SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

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(as permitted by Rule 14a-6(e)(2))
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

XETA TECHNOLOGIES, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

XETA TECHNOLOGIES, INC.
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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[XETA TECHNOLOGIES LOGO]

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Notice is hereby given that the Annual Meeting of Shareholders of XETA
Technologies, Inc. will be held at the Tulsa Marriott Southern Hills located at
1902 East 71st Street, Tulsa, Oklahoma, on April 2, 2003 at 6:30 p.m., local
time, for the following purposes:

1. To elect six (6) members to the Company's Board of
Directors to serve until the next Annual Meeting of Shareholders and
until their successors have been elected and qualified;

2. To ratify the selection of Grant Thornton LLP as
independent certified public accountants for the Company for the 2003
fiscal year; and

3. To transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.

The Board of Directors has fixed the close of business on February 7, 2003, as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting or any adjournment or adjournments thereof. Only
shareholders of record at such time will be so entitled to vote. The Company's
Proxy Statement is attached. The Proxy Statement and form of proxy will first be
sent to shareholders on or about February 28, 2003.

IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE ANNUAL MEETING REGARDLESS
OF THE NUMBER OF SHARES YOU HOLD. IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN
PERSON, PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE. THE GIVING OF THIS PROXY DOES NOT AFFECT YOUR RIGHT TO VOTE IN PERSON
IN THE EVENT YOU ATTEND THE MEETING.

By Order of the Board of Directors

/s/ Robert B. Wagner

Robert B. Wagner
Secretary

February 12, 2003

[ XETA ]
[ TECHNOLOGIES ]
[ LOGO ]
1814 West Tacoma
Broken Arrow, Oklahoma 74012

PROXY STATEMENT

SOLICITATION OF PROXIES

This Proxy Statement is being furnished to shareholders of XETA
Technologies, Inc. (the "Company") by its Board of Directors to solicit proxies
for use at the Annual Meeting of Shareholders (the "Annual Meeting") to be held
on April 2, 2003, at the Tulsa Marriott Southern Hills located at 1902 East 71st
Street, Tulsa, Oklahoma, at 6:30 p.m., local time, or at such other time and
place to which the Annual Meeting may be adjourned.

The purpose of the Annual Meeting is (i) to elect six (6) members to the
Company's Board of Directors (the "Board") to serve for the ensuing year and
until their successors are elected; (ii) to ratify the selection of Grant
Thornton LLP as the Company's independent certified public accountants for the
fiscal year ending October 31, 2003; and (iii) at the discretion of the proxy
holders, to transact any other business that may properly come before the Annual
Meeting or any adjournment thereof.

You are urged to promptly complete and return the accompanying proxy card
in the envelope provided, whether or not you intend to be present at the Annual
Meeting. If you are present at the Annual Meeting and wish to vote your shares
in person, the accompanying Proxy will, at your request, be returned to you at
the Annual Meeting. Any shareholder giving a Proxy has the power to revoke it at
any time before it is exercised by executing a subsequently dated proxy,
submitting a notice of revocation to the Company, or attending the Annual
Meeting and voting in person.

Proxies properly executed and returned will be voted in accordance with the
specifications marked on the Proxy card. Proxies containing no specifications
will be voted in favor of the proposals described in this Proxy Statement.

It is expected that this Proxy Statement and the accompanying Proxy card
will first be mailed to shareholders on or about February 28, 2003. The cost of
soliciting proxies will be borne by the Company. The Company will reimburse
brokerage firms, banks and other nominees, custodians and fiduciaries for their
reasonable expenses incurred in sending proxy materials to beneficial owners of
shares and obtaining their instructions. The Company has retained Computershare
Investor Services ("Computershare") to assist in the distribution of the Proxies
and Proxy Statements for an estimated fee of $1,800. Votes will be tabulated by
Computershare.

VOTING SECURITIES

Only shareholders of record at the close of business on February 7, 2003
(the record date) are entitled to vote at the Annual Meeting and any adjournment
thereof. As of January 31, 2003, there were 9,702,952 shares of Common Stock of
the Company outstanding (excluding 1,018,788 shares held in treasury).
Shareholders are entitled to one vote per share of Common Stock registered in
their name on the record date. A majority of the shares entitled to vote,
present in person or represented by proxy, is necessary to constitute a quorum
at the Annual Meeting. Abstentions and broker non-votes are counted as shares
present in determining whether the quorum requirement is satisfied but are not
counted as votes cast in the tabulation of votes on any matter brought before
the Meeting. The affirmative vote of a majority of the shares of the Company's
Common Stock represented at the Annual Meeting is required for the election of
directors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information known to the Company as
of December 31, 2002 regarding beneficial ownership of the Company's Common
Stock, par value $.001 per share, by (a) each person known by the Company to own
more than five percent (5%) of the Company's Common Stock, (b) each director and
nominee for election as a director of the Company, (c) each executive officer
named in the Summary Compensation Table, and (d) all directors and executive
officers of the Company as a group.

<Table>
<Caption>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER(1) OWNERSHIP(2) CLASS
- ---------------------- ----------------- -----------

Jack R. Ingram 1,350,500(3) 13.78%

Ronald L. Siegenthaler 1,200,000(4) 12.12%
P.O. Box 571300, Tulsa, OK 74157

FMR Corp 539,869(5) 5.56%
82 Devonshire St
Boston, MA 02109

Jon A. Wiese 580,000(6) 5.97%
11509 S. Granite Ave., Tulsa, OK 74137

Robert B. Wagner 119,937(7) 1.23%

Donald E. Reigel 113,237(8) 1.16%
5350 Manhattan Circle, Suite 210,
Boulder, CO 80303

Ron B. Barber 105,472 1.09%
525 S. Main Street, Suite 800
Tulsa, OK 74103

Larry N. Patterson 96,545(9) *

Robert D. Hisrich 61,150(10) *
10900 Euclid Avenue, Cleveland, OH 44106

Donald T. Duke 37,500 *
1505 Vandivort, Edmond, OK 73034

James J. Burke 11,240(11) *
2737 Dos Lomas, Fallbrook, CA 92028

All officers and directors as a group 3,095,581 31.49%
(9 persons)

</Table>

- ----------

*Less than one percent of the shares outstanding.

(1) Address is that of the Company's principal office at 1814 W. Tacoma,
Broken Arrow, Oklahoma 74012 unless otherwise indicated.

(2) Except as indicated in the footnotes to this table, the persons named in
the table have sole voting and investment power with respect to all
shares shown as beneficially owned by them, subject to community property
laws where applicable. The number of shares beneficially owned includes
the number of shares of Common Stock that such persons had the right to
acquire within 60 days of December 31, 2002, pursuant to unexercised
options under the Company's stock option plans, as follows: 135,000
shares for Mr. Ingram; 200,000 shares for Mr. Siegenthaler; 65,400 shares
for Mr. Reigel; 56,000 shares for Mr. Wagner; 66,666 shares for Mr.
Patterson; 3,000 shares for Mr. Burke; and 526,066 shares for all
directors and executive officers as a group (9 persons).

(3) Includes 10,000 shares held by Mr. Ingram's wife.

(4) Includes 175,000 shares held by Mr. Siegenthaler's wife's trust.

(5) This information is based upon a Schedule 13G dated February 14, 2002
filed with the Securities and Exchange Commission by FMR Corp., Edward C.
Johnson 3d, and Abigail P. Johnson. According to the Schedule 13G: FMR
Corp. is a parent holding company of Fidelity Management & Research
Company ("Fidelity"). Fidelity, as a result of acting as an investment
adviser to various investment companies, including Fidelity Low Priced
Stock Fund (the "Fund"), is the beneficial owner of these 539,869 shares.
Members of the Edward C. Johnson 3d family, including Abigail Johnson,
may be deemed to form a controlling group with respect to FMR Corp. by
reason of their ownership of approximately 49% of the voting power of FMR
Corp. and a shareholders' voting agreement among them and the other
shareholders of the voting stock of FMR Corp. Edward C. Johnson 3d, FMR
and the Fund each has sole investment power over the 539,869 shares of
XETA stock shown above. Neither FMR Corp. nor Mr. Johnson has sole voting
power over such shares, as that power resides with the Fund's Board of
Trustees.

(6) Reflects options which are presently exercisable. Mr. Wiese is shown as a
5% beneficial owner solely by reason of these outstanding options, of
which the Company has direct knowledge. Except for these outstanding
options, the Company has no other information or knowledge regarding Mr.
Wiese's security holdings, if any, in the Company.

(7) Includes 5,200 shares held by Mr. Wagner as custodian for his minor
children, over which he has sole voting and investment power, and 1,337
shares held by the Company's 401(k) retirement plan, over which Mr.
Wagner has shared investment power and no voting power.

(8) Includes 21,836 shares held by the Company's 401(k) retirement plan, over
which Mr. Reigel has shared investment power and no voting power.

(9) Includes 9,240 shares held by the Company's 401(k) retirement plan, over
which Mr. Patterson has shared investment power and no voting power.

(10) Includes 3,600 shares held by Dr. Hisrich as custodian for his minor
child.

(11) Includes 8,092 shares held by the Company's 401(k) retirement plan, over
which Mr. Burke has shared investment power and no voting power.

ELECTION OF DIRECTORS

INFORMATION CONCERNING THE NOMINEES

The Company's Amended and Restated Certificate of Incorporation and Amended
and Restated Bylaws, both as further amended, provide that the Board of
Directors shall consist of such number of directors as is fixed from time to
time by resolution of the Board of Directors. At the current time, the Board has
fixed the number of directors at six. Members of the Board are elected for
one-year terms.

The nominees for election to the Board of Directors are set forth below.
All of the nominees have been recommended by the Board of Directors and all have
indicated a willingness to serve if elected. If any nominee should become
unavailable for election for any presently unforeseen reason, the persons
designated as proxies will have full discretion to cast votes for another person
designated by the Board. All of the nominees are currently directors of the
Company.

<Table>
<Caption>
NAME POSITIONS WITH COMPANY DIRECTOR SINCE
- ----------------------- -------------------------------------- ---------------

Ron B. Barber Director March 1987

Donald T. Duke Director March 1991

Dr. Robert D. Hisrich Director March 1987

Jack R. Ingram Chairman of the Board, March 1989
Chief Executive Officer, and President

Ronald L. Siegenthaler Director September 1981
</Table>

Robert B. Wagner Chief Financial Officer, March 1996
Vice President of Finance,
Secretary, Treasurer and Director
</Table>

MR. BARBER, age 48, has been a director of the Company since March 1987. He
has been engaged in the private practice of law since October 1980 and is a
shareholder in the law firm of Barber & Bartz, a Professional Corporation, in
Tulsa, Oklahoma, which serves as counsel to the Company. Mr. Barber is also a
Certified Public Accountant licensed in Oklahoma. He received his Bachelor of
Science Degree in Business Administration (Accounting) from the University of
Arkansas and his Juris Doctorate Degree from the University of Tulsa.

MR. DUKE, age 53, has been a director of the Company since March 1991. From
1980 until August, 2002, he was in senior management in the oil and gas
industry, including time as President and Chief Operating Officer of Hadson
Petroleum (USA), Inc., a domestic oil and gas subsidiary of Hadson Corporation,
where he was responsible for all phases of exploration and production, land,
accounting, operations, product marketing and budgeting and planning. Mr. Duke
has a Bachelor of Science Degree in Petroleum Engineering from the University of
Oklahoma.

DR. HISRICH, age 58, has been a director of the Company since March 1987.
He occupies the A. Malachi Mixon III Chair in Entrepreneurial Studies and is
Professor of Marketing and Policy Studies at the Weatherhead School of
Management at Case Western Reserve University in Cleveland, Ohio. Prior to
assuming such positions, he occupied the Boviard Chair of Entrepreneurial
Studies and Private Enterprise and was Professor of Marketing at the College of
Business Administration for the University of Tulsa. He is also a marketing and
management consultant. He is a member of the Board of Directors of Jameson Inn,
Inc. and Noteworthy Medical Systems, Inc., a member of the Editorial Boards of
the Journal of Venturing and the Journal of Small Business Management, and a
member of the Board of Directors of Enterprise Development, Inc. Dr. Hisrich
received his Bachelor of Arts Degree in English and Science from DePauw
University and his Master of Business Administration Degree (Marketing) and
Ph.D. in Business Administration (Marketing, Finance, and Quantitative Methods)
from the University of Cincinnati.

MR. INGRAM, age 59, has been the Company's Chief Executive Officer since
July 1990. He also served as the Company's President from July 1990 until August
1999 and re-assumed that position in June 2001. He has been a director of the
Company since March 1989. Mr. Ingram's business experience prior to joining the
Company was concentrated in the oil and gas industry. Mr. Ingram holds a
Bachelor of Science Degree in Petroleum Engineering from the University of
Tulsa.

MR. SIEGENTHALER, age 59, has been a director of the Company since its
incorporation. He also served as the Company's Executive Vice President from
July 1990 until March 1999. Since 1974, through SEDCO Investments, a partnership
in which Mr. Siegenthaler is a partner, and as an individual, Mr. Siegenthaler
has been involved as partner, shareholder, officer, director, or sole proprietor
of a number of business entities with significant involvement in fabrication and
marketing of steel, steel products and other raw material, real estate, oil and
gas, and telecommunications. Mr. Siegenthaler received his Bachelor's Degree in
Liberal Arts from Oklahoma State University.

MR. WAGNER, age 41, has been the Company's Vice President of Finance and
Chief Financial Officer since March 1989. He has been with the Company since
July 1988 and became a member of the Board of Directors in March 1996. Mr.
Wagner is a Certified Public Accountant licensed in Oklahoma and received his
Bachelor of Science Degree in Accounting from Oklahoma State University.

None of the foregoing nominees has any family relationship to any other
nominee. There are no arrangements or understandings between any of the named
individuals and any other person or persons pursuant to which any of the named
individuals are to be elected as directors.

BOARD MEETINGS AND COMMITTEES

The Board of Directors of the Company held four meetings during the fiscal
year ended October 31, 2002. All other action taken by the Board of Directors
was consented to in writing by a Memorandum of Action in lieu of a meeting, to
which all incumbent directors subscribed. Directors meet their responsibilities
not only by attending Board and committee meetings but also through
communication with members of management on matters affecting the Company. The
Board of Directors has an Audit Committee and Compensation Committee. There is
no nominating committee or committee performing the functions of a nominating
committee.

Audit Committee. The Company's Audit Committee operates under a written
charter adopted by the Board of Directors. A copy of this charter was filed with
the Securities and Exchange Commission on February 13, 2001 as Appendix A to the
Company's proxy statement. The Audit Committee assists the Board in fulfilling
its responsibility for oversight of the quality and integrity of the accounting,
auditing and financial reporting practices of the Company. In this regard, the
Committee serves to insure that independent communication and information flows
between and among the Audit Committee, the Company's internal auditor and the
Company's outside auditor, and fosters candid discussion among management and
the inside and outside auditors of issues involving judgment and affecting the
quality of the audit process and public financial reporting. The Audit Committee
met five times independently of meetings of the Board of Directors during the
2002 fiscal year or in connection with the audit of the 2002 fiscal year.

The Audit Committee currently consists of directors Donald T. Duke, Robert
D. Hisrich, Ronald L Siegenthaler and Ron B. Barber. Mr. Duke, Dr. Hisrich and
Mr. Siegenthaler all qualify as independent directors under Nasdaq's existing
listing standards, and Mr. Barber serves on the Committee under an existing
exemption to such listing standards. In appointing Mr. Barber pursuant to this
exemption, the Board determined that Mr. Barber's professional training as a
lawyer and a certified public accountant, along with his service to the Company
in various positions, including outside general counsel and former Chief
Financial Officer and Senior Vice President of the Company in the mid to late
1980's, make him uniquely qualified to understand and provide guidance and
advice to the Committee with respect to financial and accounting issues
presented from time to time and the accounting and financial reporting functions
of the Company.

As a result of the Sarbanes-Oxley Act of 2002, which was signed into law on
July 30, 2002, Nasdaq is required to make changes to its listing standards on
audit committees, including the definition of "independence" for purposes of
serving on an audit committee. As new rules are adopted and implemented by
Nasdaq and by the Securities and Exchange Commission under Sarbanes-Oxley, the
Company anticipates making changes to its Audit Committee and its Audit
Committee charter as necessary to comply with the new rules and standards.

REPORT OF AUDIT COMMITTEE

January 29, 2003

To the Board of Directors of XETA Technologies, Inc.:

The Audit Committee oversees XETA's financial reporting process on behalf of the
Board of Directors. Management has the primary responsibility for the financial
statements and the reporting process including the systems of internal controls.
We have reviewed and discussed with management and with the independent auditors
the Company's audited financial statements as of and for the year ended October
31, 2002.

We have discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.

We have received and reviewed the written disclosures and the letter from the
independent auditors required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with the auditors the auditors' independence.

Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the year ended October 31, 2002.

The Audit Committee,

Donald T. Duke, Chairman
Ronald L. Siegenthaler
Robert D. Hisrich
Ron B. Barber

Compensation Committee. The Compensation Committee consists of directors
Ron B. Barber, Donald T. Duke, Robert D. Hisrich and Ronald L. Siegenthaler.
This Committee works with Company management and provides advice and assistance
to the Board regarding establishment of the Company's compensation philosophy,
objectives and strategy; administration of executive and management compensation
programs; significant changes in employee benefit plans; executive employment
and severance agreements; and appointments to the Committee. The Committee is
also responsible for recommending for full Board approval the compensation of
the Chairman and Chief Executive Officer, President and directors of the
Company, and for providing an annual report on executive compensation to the
Board. The Compensation Committee met once independently of meetings of the
Board of Directors during the 2002 fiscal year. All other action taken by the
Compensation Committee was consented to in writing by a Memorandum of Action in
lieu of a meeting, to which all committee members subscribed.

DIRECTOR COMPENSATION

Effective May 20, 2001, the Company reduced directors fees by 20% as part
of its cost containment and reduction program. The Company compensates its
directors who are not officers of the Company $9,600 per year for Board
membership. In addition, Board members serving on a Committee receive $8,000 per
year and Board members serving as Chairman of a Committee receive an additional
$16,000 per year. On November 1, 2001, the Company granted three of its outside
Board members options to purchase 8,000 shares each of the Company's common
stock, and the remaining outside Board member options to purchase 12,000 shares
of the Company's common stock, at an exercise price of $3.63 per share, the then
current market value of the Company's common stock. These options are not
exercisable until November 1, 2004 and expire on November 1, 2011. No other
compensation was paid to directors for their services as such during the
Company's 2002 fiscal year.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE ELECTION OF ALL OF THE NOMINEES LISTED ABOVE AS DIRECTORS OF THE COMPANY.

INDEPENDENT PUBLIC ACCOUNTANTS

The Company dismissed Arthur Andersen LLP ("Andersen") as the Company's
independent auditors on August 9, 2002 upon the recommendation of its Audit
Committee and with the approval of the full Board of Directors. Also on August
9, 2002, the Company engaged Grant Thornton LLP ("GT") as its new independent
auditors upon the recommendation of its Audit Committee and with the approval of
the full Board of Directors.

The reports of Andersen on the Company's consolidated financial statements
for each of the Company's fiscal years ended October 31, 2000 and 2001 did not
contain an adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope or accounting principles.

During the fiscal years ended October 31, 2000 and 2001 and through the
interim period from November 1, 2001 through August 9, 2002, (i) there were no
disagreements with Andersen on any matter of accounting principle or practice,
financial statement disclosure or auditing scope or procedure that, if not
resolved to the satisfaction of Andersen, would have caused Andersen to make
reference to the subject matter in connection with its report on the Company's
consolidated financial statements for such years and (ii) there were no
reportable events as defined in Item 304 (a)(1)(v) of Regulation S-K.

Andersen no longer provides the letter required by Item 304(a)(3)
confirming whether it agrees or disagrees with the statements made in the
foregoing disclosure. At the time the Company filed its report on Form 8-K
reporting the change in its certifying accountant from Andersen to GT, the
Company was advised that Andersen was no longer issuing such letters so the
Company relied on the provisions of Item 304T(b)(2) to excuse the Company's
inability to comply with the requirements of Item 304(a)(3).

During the years ended October 31, 2000 and 2001 and through the date of
this current report, the Company did not consult with GT with respect to the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's consolidated financial statements, or any other matters or
reportable events as set forth in Items 304 (a)(2)(i) and (ii) of Regulation
S-K.

The Audit Committee and the Company's Board of Directors has selected Grant
Thornton LLP as the independent public accountants to audit the Company's
financial statements for the fiscal year ending October 31, 2003.
Representatives of GT are expected to be present at the Annual Meeting with the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions. While ratification of the Company's selection of
accountants by the Company's shareholders is not required, in the event of a
negative vote on such ratification, the Company's Board of Directors will
reconsider its selection. GT audited the Company's financial statements for the
year ended October 31, 2002.

FEES AND INDEPENDENCE

Audit Fees. GT billed the Company an aggregate of $63,000 for professional
services rendered for the audit of the Company's financial statements for fiscal
year ended October 31, 2002 and its review of the Company's financial statements
included in the Company's Form 10-Q during the third quarter of fiscal 2002.
Prior to the dismissal of Andersen, the Company paid Andersen $6,000 for
professional services rendered in conjunction with the review of the Company's
financial statements included in the first and second quarter Forms 10-Q for
fiscal 2002.

Financial Information Systems Design and Implementation Fees. During the
fiscal year ended October 31, 2002, neither GT nor Andersen provided any
services in connection with financial information systems design and
implementation.

All Other Fees. During the fiscal year ended October 31, 2002, Andersen
billed the Company an aggregate of $31,050 for tax consulting and compliance
services. GT did not provide any tax consulting or compliance services to the
Company during fiscal 2002.

The Audit Committee of the Board of Directors has determined that the
provision of services by GT described in the preceding two paragraphs are
compatible with maintaining GT's independence as the Company's principal
accountant.

EXECUTIVE OFFICERS

The executive officers and significant employees of the Company, their
ages, positions held with the Company and length of time in such positions are
set forth below. There are no family relationships between or among any of the
named individuals. There are no arrangements or understandings between any of
the named individuals and any other person or persons pursuant to which any of
the named individuals are to be elected as officers.

<Table>
<Caption>
NAME AND AGE POSITIONS WITH COMPANY OFFICER SINCE
- ----------------------- -------------------------------------- --------------

Jack R. Ingram Chairman of the Board, Chief July 1990
Age 59 Executive Officer and President

Robert B. Wagner Chief Financial Officer, March 1989
Age 41 Vice President of Finance,
Secretary, Treasurer and Director

Larry N. Patterson Senior Vice President - Sales & Service March 2000
Age 46

Donald E. Reigel Regional Vice President, Sales - Central June 1995
Age 48

James J. Burke Regional Vice President, Sales - Western September 2000
Age 58
</Table>

Brief descriptions of the business experience of Messrs. Ingram and Wagner
are set forth under the section of this Proxy Statement entitled "Election of
Directors."

MR. PATTERSON joined the Company in March 2000 and serves as Senior Vice
President, Sales and Service. Prior to his employment with the Company, Mr.
Patterson worked for Exxon Corporation and held various executive positions in
Europe, Asia and Latin America with Exxon Company, International. He is a member
of the American Management Association and is active in Organizational
Development, Leadership Development and Investment Management activities. Mr.
Patterson received his Bachelor of Science Degree in Engineering from Oklahoma
State University.

MR. REIGEL joined the Company in June 1993 as PBX Product Sales Manager. He
was promoted to Vice President of Marketing and Sales in June 1995; became Vice
President of Hospitality Sales in December 1999; and is currently Regional Vice
President, Sales - Central. Prior to his employment with the Company, Mr. Reigel
served as a national accounts sales manager for WilTel Communications Systems.
Mr. Reigel received his Bachelor of Science Degree in Business from the
University of Colorado.

MR. BURKE joined the Company in November 1999 in conjunction with the
acquisition of USTI and is currently Regional Vice President, Sales - Western.
Prior to his employment with the Company, he had been employed by USTI since
August 1990 and served as the Western Region Sales Director and National Sales
Director. Mr. Burke received his Bachelor of Science Degree in Business from
Niagara University.

EXECUTIVE COMPENSATION AND RELATED INFORMATION

COMPENSATION COMMITTEE REPORT

The Compensation Committee is the focal point for senior management and
the Board of Directors to address corporate compensation issues. The Committee's
primary responsibility is to make recommendations to the Board regarding
remuneration of executive officers and to evaluate the design and
competitiveness of the Company's compensation plans. The Committee consists of
four outside directors, one of whom is the Company's outside counsel.

Compensation Philosophy. The heart of the Company's compensation
philosophy is the enhancement of shareholder value. Consequently, the interests
of shareholders and the need to be competitive in recruiting and retaining
quality managers and to motivate management to improve shareholder value drive
the design of executive compensation programs. A primary component of the
Company's compensation philosophy is to structure compensation programs so that
a high percentage of remuneration is "at risk". Near term cash compensation
reflects corporate performance and larger long-term incentives are tied directly
to share value.

Executive Compensation Program. Compensation for executive officers is
comprised of base salary, competitive employee benefits, an annual incentive
compensation opportunity, and long term incentive compensation in the form of
stock options. Under the Company's incentive compensation program, the higher an
executive's level of responsibility, the greater the portion of his compensation
that will be dependent on performance.

The Compensation Committee reviews executive compensation levels with
respect to corporate and individual performance, as well as competitive pay
practices. The Company's Human Resources Department assists the Committee in
this analysis and, from time to time, the Committee retains the services of a
third party compensation-consulting firm. In addition, the Committee considers
general industry conditions, as well as the Company's recent recruiting
experiences. From its review, the Committee believes the Company's executive
compensation program to be generally competitive with similarly placed
companies.

The Committee reviews annually the base salaries of XETA's executive
officers and recommends any adjustments it may deem appropriate, for approval by
the full Board of Directors. In its review, the Committee takes into account
individual factors such as; experience, performance, both during the preceding
12 months and future potential, retention considerations and others issues
particular to the executive and XETA. Additionally, the Committee considers the
growth and performance of the Company as it assesses the market basis for
executive salaries. Fiscal year 2002 was the second consecutive year of
extremely weak market fundamentals for the entire industry, and while XETA,
contrary to most of the industry, remained profitable, only minimal traction was
developed in driving the growth of revenues and cash flow. As a result, the
Company maintained its posture of aggressive cost containment, including the
general wage and salary freeze instituted in fiscal year 2001 and the
compensation reduction for the CEO and outside directors, as well. The Company's
financial performance in the fourth quarter was sufficient, however, to allow
the salaries and wages of all employees except senior officers to be increased
by a modest 2% effective December 2, 2002.

Due to poor business visibility, the Company, as reported last year,
suspended indefinitely its defined incentive compensation program for all
non-sales employees. However, the Company still believes it is essential to
appropriately recognize the leadership and sacrifice of many of its key
employees during this difficult time. To achieve that recognition, the Board
again authorized a small discretionary bonus pool ($180,000). From the pool a
total of $52,500 was awarded to four executives with the remaining $127,500
being distributed to numerous other key employees. In keeping with the Company's
compensation philosophy, the Committee will continue to support this practice at
current levels of profitability.

The Company's sales executives are provided an annual incentive
compensation opportunity under the compensation plan for all sales
professionals, which went into effect December 1, 1999. The purpose of this
incentive compensation plan is to provide an incentive to the Company's sales
force to help XETA achieve its targeted strategic and margin sales objectives.
Award levels under the plan are set so as to be competitive with the market and
are paid on a prorated basis. The awards paid to the Company's sales executives
during fiscal year 2002 are tabulated in the Summary Compensation Table. The
Committee believes the plan's provisions are consistent with XETA's executive
compensation philosophy and that the plan has been effective for its stated
purpose.

As a long-term incentive, the Company grants options to purchase shares
of Common Stock to directors, executive officers, and other key employees. These
stock options have been awarded in two ways under plans approved by the Board of
Directors. The first is under the shareholder-approved stock option plans, and
the second is through special grants of non-qualified options. Most of the
grants are subject to a vesting period and carry a ten-year exercise term.
During fiscal year 2002, the Company granted non-qualified and qualified
incentive options for a total of 277,900 shares, of which 116,000 were awarded
to executives with the balance awarded to other employees.

The Committee believes that stock options are an effective compensation
tool for the purpose of enhancing shareholder value. Currently, the Company's
employees hold valid and unexercised option grants for a total of 1,659,640
shares of common stock and are vested in options for 1,153,074 shares. Of these
totals, the Company's executives presently possess option grants for 455,000
shares and are vested in options for 277,734 shares.

Strike prices for grants are determined by the closing market price of
the Company's stock on the date of the grant. The strike prices of the option
grants currently outstanding range from a high of $18.13 per share to a low of
$.25 per share (the low dating back to grants made in the early 1990's). Of the
1,659,640 shares of common stock subject to outstanding options, 904,600 shares
(constituting more than 50% of outstanding options and more than 78% of vested
options) are at a strike price in excess of $5.00 per share.

2002 CEO Compensation. The compensation package for the Company's CEO,
Mr. Jack Ingram, is consistent in all material aspects with the program for the
Company's other executive officers. His current annual base salary is $165,000,
down from $220,000 as part of the fiscal year 2001 reductions discussed earlier.
Additionally, he was granted a cash bonus of $17,000 for his performance during
fiscal year 2002 from the small Board-authorized discretionary bonus pool
outlined above.

As part of his original compensation package with the Company at the
time of his employment in 1990, Mr. Ingram was granted options to purchase an
aggregate of 200,000 shares of Common Stock pursuant to a special non-qualified
grant approved by the Board of Directors. These options, which have a 10-year
exercise period, were subsequently adjusted proportionately in number and
exercise price in accordance with 2-for-1 stock split in 1999 and a 2-for-1
stock split in 2000. At this time these options are fully vested, and Mr. Ingram
has exercised all but options to purchase 100,000 post-split shares. On November
1, 2001 he was granted an additional option to purchase 35,000 shares of the
Company's stock at a price of $3.63 per share. He is not yet vested in this
grant. Mr. Ingram has purchased the balance of his stock holdings in the Company
on the open market.

In evaluating the compensation package of the Company's CEO, the
Committee considers such factors as XETA's strategic and financial performance,
his compensation in relation to that of CEO's at other comparable companies, his
personal contribution to the XETA's success, and the Company's overall executive
compensation philosophy. For fiscal year 2002, the Committee believes the
compensation package of the CEO was consistent with the Company's objectives.

Conclusion. The Compensation Committee believes the Company's executive
compensation program has been consistent with the philosophy outlined in this
report and has been effective overall in achieving its objectives during fiscal
2002. The Committee hereby submits this report to XETA's Board of Directors for
approval.

The Compensation Committee,

Donald T. Duke, Chairman
Ron B. Barber
Robert D. Hisrich
Ronald L. Siegenthaler

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee are those named above. There are
no "interlocks" (as defined by the rules of the Securities and Exchange
Commission) with respect to any member of the Compensation Committee of the
Board of Directors. No member of this Committee was at any time during the 2002
fiscal year an officer or employee of the Company.

No member of the Committee is a former officer or employee of the Company,
except as follows: Mr. Barber served as Senior Vice President of the Company
from August 17, 1987 to March 1991, and is a shareholder in the law firm of
Barber & Bartz, a Professional Corporation, which serves as outside general
counsel to the Company; and Mr. Siegenthaler served as Executive Vice President
of the Company from July 1990 to March 1999.

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth information concerning the compensation of
the Company's Chief Executive Officer and the next four most highly compensated
executive officers of the Company.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------- ----------------------
(a) (b) (c) (d) (e) (g) (i)

NAME AND COMMON STOCK ALL
PRINCIPAL UNDERLYING OTHER
POSITION YEAR SALARY BONUS OTHER OPTIONS(#)(1) COMPENSATION(2)
- -------- ---- ------------ ------------ -------------- ------------- ---------------

Jack R. Ingram 2002 $ 165,725 $ 17,000 $ 486,000(3) 35,000 $ 8,000
Chief Executive 2001 194,025 -- 926,838(3) -- 6,800
Officer 2000 192,696 -- 648,750(3) -- 6,800

Larry N. Patterson 2002 137,991 14,000 7,932(4) 25,000 6,394
Senior Vice President 2001 130,615 12,500 -- 50,000 5,727
-Sales & Service 2000 84,135 10,000 -- 40,000 3,765

Donald E. Reigel 2002 100,357 37,367 1,131(4) 8,000 5,552
Regional Vice 2001 95,797 89,685 358,947(3) -- 6,800
President, Sales- 2000 99,808 53,596 1,744,459(5) 12,000 6,800
Central

James J. Burke 2002 100,357 37,367 -- 8,000 5,507
Regional Vice 2001 93,585 89,685 11,326(6) -- 6,800
President, Sales- 2000 53,135 -- 182,493(6) 8,600 6,800
Western

Robert B. Wagner 2002 110,393 14,000 -- 25,000 4,974
Chief Financial 2001 104,492 12,500 3,592(4) -- 4,826
Officer and Vice 2000 100,846 10,000 432,500(3) 12,000 4,434
President of Finance
</Table>

- ----------

(1) Amounts shown reflect the 2-for-1 stock split effected in July 2000.

(2) Represents the Company's contributions to the employee's account under the
Company's 401(k) plan.

(3) Represents the dollar value of the difference between the price paid for
shares of the Company's common stock upon exercise of stock options and the
market value of such stock on the date of exercise.

(4) Represents unused vacation time for which the employee was paid in cash.

(5) $1,716,703 represents amount under footnote 3 above and $27,756 represents
amount under footnote 6 below.

(6) Represents sales commissions paid.

STOCK OPTIONS

The following table sets forth certain information regarding stock options
granted during the 2002 fiscal year to persons named in the Summary Compensation
Table. No stock appreciation rights were granted during fiscal 2002.

OPTION GRANTS IN LAST YEAR
<Table>
<Caption>

POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
- --------------------------------------------------------------------------------- --------------------
(a) (b) (c) (d) (e) (f) (g)

NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE EXPIRATION
NAME GRANTED(#)(1) FISCAL YEAR PRICE($/SH) DATE(1) 5%($) 10%($)
- ------------------ ------------- ------------ ----------- ---------- ------ -------

Jack R. Ingram 35,000 12.59% 3.63 11/1/11 79,901 202,485
Robert B. Wagner 25,000 8.99% 3.63 11/1/11 57,072 144,632
Larry N. Patterson 25,000 8.99% 3.63 11/1/11 57,072 144,632
Donald E. Reigel 8,000 2.88% 3.63 11/1/11 18,263 46,282
James J. Burke 8,000 2.88% 3.63 11/1/11 18,263 46,282

</Table>

- ----------

(1) These options become exercisable on the third anniversary of the date of
grant and may be exercised at any time from and after such date until the
tenth anniversary of the date of grant.

(2) The potential realizable value is based on the term of the option at its
time of grant (10 years). It is calculated by assuming that the stock price
on the date of the grant appreciates at the indicated annual rate,
compounded annually for the entire term of the option and that the option
is exercised and sold on the last day of its term for the appreciated stock
price. These amounts represent certain rates of appreciation only, in
accordance with the rules of the SEC, and do not reflect the Company's
estimate or projection of future stock price performance. There can be no
assurance that the rates of appreciation assumed in this table can be
achieved or that the amounts reflected will be received by the individuals.
Actual gains, if any, are dependent on the actual future performance of the
Company's stock and no gain to the optionee is possible unless the stock
price increases over the option term.

OPTION EXERCISES AND HOLDINGS

The following table sets forth certain information regarding stock options
exercised during the 2002 fiscal year by persons named in the Summary
Compensation Table and the number and value of unexercised options held by such
persons as of the fiscal year-end. The Company has not granted stock
appreciation rights.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION VALUES

<Table>
<Caption>
(a) (b) (c) (d) (e)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END (#) AT FY-END ($)(2)
----------------------------- -------------------------------
SHARES ACQUIRED VALUE REALIZED
NAME ON EXERCISE(#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- ----------- ------------- ----------- -------------

Jack R. Ingram 265,000 $ 511,000 100,000 35,000 $ 82,000 --
Larry N. Patterson -- -- 66,666 58,334 -- --
Donald E. Reigel -- -- 65,400 20,000 44,963 --
James J. Burke -- -- 3,000 13,600 -- --
Robert B. Wagner -- -- 56,000 37,000 45,920 --
</Table>

- ----------

(1) Value is based upon the difference between the fair market value
of the securities underlying the options on the date of exercise
and the exercise price.

(2) Based upon the difference between the fair market value of the
securities underlying the options at fiscal year-end ($1.07 per
share) and the exercise price.

EMPLOYMENT AGREEMENTS

Following is a description of employment agreements which the Company has
with certain officers named in the Summary Compensation Table.

The Company entered into a letter agreement with Mr. Reigel upon his
employment with the Company in June 1995, which set forth his compensation and
certain other terms of his employment. Under the current terms of Mr. Reigel's
compensation agreement, as amended, his base salary (commencing December 1,
1999) is $100,000 and his incentive bonus compensation is set pursuant to the
incentive compensation plan adopted by the Company for its sales professionals
(as described in the Compensation Committee Report). The letter agreement also
imposes certain non-solicitation restrictions upon Mr. Reigel.

RELATED TRANSACTIONS

Mr. Barber is a shareholder in the law firm of Barber & Bartz, a
Professional Corporation, which serves as outside general counsel to the
Company. During the fiscal year ended October 31, 2002, the Company paid legal
fees to Barber & Bartz in the approximate amount of $176,000.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely upon a review of (i) Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, (ii) Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, and (iii) written representations made to the Company by its
directors and officers, the Company knows of no director, officer, or beneficial
owner of more than ten percent of the Company's Common Stock who has failed to
file on a timely basis reports of beneficial ownership of the Company's Common
Stock as required by Section 16(a) of the Securities Exchange Act of 1934, as
amended, except as follows: Don Reigel, the Company's Regional Vice President of
Sales--Central, was late in filing five reports on Form 4 reporting nine
transactions. Mr. Jack Ingram, the Company's President and CEO, was late in
filing two reports on Form 4 reporting two transactions.

STOCK PERFORMANCE GRAPH

The graph depicted below shows the Company's stock price as an index
assuming $100 invested on November 1, 1997, along with the composite prices of
companies listed in the SIC Code (Telephone, Telegraph Apparatus) Index and the
Nasdaq Market Index.

COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG XETA TECHNOLOGIES, INC.,
NASDAQ MARKET INDEX AND SIC CODE INDEX

[PERFORMANCE GRAPH]

<Table>
<Caption>
1997 1998 1999 2000 2001 2002
------ ------ ------ ------ ------ -----

XETA TECHNOLOGIES 100.00 93.42 204.61 227.64 75.79 22.53
------ ------ ------ ------ ------ -----
SIC CODE INDEX 100.00 88.69 179.02 203.24 52.33 21.85
------ ------ ------ ------ ------ -----
NASDAQ MARKET INDEX 100.00 113.07 186.63 219.50 110.07 88.57
------ ------ ------ ------ ------ -----
</Table>

ASSUMES $100 INVESTED ON NOV. 1, 1997
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING OCT. 31, 2002

Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that might incorporate future filings made by the Company under those
statutes, the preceding Compensation Committee Report on Executive Compensation
and the Stock Performance Graph will not be incorporated by reference into any
of those prior filings, nor will such report or graph be incorporated by
reference into any future filings made by the Company under those statutes.

SHAREHOLDER PROPOSALS

Under regulations of the Securities and Exchange Commission, shareholders
are entitled to submit proposals on matters appropriate for shareholder action
at subsequent Annual Meetings of the Company in accordance with those
regulations. In order for shareholder proposals for the Company's next Annual
Meeting to be eligible for consideration for inclusion in the proxy statement
and proxy relating to such meeting, they must be received by the Company no
later than October 1, 2003. Such proposals should be directed to XETA
Technologies, Inc., 1814 West Tacoma, Broken Arrow, Oklahoma 74012, Attention:
CEO.

OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors knows of no
matter other than those described herein that will be presented for
consideration at the Annual Meeting. However, should any other matters properly
come before the Annual Meeting or any adjournment thereof, it is the intention
of the persons named in the accompanying Proxy to vote in accordance with their
best judgment in the interest of the Company.

By Order of the Board of Directors

/s/ Robert B. Wagner

Robert B. Wagner
Secretary

Broken Arrow, Oklahoma
February 12, 2003

Appendix A

XETA TECHNOLOGIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
April 2, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Jack R. Ingram and Robert B. Wagner, or either
of them, as proxies and attorneys for the undersigned (with full power to act
alone and to designate substitutions), hereby revoking any prior Proxy, and
hereby authorizes them to represent the undersigned and to vote as designated
below, all the shares of Common Stock of XETA Technologies, Inc. held of record
by the undersigned on February 7, 2003 at the Annual Meeting of Shareholders to
be held April 2, 2003, or any adjournment or postponement thereof.

1. ELECTION OF DIRECTORS:[ ]FOR all nominees listed below [ ]WITHHOLD AUTHORITY

RON B. BARBER, DONALD T. DUKE, ROBERT D. HISRICH, JACK R. INGRAM,
RONALD L. SIEGENTHALER, AND ROBERT B. WAGNER

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)

- -------------------------------------------------------------------------------

2. PROPOSAL TO RATIFY THE SELECTION OF GRANT THORNTON LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE COMPANY FOR THE 2003 FISCAL YEAR.

[ ] For [ ] Against [ ]Abstain

(continued on other side)

3. IN THEIR DISCRETION ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
MEETING.

This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE TWO FOREGOING PROPOSALS.

------------------------------------ ---------------------------------------
(Signature) (Print Name)

NOTE: Signature(s) should follow exactly as your name appears on your
stock certificate. In case of joint ownership, each owner should sign.
Executors, administrators, guardians, trustees, etc. should add their title as
such and where more than one executor, etc. is named, a majority must sign. If
the signer is a corporation, please sign full corporate name by a duly
authorized officer.

Dated: ___________________________, 2003.