FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
ANNUAL REPORT
PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(X) Annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934
For the fiscal year ended December 31, 2002
OR
( ) Transition report pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the transition period from _________ to ________
Commission file number 333-106868
A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM THAT
OF THE ISSUER NAMED BELOW:
Inter-Tel, Incorporated
Tax Deferred Savings Plan and Retirement Trust
1615 South 52nd Street
Tempe, AZ 85281
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Inter-Tel, Incorporated
1615 South 52nd Street
Tempe, AZ 85281
INTER-TEL, INCORPORATED
TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2002 AND 2001
TABLE OF CONTENTS
--------------------------------------------------------------------------------
PAGE
Independent Auditors' Report...................................................3
Financial Statements:
Statements of Net Assets Available for Benefits................................4
Statement of Changes in Net Assets Available for Benefits......................5
Notes to Financial Statements..................................................6
Supplemental Schedule:
Schedule H, Line 4(i) - Schedule of Assets (Held at end of year)..............11
2
INDEPENDENT AUDITORS' REPORT
To the Participants and the Plan Administrator of the Inter-Tel, Incorporated
Tax Deferred Savings Plan and Retirement Trust:
We have audited the accompanying statements of net assets available for benefits
of Inter-Tel, Incorporated Tax Deferred Savings Plan and Retirement Trust at
December 31, 2002 and 2001, and the related statement of changes in net assets
available for benefits for the year ended December 31, 2002. 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 U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. 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 Inter-Tel,
Incorporated Tax Deferred Savings Plan and Retirement Trust at December 31, 2002
and 2001, and the changes in net assets available for benefits for the year
ended December 31, 2002 in conformity with U.S. generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) is presented for purposes of additional analysis and is not a
required part of the basic 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,
and has been subjected to the auditing procedures applied in the audit of the
basic financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ MAYER HOFFMAN MCCANN P.C.
June 17, 2003
Phoenix, Arizona
3
INTER-TEL, INCORPORATED
TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------
DECEMBER 31,
----------------------------
2002 2001
----------- -----------
ASSETS:
Cash and cash equivalents $ 47,933 $ 33,599
----------- -----------
Investments, at fair value 34,699,660 36,208,468
----------- -----------
Receivables
Employer contribution 1,502,302 1,414,318
Participant contributions 1,718 10,778
Interest and dividends 6,816 42,103
----------- -----------
Total receivables 1,510,836 1,467,199
----------- -----------
Total Assets 36,258,429 37,709,266
LIABILITIES:
Excess contribution refund payable -- 11,434
----------- -----------
Net assets available for benefits $36,258,429 $37,697,832
=========== ===========
See accompanying notes to financial statements.
4
INTER-TEL, INCORPORATED
TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2002
--------------------------------------------------------------------------------
Additions to net assets attributed to:
Interest and dividends $ 635,385
Contributions:
Employer 1,502,302
Participant 4,775,629
Rollovers 718,380
------------
Total additions 7,631,696
------------
Deductions from net assets attributed to:
Net depreciation in fair value of investments 7,155,258
Benefits paid to participants 2,305,599
Administrative expenses 63,324
Other 54,651
------------
Total deductions 9,578,832
------------
Asset Transfers to the Plan 507,733
------------
Net decrease in net assets (1,439,403)
Net assets available for benefits at beginning of year 37,697,832
------------
Net assets available for benefits at end of year $ 36,258,429
============
See accompanying notes to financial statements.
5
INTER-TEL, INCORPORATED
TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
--------------------------------------------------------------------------------
(1) DESCRIPTION OF THE PLAN
The following description of the Inter-Tel, Incorporated Tax Deferred
Savings Plan and Retirement Trust (the "Plan") provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
GENERAL - The Plan is a defined contribution plan covering all
employees of Inter-Tel, Incorporated and its subsidiaries (the "Company").
The Plan is administered by the Company. Effective January 1, 2001, an
employee becomes eligible to participate in the Plan subsequent to the pay
period in which the employee completes one hour of service. The Plan was
established on December 1, 1984 and is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
CONTRIBUTIONS - Each year, participants may contribute a percentage or
dollar amount of their annual compensation to the Plan up to the annual IRS
maximum through regular payroll deductions. Participants have the
opportunity to change the previously elected percentage or dollar
contributions each business day, to be effective at the next bi-weekly
payroll period. Eligible participants receive a discretionary matching
Company contribution. For 2002, the Company matched 50 percent of the
participant's basic contribution limited to six percent of the
participant's 2002 compensation. At the Company's discretion, it may
allocate profit sharing contributions at the end of each Plan year
according to the terms of the Plan.
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contributions, the Company's contributions and an allocation
of Plan earnings. Allocations are based on participant account balances.
The benefit a participant is entitled to receive is the participant's
vested account balance. Participants may elect to have their accounts
invested in mutual funds or common stock of the Company as offered by the
Plan, or they may elect to have their accounts invested through individual
self-directed brokerage accounts.
VESTING - Participants immediately vest in their voluntary
contributions plus actual earnings thereon and amounts rolled over from
other plans into the Plan. Vesting in the Company's matching contribution
is based on years of service. The employer contribution portion of each
participant account vests starting the first year of service at a graduated
amount each year until completing the sixth year of service. After six
years, the participant is 100 percent vested in the employer contribution
account.
6
INTER-TEL, INCORPORATED
TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
--------------------------------------------------------------------------------
FORFEITURES - Forfeited balances of terminated participants' nonvested
accounts are used to reduce future employer contributions. In 2002,
forfeitures totaled $64,938 and are reflected as a reduction of employer
contributions receivable and employer contributions at December 31, 2002 in
the accompanying financial statements.
PARTICIPANT LOANS - Participants can borrow from their accounts a
minimum of $1,000, up to a maximum equal to the lesser of $50,000 or 50% of
their vested account balance. Loan terms range up to a maximum of five
years, with the exception of loans for the purchase of a primary residence,
which carry a maximum of up to twenty years. Loans are secured by the
balance in the participant's account and bear interest at a rate
commensurate with prevailing rates at the time the loan is made as
determined by the loan administrator. Principal and interest is generally
paid ratably through payroll deductions.
PAYMENT OF BENEFITS - Upon termination of service, a participant may
receive a lump-sum amount equal to the vested value of his or her account.
Upon death, disability, or retirement, participants or their beneficiaries
may elect to receive lump sums or annual installments over a 10 year
period.
PLAN TERMINATION - Although the Company intends to continue the Plan
indefinitely for the benefit of its participants, the Company has the right
to discontinue its contributions at any time and to terminate or modify the
Plan, subject to the provisions of ERISA. In the event of termination of
the Plan, participants will become 100 percent vested in all of their
accounts.
(2) SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Plan are as follows:
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments
are stated at fair value. Securities and mutual funds traded on national
securities exchanges are valued at the last quoted sales price on the
principal exchange on which they are traded. Securities, limited
partnerships and real estate promissory notes for which no price is readily
available on the valuation date are valued at fair value as determined by
the Plan Administrator. Participant loans are valued at their outstanding
balances, which approximates fair value. Purchases and sales of securities
are recorded on a trade date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date.
USE OF ESTIMATES - The preparation of financial statements in
conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of net assets, and the reported amounts of changes in net assets
during the year. Actual results could differ from those estimates.
7
INTER-TEL, INCORPORATED
TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
--------------------------------------------------------------------------------
CONCENTRATIONS OF CREDIT AND INVESTMENT RISK - The Plan provides for
various investment fund options, which in turn invest in any combination of
mutual and other investment funds. Investment securities are exposed to
various risks, such as interest rate, credit and overall market volatility
risks. Due to the level of risk associated with certain investment
securities, it is reasonably possible that changes in risks in the near
term could materially affect participants' account balances and the amounts
reported in the statements of net assets available for benefits and the
statement of changes in net assets available for benefits.
RECLASSIFICATIONS - Certain amounts in the 2001 statement of net
assets available for benefits have been reclassified to conform to the
current year presentation.
(3) INVESTMENTS
Investment information is summarized as follows:
December 31,
-------------------------
Investments at fair value: 2002 2001
----------- -----------
Common stock $ 4,933,982 $ 4,579,931
Preferred stock 1,131 829
Money market accounts 5,298,864 4,190,407
Mutual funds 22,944,772 25,694,096
Unit investment trusts 64,265 19,455
Participant loans 1,068,334 1,100,090
Limited partnerships 28,716 21,695
Real estate note 295,813 534,813
Promissory note 33,583 36,952
Limited liability company units 30,200 30,200
----------- -----------
Total investments, at fair value $34,699,660 $36,208,468
=========== ===========
During 2002, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in fair value as follows:
Common stock $ (201,703)
Preferred stock 302
Mutual funds (6,951,945)
Limited partnerships 5,399
Unit investment trusts (7,311)
-----------
$(7,155,258)
===========
8
INTER-TEL, INCORPORATED
TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
--------------------------------------------------------------------------------
Investments that represent five percent or more of the PLAN'S net
assets at December 31 are as follows:
2002
----------
CR Suisse Fixed Income $1,824,778
Growth Fund of America 3,558,782
Inter-Tel, Incorporated Common Stock 2,453,531
Invesco Technology II Fund 2,339,006
Invesco Total Return Fund 2,029,662
Janus Worldwide Fund 2,405,702
Schwab Government Securities Fund 4,303,425
Schwab S&P 500 - Investor Shares 2,331,598
Vanguard Windsor II Fund 3,094,771
Weitz Value Portfolio 3,419,215
2001
----------
Dreyfus Disciplined Stock Fund $4,428,725
Inter-Tel, Incorporated Common Stock 2,363,642
Investco Technology II Fund 4,109,519
Investco Total Return Fund 2,158,077
Janus Worldwide Fund 2,874,776
Schwab Government Securities Fund 2,990,201
Schwab S & P 500 - Investor Shares 2,287,649
Vanguard Windsor II Fund 2,941,160
Weitz Value Portfolio 3,611,381
(4) ADMINISTRATIVE EXPENSES
Substantially all of the Plan's administrative expenses, except for
record-keeper fees associated with several specific fund expenses and
special transaction fees, are paid by the Company.
(5) PARTY-IN-INTEREST TRANSACTIONS
Certain plan investments are shares of common stock of the Company or
are funds held and managed by Charles Schwab Trust Company, the asset
custodian; accordingly, these transactions qualify as party-in-interest
transactions. Such transactions, while considered party in interest
transactions under ERISA regulations, are permitted under the provisions of
the Plan and are specifically exempt from the prohibition of party in
interest transaction under ERISA. Fees paid and accrued by the Plan to the
record-keeper for administrative fees amounted to $63,324 for the year
ended December 31, 2002.
9
INTER-TEL, INCORPORATED
TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
--------------------------------------------------------------------------------
(6) DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of net assets available for benefits
as reported in the financial statements to the Form 5500:
December 31,
---------------------------
2002 2001
------------ ------------
Net assets available for benefits as reported
in the financial statements $ 36,258,429 $ 37,697,832
Amounts allocated to withdrawn participants -- (3,564)
------------ ------------
Net assets available for benefits as
reported in the Form 5500 $ 36,258,429 $ 37,694,268
============ ============
The following is a reconciliation of benefits paid to participants as
reported in the financial statements to the Form 5500:
Year Ended
December 31,
2002
-----------
Benefits paid to participants as reported
in the financial statements $ 2,305,599
Less: Amounts allocated on Form 5500 to
withdrawn participants at December 31, 2001 (3,564)
Less: Corrective distributions (11,569)
-----------
Benefits paid to participants as reported
in the Form 5500 $ 2,290,466
===========
Amounts allocated to withdrawn participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment
prior to year-end but not yet paid.
(7) INCOME TAX STATUS
The Plan has received a favorable determination letter from the
Internal Revenue Service dated January 8, 1992 stating that the Plan is
qualified under Section 401(a) of the Internal Revenue Code (`'the Code")
and, therefore, that the related trust is exempt from federal and state
income or franchise taxation. Subsequent amendments have been structured to
and are intended to maintain the Plan's tax status. Once qualified, the
Plan is required to operate in conformity with the Code to maintain its
qualification. The Plan administrator believes the Plan is being operated
in compliance with the applicable requirements of the Code and ERISA, and,
therefore, believes that the Plan is qualified and the related trust is
exempt from federal and state income or franchise taxes..
10
SUPPLEMENTAL SCHEDULE
INTER-TEL, INCORPORATED EIN: 86-0220994
TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST: PLAN #001
SCHEDULE H, LINE 4(i)
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2002
--------------------------------------------------------------------------------
(C) DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE, RATE
(B) IDENTITY OF ISSUE, BORROWER, LESSOR INTEREST, COLLATERAL, PAR
(a) OR SIMILAR PARTY OR MATURITY VALUE (D) COST (E) CURRENT VALUE
--- ---------------- ----------------- -------- -----------------
Common Stock:
8x8, Inc. 2,500 shares ** $ 550
3Com Corporation 100 shares ** 463
Abaxis, Inc 2,000 shares ** 7,920
ABM Industries, Inc 4 shares ** 68
ACLN Ltd. 115 shares ** 1
ADAPTEC 200 shares ** 1,130
Advanced Viral Research 13,000 shares ** 1,040
Aerocentury Corp. 3,900 shares ** 12,870
Agere Systems Inc 9 shares ** 13
Allianz AG ADR 300 shares ** 2,865
Amdocs Limited 200 shares ** 1,964
American Movil AOR Inc. 100 shares ** 1,390
Amylin Pharmaceuticals, Inc 2,000 shares ** 32,280
Anheuser Busch Co. Inc. 102 shares ** 4,952
Annaly Mortgage Management, Inc 300 shares ** 5,640
AOL Time Warner Inc. 100 shares ** 1,310
Applied Materials, Inc. 600 shares ** 7,818
Aquila, Inc. 2,000 shares ** 3,540
Asiainfo Holdings, Inc. 2,000 shares ** 12,680
Avanex Corp. 20 shares ** 21
Aware, Inc. 700 shares ** 1,526
Axtive Corporation 2,500 shares ** 425
Bassett Furniture Industries 567 shares ** 8,117
Biocryst Pharmaceuticals 1,500 shares ** 1,440
Biogen 500 shares ** 20,030
Biotransplant, Inc. 500 shares ** 225
Boeing Company 2,400 shares ** 79,176
11
Brooktrout, Inc. 500 shares ** 2,650
California Amplifier, Inc. 200 shares ** 1,002
Calpine Corporation 1,000 shares ** 3,260
Charter Communications 5,055 shares ** 5,965
Chevron Texaco Corp. 1,000 shares ** 66,480
Cisco System, Inc. 5,300 shares ** 69,430
CKE Restaurants, Inc. 5,000 shares ** 21,500
Coca Cola Company 240 shares ** 10,528
Coded Communications Corp. 15,500 shares ** 2
Cohu, Inc. 500 shares ** 7,350
Comdisco Holding Co. Rts 10,000 shares ** 820
Corvis Corp. 59 shares ** 42
Costco Wholesale Corp. 300 shares ** 8,418
Covad Communications Group, Inc. 5,750 shares ** 5,405
Critical Path, Inc 25 shares ** 13
Dell Computer Corp. 100 shares ** 2,674
Deltagen, Inc. 2,500 shares ** 1,200
Digital Lightwave, Inc. 210 shares ** 259
Disney Walt HLDG, Co. 193 shares ** 3,148
Divine Inc. 17 shares ** 24
DSL.Net Inc. 1,000 shares ** 490
Dynergy, Inc. Cl A 552 shares ** 651
Earthlink, Inc. 1,001 shares ** 5,455
Eastman Kodak Company 3,685 shares ** 129,107
Edulink, Inc. 20,000 shares ** 52
EFunds Corp. 1,300 shares ** 11,843
Emulex Corp. 600 shares ** 11,130
Enron Corp. 40 shares ** 3
Enterasys Networks, Inc. 350,000 shares ** 546,000
Exxon Mobile Corp. 140 shares ** 4,897
Foster Wheeler Ltd. 900 shares ** 1,044
Foundry Networks, Inc. 87 shares ** 612
Frontier Insurance Group, Inc. 183 shares ** 1
Frozen Food Express, Inc. 270 shares ** 701
General Electric Co. 1,101 shares ** 26,808
Genome Therapeutics Corp. 1,900 shares ** 2,945
Gillette Co. 200 shares ** 6,072
Global Crossing Ltd. 515 shares ** 9
Global Power Equipment Group 2,500 shares ** 12,325
Globalstar Telecom 500 shares ** 26
Goodrich Corporation 3,000 shares ** 54,960
Goodyear Tire & Rubber Company 371 shares ** 2,526
Gunslinger Records, Inc. 42,500 shares ** 213
Hewlett Packard Company 689 shares ** 11,961
Hollis-Eden Pharmaceuticals 61 shares ** 357
12
Home Depot, Inc. 1,159 shares ** 27,774
House 2 Home, Inc. 2,000 shares ** 0
Impath, Inc. 16 shares ** 316
Infosys Tech Spon Adr 300 shares ** 20,865
Intel Corp. 4,899 shares ** 76,277
International Business Machines 100 shares ** 7,764
* Inter-Tel, Incorporated 117,338 shares ** 2,453,531
Iomega Corp. 1,050 shares ** 8,243
Iridium World Communications 60 shares ** 6
ISCO International, Inc. 5,440 shares ** 1,741
IVAX Corp. 62 shares ** 752
J M Smuckers Co. 5 shares ** 199
Juniper Networks, Inc. 200 shares ** 1,360
Kafus Industries, Ltd. 20,000 shares ** 14
Keithley Instruments, Inc. 34 shares ** 429
King Pharmaceuticals, Inc. 973 shares ** 16,726
K-Tel International, Inc. 362 shares ** 16
Level 3 Communications, Inc. 300 shares ** 1,470
Ligand Pharmaceuticals 300 shares ** 1,611
Limited, Inc. 1 share ** 14
Lipid Sciences, Inc. 2,000 shares ** 2,460
Lowes Corp. Carolina Group 700 shares ** 14,189
Lowes Companies 1,208 shares ** 45,290
Lucent Technologies, Inc. 437 shares ** 551
Lumenon Innovation Lightwave 150 shares ** 20
Lynx Therapeutics 2,500 shares ** 1,025
Macrochem Corp. Del 3,000 shares ** 1,500
Mangosoft, Inc. 250 shares ** 28
Maxim Integrated Products, Inc. 65 shares ** 2,148
McHenry Metals Golf Corp. 5,000 shares ** 1
McLeod USA, Inc. 1,900 shares ** 38
McLeodusa Inc. 111 shares ** 93
Merck & Co., Inc. 2,500 shares ** 141,525
Metromedia Fiber Network 1,801 shares ** 18
Microsemi Corp. 31 shares ** 189
Microsoft Corp. 3,045 shares ** 157,427
Motorola, Inc. 940 shares ** 8,133
Moving Bytes, Inc. 20,000 shares ** 1,800
Multex Systems, Inc. 500 shares ** 2,100
Nabors Industries, Ltd. 55 shares ** 1,940
Napro Biotherapeutics 2,000 shares ** 1,360
Neomagic Corp. 500 shares ** 540
Network Commerce, Inc. 133 shares ** 3
NMS Communications 840 shares ** 1,613
Nokia Corp 494 shares ** 7,657
13
Nortel Networks Corp. 14,385 shares ** 23,160
Northpoint Communication Holdings 1,000 shares ** 1
Northwestern Corp. 1,100 shares ** 5,588
Novell, Inc. 4,000 shares ** 13,360
Oilex, inc 9,000 shares ** 1
Oracle Corp. 2,203 shares ** 23,792
Palm, Inc. 33 shares ** 518
Penn Traffic Co. 500 shares ** 1,750
Perot System Corp. 150 shares ** 1,608
Petsmart, Inc. 3,700 shares ** 63,381
Pfizer, Inc. 1,000 shares ** 30,570
Pinnacle Systems 4,300 shares ** 58,523
PNC Bk Corp. 1,700 shares ** 71,230
Polycom 286 shares ** 2,722
Practiceworks, Inc. 386 shares ** 3,052
Priceline.com, Inc. 200 shares ** 320
Qualcomm, Inc. 374 shares ** 13,610
Qwest Communications International 2,866 shares ** 14,330
Read-Rite Corp. 2,600 shares ** 910
RF Micro Devices Inc. 2,100 shares ** 15,393
Ribozyme Pharm, Inc. 7,500 shares ** 1,800
Ritchie Brothers Auctioneers 400 shares ** 12,940
Saba Software, Inc. 2,500 shares ** 2,650
Save the World Air, Inc. 5,900 shares ** 2,065
Scientific Atlanta, Inc. 4,000 shares ** 47,440
Sears Roebuck & Company 430 shares ** 10,296
Siebel Systems, Inc. 28 shares ** 209
Sonic Corp. 100 shares ** 2,049
Southtrust Corp. 2,000 shares ** 49,700
Southwest Airlines 135 shares ** 1,877
Spectralink Corp. 500 shares ** 3,590
Starbase Corp. 50 shares ** 137
Storagenetworks, Inc. 154 shares ** 179
Sun Microsystems, Inc. 3,455 shares ** 10,745
Sysco Corp. 1,000 shares ** 29,790
Target Corp. 200 shares ** 6,011
Targeted Genetics Corp. 2,000 shares ** 800
Teardrop Golf Company 2,000 shares ** 8
Techne Corp. 116 shares ** 3,314
Telaxis Communications Corp. 1,800 shares ** 324
Telefonos de Mexico 100 shares ** 3,175
Telegen Corp. 3,790 shares ** 606
Terayon Communication Systems 205 shares ** 420
Texas Instruments, Inc. 3,500 shares ** 52,535
* The Charles Schwab Corp. 1,000 shares ** 10,850
14
Tyco Intl. Ltd. 500 shares ** 8,540
U. S. Physical Therapy, Inc. 1,200 shares ** 13,380
Vitalworks, Inc. 1,548 shares ** 5,960
Vitesse Semiconductor Corp. 46 shares ** 100
Walgreen Company 201 shares ** 5,860
Wal-Mart Stores, Inc. 100 shares ** 5,050
Wattage Monitor, Inc. 6,000 shares ** 1
Worldcom, Inc. 70,661 shares ** 9,750
Worldcom, Inc - MCI Group 27 shares ** 4
Xcelera, Inc. 50 shares ** 31
Xerox Corp. 2 shares ** 15
3M Company 222 shares ** 27,394
-----------
4,933,982
Preferred Stock:
Practiceworks 6% B 377 shares ** 1,131
-----------
Mutual Funds:
AIM Equity Fund Class A 1,948 shares ** 24,889
Artisan Midcap Fund 169 shares ** 3,311
AXA Rosenbert US Small Cap Fund 118 shares ** 1,097
Baron Asset Fund 59 shares ** 2,034
Berger Mid Cap Value Fund 696 shares ** 10,233
Buffalo Small Cap Fund 823 shares ** 12,179
Calamos Growth FD CL A 63 shares ** 1,970
Calvert Income Fund 130 shares ** 2,119
CR Suisse Capital Appreciation Fund 120 shares ** 1,462
CR Suisse Fixed Income 188,510 shares ** 1,824,778
Dodge & Cox Income Fund 2,251 shares ** 28,739
Dodge & Cox Stock Fund 33 shares ** 2,931
Dreyfus Appreciation Fund 1,628 shares ** 50,787
Dreyfus Disciplined Stock Fund 1 share ** 9
Dreyfus Premier Emerging Mkts CL A 241 shares ** 2,671
Fidelity Magellan Fund 297 shares ** 23,472
Franklin Small Cap Growth Fund 2,437 shares ** 53,491
Fremont US Micro Cap Fund 1,136 shares ** 21,568
Gabelli Growth Fund 263 shares ** 4,998
Growth Fund of America CL F 192,680 shares ** 3,558,782
Harbor Bond Fund 94 shares ** 1,105
Harbor International Growth Fund 155 shares ** 1,024
Hennessy Cornerstone Growth Fund 455 shares ** 6,040
Invesco Leisure Fund 710 shares ** 22,605
Invesco Technology Fund 60 shares ** 1,037
Invesco Technology II Fund 136,068 shares ** 2,339,006
Invesco Total Return Fund 97,113 shares ** 2,029,662
15
Janus Balance Fund 2,148 shares ** 38,397
Janus Growth & Income Fund 325 shares ** 7,591
Janus Mercury Fund 1,027 shares ** 15,157
Janus Olympus Fund 150 shares ** 2,991
Janus Overseas Fund 134 shares ** 2,048
Janus Worldwide Fund 74,874 shares ** 2,405,702
Jensen Portfolio, Inc. 1,446 shares ** 29,022
Julius Baer Intl Equity Fund 1,724 shares ** 34,383
Loomis Sayles Bond Fund 5,524 shares ** 60,707
Managers Special Equity Fund 33 shares ** 1,833
Meridian Value Fund 378 shares ** 10,621
MFS Research Fund 82 shares ** 1,153
Navellier Mid Cap Growth 1,678 shares ** 29,094
NB Genesis Fund 123 shares ** 2,418
NB Ltd Maturity Bond Fund 431 shares ** 4,174
Oakmark Equity Income Fund 256 shares ** 4,613
Oakmark Fund 445 shares ** 13,384
Oakmark International Fund 277 shares ** 3,644
Oakmark Select Fund 1,633 shares ** 38,898
PBHG Clipper Focus PBHG 233 shares ** 3,078
Pimco Real Return Fund 5,368 shares ** 60,445
Pioneer Mid Cap Value Class A 3,059 shares ** 53,015
Prime Retail, Inc. 333 shares ** 42
Putnam Growth & Income Fund 3,009 shares ** 42,550
Putnam Intl Growth Fund CL A 109 shares ** 1,793
Royce Low Priced Stock Fund 534 shares ** 5,208
Royce Opportunity Fund 524 shares ** 3,863
Royce Special Equity Fund 361 shares ** 5,142
Royce Total Return Fund 1,571 shares ** 13,148
RS Diversified Growth Fund 274 shares ** 3,874
Safeco Growth Opportunities 51,986 shares ** 893,644
* Schwab 1000 Fund 197 shares ** 4,891
* Schwab S&P 500 - Investor shares 172,201 shares ** 2,331,598
Scudder Technology Fund 99 shares ** 941
Sound Shore Fund 117 shares ** 3,026
Strong Advantage Common Stock 580 shares ** 9,263
Strong Government Securities Fund 213 shares ** 2,373
Strong Mid Cap Disciplined Fund 243 shares ** 3,603
Strong Ultra Short Fund 1,508 shares ** 14,190
Templeton Developing Markets Trust 1,947 shares ** 19,470
Templeton Foreign Fund 8,809 shares ** 73,200
Thompson Plumb Growth Fund 83 shares ** 2,889
Torray Fund 105 shares ** 3,394
Turner Mid Cap Fund 192 shares ** 2,827
Van Kampen Emerging Growth Fund 114 shares ** 3,231
16
Van Kampen Real Estate Sec Fund 288 shares ** 3,929
Vanguard F-1 Secs GNMA Portfolio 258 shares ** 2,778
Vanguard Growth Index Fund 633 shares ** 12,619
Vanguard Healthcare Fund 522 shares ** 50,225
Vanguard Index Trust 500 Portfolio 151 shares ** 12,215
Vanguard International Growth Portfolio 742 shares ** 9,017
Vanguard Wellesley Income Fund 2,030 shares ** 40,388
Vanguard Windsor II Fund 148,787 shares ** 3,094,771
Weitz Value Portfolio 122,465 shares ** 3,419,215
White Oak Growth Stock 47 shares ** 1,088
-----------
22,944,772
Unit Investment Trusts:
Ishares S&P Smallcap 600 800 shares ** 52,080
Nasdaq 100 500 shares ** 12,185
-----------
64,265
Money Market Accounts:
* Charles Schwab Money Market Fund 995,064 shares ** 995,064
* Schwab Government Securities Fund 4,303,425 shares ** 4,303,425
* Schwab Stock Liquidity 375 shares ** 375
-----------
5,298,864
Limited Partnerships:
Beaconsfield LP Fund I 1 unit ** 17,917
Beaconsfield LP Fund II 1 unit ** 8,066
Kaneb Pipe Line Partners LP 78 units ** 2,733
-----------
28,716
Limited Liability Company Units
Angstrom Preferred Holdings, LLC 20,000 units ** 30,200
-----------
Promissory Note:
Baptist Foundation Promissory Note Interest rate:
11.75%; maturity
date: November 7,
2012; unsecured ** 33,583
-----------
Real estate note:
Forest Lakes Real Estate Interest rate: 14%;
maturity date: August
1, 2004; secured by
real estate ** 295,813
-----------
17
* Participant loans Interest rates ** 1,068,334
ranging from -----------
6.75% to 7.5%
Total investments $34,699,660
===========
* Denotes a party-in-interest
** Disclosure of historical cost information is not required for participant
directed investments.
18
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Inter-Tel, Incorporated Tax Deferred Savings Plan and Retirement Trust has duly
caused this report to be signed by the undersigned hereunto duly authorized.
Inter-Tel, Incorporated Tax Deferred Savings Plan and Retirement Trust
By /s/ Kurt R. Kneip
-------------------------------------------------
Inter-Tel, Incorporated
Kurt R. Kneip
Sr. Vice President and Chief Financial Officer
Date: July 8, 2003
19
EXHIBIT INDEX
Exhibits:
Exhibit 23.1 - Consent of Independent Accountants
Exhibit 99 - Section 906 Certification
20