UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
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
March 3, 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 [X].
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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Item 1. Security and Issuer.
This statement on Schedule 13D (this "Statement") relates to the common
stock, no par value per share ("Common Stock"), of Inter-Tel, Incorporated, an
Arizona corporation ("Inter-Tel"). Inter-Tel's principal executive offices are
located at 1615 S. 52nd Street, Tempe, Arizona 85281.
Item 2. Identity and Background.
(a)-(c) This Statement is being filed by Steven G. Mihaylo ("Mr.
Mihaylo"), an individual. Mr. Mihaylo's address is P.O. Box 19790, Reno, Nevada
89511.
(d) During the last five years, Mr. Mihaylo has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, Mr. Mihaylo has not been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) Mr. Mihaylo is a citizen of the State of Nevada, United States of
America.
Item 3. Source and Amount of Funds or Other Consideration.
Of the 5,180,498 shares of Common Stock reported herein by Mr.
Mihaylo, 5,079,498 shares are founder's shares and 100,000 shares were acquired
upon the exercise of options.
Item 4. Purpose of Transaction.
Mr. Mihaylo originally acquired the shares of Common Stock reported
herein (the "Shares") solely for investment purposes, and not with any plans or
proposals that relate to or would result in any of the transactions specified
in clauses (a) through (i) of Item 4 of Schedule 13D. However, because of
recent events and as further described in this Item 4, Mr. Mihaylo is
evaluating his alternatives with respect to Inter-Tel and his Shares.
Because of differences in strategic direction between the Board and
Mr. Mihaylo, Inter-Tel's founder, largest shareholder and since 1969 its Chief
Executive Officer, on February 22, 2006, Mr. Mihaylo resigned as Chief
Executive Officer of Inter-Tel, and on March 6, 2006, Mr. Mihaylo resigned as a
director of Inter-Tel. As the largest single shareholder of Inter-Tel, Mr.
Mihaylo is considering his alternatives with respect to the future of Inter-Tel
and his investment therein. In that regard, Mr. Mihaylo has engaged legal
counsel and RBC Capital Markets Corporation as financial advisor. See Item 6
below.
In connection with his evaluation of alternatives, Mr. Mihaylo may
acquire additional shares of Common Stock or dispose of shares of Common Stock,
or may suggest or propose to Inter-Tel's management or Board, or take a
position with respect to, an extraordinary corporate transaction, sale or
transfer of assets of Inter-Tel, changes in the Board or management of
Inter-Tel, changes in the capitalization of Inter-Tel, changes in Inter-Tel's
business or corporate structure and/or similar actions and transactions as a
means of enhancing shareholder value, including without limitation, a proposal
to acquire Inter-Tel, going private transaction, tender offer or similar
transaction.
Mr. Mihaylo will continue to evaluate on an ongoing basis Inter-Tel's
financial condition, business, operations and prospects, capital structure,
competitive and strategic matters, management, market price of the Common
Stock, conditions in securities markets generally, general economic and
industry conditions and other factors. Accordingly, Mr. Mihaylo reserves the
right to change his intentions and plans at any time, as he deems appropriate.
Item 5. Interest in Securities of the Issuer.
(a) As of March 6, 2006, Mr. Mihaylo beneficially owned an aggregate
of 5,179,498 shares of Common Stock, representing approximately 19.8% of the
outstanding Common Stock (based on 26,187,913 shares outstanding as of
September 30, 2005, as reported in Inter-Tel's Form 10-Q for the quarter ended
September 30, 2005).
(b) Mr. Mihaylo has the sole power to vote or direct the vote and sole
power to dispose of and direct the disposition of the Shares.
(c) Mr. Mihaylo has not effected any transaction in the Common Stock
during the past 60 days.
(d) No other person is known by Mr. Mihaylo to have the right to
receive or power to direct the receipt of dividends from, or the proceeds from
the sale of, the Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
An affiliate of Mr. Mihaylo, Summit Growth Management, LLC, has
entered into a letter agreement, dated March 3, 2006, (the "Agreement") with
RBC Capital Markets Corporation ("RBC") pursuant to which such affiliate has
engaged RBC to provide certain investment banking and financial advisory
services in connection with a review of Mr. Mihaylo's strategic alternatives
regarding Inter-Tel. Such services may include assisting Mr. Mihaylo in
structuring, negotiating, implementing and coordinating key aspects of a
possible Transaction (as defined below) and in the solicitation of parties
interested in providing equity and/or debt financing in connection with a
possible Transaction. "Transaction" means any transaction or series or
combination of related transactions, whereby directly or indirectly, a majority
of the capital stock of Inter-Tel is, or assets representing a majority in
value of the assets of Inter-Tel are, transferred to Mr. Mihaylo or otherwise
becomes beneficially owned by Mr. Mihaylo for consideration, including, without
limitation, a sale or exchange of capital stock (including by means of a tender
offer) or assets, a merger, plan of exchange or consolidation, the formation of
a joint venture, a minority investment or partnership, or any similar
transaction.
Mr. Mihaylo has agreed to pay RBC, as compensation for its services
under the Agreement, (i) a non-refundable cash retainer fee, (ii) an agreed
upon transaction fee in the event that Mr. Mihaylo consummates, during the term
of the Agreement or during the 12 months following the term, a Transaction
pursuant to a definitive agreement, letter of intent or other evidence of a
commitment entered into between Mr. Mihaylo and Inter-Tel, or by means of a
tender offer to the stockholders of Inter-Tel initiated by Mr. Mihaylo, and
(iii) an agreed upon topping fee in the event that a Third Party Transaction
(as defined below) is consummated during the term of the Agreement or during
the 12 months following the term and such Third Party Transaction is subsequent
to any offer (whether written or oral) made by Mr. Mihaylo to Inter-Tel
relating to a Transaction. "Third Party Transaction" means any transaction or
series or combination of related transactions, whereby directly or indirectly,
a majority of the capital stock of Inter-Tel is, or assets representing a
majority of the assets of Inter-Tel are, transferred to a person not affiliated
with Mr. Mihaylo or Inter-Tel for consideration, including, without limitation,
a sale or exchange of capital stock or assets, a merger, plan of exchange or
consolidation, the formation of a joint venture, a minority investment or
partnership, or any similar transaction. In addition, Mr. Mihaylo has agreed to
reimburse RBC for its reasonable out of pocket expenses in performing the
services under the Agreement, up to an agreed upon dollar amount. The term of
the Agreement is one year, unless earlier terminated by one or both parties
upon 30 days written notice to the other.
Item 7. Material to be Filed as Exhibits.
None.
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: March 6, 2006
/s/ Steven G. Mihaylo
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Steven G. Mihaylo