April 21, 2006
Via Facsimile (212.858.1500) and U.S. Mail
Steven R. Rusmisel, Esq.
Pillsbury Winthrop Shaw Pittman LLP.
1540 Broadway
New York, NY 10036
Re: Inter-Tel, Inc.
Preliminary Proxy Statement on Schedule 14A
Filed April 18, 2006
File No. 0-10211
Dear Mr. Rusmisel:
We have reviewed your filing and have the following
comments. Where indicated, we think you should revise your document
in response to these comments. If you disagree, we will consider
your explanation as to why a comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide us
with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not raise
additional comments.
Please understand that the purpose of our review process is
to assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of our review. Feel free to call us at the telephone numbers listed
at the end of this letter.
General
1. The preliminary proxy statement filed on April 10, 2006, as
revised by this filing, was not identified with the appropriate
header tag to indicate the materials relate to a contest. Thus,
please resubmit this filing with the PREC14A Edgar header tag to
so indicate. Contact Sylvia J. Pilkerton in the Office of Edgar and
Information Analysis by facsimile at (202) 772.9216 to request
guidance on resubmitting the filing with the appropriate header
tag.
Schedule 14A
Notice of Annual Meeting
2. We note the board`s belief that Mr. Mihaylo`s proposals are not
in the security holders` best interests. To the extent the board has
taken a position with regard to the proposals, the proxy statement
should address the basis for that position. Please expand where
appropriate. Further, you should disclose prominently that, by
executing the company`s proxy, security holders will be unable to
vote for Mr. Mihaylo`s proposals if presented.
Revocability of Proxies, page 3
3. Please expand to address the effect of a security holder`s
execution of a White Proxy Card after the execution of the
insurgent`s card, i.e., would the execution revoke the first proxy
in its entirety. For example, will a subsequent execution of a
White Proxy Card revoke a security holder`s vote in connection with
Mr. Mihaylo`s non-election proposals? In this regard, please address
Any other effects of using a limited proxy card.
Voting and Solicitation, page 3
4. We note that you and Innisfree M&A may employ various methods
to solicit proxies, including mail, telephone, in person, facsimile,
or other electronic means. Be advised that all written soliciting
materials, including any e-mails or scripts to be used in
soliciting proxies over the telephone or any other medium, must be
filed under the cover of Schedule 14A on the date of first use. Refer
to Rule 14a-6(b) and (c). Please confirm your understanding.
5. If solicitation via the internet is among the methods you may
employ to solicit proxies, please tell us whether you plan to
solicit via internet chat rooms, and if so, tell us which websites
you plan to utilize.
6. We note your employees may solicit proxies. Please provide the
information required by Item 4(b)(2) of Schedule 14A.
Deadline for Receipt of Shareholder Proposals, page 5
7. It is unclear whether the Company`s proxies will exercise
discretionary authority to vote on Mr. Mihaylo`s proposals in the
event he does not comply with the requirements of Rule 14a-
4(c)(2). In this regard, please note that if the Company does intend
to utilize discretionary authority, if it is available, the Company
must include "advice on the nature of the matter and how [it] intends
to exercise its discretion to vote on each matter."
8. Provide the disclosure regarding Mr. Mihaylo`s proposals under
a separate subheading. Further, if true, clarify that a non-vote
for Mr. Mihaylo`s proposals, i.e., execution of the White Proxy Card,
would constitute a vote against.
Proposal No. 2
9. Please revise your disclosure in this section to address all of
the "material" consequences of the Reincorporation and of the
differences between the provisions of Arizona Law and Delaware
Law, rather than just "certain aspects" of this proposal and "certain
differences" between the state law provisions. Also, to the
extent applicable, revise your description of the possible negative
consequences of this proposal in light of this comment.
Mechanics of the Reincorporation, page 10
10. We refer you to your disclosure in the last full paragraph on
page 11. Please revise your disclosure to state clearly that the
Reincorporation Agreement may be amended after security holders
have voted to adopt the proposal, and confirm that you will re-solicit
security holders` approval if the terms of the agreement will be
materially different than as described here. Additionally, please
summarize the "principal portions" of the Reincorporation
Agreement that may not be amended without the approval of security
holders.
Principal Reasons for the Reincorporation; Recommendation, page 11
11. We refer you to your disclosure in the penultimate paragraph
on page 12. Please explain in greater detail your belief that
Delaware law "strikes an appropriate balance" with respect to the
personal liability of directors and officers.
Federal Income tax Consequences of the Reincorporation, page 24
12. Please revise your disclosure to include a description of all
of the "material" federal tax consequences of the transaction, rather
than just "certain" federal tax consequences.
Shareholder Proposals, page 30
13. It appears that security holders who follow the instructions
included in these materials will be disenfranchised insofar as
they will not be permitted to vote on the matters (other than the
election of directors) that may be proposed by Mr. Mihaylo. Revise
to indicate that by executing and returning the white proxy card,
security holders will relinquish the opportunity to vote on these
proposals.
Form of Proxy
14. Execution of the White Proxy Card gives the company`s proxies
the power to vote shares on "any other matters which may come before"
the meeting. Please revise this language to address Mr. Mihaylo`s
shareholder proposals for which the company may not exercise
discretionary authority. In addition, state clearly that security
holders executing the White Proxy Card will not be able to vote on
Mr. Mihaylo`s proposals. Further, to the extent the proxies
intend to retain discretionary authority on matters for which the
company did not have adequate notice pursuant to Rule 14a-4(c)(1),
please state.
15. It is unclear whether you plan to use discretionary authority
to adjourn the meeting to solicit additional proxies. In this
regard, adjournment of a meeting in order to solicit additional proxies
is not a matter incidental to the conduct of the meeting. See Rule
14a-4(c)(7). To the extent that you wish to vote the proxies in this
way, you must provide a separate voting box on the proxy card so
shareholders may decide whether to grant a proxy to vote in favor
of adjournment for the solicitation of additional votes. Should you
add this box, revise the proxy statement to provide a separate section
discussing the reasons for this proposal and the board`s voting
recommendation with respect to this proposal.
Closing Comments
Please amend the preliminary proxy statement in response to
these comments. Clearly and precisely mark the changes to the
preliminary proxy statement effected by the amendment, as required
by Rule 14a-6(h) and Rule 310 of Regulation S-T. We may have further
comments upon receipt of your amendment; therefore, please allow
adequate time after the filing of the amendment for further staff
review.
You should furnish a response letter with the amendment
keying your responses to our comment letter and providing any
supplemental information we have requested. You should transmit the
letter via EDGAR under the label "CORRESP." In the event that you
believe that compliance with any of the above comments is inappropriate,
provide a basis for such belief to the staff in the response letter.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be certain that they have provided all information investors require
for an informed decision. Since you are in possession of all facts
relating to the company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures you have made.
In connection with responding to our comments, please
provide, in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff of
the Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
Please direct any questions to me at (202) 551-3636 or, in
may absence, to Pam Carmody, Special Counsel, at (202) 551-3265. You
may also contact me via facsimile at (202) 772-9203. Please send all
correspondence to us at the following ZIP code: 20549-3628.
Very truly yours,
Ade K. Heyliger
Attorney-Advisor
Office of Mergers and Acquisitions