were
adopted on March 29, 2006 and no amendments
subsequent to that date have been publicly
disclosed. If the Inter-Tel Board has adopted
any amendments to the Bylaws since March 29,
2006, or adopts any amendments to the Bylaws
prior the Annual Meeting, the No Amendments
Resolution would repeal all such amendments.
MacKenzie Partners, Inc. ("MacKenzie") has been retained to
assist in the proxy solicitation, and Sitrick And Company Inc.
("Sitrick") has been retained to provide public relations services.
On April 10, 2006, Mr. Mihaylo sent a letter (the "April 10
Letter") to the Inter-Tel Board to reaffirm his interest in meeting
with the Inter-Tel Board or its advisors to discuss a possible all-cash
acquisition of Inter-Tel led by Mr. Mihaylo, as expressed in the April
3 Letter. A copy of the April 10 Letter is filed as Exhibit 2 hereto
and is incorporated herein by this reference.
Also on April 10, 2006, Mr. Mihaylo issued a press release
announcing that he had sent to the Inter-Tel Board the April 3 Letter
and the April 10 Letter, and setting forth the text of the letters, and
that he had delivered to Inter-Tel the Bylaw Advance Notices. A copy of
the press release is filed as Exhibit 3 hereto and is incorporated
herein by this reference.
Mr. Mihaylo plans to file with the SEC, and mail to
Inter-Tel's shareholders, a proxy statement in connection with the
Director Nominations and the Shareholder Proposals. The proxy statement
will include information with respect to any other participants in the
solicitation and a description of the direct and indirect interests of
Mr. Mihaylo and any other participants in the solicitation. Investors
are urged to read the proxy statement and any other relevant documents
when they become available because they will contain important
information. Investors will be able to obtain free copies of the proxy
statement (when available) and other documents that Mr. Mihaylo files
with the SEC through the web site maintained by the SEC at www.sec.gov.
In addition, investors will be able to obtain a copy of the proxy
statement (when available) from Mr. Mihaylo free of charge by
contacting Mr. Mihaylo's proxy solicitor: MacKenzie Partners, Inc., 105
Madison Avenue, New York, New York 10016, Tel: 212-929-5500, Fax:
212-929-0308, email: proxy@mackenziepartners.com.
Item 5. Interest in Securities of the Issuer.
The response to Item 5(a) of the Original Schedule 13D is hereby amended
and supplemented by adding the following paragraph at the end of such Item
5(a):
Of these 5,179,498 shares of Common Stock, Mr. Mihaylo (i) is
the holder of record of 144,000 shares and (ii) may be deemed to be
the beneficial owner of the 5,035,498 shares of Common Stock held by
The Steven G. Mihaylo Trust (the "Trust") because Mr. Mihaylo is the
sole trustee of the Trust.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
The response to Item 6 of the Original Schedule 13D is hereby amended and
supplemented by adding the following paragraph at the end of such Item 6:
In connection with his review of alternatives, as described
above in Item 4, Mr. Mihaylo has been discussing a possible arrangement
between himself and Vector, and he and Vector have been meeting to
discuss the possibility of together pursuing an acquisition of
Inter-Tel and the manner in which that might best be effected.
Item 7. Material to be Filed as Exhibits.
Exhibit 1. Letter, dated April 3, 2006, from Steven G. Mihaylo to
the Board of Directors of Inter-Tel.
Exhibit 2. Letter, dated April 10, 2006, from Steven G. Mihaylo to
the Board of Directors of Inter-Tel.
Exhibit 3. Press release, dated April 10, 2006, issued by
Steven G. Mihaylo.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: April 10, 2006
/s/ Steven G. Mihaylo
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Steven G. Mihaylo
EXHIBIT INDEX
Exhibit 1. Letter, dated April 3, 2006, from Steven G. Mihaylo to
the Board of Directors of Inter-Tel.
Exhibit 2. Letter, dated April 10, 2006, from Steven G. Mihaylo to
the Board of Directors of Inter-Tel.
Exhibit 3. Press release, dated April 10, 2006, issued by
Steven G. Mihaylo.