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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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o Preliminary Proxy Statement
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o Definitive Proxy Statement
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o Soliciting Material Pursuant to §240.14a-12
Inter-Tel (Delaware), Incorporated
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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This filing consists of correspondence to stockholders of Inter-Tel (Delaware), Incorporated,
in connection with the definitive proxy statement which was filed by the registrant with the United States
Securities and Exchange Commission on September 19, 2006.
Correspondence to stockholders of Inter-Tel (Delaware), Incorporated:
[Inter-Tel Logo]
October 2, 2006
Dear Stockholder:
Inter-Tels former CEO Steven G. Mihaylo has demanded a Special Meeting of stockholders, to be
held on Tuesday, October 24, 2006. At the Special Meeting, you will be asked to consider a
resolution put forward by Mr. Mihaylo that would urge the Board to arrange for the prompt sale of
the Company to the highest bidder (the Mihaylo Resolution). We urge you to reject Mr. Mihaylos
self-serving resolution and to put an end to his disruptive attempt to force the Company into a
fire-sale that would benefit Mr. Mihaylo at the expense of other stockholders.
Mr. Mihaylo proposed in July and August 2006 to buy Inter-Tel at prices that the Special
Committee of the Board of Directors, working with its financial and legal advisors, determined do
not adequately reflect the Companys intrinsic value. We believe that Mr. Mihaylos primary
objective is to use this resolution to force the Company to sell itself as soon as possible so that
Mr. Mihaylo and his financiers would be the buyer, benefiting from the extensive due diligence that
only they have conducted. This would unfairly allow Mr. Mihaylo to reap the benefits of Inter-Tels
substantial recent investment in new products, while preventing other stockholders from sharing in
the value creation expected to result from the continued implementation of the Companys strategic
plan.
The Special Committee of the Companys Board of Directors has unanimously recommended that
Inter-Tel stockholders vote AGAINST the Mihaylo Resolution. We urge you to protect your
investment by voting the enclosed WHITE proxy card today by telephone, via the Internet, or by
signing, dating and returning the enclosed card.
INTER-TELS STRATEGIC PLAN IS DESIGNED TO DELIVER SUPERIOR VALUE TO ALL STOCKHOLDERS NOT JUST
STEVEN MIHAYLO
Inter-Tels management is currently pursuing a long-term strategic plan for the Company,
adopted after Mr. Mihaylo resigned as CEO at the Boards request on February 22, 2006. The plan
includes the rollout of the recently released Inter-Tel 5600 and version 2.0 software for the
Inter-Tel 5000 family, the forthcoming introduction of the 7000 communications systems and
enhancements to Inter-Tels portfolio of advanced
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software applications. This was the first such plan adopted in Inter-Tels recent history, because
in his role as CEO of Inter-Tel, Mr. Mihaylo resisted the Boards request to formulate a strategic
plan, insisting that such plans were unnecessary.
We believe that the lack of a strategic plan, combined with the fact that Mr. Mihaylo was not
a fully engaged CEO, contributed to the underperformance of Inter-Tel during Mr. Mihaylos watch
and led to the Boards decision to request his resignation as CEO.
The Special Committee believes that the Companys recently formulated Strategic Plan will
create greater value for Inter-Tel stockholders than either of Mr. Mihaylos prior offers to
acquire the Company. In our view, all stockholders not just a single dissident stockholder who
happens to be our former CEO should benefit from these value-creating opportunities.
The Special Committee, with the assistance of its financial advisors, is continuing to conduct a
serious and thorough review of Inter-Tels strategic options. Although we do not believe this is
the appropriate time to sell the Company, a possible sale of Inter-Tel has not been precluded. In
accordance with our fiduciary duties, we would absolutely consider a sale if we were to determine
that a sale would result in greater value for stockholders than continuing to pursue the Companys
strategic plan or pursuing another alternative.
WHY IS MR. MIHAYLO IN SUCH A HURRY TO SELL THE COMPANY?
After more than 36 years as the Companys CEO and as a current member of the Board of
Directors, Mr. Mihaylo has had ample opportunity to assess Inter-Tels products, business strategy
and potential. We believe that due to his possession of this unique, insider perspective,
compared to other stockholders, Mr. Mihaylo recognizes that the Company which is just beginning
to realize the benefit of its recent investments is poised to generate considerable value. The
Special Committee believes that all stockholders should have the opportunity to realize this value,
not just our former CEO and his financiers. That, we believe, is why Mr. Mihaylo wants a sale now
that will allow him to acquire the Company at a bargain price, reaping for himself the benefits of
more than $50 million that your Company has spent on research and development since 2003 in the
development of the Inter-Tel 5000 and 7000 series communications systems, which are just coming to
market.
STOCKHOLDERS SHOULD SEND A MESSAGE TO MR. MIHAYLO
THAT THEY WANT TO REALIZE THE FULL VALUE
OF THE COMPANYS STRATEGIC PLAN
Since Mr. Mihaylo was replaced as Chairman in July 2005, the Board has been enhanced by the
addition of exceptionally well-qualified individuals with diverse backgrounds and experience and
has become more independent, professional, and
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representative of stockholders. It is only as a result of a settlement earlier this year with
Mr. Mihaylo that Mr. Mihaylo and his two designees were added to the Board. We believe that
although the Mihaylo Resolution is non-binding, the kind of sale process contemplated by the
Mihaylo Resolution would tie the hands of the Board and inappropriately restrict the Boards
ability to select the best alternative for the maximization of stockholder value.
The Special Committee (which is composed of all Board members other than Mr. Mihaylo and his
designees) and management are committed to exploring all alternatives to maximize long-term
stockholder value. The Mihaylo Resolution, on the other hand, presumes that an immediate sale is
the only way to maximize value, and would, if it were the only option followed, prevent us from
considering any other alternatives.
YOU HAVE A VALUABLE INVESTMENTPROTECT IT
Mr. Mihaylos protracted public campaign against the Board and management has already caused
the Company significant disruption. If adopted, the Mihaylo Resolution would further harm the
Companys day-to-day operations and would cause uncertainty among the Companys customers,
employees, vendors, and other stakeholders, resulting in disruption of the Companys business to
the detriment of the other stockholders.
We urge you to reject our ex-CEOs self-serving attempts to force the Company down a path that
could hamstring the Board and, we believe, prevent you from realizing greater value for your
Inter-Tel investment. We urge you to send a message to Mr. Mihaylo that you want maximum value for
your shares by signing, dating and returning the enclosed WHITE proxy card today.
On behalf of the Special Committee of your Board of Directors, thank you for your continued
support.
/s/ Alexander L. Cappello
Alexander L. Cappello
Chairman of the Board of Directors
Your vote is important, no matter how many or how few shares you own. Please vote TODAY by
telephone, via the Internet, or by signing, dating and returning the enclosed WHITE card in the
postage-paid envelope provided. Properly voting your shares, whether by telephone, Internet or
mail, automatically revokes any proxy you previously returned for those shares.
DO NOT RETURN ANY BLUE PROXY CARD SENT TO YOU
BY STEVEN G. MIHAYLO AND VECTOR CAPITAL CORPORATION.
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Even if you previously have voted on the Mihaylo and Vector blue proxy card, you have every
legal right to change your vote by executing the WHITE Proxy by telephone, by Internet, or by
signing, dating and returning the enclosed WHITE Proxy Card in the postage-paid envelope provided.
Only your latest-dated vote will count at the meeting.
If you hold your shares through a bank, broker or other nominee, the Special Committee urges
you to confirm in writing your voting instructions to your nominee by providing a copy of them to
the Company, to the attention of the Corporate Secretary at 1615 S. 52nd Street, Tempe, Arizona
85281.
IF YOU HAVE ANY QUESTIONS ABOUT VOTING YOUR PROXY
OR REQUIRE ASSISTANCE, PLEASE CONTACT:
INNISFREE M&A INCORPORATED
Stockholders Call Toll Free: (888) 750-5834
Banks and Brokers Call Collect: (212) 750-5833
This letter contains forward-looking statements. All statements other than statements of
historical fact may be forward-looking statements. These include statements concerning the
anticipated impact on stockholder value of the Companys long term strategy, the timing and impact
on stockholder value of new product announcements, releases and enhancements, the results of prior
and continued investment in research and development, the ability of management to execute the
Companys strategy and adapt to changes in the industry, the Companys review of all strategic
alternatives to maximize stockholder value, and the effect of the Mihaylo Resolution and the
actions of its sponsors and others. Such statements are based on current assumptions that involve
risks and uncertainties which could cause the actual results, performance, or achievements of the
Company to be materially different from those described in such statements, including, market
acceptance of new and existing products, software and services; dependence on continued new product
development; product defects; timely and successful hiring and retention of employees; retention of
existing dealers and customers; industry, competitive and technological changes; general market and
economic conditions; the composition, product and channel mixes, timing and size of orders from and
shipments to major customers; price and product competition; and availability of inventory from
vendors and suppliers. For a further list and description of such risks and
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uncertainties, please see the risks factors contained in the Companys Form 10-K, as amended on
Form 10-K/A, each as filed with the SEC, other subsequently filed current and periodic reports, and
the Companys most recent Form 10-Q dated August 9, 2006. Inter-Tel disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
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