e8vk

INTER-TEL, INCORPORATED

Dated: March 30, 2006

/s/ Norman Stout

Norman Stout

Chief Executive Officer

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dh1Zt5aH6puBqZGgEIQjNzIbXz1DLu+xZf3mUt9DZqzrmA6Q/mFTxdSOBloCiu9u Ktj9IUnTBaLDbEe4/GMLCw== 0000950153-06-000857.txt : 20060330 0000950153-06-000857.hdr.sgml : 20060330 20060330155431 ACCESSION NUMBER: 0000950153-06-000857 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060324 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060330 DATE AS OF CHANGE: 20060330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTER TEL INC CENTRAL INDEX KEY: 0000350066 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 860220994 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-10211 FILM NUMBER: 06723190 BUSINESS ADDRESS: STREET 1: 1615 S. 52ND STREET STREET 2: . CITY: TEMPE STATE: AZ ZIP: 85281 BUSINESS PHONE: 480-449-8900 MAIL ADDRESS: STREET 1: 1615 S. 52ND STREET STREET 2: . CITY: TEMPE STATE: AZ ZIP: 85281 8-K 1 p72100e8vk.htm 8-K e8vk

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):
March 24, 2006

INTER-TEL, INCORPORATED

(Exact Name of Registrant as specified in charter)

Commission File Number 0-10211


Arizona (State or other jurisdiction of incorporation)		86-0220994 I.R.S. Employer Identification Number


1615 S. 52^nd Street
Tempe, Arizona (Address of principal executive offices)		85281 (Zip Code)

Registrant’s telephone number, including area code: (480) 449-8900

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

In February 2006, the Board of Directors (“Board”) of Inter-Tel, Incorporated (the “Company”) authorized the Company to prepare new indemnification agreements for its directors and selected executive officers. From March 24, 2006 through March 29, 2006, the Company entered into such agreements with certain of the Company’s executive officers and each member of the Board in the form attached hereto as Exhibit 10.1 (the “Indemnity Agreement”).

The Indemnity Agreement provides, among other things, that, subject to the procedures set forth in the Indemnity Agreement: (i) the Company will indemnify the Indemnitee (as defined in the Indemnity Agreement) in the event Indemnitee was, is or becomes a party to a proceeding by reason of Indemnitee being or formerly being a director or officer of the Company; (ii) if requested by Indemnitee, and subject to certain exceptions, the Company will advance expenses to the Indemnitee; (iii) the rights of the Indemnitee under the Indemnity Agreement are in addition to any other rights the Indemnitee may have under the Company’s charter or bylaws or Arizona law or otherwise; and (iv) the Company may maintain an insurance policy or policies providing directors’ and officers’ liability insurance which would indemnify Indemnitee or advance expenses to Indemnitee whether or not such indemnity or advancement of expenses is of the type provided by the Indemnity Agreement.

The foregoing summary of the Indemnity Agreement is qualified in its entirety by reference to the full text of the Indemnity Agreement attached as Exhibit 10.1 hereto and incorporated by reference herein.

Item 5.02. (d) Election of Directors without Shareholder Vote.

As previous reported by the Company in its current report on Form 8-K filed February 21, 2006, Messrs. Robert Rodin and Steven E. Karol were elected to the Board effective March 1, 2006. At a meeting of the Board held March 29, 2006, the Board appointed Mr. Rodin to the Compensation Committee and Mr. Karol to the Corporate Governance and Nominating Committee.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On March 29, 2006, the Board of Directors of the Company adopted an amendment to the Amended and Restated Bylaws of the Company which added to the Company’s existing Bylaws two provisions, (i) one requiring shareholders bringing business before an annual meeting of the Company’s shareholders to provide the Company with advance notice of such business and (ii) one requiring shareholders nominating directors for election at an annual meeting of the Company’s shareholders to provide the Company with advance notice of such nominations. The provisions have been included in the Company’s Amended and Restated Bylaws as Sections 2.12 and 2.13, respectively.

Section 2.12 provides that, in order to be properly brought before an annual meeting, any business must be (i) specified in the notice of meeting given by the Company, (ii) otherwise properly brought before the meeting by or at the direction of the Board, or (c) otherwise properly brought before the meeting by a shareholder as set forth in the Bylaws. In order for a shareholder to timely bring business before such an annual meeting, such shareholder must provide notice to the Company not less than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting or, if an annual meeting is called for a date not within thirty (30) days before or after such anniversary date, not later than the tenth (10th) day following the day on which such notice of the date of the meeting was announced. New Section 2.12 also provides that in the event it becomes effective less than one hundred (100) days prior to the anniversary date of the immediately preceding annual meeting of shareholders, notice by the shareholder would also be timely if received not later than the close of business on the tenth (10th) day following the day on which new Section 2.12 became effective. Section 2.12 also prescribes the proper form and content of such a notice, among other things.

Section 2.13 provides that, in order for director nominations to be properly made for and voted upon at an annual meeting of Company shareholders, such nominations must be (i) specified in the notice of meeting given by the Company, (ii) made by or at the direction of the Board, or (c) otherwise properly brought before the meeting by a shareholder as set forth in the Bylaws. In order for a shareholder to timely make nominations of directors to be voted

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upon at an annual meeting of the Company’s shareholders, such shareholder must provide notice of such nominations to the Company not less than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting or, if an annual meeting is called for a date not within thirty (30) days before or after such anniversary date, not later than the tenth (10th) day following the day on which such notice of the date of the meeting was announced. New Section 2.13 also provides that in the event it becomes effective less than one hundred (100) days prior to the anniversary date of the immediately preceding annual meeting of shareholders, notice by the shareholder would also be timely if received not later than the close of business on the tenth (10th) day following the day on which new Section 2.13 became effective. Section 2.13 also prescribes the proper form and content of such a notice, among other things and specifies that such a notice shall in each case include a written consent of the nominee to such nomination.

The description of the Bylaws herein has been simplified in some regards and is qualified in its entirety by reference to the Bylaws attached hereto as Exhibit 3.1.

Item 8.01. Other Events.

The Company hereby gives notice that its annual meeting of shareholders is scheduled to take place on May 31, 2006.

Item 9.01. Financial Statements and Exhibits.

The following Exhibits are filed as part of this report:


Exhibit
Number
Exhibit 3.1		Amended and Restated Bylaws of Inter-Tel, Incorporated.
Exhibit 10.1		Form of Indemnity Agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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EXHIBIT INDEX


Exhibit
Number
Exhibit 3.1		Amended and Restated Bylaws of Inter-Tel, Incorporated.
Exhibit 10.1		Form of Indemnity Agreement

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EX-3.1 2 p72100exv3w1.htm EX-3.1 exv3w1

EXHIBIT 3.1

INTER-TEL, INCORPORATED
an Arizona Corporation

BYLAWS

(As adopted June 25, 1979; amended December 24, 1980; amended November 30, 1981; amended March 30, 1983; amended June 30, 1983; amended September 29, 1983; amended August 15, 1984; amended January 31, 1985; amended November 2, 1995; amended February 24, 1997; amended February 21, 2006; and amended March 29, 2006.)

SECTION I

OFFICES AND CORPORATE SEAL

1.1 Principal Office. The known place of business of the Corporation which shall also be known as its principal place of business shall be at the address so designated in the Articles of Incorporation or if no address is so designated, at the office of its statutory agent. The address of the Corporation’s known place of business may be changed from time to time by the Board in the manner provided by the Arizona Revised Statutes and without amending the Articles of Incorporation.

1.2 Other Offices. The Corporation may also maintain offices at such other place or places, either within or without the State of Arizona, as the Board of Directors may from time to time determine or the business of the Corporation may require, where the business of the Corporation may be transacted with the same effect as though done at the principal office.

1.3 Corporate Seal. A corporate seal shall not be requisite to the validity of any instrument executed by or on behalf of the Corporation, but nevertheless if in any instance a corporate seal be used, the same shall, at the pleasure of the officer affixing the same, be either (a) a circle having on the circumference thereof “Inter-Tel, Incorporated” and in the center “Incorporated 1969 Arizona,” or (b) a circle containing the words “Corporate Seal” on the circumference thereof.

1.4 President. For purposes of these bylaws, except for Section 4, the term “President” shall be as defined in Section 10-140.37 of the Arizona Corporations Law (the “Law”).

SECTION 2

SHAREHOLDERS

2.1 Shareholder’s Meetings. All meetings of shareholders shall be held at such place as may be fixed from time to time by the Board of Directors, or in the absence of direction by the Board of Directors, by the President or Secretary of the Corporation, either within or without the State of Arizona, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

2.2 Annual Meetings. Commencing in 1996, annual meetings of shareholders shall be held on the third Thursday in April, if not a legal holiday, and if a legal holiday, then on the next secular day following, or at such other date and time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. At the annual meeting, shareholders entitled to vote shall elect a Board of Directors and transact such other business as properly may be brought before the meeting. The candidates receiving the greatest number of votes, up to the number of Directors to be elected, shall be the Directors.

2.3 Notice of Annual Meetings. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each shareholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting. The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders

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shall not be more than seventy nor less than ten days before the date of such meeting, nor more than seventy days nor less than ten days prior to any such action, as fixed by the Board of Directors. If no record date is fixed, the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at 4:00 in the afternoon on the later of the day thirty days before the day on which notice is given or the day seventy days prior to the date of the meeting.

2.4 List of Shareholders. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any shareholder who is present.

2.5 Special Meetings of Shareholders. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the Board of Directors and shall be called by the President or Secretary at the request in writing of shareholders owning at least ten percent (10%) in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote except that a special meeting for the purpose of considering any action to directly or indirectly facilitate a “business combination” as defined in Section 10-2701.6 of the Law, including any action to change or otherwise affect the composition of the board of directors for that purpose, may only be called at the request in writing of shareholders owning at least twenty-five percent (25%) in amount of the entire capital stock of the Corporation. Such request shall state the purpose or purposes of the proposed meeting and, if submitted by holder of less than twenty-five percent (25%) in amount of the entire capital stock of the Corporation, shall be accompanied by a declaration under penalty of perjury that the meeting is not being held for the purpose of considering any action to directly or indirectly facilitate a “business combination”, including any action to change or otherwise affect the composition of the board of directors for that purpose.

2.6 Notice of Special Meeting. Written notice of a special meeting of shareholders stating in reasonable detail the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given, not less than ten nor more than fifty days before the date of the meting, to each shareholder entitled to vote at such meeting. Business transacted at any special meeting of shareholders shall be limited to the purposes stated in the notice. The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall not be more than seventy nor less than ten days before the date of such meeting, nor more than seventy days nor less than ten days prior to any such action, as fixed by the Board of Directors. If no record date is fixed, the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at 4:00 in the afternoon on the later of the day thirty days before the day on which notice is given or the day seventy days prior to the date of the meeting.

2.7 Quorum and Adjournment. The holders of a majority of the stock issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by statute or by the Articles of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the shareholders, the shareholders entitled to vote at the meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.

2.8 Majority Required. When a quorum is present at any meeting, the vote of the holders of a majority of the voting power present, whether in person or represented by proxy, shall decide any question brought before such meeting, unless the question is one upon which, by express provision of the statutes or of the Articles of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question.

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2.9 Voting. Each shareholder shall at every meeting of the shareholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such shareholder, but no proxy shall be voted or acted upon after eleven months from its date, unless the proxy provides for a longer period. No proxy shall be effective unless in writing and in compliance with (i) applicable law and (ii) such reasonable requirements as the Board of Directors may prescribe. Unless demanded by a shareholder present in person or by proxy at any meeting of the shareholders and entitled to vote thereat, or unless so directed by the chairman of the meeting, the vote thereat on any question need not be by ballot. If such demand or direction is made, a vote by ballot shall be taken, and each ballot shall be signed by the shareholder voting, or by his or her proxy, and shall state the number of shares voted.

2.10 Action Without Meeting. Any action required or permitted to be taken at any meeting of shareholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of all of the outstanding stock entitled to vote with respect to the subject matter of the action.

2.11 Waiver of Notice. Attendance of a shareholder at a meeting shall constitute waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Any shareholder may waive notice of any annual or special meeting of shareholders by executing a written waiver of notice either before or after the time of the meeting.

2.12 Advance Notice of Shareholder Business. To be properly brought before an annual meeting, any business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a shareholder (i) who is a shareholder of record on the date of the giving of the notice provided for in this Section 2.12 and on the record date for the determination of shareholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section 2.12.

For such nominations or other business to be considered properly brought before the meeting by a shareholder such shareholder must, in addition to any other applicable requirements, have given timely written notice of demand to the Chief Executive Officer or Secretary of the Corporation containing the purposes of the meeting in proper written form.

To be timely, such shareholder’s notice must be delivered to or mailed and received by the Chief Executive Officer or Secretary of the Corporation at the principal executive offices of the Corporation not less than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting; provided, however, that in the event the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the shareholder to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the meeting was mailed or such public disclosure made, whichever occurs first; provided further, that in the event this Section 2.12 becomes effective less than one hundred (100) days prior to the anniversary date of the immediately preceding annual meeting of shareholders, notice by the shareholder would also be timely if so received not later than the close of business on the tenth (10th) day following the day on which this Section 2.12 became effective.

To be in proper written form, a shareholder’s notice to the Secretary shall set forth:

	(a)		the name and record address of the shareholder who intends to propose the business and the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such shareholder;

	(b)		a representation that the shareholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to introduce the business specified in the notice;

	(c)		a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; and

	(d)		any material interest of the shareholder in such business.

No business shall be conducted at the annual meeting of shareholders except business brought before the annual meeting in accordance with the procedures set forth in this Section; provided, however, that, once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 2.12 shall be deemed to

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preclude discussion by any shareholder of any such business. The Chairman of the meeting may refuse to acknowledge the proposal of any business not made in compliance with the foregoing procedure.

2.13 Advance Notice of Director Nominations. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. To be properly brought before an annual meeting nominations for the election of director must be (a) specified in the Corporation’s notice of meeting (or any supplement thereto), (b) made by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) made by any shareholder (i) who is a shareholder of record on the date of the giving of the notice provided for in this Section 2.13 and on the record date for the determination of shareholders entitled to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section 2.13.

In addition to any other applicable requirements, for a nomination to be made by a shareholder, such shareholder must have given timely written notice of demand to the Chief Executive Officer or Secretary of the Corporation in proper written form.

To be timely, a shareholder’s notice to the Chief Executive Officer or Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting of shareholders; provided, however, that in the event that the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the shareholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting; provided further, that in the event this Section 2.13 becomes effective less than one hundred (100) days prior to the anniversary date of the immediately preceding annual meeting of shareholders, notice by the shareholder would also be timely if so received not later than the close of business on the tenth (10th) day following the day on which this Section 2.13 became effective.

To be in proper written form, a shareholder’s notice to the Secretary must set forth:

	(a)		as to each person whom the shareholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person over at least the last five years, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by the person, (iv) a statement as to the person’s citizenship, and (v) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder; and

	(b)		as to the shareholder giving the notice (i) the name and record address of such shareholder, (ii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such shareholder, (iii) a description of all arrangements or understandings between such shareholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such shareholder, (iv) a representation that such shareholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such shareholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee who consents to being named as a nominee and to serve as a director if elected.

No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.13. If the Chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

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SECTION 3

DIRECTORS

3.1 Number. The number of Directors shall be determined from time to time by resolution adopted by a majority of the total authorized number of Directors. Until otherwise determined by such resolution, the authorized number of Directors shall be nine. The Directors shall be elected at the annual meeting of the shareholders, except as provided in 3.2 of this Section 3, and each Director elected shall hold office until his or her successor is elected and qualified, unless sooner displaced. Directors need not be shareholders. Subject to the limitations imposed by applicable law, the holders of a majority of the shares then entitled to vote at an election of the Directors may remove a Director or Directors (or all Directors) at any time, with or without cause. Any Director may resign at any time by giving written notice of his or her resignation to the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time when it shall become effective is not specified therein, it shall take effect immediately upon its receipt by the President or the Secretary; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

3.2 Qualification. A person will not qualify for initial election or appointment as a director if such person’s 70^th birthday occurs on or has occurred before the date of such election or appointment. A person who is a director is qualified for re-election after his or her 70^th birthday, but will not qualify for re-election if their 75^th birthday occurs on or has occurred before the date of such election or appointment. A person who has qualified by age for his or her most recent election as a director may serve throughout the term for which such person was elected, notwithstanding the occurrence of his or her 75^th birthday between the date of such election and the end of such term.

3.3 Vacancies. Vacancies and newly created Directorships resulting from any increase in the authorized number of Directors may be filled by a majority of the Directors then in office, though less than a quorum, or by a sole remaining Director, and the Directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no Directors in office, then an election of Directors may be held in the manner provided by statute.

3.4 Powers. The business of the Corporation shall be managed by its Board of Directors which may exercise all such powers of the Corporation, and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these bylaws directed or required to be exercised or done by the shareholders.

3.5 Place of Meetings. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Arizona; and such meetings may be held by means of conference telephone or other similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to such communication shall constitute presence in person at such meeting.

3.6 Annual Meetings. The first meeting of the newly elected Board of Directors shall be held immediately following the annual meeting of shareholders and in the same place of the annual meeting of shareholders, and no notice of such meeting shall be necessary to the newly elected Directors in order legally to constitute the meeting, provided a quorum shall be present. In the event such meeting is not held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver by all of the Directors.

3.7 Regular Meetings. Regular meetings of the Board of Directors may be held without notice and at such time and at such place as shall from time to time be determined by the Board.

3.8 Special Meetings.
(a) Calling of the Meeting Special meetings of the Board of Directors may be called by the Chairman of the Board, President or the Secretary on notice to each Director, either personally or by mail, overnight courier service, telegram, facsimile, email, or telephone; special meetings shall be called by the Chairman of the Board, President or Secretary in like manner and on like notice on the written request of a majority of the Board of Directors.

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(b) Notice of the time and place of special meetings shall be given in any one of the following manners:

(i) if delivered in person or by telephone, such notice shall be delivered at least twenty-four (24) hours prior to the time the meeting is to be held. Such notice may be communicated either to the director or to a person at the home or business of the director when the person delivering the notice has reason to believe such person will promptly communicate it to the director. Such notice shall be considered delivered when the person noticing the meeting believes in good faith that the notified person has heard and acknowledged the notice;

(ii) if delivered by telegram, such notice shall be delivered to a common carrier, charges prepaid, for transmission to the director at least twenty-four (24) hours prior to the time the meeting is to be held. Delivery to a common carrier shall be due and legal notice to such director;

(iii) if delivered by overnight courier service, including without limitation such services as Express Mail and Federal Express, such notice shall be delivered to such courier service, charges prepaid, for delivery to the director no later than one day prior to the day upon which the meeting is to be held. Delivery to a courier service shall be due and legal notice to such director;

(iv) if delivered by facsimile transmission, such notice shall be either delivered to a common carrier, charges prepaid, for transmission to the director or transmitted by or under the direction of the person giving notice to the director at least twenty-four (24) hours prior to the time the meeting is to be held. Delivery to a common carrier or transmission of a facsimile shall be due and legal notice to such director;

(v) if delivered by first-class mail, such notice shall be deposited in the United States mail, postage prepaid, at least four (4) days prior to the date of the meeting to be held. Deposit in the U.S. mail shall be due and legal notice to such director.

(vi) if delivered by electronic mail (e-mail) transmission, such notice shall be transmitted by or under the direction of the person giving notice to the directors at least twenty-four (24) hours prior to the time the meeting is to be held. Transmission of an e-mail shall be legal notice to such director.

If the notice is given in the (b)(i) manner and the communication is not with the director or if the notice if given in the (b)(ii), (b)(iv), or (b)(vi) manner and the receipt of the notice is not confirmed by the director by phone, voicemail, e-mail, fax or telegram, then to constitute proper notice, the notice must also be timely given in another of the (b)(i), (b)(ii), (b) (iv), or (b)(vi) manners.

The notice need not specify the place of the meeting if the meeting is to be held at the principal office of the Corporation.

3.9 Quorum. At all meetings of the Board, a majority of the membership of the Board of Directors shall constitute a quorum and the concurrence of a majority of those present shall be sufficient to conduct the business of the Board, except as may be otherwise specifically provided by statute or by the Articles of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

3.10 Action Without Meeting. Unless otherwise restricted by the Articles of Incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.

3.11 Waiver of Notice. Attendance of a director at a meeting shall constitute waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Any director may waive notice of any annual, regular or special meeting of Directors by executing a written waiver of notice either before or after the time of the meeting.

3.12 Executive Committee. There shall be an Executive Committee consisting of at least three members of the Board of Directors who shall be elected by the whole Board at the first meeting of the Board of Directors following each annual

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meeting of shareholders. Members of the Executive Committee shall serve at the pleasure of the Board of Directors and each member of the Executive Committee may be removed with or without cause at any time by the Board of Directors acting at a meeting or by unanimous written consent. In the event any vacancy occurs in the Executive Committee, the vacancy shall be filled by the Board of Directors. The Executive Committee shall have and may exercise the powers of the Board of Directors and the management of the business and affairs of the Corporation, but no such committee shall have the authority of the Board of Directors in reference to the following matters:

	(a)		The submission to shareholders of any action that requires shareholders’ authorization or approval by law.

	(b)		The filling of vacancies on the Board of Directors or in any committee of the Board of Directors.

	(c)		The amendment or repeal of the bylaws or the adoption of new bylaws.

	(d)		The fixing of compensation of Directors for serving on the Board or on any committee of the Board of Directors.

3.13 Additional Standing Committees. The Board of Directors may from time to time designate such additional standing committees as it may deem advisable. The Board of Directors shall delegate to such standing committees such functions, duties and responsibilities as it may choose, and shall from time to time fix, appoint and remove the members of such committees.

3.14 Special Committees. The Board of Directors may at any time designate such special committees as it may deem advisable, may fix the duties of such committees, and appoint and remove their members.

3.15 Minutes and Records of Committees. A record shall be kept of the proceedings and determinations of all standing committees and the reports of all special committees. The minutes of the meetings of the Executive Committee and other special and standing committees (if such committees shall be organized) shall be preserved in the same manner as are preserved the minutes of all meetings of the Board of Directors.

3.16 Compensation. The Directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each such meeting of the Board of Directors or a stated salary as Director. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. The amount or rate of such compensation of members of the Board of Directors or of committees shall be established by the Board of Directors and shall be set forth in the minutes of the Board.

3.17 Vacancies. Any vacancy in the Executive Committee or any other committee shall be filled by the vote of a majority of the whole Board.

3.18 Dissolution of Committees; Removal of Committee Members. The Board, by resolution adopted by a majority of the whole Board, may, with or without cause, dissolve the Executive Committee or any other committee, and with or without cause, remove any member thereof.

3.19 Adjournment. A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place.

3.20 Notice of Adjournment. Notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place are fixed at the meeting being adjourned, except that if the meeting is adjourned for more than twenty-four (24) hours such notice shall be given prior to the adjourned meeting to the directors who were not present at the time of the adjournment.

3.21 Telephone Participation. Members of the Board of Directors may participate in a meeting through use of conference telephone or similar communications equipment, so long as all members participating in such meetings can hear one another. Such participation constitutes presence in person at such meeting.

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SECTION 4

OFFICERS

4.1 Designation of Titles. The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chief Executive Officer, President, a Vice President, a Secretary and a Treasurer. The Board of Directors may also choose a Chairman of the Board, additional vice presidents, and one or more assistant secretaries and assistant treasurers. Any number of offices, except the offices of President and Secretary, may be held by the same person.

4.2 Appointment of Officers. The Board of Directors at its first meeting after each annual meeting of shareholders shall choose a President, one or more vice presidents, a Secretary and a Treasurer, and may choose a chairman of the Board, each of whom shall serve at the pleasure of the Board of Directors. The Board of Directors at any time may appoint such other officers and agents as it shall deem necessary who shall hold their offices at the pleasure of the Board of Directors and who shall exercise such powers and perform such duties as shall be determined from time to time by the Board. The power to appoint and remove such agents may be delegated by the Board. the officers of the Corporation shall hold office until their successors are chosen, or until sooner displaced. Any officer elected by the Board of Directors may be removed, with or without then serving. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors. Any officer may resign at any time by giving written notice of his or her resignation to the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time when it shall become effective is not specified therein, it shall take effect immediately upon its receipt by the Board, the President or the Secretary; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

4.3 Salaries. The salaries of the officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he or she is also a Director of the Corporation. The salaries of the officers or the rate by which salaries are fixed shall be set forth in the minutes of the meetings of the Board of Directors, or if delegated to a committee in the minutes of such committee.

4.4 Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or otherwise may be filled by the Board of Directors at any time.

4.5 Chairman of the Board. The chairman of the Board, if one shall have been appointed and be serving, shall preside at all meetings of the Board of Directors and shall perform such other duties as may be from time to time assigned to him or her. The Chairman of the Board shall be, ex officio, a member of all standing committees of the Board, including the Executive Committee, if any.

4.6 Chief Executive Officer. Subject to any supervisory powers that may be given by the Board of Directors or these Bylaws to the Chairman of the Board, the Chief Executive Officer shall be the general manager and chief executive officer of the corporation; shall, subject to the control of the Board, have general supervision, direction, and control over the corporation’s business and officers; and shall have the general powers and duties of management usually vested in a corporation’s chief executive officer. He or she shall also have any other powers and duties that are prescribed for this office by the Board or these Bylaws. The Chief Executive Officer shall be ex officio a member of all the standing committees of the Board, including the Executive Committee, if any. The Chief Executive Officer shall preside at all meetings of shareholders, and if a chairman of the Board shall not have been appointed or, having been appointed, shall not be serving or be absent, the Chief Executive Officer shall preside at all meetings of the Board of Directors. He or she may sign all deeds and conveyances, all contracts and agreements, and all other instruments requiring execution on behalf of the Corporation, and shall act as operating and directing head of the Corporation, subject to policies established by the Board of Directors. Unless the Board of Directors specifies otherwise, the Chief Executive Officer shall have the authority to vote (or grant a proxy with respect to) any securities held or owned by the Corporation.

4.7 President. The President shall have such management responsibilities and authority relative to the business of the Company as may be prescribed by the Board of Directors or the By-Laws or as the Chief Executive Officer shall delegate.

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4.8 Vice Presidents. There shall be as many vice presidents as shall be determined from time to time and they shall perform such duties as may be from time to time assigned to them. Any one of the vice presidents, as authorized by the Board, shall have all the powers and perform all the duties of the President in case of the temporary absence of the Chief Executive Officer and President or in case of his or her temporary inability to act. In case of the permanent absence or inability of the Chief Executive Officer or President to act, the office shall be declared vacant by the Board of Directors and a successor chosen by the Board.

4.9 Secretary. The Secretary shall see that the minutes of all meetings of shareholders, of the Board and of any standing committees are kept. He or she shall be the custodian of the corporate seal, and shall affix it to all proper instruments when deemed advisable by him or her. He or she shall give or cause to be given required notices of all meetings of the shareholders and of the Board of Directors. He or she shall have charge of all the books and records of the Corporation except the books of account and in general shall perform all the duties incident to the office of Secretary of the Corporation and such other duties as may be assigned to him or her.

4.10 Treasurer. The Treasurer shall have general custody of all of the funds and securities of the Corporation except such as may be required by law to be deposited with any state official; he or she shall see to the deposit of the funds of the Corporation in such bank or banks as the Board of Directors may designate. Regular books of account shall be kept under his or her direction and supervision, and he or she shall render financial statements to the President, Directors and shareholders at proper times. He or she shall have charge of the preparation and filing of such reports and financial statements and returns as may be required by law. He or she shall give to the Corporation such fidelity bond as may be required, and the premium therefor shall be paid by the Corporation as an operating expense.

4.11 Assistant Secretaries. There may be such number of assistant secretaries as the Board of Directors may from time to time fix, and such persons shall perform such functions as may be from time to time assigned to them. No assistant secretary shall have power or authority to collect, account for, or pay over any tax imposed by federal, state or city government.

4.12 Assistant Treasurers. There may be such number of assistant treasurers as the Board of Directors may form time to time fix, and such persons shall perform such functions as may be from time to time assigned to them. No assistant treasurer shall have the power or authority to collect, account for, or pay over any tax imposed by any federal, state or city government.

SECTION 5

REPEAL, ALTERATION OR AMENDMENT

These bylaws may be repealed, altered or amended or substitute bylaws may be adopted only by a majority of the Board of Directors.


/s/ Norman Stout
Chief Executive Officer

ATTEST:

/s/ Kurt R. Kneip
Secretary

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EX-10.1 3 p72100exv10w1.htm EX-10.1 exv10w1

Exhibit 10.1

INDEMNITY AGREEMENT

This Indemnity Agreement (this “Agreement”), dated as of the 24th day of March, 2006, is made by and between Inter-Tel, Incorporated, an Arizona corporation (the “Company”), and the undersigned director and/or officer of the Company (the “Indemnitee”).

RECITALS

A. The Company is aware that competent and experienced persons are reluctant to serve as directors or officers of corporations unless they are protected by comprehensive liability insurance and/or indemnification, due to the exposure to litigation costs and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no reasonable relationship to the compensation of such directors and officers.

B. The Board of Directors of the Company (the “Board”) has concluded that, to retain and attract talented and experienced individuals to serve as directors and officers of the Company, it is necessary for the Company contractually to indemnify directors and officers and to assume for itself maximum liability for expenses and damages in connection with claims against such directors and officers in connection with their service to the Company.

C. The Arizona Revised Statutes empower the Company to eliminate the personal liability of any director of the Company to the Company or its shareholders for monetary damages for any action taken or any failure to take any action as a director and to indemnify by agreement its present and former directors and officers against liability incurred in a proceeding.

D. It is the intention of the Company that no director or officer of the Company shall have any personal liability to the Company or its shareholders for monetary damages for any action taken or any failure to take any action and that the Company indemnify and advance expenses to, to the fullest extent allowed by law, to any director or officer that incurs liability or expense by reason of such person acting as a director or officer of the Company.

E. The Company desires and has requested the Indemnitee to serve or continue to serve as a director or officer of the Company free from undue concern for claims for damages arising out of or related to such services to the Company.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Definitions. As used in this Agreement, the following terms shall have the meanings set forth below.

1.1 Company. The “Company” shall include, in addition to its subsidiaries any resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence had continued, would have had power and authority to indemnify its directors and officers, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise shall stand in the same position under this Agreement with respect to the

resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.

1.2 Director. “Director” means an individual who is or was a director of the Company or an individual who, while a director of the Company, is or was serving at the Company’s request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other entity. A director is considered to be serving an employee benefit plan at the Company’s request if the director’s duties to the Company also impose duties on or otherwise involve services by the director to the plan or to participants in or beneficiaries of the plan. Director includes the estate or personal representative of a director.

1.3 Expenses. “Expenses” includes attorney fees and all other costs and expenses reasonably related to a proceeding. Without limiting the foregoing and to the extent not prohibited by the Arizona Revised Statutes, expenses include all direct and indirect costs of any type or nature whatsoever (including, without limitation, all disbursements and other out-of-pocket costs of attorneys) actually and reasonably incurred by the indemnified person in connection with the investigation, defense, or appeal of a proceeding or establishing or enforcing a right to indemnification or advancement of expenses under this Agreement, the Arizona Revised Statutes, or otherwise.

1.4 Liability. “Liability” means the obligation to pay a judgment, settlement, penalty, or fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses incurred with respect to a proceeding and includes obligations and expenses that have not yet been paid by the indemnified person but that have been or may be incurred.

1.5 Officer. “Officer” means an individual who is or was an officer of the Company or an individual who, while an officer of the Company, is or was serving at the Company’s request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other entity. An officer is considered to be serving an employee benefit plan at the Company’s request if the officer’s duties to the Company also impose duties on or otherwise involve services by the officer to the plan or to participants in or beneficiaries of the plan. Officer includes the estate or personal representative of an officer.

1.6 Official Capacity. “Official capacity” means, if used with respect to a director, the office of director in the Company and, if used with respect to an officer, the office in the Company held by the officer. Official capacity does not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, employee benefit plan, or other entity.

1.7 Outside Director. “Outside director” means a director who, when serving as a director, was not an officer, employee, or holder of more than five percent of the outstanding shares of any class of stock of the Company or of any affiliate of the Company.

1.8 Party. “Party” includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.

1.9 Proceeding. “Proceeding” means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal.

1.10 Subsidiary. “Subsidiary” means any corporation or other entity of which more than 50% of the outstanding voting securities is owned directly or indirectly by the Company, by the Company and one or more of its subsidiaries, or by one or more of the Company’s subsidiaries.

2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to serve the Company, at the will of the Company (or under separate agreement, if such agreement exists), in the capacity the Indemnitee currently serves the Company, faithfully and to the best of the Indemnitee’s ability, as long as the Indemnitee is duly appointed or elected and qualified in accordance with the applicable provisions of the charter documents of the Company or any subsidiary of the Company; provided, however, that the Indemnitee may at any time and for any reason resign from such position (subject to any contractual obligation that the Indemnitee may have assumed apart from this Agreement), and the Company and any subsidiary shall have no obligation under this Agreement to continue the Indemnitee in any such position.

3. Directors’ and Officers’ and Other Insurance. The Company shall, to the extent that the Board determines it to be economically reasonable, purchase and maintain insurance, including directors’ and officers’ liability insurance (“D&O Insurance”) and retrospectively rated and self-insured programs, on behalf of an individual who is or was a director or officer of the Company or who, while a director or officer of the Company, is or was serving at the request of the Company as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other entity, against liability asserted against or incurred by the individual in that capacity or arising from the individual’s status as a director or officer, whether or not the Company would have power to indemnify or advance expenses to the individual against the same liability under this Agreement. Any insurance will be on such terms and conditions as may be approved by the Board.

4. Indemnification.

4.1 Mandatory Indemnification of Outside Directors and Officers. The Company shall indemnify its outside directors and, subject to Section 9.3 of this Agreement, its officers who are not directors against liability, subject to Section 9.1 of this Agreement. This right to indemnification against liability under this Section 4.1 is independent of any right to indemnification provided elsewhere under this Agreement, including Sections 4.2, 8.1, 8.2, and 8.5. This right to indemnification under this Section 4.1 is not subject to the prohibitions of Section 8.3 of this Agreement, and the Company shall not be obligated to make a submission under Section 8.4 of this Agreement in the event this Section 4.1 right to indemnification is applicable.

4.2 Third-Party Actions. Subject to Section 9.2 of this Agreement, the Company shall indemnify and advance expenses to an individual made party to a proceeding (other than an action by or in the right of the Company) for all expenses and liabilities of any

type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) actually and reasonably incurred by the director or officer in connection with the investigation, defense, settlement, or appeal of such proceeding) because either (a) the individual was made party to the proceeding because the individual is or was a director or officer of the Company, if (i) the conduct of the director or officer was in good faith, (ii) the director or officer reasonably believed that the conduct was in the best interests of the Company in the case of conduct in an official capacity, (iii) the director or officer reasonably believed that the conduct was at least not opposed to the best interests of the Company in all other cases, (iv) the director or officer had no reasonable cause to believe the conduct was unlawful in the case of any criminal proceedings or, (v) the director or officer reasonably believed the conduct with respect to an employee benefit plan was in the interests of the participants in and beneficiaries of the employee benefit plan or, (b) the director or officer engaged in conduct for which broader indemnification has been made permissible or obligatory under the Company’s Articles of Incorporation.

4.3 Exception for Amounts Covered by Insurance. Notwithstanding the foregoing, the Company shall not be obligated to indemnify the Indemnitee for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) to the extent such have been paid to the Indemnitee by D&O Insurance.

5. Partial Indemnification and Contribution.

5.1 Partial Indemnification. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) incurred by the Indemnitee in the investigation, defense, settlement, or appeal of a proceeding but is not entitled, however, to indemnification for all of the total amount thereof, then the Company shall nevertheless indemnify the Indemnitee for such total amount, except as to the portion thereof to which the Indemnitee is not entitled to indemnification.

5.2 Contribution. If the Indemnitee is not entitled to the indemnification provided in Section 4 for any reason other than the statutory limitations set forth in the Arizona General Corporation Law, then in respect of any threatened, pending, or completed proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such proceeding), the Company shall contribute to the amount of expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred and paid or payable by the Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and the Indemnitee on the other hand from the transaction from which such proceeding arose and (ii) the relative fault of the Company on the one hand and of the Indemnitee on the other hand in connection with the events that resulted in such expenses, judgments, fines, or settlement amounts, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent the circumstances resulting in such expenses, judgments, fines, or settlement amounts. The Company agrees that it

would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation or any other method of allocation that does not take account of the foregoing equitable considerations.

6. Advancement of Expenses.

6.1 Mandatory Indemnification Against Reasonable Expenses for Prevailing Party. The Company shall indemnify a director or officer who was the prevailing party, on the merits or otherwise, in the defense of any proceeding to which the director or officer was a party because the director or officer is or was a director of the Company against reasonable expenses incurred by the director or officer in connection with the proceeding.

6.2 Mandatory Expense Advancement for Outside Directors and Officers Who Are Not Directors. Subject to Section 9.1 and Section 9.3 of this Agreement, the Company shall pay an outside director’s and an officer’s expenses in advance of a final disposition of a proceeding if the director or officer (a) furnishes the Company with a written affirmation of the director’s and officer’s good faith belief that (i) the conduct of the director or officer was in good faith, (ii) the director or officer reasonably believed that the conduct was in the best interests of the Company in the case of conduct in an official capacity, (iii) the director or officer reasonably believed that the conduct was at least not opposed to the best interests of the Company in all other cases, (iv) the director or officer had no reasonable cause to believe the conduct was unlawful in the case of any criminal proceeding, or (v) the director or officer reasonably believed the conduct with respect to an employee benefit plan was in the interests of the participants in or beneficiaries of the employee benefit plan, and (b) the director or officer furnishes the Company with a written undertaking executed personally, or on the director’s or officer’s behalf, to repay the advance if it is ultimately determined that the director or officer did not meet the standard of conduct.

6.3 Inside Directors and Officers. Subject to Section 9.3 below, the Company shall pay or advance the reasonable expenses incurred by a director, who is not an outside director, or by an officer who is a party to a proceeding in advance of the final disposition of the proceeding if both of the following conditions are met: (a) either (i) the director or officer furnishes the Company with a written affirmation of the director’s or officer’s good faith belief that (A) the conduct of the director or officer was in good faith, (B) the director or officer reasonably believed that the conduct was in the best interests of the Company in the case of conduct in an official capacity, (C) the director or officer reasonably believed that the conduct was at least not opposed to the best interests of the Company in all other cases, (D) the director or officer had no reasonable cause to believe the conduct was unlawful in the case of any criminal proceeding, or (E) the director or officer reasonably believed the conduct with respect to an employee benefit plan was in the interests of the participants in or beneficiaries of the employee benefit plan, or (ii) that the proceeding involves conduct for which liability has been eliminated under a provision of the Company’s Articles of Incorporation pursuant to Section 10-202, subsection B, paragraph 1 of the Arizona Revised Statutes, and (b) the director or officer furnishes the Company with a written undertaking, executed personally or on behalf of the director or officer, to repay the advance if the director or officer is not entitled to mandatory indemnification under Section 10-852 of the Arizona Revised Statutes and it is ultimately

determined under Section 10-854 or Section 10-855 of the Arizona Revised Statutes that the director or officer did not meet the standard of conduct.

6.4 Derivative Actions. Subject to Section 9.2 of this Agreement, the Company shall advance expenses actually and reasonably incurred by a director or officer who is a party to any proceeding by or in the right of the Company to procure a judgment in its favor because either (a) the individual was made party to the proceeding because the individual is or was a director or officer of the Company, if (i) the conduct of the director or officer was in good faith, (ii) the director or officer reasonably believed that the conduct was in the best interests of the Company in the case of conduct in an official capacity, (iii) the director or officer reasonably believed that the conduct was at least not opposed to the best interests of the Company in all other cases, (iv) the director or officer had no reasonable cause to believe the conduct was unlawful in the case of any criminal proceeding, or (v) the director or officer reasonably believed the conduct with respect to an employee benefit plan was in the interests of the participants in and beneficiaries of the employee benefit plan or, (b) the director or officer engaged in conduct for which broader indemnification has been made permissible or obligatory under the Company’s Articles of Incorporation.

6.5 Rights Independent. The rights to advancement of expenses provided in Sections 6.1, 6.2, 6.3, and 6.4 above are all independent of one another and an officer or director who is entitled to expense advancement under any of such sections shall not be denied expense reimbursement because the officer or director is not entitled to expense advancement under another of such sections.

6.6 Adverse Determination. The termination of a proceeding by judgment, order, settlement, or conviction or on a plea of no contest or its equivalent is not of itself determination that the director or officer did not meet the standards set forth in Section 4.2 or Section 6.3 of this Agreement.

7. Notice and Other Indemnification Procedures.

7.1 Notification. Promptly after receipt by the Indemnitee of notice of the commencement of or the threat of commencement of any proceeding, the Indemnitee shall, if the Indemnitee believes that indemnification with respect thereto may be sought from the Company under this Agreement, notify the Company of the commencement or threat of commencement thereof.

7.2 Insurance. If, at the time of the receipt of a notice of the commencement of a proceeding pursuant to Section 7.1 hereof, the Company has D&O Insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such D&O Insurance policies.

7.3 Defense. In the event the Company shall be obligated to advance the expenses for any proceeding against the Indemnitee, the Company, if appropriate, shall be

entitled to assume the defense of such proceeding, with counsel approved by the Indemnitee (which approval shall not be unreasonably withheld), upon the delivery to the Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee with respect to the same proceeding, provided that (a) the Indemnitee shall have the right to employ the Indemnitee’s own counsel in any such proceeding at the Indemnitee’s expense; (b) the Indemnitee shall have the right to employ the Indemnitee’s own counsel in connection with any such proceeding, at the expense of the Company, if such counsel serves in a review, observer, advice, and counseling capacity and does not otherwise materially control or participate in the defense of such proceeding; and (c) if (i) the employment of counsel by the Indemnitee has been previously authorized by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be conflict of interest between the Company and the Indemnitee in the conduct of any such defense, or (iii) the Company shall not, in fact, have employed counsel to assume the defense of such proceeding, then the fees and expenses of the Indemnitee’s counsel shall be at the expense of the Company.

7.4 Compliance with Articles of Incorporation. An Indemnitee who complies with Sections 7.1 and 7.3 shall be deemed to have not “unreasonably refused to permit the Company at its own expense and through counsel of its own choosing to defend the Indemnitee in the action.” As a result, in the event of such compliance, the Company shall not be entitled to refuse indemnification pursuant to the first paragraph of Article IX of the Company’s articles of incorporation.

8. Determination of Right to Indemnification.

8.1 Success on Merits. To the extent the Indemnitee has been successful on the merits or otherwise in defense of any proceeding referred to in Section 4.1 or 4.2 of this Agreement or in the defense of any claim, issue, or proceeding described therein, the Company shall indemnify the Indemnitee against liability and against expenses actually and reasonably incurred by the Indemnitee in connection with the investigation, defense, or appeal of such proceeding, or such claim, issue, or proceeding, as the case may be.

8.2 Proof by Company. In the event that Section 8.1 is inapplicable, or does not apply to the entire proceeding, the Company shall nonetheless indemnify the Indemnitee unless the Company shall prove by clear and convincing evidence to a forum listed in Section 8.3 below that the Indemnitee has not met the applicable standard of conduct required to entitle the Indemnitee to such indemnification.

8.3 Applicable Forums. The Company may not indemnify a director or officer under Section 4.2 of this Agreement unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in Section 4.2 of this Agreement.

(a) The determination shall be made either of the following:

(i) By the Board by a majority vote of the directors not at the time parties to the proceeding.

(ii) By special legal counsel (A) selected by majority vote of the disinterested directors or (B) if there are no disinterested directors, selected by majority vote of the Board.

(iii) By the shareholders, but shares owned or voted under the control of directors who are at the time parties to the proceeding shall not be voted on the determination.

(b) Neither special legal counsel nor any shareholder has any liability whatsoever for a determination made pursuant to this section. In voting pursuant to subsection B of this section, directors shall discharge their duty in accordance with Section 10-830 of the Arizona Revised Statutes.

(c) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subsection (a)(ii), paragraph 2 of this Section 8.3 to select counsel.

8.4 Submission. As soon as practicable, and in no event later than 30 days after the forum has been selected pursuant to Section 8.3 above, the Company shall, at its own expense, submit to the selected forum its claim that the Indemnitee is not entitled to indemnification, and the Company shall act in the utmost good faith to assure the Indemnitee a complete opportunity to defend against such claim.

8.5 Court Ordered Indemnification. A director or officer of the Company who is a party to a proceeding may apply for indemnification or an advance for expenses to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice the court considers necessary may order indemnification or advance for expenses if the court determines either of the following:

(a) The director or officer is entitled to mandatory indemnification under Section 10-852 of the Arizona Revised Statutes and contemplated in Sections 4.1, 6.1, and 6.2 of this Agreement.

(b) The director or officer is fairly and reasonably entitled to indemnification in view of all of the relevant circumstances, (i) whether or not the director or officer met the following standard of conduct: (A) the conduct of director or officer was in good faith, (B) the director or officer reasonably believed that the conduct was in the best interests of the Company in the case of conduct in an official capacity, (C) the director or officer reasonably believed that the conduct was at least not opposed to the best interests of the Company in all other cases, (D) the director or officer had no reasonable cause to believe the conduct was unlawful in the case of any criminal proceedings, or (ii) whether or not the director or officer was adjudged liable to the Company in connection with a proceeding by or in the right of the Company or the director or officer was adjudged on the basis that financial benefit was improperly received by the director or officer in connection with any proceeding (other than by

or in the right of the Company) charging improper financial benefit to the director or officer, but if the director or officer was adjudged liable under Section 10-851D of the Arizona Revised Statutes as contemplated by Section 8.5(b)(ii) of this Agreement, indemnification is limited to reasonable expenses incurred.

8.6 Expenses for Interpretation. Notwithstanding any other provision in this Agreement to the contrary, the Company shall indemnify the Indemnitee against all expenses incurred by the Indemnitee in connection with any hearing or proceeding under this Section 8 involving the Indemnitee and against all expenses incurred by the Indemnitee in connection with any other proceeding between the Company and the Indemnitee involving the interpretation or enforcement of the rights of the Indemnitee under this Agreement unless a court of competent jurisdiction finds that each of the material claims and/or defenses of the Indemnitee in any such proceeding was frivolous or not made in good faith.

9. Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:

9.1 Outside Directors and Officers. The Company shall not provide the indemnification or advances of expenses to an outside director or officer as provided in Sections 4.1 or 6.2 of this Agreement if a court of competent jurisdiction has determined before payment (a) that the outside director or officer failed to meet the following standards: (i) the conduct of the director or officer was in good faith, (ii) the director or officer believed that the conduct was in the best interests of the Company in the case of conduct in an official capacity, (iii) the director or officer reasonably believed that the conduct was at least not opposed to the best interests of the Company in all other cases, (iv) the director or officer had no reasonable cause to believe the conduct was unlawful in the case of any criminal proceeding, and (v) the director or officer reasonably believed the conduct with respect to an employee benefit plan was in the interests of the participants in and beneficiaries of the employee benefit plan, and (b) a court of competent jurisdiction does not otherwise authorize payment as contemplated by Section 8.5 of this Agreement and provided in Section 10-854 of the Arizona Revised Statutes. The Company shall not delay payment of indemnification or expenses as provided in Sections 4.1 or 6.2 of this Agreement for more than 60 days after a request is made unless ordered to do so by a court of competent jurisdiction.

9.2 Directors and Officers. The Company may not indemnify a director or officer as provided in Section 4.2 or Section 6.4 of this Agreement:

(a) the director or officer was adjudged liable to the Company in connection with a proceeding by or in the right of the Company; or

(b) the director or officer was adjudged liable in connection with any other proceeding charging improper financial benefit to the director or officer, whether or not involving action in the director’s or officer’s official capacity, on the basis that financial benefit was improperly received by the director or officer.

9.3 Officers. If an individual is an officer but not a director or an individual is both an officer and a director but the basis of which such individual is made party to the

proceeding is an act of omission solely as an officer, indemnification will not be available under Sections 4.1, 4.2, 6.2, or 6.3 of this Agreement for any of the following:

(a) Liability in connection with a proceeding by or in the right of the Company other than for reasonable expenses incurred in connection with the proceeding; or

(b) Liability arising out of conduct that constitutes (i) receipt by the officer of a financial benefit to which the officer is not entitled, (ii) an intentional inflection of harm on the Company or its shareholders, or (iii) an intentional violation of criminal law.

9.4 Claims Initiated by Indemnitee. To indemnify or advance expenses to the Indemnitee with respect to proceedings or claims initiated or brought voluntarily by the Indemnitee and not by way of defense, except with respect to proceedings specifically authorized by the Board or brought to establish or enforce a right to indemnification and/or advancement of expenses arising under this Agreement, the charter documents of the Company or any subsidiary or any statute or law or otherwise, but such indemnification or advancement of expenses may be provided by the Company in specific cases if the Board finds it to be appropriate; or

9.5 Unauthorized Settlements. To indemnify the Indemnitee hereunder for any amounts paid in settlement of a proceeding unless the Company consents in advance in writing to such settlement, which consent shall not be unreasonably withheld; or

9.6 Securities Law Actions. To indemnify the Indemnitee on account of any suit in which judgment is rendered against the Indemnitee for an accounting of profits made from the purchase or sale by the Indemnitee of securities of the company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state, or local statutory law; or

9.7 Unlawful Indemnification. To indemnify the Indemnitee if a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful. In this respect, the Company and the Indemnitee have been advised that the Securities and Exchange Commission takes the position that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication.

10. Non-Exclusivity. The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights that the Indemnitee may have under any provision of law, the Company’s Articles of Incorporation or Bylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, or otherwise, both as to action in the Indemnitee’s official capacity and to action in another capacity while occupying the Indemnitee’s position as an agent of the Company, and the Indemnitee’s rights hereunder shall continue after the Indemnitee has ceased acting as an agent of the Company and shall inure to the benefit of the heirs, executors, and administrators of the Indemnitee.

11. General Provisions.

11.1 Interpretation of Agreement. It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification and advancement of expenses to the Indemnitee to the fullest extent now or hereafter permitted by law, except as expressly limited herein.

11.2 Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal, or unenforceable for any reason whatsoever, then (a) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal, or unenforceable that are not themselves invalid, illegal, or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal, or unenforceable, that are not themselves invalid, illegal, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable and to give effect to Section 11.1 hereof.

11.3 Modification and Waiver. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.

11.4 Subrogation. In the event of full payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all documents required and shall do all acts that may be necessary or desirable to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

11.5 Counterparts. This Agreement may be executed in one or more counterparts, which shall together constitute one agreement.

11.6 Successors and Assigns. The terms of this Agreement shall bind, and shall inure to the benefit of, the successors and assigns of the parties hereto. The indemnification and advancement of expenses provided by, or granted pursuant to, this Agreement shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

11.7 Notice. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed duly given (a) if delivered by hand and receipted for by the party addressee; or (b) if mailed by certified or registered mail, with postage prepaid, on the third business day after the mailing date. Addresses for notice to either party are as shown on the signature page of this Agreement or as subsequently modified by written notice.

11.8 Governing Law. This Agreement shall be governed exclusively by and construed according to the laws of the state of Arizona, as applied to contracts between Arizona residents entered into and to be performed entirely within Arizona.

11.9 Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the state of Arizona for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement.

11.10 Attorneys’ Fees. In the event Indemnitee is required to bring any action to enforce rights under this Agreement (including, without limitation, the expenses of any proceeding described in Section 3), the Indemnitee shall be entitled to all reasonable fees and expenses in bringing and pursuing such action, unless a court of competent jurisdiction finds each of the material claims of the Indemnitee in any such action was frivolous and not made in good faith.

IN WITNESS WHEREOF, the parties hereto have entered into this Indemnity Agreement effective as of the date first written above.


INDEMNITEE:		INTER-TEL, INCORPORATED
		an Arizona corporation

		By:


		Title:


		Date:

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