SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
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| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE |
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| SECURITIES EXCHANGE ACT OF 1934 |
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| For the fiscal year ended December 31, 2001 |
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| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE |
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| SECURITIES EXCHANGE ACT OF 1934 |
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| For the transition period from to . |
Commission file number: 000-27385
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
INTERACTIVE INTELLIGENCE, INC.
8909 Purdue Road, Suite 300
Indianapolis, Indiana 46268
Item 4. The Plan is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Plan’s financial statements and schedules have been prepared in accordance with the financial reporting requirements of ERISA. Such financial statements and schedules are included in this Report in lieu of the information required by Items 1–3 of Form 11–K.
Financial Statements and Exhibits
(a) Financial Statements:
Report of Independent Auditors
Financial Statements:
Statements of Net Assets Available for Benefits as of
December 31, 2001 and 2000
Statement of Changes in Net Assets Available for Benefits for the
Year Ended December 31, 2001
Notes to Financial Statements
(b) Supplemental Schedules:
Schedule H, Line 4(i) - Schedule of Assets (Held At End of Year)
(Supplemental schedules not listed are omitted due to the absence of conditions under which they are required.)
(c) Signature Page
(d) Exhibits
23 - Consent of Ernst & Young LLP
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Report of Independent Auditors
Plan Administrator
Interactive Intelligence, Inc. 401(k) Savings Plan
We have audited the accompanying statements of net assets available for benefits of the Interactive Intelligence, Inc. 401(k) Savings Plan as of December 31, 2001 and 2000 and the related statement of changes in net assets available for benefits for the year ended December 31, 2001. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2001 and 2000 and the changes in its net assets available for benefits for the year ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2001, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to auditing procedures applied in our audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Indianapolis, Indiana
May 17, 2002
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Interactive Intelligence, Inc. 401(k) Savings Plan
Statements of Net Assets Available for Benefits
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| December 31 |
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| 2001 |
| 2000 |
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Investments, at fair value |
| $ | 3,971,653 |
| $ | 3,323,229 |
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Cash |
| — |
| 45,516 |
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Contribution receivable |
| 34,881 |
| — |
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Accrued income |
| 4,664 |
| 4,404 |
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Net assets available for benefits |
| $ | 4,011,198 |
| $ | 3,373,149 |
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See accompanying notes.
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Interactive Intelligence, Inc. 401(k) Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2001
Additions: |
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Contributions |
| $ | 1,660,559 |
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Investment income |
| 39,348 |
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Total additions |
| 1,699,907 |
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Deductions: |
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Net realized and unrealized depreciation |
| 925,705 |
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Benefits paid to participants |
| 118,565 |
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Administrative expenses |
| 17,588 |
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Total deductions |
| 1,061,858 |
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Net increase |
| 638,049 |
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Net assets available for benefits at beginning of year |
| 3,373,149 |
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Net assets available for benefits at end of year |
| $ | 4,011,198 |
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See accompanying notes.
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Interactive Intelligence, Inc. 401(k) Savings Plan
Notes to Financial Statements
December 31, 2001
1. Description of the Plan
The following description of the Interactive Intelligence, Inc. 401(k) Savings Plan (“Plan”) provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan’s provisions.
General
Interactive Intelligence, Inc. (“Company”) established the Plan for qualifying employees effective January 1, 1996. The Plan is administered by the Company (“Plan Administrator”). The purpose of the Plan is to provide retirement income and other benefits to eligible employees of the Company. An employee must have reached age 21 to be eligible for participation in the Plan. If an employee has met the age requirement, the employee is eligible to participate in the Plan as of his or her first day of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
Contributions
The Plan is a contributory defined contribution plan. Each year participants may contribute up to 20% of pretax annual compensation, as defined, limited to a maximum as established by the Internal Revenue Service. Participants may also contribute amounts representing qualified rollovers from other qualified plans.
Vesting
Participants are immediately vested in their contributions plus the actual earnings thereon.
Participant Accounts
Each participant’s account is credited with the participant’s contributions and Plan earnings. The benefit to which a participant is entitled equals the participant’s vested accrued balance.
Investment Options
Participants may direct their employee contributions to any of the investment options selected by the Plan Administrator. All investment elections are participant directed.
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Payment of Benefits
Benefits generally are distributed on the participant’s termination of employment with the Company, normal retirement, disability retirement, or death. Benefits are payable in a lump-sum distribution unless otherwise elected by the participant.
Participants may borrow from their account a minimum of $1,000 up to a maximum of $50,000 or 50% of their vested balance. Loans generally range from one to five years. Loans are secured by the balance of the participant’s account and bear interest at rates commensurate with local prevailing rates. Principal and interest payments are made through payroll deductions.
Plan Termination
The Company has not expressed any intent to terminate the Plan but has the option to do so at any time subject to the provisions of ERISA.
Administrative Expenses
Expenses related to the Plan may be paid for by either the Plan or the Plan Administrator.
2. Significant Accounting Policies
Investments
All investments are stated at fair value, which equals the quoted market price on the last business day of the plan year. Participant loans are valued at their outstanding balances, which approximate fair value. Purchases and sales are recorded on a trade-date basis. Interest income is recorded on the accrual basis.
Contributions
Participant contributions are recorded as additions to net assets available for benefits when withheld from the employees’ earnings. Qualified matching and qualified nonelective employer contributions may be made as determined by the Company. The Company may also make profit sharing contributions at its discretion. The Company has made no contributions to the plan through December 31, 2001.
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Income Tax Status
The Plan has not received a determination letter from the Internal Revenue Service stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”). However, the Plan Administrator believes that the Plan is qualified and, therefore, that the related trust is exempt from taxation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
3. Investments
The Plan’s investments were held in trust by Merrill Lynch for the year ended December 31, 2001. The Plan’s investments were held in trust by Fifth Third Bank from January 1, 2000 through March 31, 2000 and by Merrill Lynch from April 1, 2000 through December 31, 2000. During 2001, the Plan’s investments in the various funds (including investments bought, sold, and held during the year) depreciated in fair value as presented in the following table:
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| Net Realized and Unrealized Depreciation in Fair Value of Investments |
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Mutual funds |
| $ | 793,275 |
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Common stock |
| 132,430 |
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| $ | 925,705 |
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The fair value of individual investments that represent 5% or more of the Plan’s net assets is as follows:
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| December 31 |
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| 2001 |
| 2000 |
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Mutual funds: |
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Van Kampen Aggressive Growth |
| $ | 730,672 |
| $ | 1,005,904 |
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Fidelity Advisor Growth and Income |
| 234,257 |
| 243,800 |
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Alger Balanced Portfolio Class A |
| 308,699 |
| 260,265 |
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ML S&P 500 Index Fund Class A |
| 678,275 |
| 754,914 |
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Alliance Premier Growth Class A |
| 453,424 |
| 411,370 |
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Franklin Small Cap Growth Class A |
| 209,837 |
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Money market account: |
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ML Retirement Reserves Money Fund |
| 240,704 |
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Interactive Intelligence, Inc. 401(k) Savings Plan
Schedule H, Line 4i — Schedule of Assets (Held At End of Year)
December 31, 2001
EIN: 35-1933097
Plan Number: 001
Identity of Issue, Borrower, Lessor, or Similar Party |
| Description of Investment, |
| Current Value |
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Mutual funds: |
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Alger Balanced Portfolio Class A | 16,221.6829 |
| shares |
| $ | 308,699 |
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Alger Capital Appreciation Return Portfolio Class A | 2,103.1834 |
| shares |
| 27,068 |
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Alliance Premier Growth Class A | 22,314.1652 |
| shares |
| 453,424 |
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Alliance Premier Growth Class A GM | 1,530.3127 |
| shares |
| 31,096 |
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Calvert Social Investment Fund Equity Porfolio Class A | 114.3474 |
| shares |
| 3,552 |
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Davis New York Venture Fund Class A | 5,976.2581 |
| shares |
| 151,975 |
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Fidelity Advisor Growth and Income Fund Class T | 14,517.4439 |
| shares |
| 234,257 |
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Franklin Small Cap Growth Class A | 6,732.0266 |
| shares |
| 209,837 |
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ING Pilgrim International Value Fund Class A | 6,593.5692 |
| shares |
| 84,793 |
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ING Pilgrim International Value Fund Class A GM | 772.3788 |
| shares |
| 9,933 |
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ING Pilgrim Worldwide Growth Class A | 9,933.8722 |
| shares |
| 166,094 |
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John Hancock Technology Fund Class A | 1,837.1076 |
| shares |
| 9,039 |
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MFS Utilities Fund Class A | 1,649.1620 |
| shares |
| 14,381 |
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* | ML Bond Fund Inc. Intermediate Term Fund Class D | 10,320.5097 |
| shares |
| 116,519 |
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* | ML Global Allocation Fund Class D | 2,971.7527 |
| shares |
| 38,128 |
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* | ML Healthcare Fund Class D | 8,146.8132 |
| shares |
| 52,465 |
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* | ML Pacific Fund Class D | 448.2623 |
| shares |
| 7,568 |
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* | ML S&P 500 Index Fund Class A | 48,172.9570 |
| shares |
| 678,275 |
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Munder Micro Cap Equity | 163.5435 |
| shares |
| 4,233 |
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Munder Netnet Fund Class A | 118.1761 |
| shares |
| 2,125 |
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PIMCO Innovation Fund Class A | 1,573.3358 |
| shares |
| 35,573 |
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PIMCO Total Return Fund Class A | 767.1921 |
| shares |
| 8,025 |
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PIMCO Total Return Fund Class A GM | 2,255.0670 |
| shares |
| 23,588 |
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Pioneer Europe Fund Class A | 79.0500 |
| shares |
| 1,909 |
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Seligman Communications & Information Class A | 504.9156 |
| shares |
| 12,906 |
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Van Kampen Aggressive Growth Fund Class A | 54,527.7629 |
| shares |
| 730,672 |
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Van Kampen Emerging Growth Class A | 976.8784 |
| shares |
| 41,342 |
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Total mutual funds |
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| 3,457,476 |
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Common stock: |
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* | Interactive Intelligence | 18,811.7221 |
| shares |
| 131,068 |
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Money market accounts: |
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* | ML Retirement Reserves Money Fund | 240,705.2800 |
| shares |
| 240,704 |
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Participant loans | Interest rate range 7% to 10.5 % |
| 142,405 |
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| $ | 3,971,653 |
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* Indicates party-in-interest to the Plan.
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| INTERACTIVE INTELLIGENCE, INC. 401(K) SAVINGS PLAN |
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| By: Interactive Intelligence, Inc. Administrative Committee |
Date: June 25, 2002 |
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| /s/ Barbara J. Claassen |
| Barbara J. Claassen, Member |
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| /s/ John R. Gibbs |
| John R. Gibbs, Member |
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| /s/ Debra L. Jones |
| Debra L. Jones, Member |
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| /s/ Keith A. Midkiff |
| Keith A. Midkiff, Member |
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