<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
GEOTEL COMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
GEOTEL COMMUNICATIONS CORPORATION
1998 ANNUAL MEETING OF STOCKHOLDERS
To Our Stockholders:
The 1998 Annual Meeting of the Stockholders of GeoTel Communications
Corporation will be held on Thursday, May 28, 1998 at 11:00 a.m. EDT at Cross
Point at 900 Chelmsford Street, Lowell, Massachusetts in the Lowell conference
room of Tower 3 on the first floor for the following purposes:
1. To elect two directors, to serve for a term of three years as more
fully described in the accompanying Proxy Statement.
2. To consider and act upon a proposal to ratify, confirm and approve
the selection of Coopers & Lybrand L.L.P. as the independent accountants of
the Company for fiscal year 1998.
3. To consider and act upon any other business which may properly come
before the meeting.
The Board of Directors has fixed the close of business on April 15, 1998,
as the record date for the meeting. All stockholders of record on that date are
entitled to notice of and to vote at the meeting.
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN PERSON.
By order of the Board of Directors
/s/ Timothy J. Allen
----------------------------------
TIMOTHY J. ALLEN
Vice President of Finance,
Chief Financial Officer,
Treasurer and Secretary
Lowell, Massachusetts
April 27, 1998
<PAGE> 3
GEOTEL COMMUNICATIONS CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of GeoTel Communications Corporation (the
"Company") for use at the 1998 Annual Meeting of Stockholders to be held on
Thursday, May 28, 1998, at the time and place set forth in the notice of the
meeting, and at any adjournments thereof. The approximate date on which this
Proxy Statement and form of proxy are first being sent to stockholders is April
27, 1998.
If the enclosed proxy is properly executed and returned, it will be voted
in the manner directed by the stockholder. If no instructions are specified with
respect to any particular matter to be acted upon, proxies will be voted in
favor thereof. Any person signing the enclosed form of proxy has the power to
revoke it by voting in person at the meeting, or by giving written notice of
revocation to the Secretary of the Company at any time before the proxy is
exercised.
The holders of a majority in interest of all Common Stock issued,
outstanding and entitled to vote are required to be present in person or be
represented by proxy at the meeting in order to constitute a quorum for the
transaction of business. The election of the nominees for director will be
decided by majority vote. The affirmative vote of the holders of at least a
majority of the shares of Common Stock voting in person or by proxy at the
meeting are required to approve all other matters listed in the notice of the
meeting.
The Company will bear the cost of the solicitation. It is expected that the
solicitation will be made primarily by mail, but regular employees or
representatives of the Company (none of whom will receive any extra compensation
for their activities) may also solicit proxies by telephone, telecopier and in
person and arrange for brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy materials to their principals at the
expense of the Company.
The Company's current principal executive office is located at Cross Point
at 900 Chelmsford Street, Lowell, Massachusetts 01851 (978) 275-5100.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on April 15, 1998 are
entitled to notice of and to vote at the meeting. On that date, the Company had
outstanding and entitled to vote 13,211,402 shares of Common Stock, par value
$0.01 per share ("Company's Common Stock" or "Common Stock"). Each outstanding
share of the Company's Common Stock entitles the record holder to one vote.
ELECTION OF DIRECTORS
The Board of Directors is divided into three equal classes. One class is
elected each year for a term of three years. It is proposed that the nominees
listed below, whose terms expire at this meeting, be elected to serve a term of
three years and until his successor is duly elected and qualified or until he
sooner dies, resigns or is removed. The Company presently has a Board of
Directors of six members.
The persons named in the accompanying proxy will vote, unless authority is
withheld, for the election of the nominees named below. If such nominees should
become unavailable for election, which is not
<PAGE> 4
anticipated, the persons named in the accompanying proxy will vote for such
substitutes as the Board of Directors may recommend. The nominees are not
related to any other executive officer of the Company.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED A POSITION WITH THE COMPANY OR PRINCIPAL
NAME OF DIRECTOR AGE DIRECTOR OCCUPATION DURING THE PAST FIVE YEARS
---------------- --- ---------- ----------------------------------------------
<S> <C> <C> <C>
NOMINATED FOR A TERM ENDING IN
2001:
Alexander V. d'Arbeloff........... 70 1994 Alexander V. d'Arbeloff has been a Director of
the d'Arbeloff Company since July 1994. Mr.
d'Arbeloff is Chairman, Chief Executive
Officer and a Director of Teradyne, Inc. He
co-founded Teradyne in 1960 and became
President and Chief Executive Officer in 1971.
Mr. d'Arbeloff is a life member of the MIT
Corporation, Chairman of Semi/Sematech, a
trustee of Partners Health Care System, a
trustee of Massachusetts General Hospital and
a trustee of the New England Conservatory. He
is a Director of the Massachusetts High
Technology Council and the Center for Quality
Management. He is a Director of Stratus
Computer, Inc., PRI Automation, Inc. and BTU
International Corporation, each of which is a
publicly-traded company. He also serves on the
boards of several privately-held companies.
Gardner C. Hendrie................ 66 1993 Gardner C. Hendrie has been a Director of the
Company since October 1993. Since 1988, Mr.
Hendrie has been a partner of Sigma Partners,
a private venture capital firm. Mr. Hendrie is
a Director of Stratus Computer, Inc., which is
a publicly-traded company. He also serves on
the boards of several privately-held
companies.
SERVING A TERM ENDING IN 2000:
Gary Bowen........................ 51 1997 Gary Bowen has been a Director of the Company
since February 1997. Mr. Bowen has served as a
Principal at Technology Investments since
1997. Mr. Bowen served as the Chairman of New
Oak Communications, a privately held data
communications company from 1996 until it was
acquired by Bay Networks, Inc. in January
1998. From 1990 to 1996, Mr. Bowen was
Executive Vice President of Marketing and
Worldwide Field Operations for Bay Networks,
Inc. Prior to Bay Networks, Inc., Mr. Bowen
held various management positions up to Senior
Vice President of Marketing, Sales and
Services at Masscomp from 1981 to 1989. Mr.
Bowen is a Director of Xircom Corporation, a
publicly-traded company. He also serves on the
boards of several privately-held companies.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED A POSITION WITH THE COMPANY OR PRINCIPAL
NAME OF DIRECTOR AGE DIRECTOR OCCUPATION DURING THE PAST FIVE YEARS
- ---------------- --- ---------- ----------------------------------------------
<S> <C> <C> <C>
Louis J. Volpe(1)................. 48 1998 Louis J. Volpe has served as Senior Vice
President of Worldwide Sales and Marketing of
the Company since May 1996. From February 1995
to April 1996, Mr. Volpe served as Vice
President of Marketing of the Company. Mr.
Volpe served as Senior Vice President of
Marketing and Operations of Parametric
Technology Corporation from May 1993 to
January 1995 and as Vice President of
Marketing and Operations from September 1989
to May 1993. Prior to Parametric, Mr. Volpe
was an executive at Prime Computer.
SERVING A TERM ENDING IN 1999:
W. Michael Humphreys.............. 46 1993 W. Michael Humphreys has been a Director of
the Company since October 1993. Mr. Humphreys
has been a partner of Matrix Partners, a
private venture capital firm since 1982. Prior
to his association with Matrix, he was a
general partner of Hellman, Ferri Investment
Associates. Mr. Humphreys is a director of
Peritus Software Services, Inc., a
publicly-traded company. He also serves on the
boards of several privately-held companies.
John C. Thibault.................. 44 1994 John C. Thibault has served as President,
Chief Executive Officer and Director of the
Company since January 1994. From April 1991 to
October 1993, Mr. Thibault served as
President, Chief Executive Officer and
Director of Coral Network Corporation. From
April 1988 to April 1991, Mr. Thibault served
as an officer of Motorola, Inc. and Senior
Vice President and General Manager of
Motorola's Codex product division. From May
1986 to April 1988, Mr. Thibault was President
and Chief Executive Officer of PBX
manufacturer Intecom, Inc., a subsidiary of
Wang Laboratories. Prior to his position at
Intecom, he held several senior management
positions over an 11-year period with Wang.
</TABLE>
- ---------------
(1) Mr. Volpe was appointed to the Board of Directors effective April 1998 to
replace G. Wayne Andrews who stepped down from the Board to focus on product
direction and business development strategies in his continuing role as the
Company's Vice President and Chief Technical Officer. G. Wayne Andrews, 47,
a co-founder of the Company, has served as Vice President and Chief
Technical Officer of the Company since January 1994, as President of the
Company from June 1993 to December 1993 and as a Director of the Company
from June 1993 to April 1998. From October 1989 to December 1992, Mr.
Andrews was co-founder and Vice President of Teloquent Communications
Corporation. At Teloquent, Mr. Andrews held positions as Vice President
Product Management, Vice President Engineering and Vice President Customer
Support. Prior to co-founding Teloquent, Mr. Andrews was Director,
International Development Center, and Director, Advanced Switching Systems
at Teknekron Infoswitch Corp.
3
<PAGE> 6
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During fiscal 1997, there were six meetings of the Board of Directors of
the Company. All of the directors attended at least 75% of the aggregate of (i)
the total number of meetings of the Board of Directors during which they served
as director and (ii) the total number of meetings held by committees of the
Board of Directors on which they served. The Board of Directors does not have a
Nominating Committee. During fiscal 1997, none of the directors received
compensation for serving as directors of the Company, except Mr. Thibault and
Mr. Andrews received compensation as employees of the Company. Mr. Volpe, who
replaced Mr. Andrews on the Board of Directors effective April 1998, also
received compensation as an employee of the Company during fiscal 1997. See
"Compensation Committee Interlocks and Insider Participation -- Certain
Relationships and Related Transactions -- Employment Agreements and Change of
Control Agreements." In February 1997, the Board of Directors of the Company
adopted the 1997 Non-Employee Director Stock Option Policy to provide for the
granting of options to purchase Common Stock of the Company pursuant to the
Company's 1995 Stock Option Plan. See "Stock Plans -- 1997 Non-Employee Director
Stock Option Policy."
The Board of Directors has a Compensation Committee whose present members
and Messrs. Humphreys, d'Arbeloff, and Hendrie. The Compensation Committee
determines the compensation to be paid to key officers of the Company and
administers the Company's stock option plans. During 1997, there were eight
meetings of the Compensation Committee.
The Company also has an Audit Committee whose present members are Messrs.
Bowen, d'Arbeloff and Humphreys. The Audit Committee responsibilities, amongst
others, are to review with the Company's independent accountants the scope of
the audit, the results of the audit when competed and the independent
accountants' fee for services performed. The Audit Committee also recommends
independent accountants to the Board of Directors and reviews with management
various matters related to its internal accounting controls. During 1997, there
were two meetings of the Audit Committee.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of April 15, 1998 (i) by each person
who is known by the Company to own beneficially more than five percent (5%) of
the Company's Common Stock, (ii) by each of the Company's directors, (iii) by
each of the Named Executive Officers (as defined elsewhere herein) and (iv) by
all directors and executive officers who served as directors or executive
officers at December 31, 1997 as a group. For purposes of this Proxy Statement,
beneficial ownership is defined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, and means generally the power to
vote or dispose of the securities, regardless of any economic interest therein.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------ -------------------- ----------------
<S> <C> <C>
Pilgrim Baxter & Associates(1)............................. 1,169,400 8.9%
825 Duportail Road
Wayne, PA 19087
Sigma Partners II, L.P.
Sigma Associates II, L.P.(2)............................. 1,120,277 8.5%
2884 Sand Hill Road
Suite 121
Menlo Park, CA 94025
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------------------------ -------------------- ----------------
<S> <C> <C>
Essex Investment Management Company(3)..................... 1,036,615 7.8%
125 High Street
Boston, MA 02110
Alexander V. d'Arbeloff(4)................................. 280,331 2.1%
Gary Bowen(5).............................................. 5,000 *
Gardner C. Hendrie(6)...................................... 1,160,402 8.8%
W. Michael Humphreys(7).................................... 62,580 *
G. Wayne Andrews(8)........................................ 326,687 2.5%
John C. Thibault(9)........................................ 358,667 2.7%
Steven H. Webber(10)....................................... 323,438 2.4%
Louis J. Volpe(11)......................................... 293,547 2.2%
Timothy J. Allen(12)....................................... 81,713 *
Judith A. Kelly (13)....................................... 0 *
All Executive Officers and Directors as a group (10
persons)(14)............................................. 2,892,365 21.5%
--------- ----
</TABLE>
- ---------------
* Less than 1%
(1) According to a Schedule 13G filed February 17, 1998. Pilgrim Baxter &
Associates, Ltd. is an Investment Adviser registered under Section 203 of
the Investment Advisers Act of 1940.
(2) Consists of 1,042,284 shares of Common Stock held by Sigma Partners II, L.P.
and 77,993 shares of Common Stock held by Sigma Associates II, L.P. Sigma
Management II, L.P. serves as a general partner for the aforementioned
entities, and as such exercises sole investment and voting power.
(3) According to a Schedule 13G filed January 29, 1998. Essex Investment
Management Company is an Investment Adviser registered under Section 203 of
the Investment Adviser Act of 1940.
(4) Includes 11,667 shares of restricted Common Stock which remain subject to
vesting and the Company's right to repurchase at cost and 5,000 shares of
Common Stock issuable pursuant to currently exercisable stock options.
(5) Consists of 5,000 shares of Common Stock issuable pursuant to currently
exercisable stock options.
(6) Includes 1,120,277 shares held by Sigma Partners II, L.P. and Sigma
Associates II, L.P., 35,125 held by Mr. Hendrie and 5,000 shares of Common
Stock issuable to Mr. Hendrie pursuant to currently exercisable stock
options. Mr. Hendrie is a partner of Sigma Management II, L.P. which is the
general partner of each of Sigma Partners II, L.P. and Sigma Associates II,
L.P. and as such may be deemed to beneficially own all of the shares held by
such entities. Mr. Hendrie disclaims beneficial ownership of the 1,120,277
shares held by Sigma Partners II, L.P. and Sigma Associates II, L.P., except
to the extent of his proportionate pecuniary interest therein.
(7) Includes 5,000 shares of Common Stock issuable pursuant to currently
exercisable stock options.
(8) Includes 8,200 shares of Common Stock held by Mr. Andrews' children under
the Massachusetts Uniform Transfers to Minors Act and 20,074 shares of
Common Stock issuable pursuant to stock options which are either currently
exercisable or will become exercisable within 60 days.
(9) Includes 12,844 shares of Common Stock held by Mr. Thibault's children under
the Massachusetts Uniform Transfers to Minors Act and 62,443 shares of
Common Stock issuable pursuant to stock options which are either currently
exercisable or will become exercisable within 60 days.
5
<PAGE> 8
(10) Includes 38,581 shares of Common Stock issuable pursuant to stock options
which are either currently exercisable or will become exercisable within 60
days.
(11) Includes 57,921 shares of restricted Common Stock which remain subject to
vesting and the Company's right to repurchase at cost and 108,078 shares of
Common Stock issuable pursuant to stock options which are either currently
exercisable or will become exercisable within 60 days.
(12) Includes (i) 23,333 shares of restricted Common Stock which remain subject
to vesting and the Company's right to repurchase at cost; (ii) 7,000 shares
of Common Stock held by Mr. Allen's children under the Massachusetts
Uniform Transfers to Minors Act; and (iii) 14,834 shares of Common Stock
issuable pursuant to stock options which are either currently exercisable
or will become exercisable within 60 days.
(13) Ms. Kelly joined the Company as Vice President of Customer Service in
November 1997.
(14) The group is comprised of the individuals named in the Summary Compensation
Table on page 12, the remaining executive officers of the Company, and
those persons who were directors of the Company on April 15, 1998. Includes
264,010 shares of Common Stock which the directors and executive officers
as a group have the right to acquire by exercise of stock options granted
under the Company's stock plans and 92,921 shares of restricted Common
Stock which remain subject to vesting and the Company's right to repurchase
at cost.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors has
furnished the following report on executive compensation.
The Company's executive compensation program is administered by the
Committee. The Committee, which is composed of three independent directors,
establishes and administers the Company's executive compensation policies and
plans and administers the Company's stock option and other equity-related
employee compensation plans. The Committee considers internal and external
information in determining officers' compensation, including outside survey
data.
Compensation Philosophy
The Company's compensation policies for executive officers are based on the
belief that the interests of executives should be closely aligned with those of
the Company's shareholders. The compensation policies are designed to achieve
the following objectives:
- Offer compensation opportunities that attract highly qualified
executives, reward outstanding initiative and achievement, and retain the
leadership and skills necessary to build long-term shareholder value.
- Maintain a significant portion of executives' total compensation at risk,
tied to both the annual and long-term financial performance of the
Company and the creation of shareholder value.
- Further the Company's short and long-term strategic goals and values by
aligning compensation with business objectives and individual
performance.
6
<PAGE> 9
Compensation Program
The Company's executive compensation program has three major integrated
components, base salary, annual incentive awards, and long-term incentives.
Base Salary: Base salary levels for executive officers are determined
annually by: reviewing the competitive pay practices of software companies of
similar size and market capitalization, the skills, performance level, and
contribution to the business of individual executives, and the needs of the
Company. Overall, the Company believes that base salaries for its executive
officers are approximately competitive with median base salary levels for
similar positions in these software companies.
Annual Incentive Awards. Under the Company's 1997 Executive Incentive
Program, the Company's executive officers were eligible to receive annual cash
and stock bonus awards designed to motivate executives to attain short-term and
long-term corporate and individual management goals. The Committee establishes
the annual incentive opportunity for each executive officer in relation to his
or her base salary. Awards under this program are based on the attainment of
specific Company performance measures established by the Committee early in the
fiscal year, and by the achievement of specified individual objectives and the
degree to which each executive officer contributes to the overall success of the
Company and the management team. For 1997, the formula for these bonuses was
determined as a function of sales and earnings growth and other individual
objectives, thus establishing a direct link between executive pay and the
Company's growth. In 1997, the Executive Incentive Program also provided that
options to purchase an aggregate of 16,914 shares at $0.01 per share previously
granted to the executive participants, which would otherwise vest on the fifth
anniversary of the date of grant, would be fully vested on the first anniversary
of the date of grant, subject to the achievement of the Executive Incentive
Plans performance criteria. The Company's performance in 1997 exceeded the
objectives set by the Committee and the options became fully vested on the first
anniversary of the date of grant.
Long-Term Incentives. The Committee believes that stock options are an
excellent vehicle for compensating its officers and employees. The Company
provides long-term incentives through its 1995 Stock Option Plan, the purpose of
which is to create a direct link between executive compensation and increases in
shareholder value. Stock options are generally granted at fair market value and
vest in installments, over four to five years. When determining option awards
for an executive officer, the Committee considers the executive's current
contribution to Company performance, the anticipated contribution to meeting the
Company's long-term strategic performance goals, and industry practices and
norms. Long-term incentives granted in prior years and existing levels of stock
ownership are also taken into consideration. Because the receipt of value by an
executive officer under a stock option is dependent upon an increase in the
price of the Company's Common Stock, this portion of the executive's
compensation is directly aligned with an increase in shareholder value.
Chief Executive Officer Compensation
Mr. Thibault's base salary, annual incentive award and long-term incentive
compensation are determined by the Committee based upon the same factors as
those employed by the Committee for executive officers generally. Mr. Thibault's
current annual base salary is $181,667 subject to annual review and increase by
the Board of Directors of the Company. Mr. Thibault was paid a cash bonus of
$104,500 under the 1997 Executive Incentive Program. During fiscal 1997, Mr.
Thibault was granted options to purchase 100,000 and 3,026 shares of Common
Stock. The 3,026 options which were granted under the 1997 Executive Incentive
Program and which would otherwise vest on the fifth anniversary of the date of
grant, were fully vested on the
7
<PAGE> 10
first anniversary of the date of grant due to the achievement of certain
financial and strategic initiatives in the 1997 fiscal year and job performance
evaluations. The 100,000 option vests in installments over a four year period.
Section 162(m) Limitation
Section 162(m) of the Internal Revenue Code limits the tax deduction to $1
million for compensation paid to certain executives of public companies. Having
considered the requirements of Section 162(m), the Committee believes that
grants made pursuant to the Company's 1995 Stock Option Plan meet the
requirement that such grants be "performance based" and are, therefore, exempt
from the limitations on deductibility. Historically, the combined salary and
bonus of each executive officer has been well below the $1 million limit. The
Committee's present intention is to comply with Section 162(m) unless the
Committee feels that such compliance would not be in the best interest of the
Company or its shareholders.
COMPENSATION COMMITTEE
W. Michael Humphreys (Chairman)
Alexander V. d'Arbeloff
Gardner C. Hendrie
8
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
GENERAL
Messrs. d'Arbeloff, Hendrie and Humphreys served as members of the
Compensation Committee during 1997. Neither Messrs. d'Arbeloff, Hendrie nor
Humphreys was an officer or employee of the Company or any of its subsidiaries
during fiscal 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Registration Rights Agreements. The investors who purchased shares of
Series A, Series B and Series C Convertible Participating Preferred Stock, which
were converted into Common Stock in connection with the Company's initial public
offering, and certain executive officers have certain registration rights with
respect to the shares of Common Stock. Those stockholders (the "Rightsholders")
are entitled to require the Company to register under the Securities Act of
1933, as amended (the "Securities Act") shares of Common Stock (the "Registrable
Shares") held by them under terms of agreements among the Company and the
Rightsholders (the "Registration Agreements"). The Registration Agreements
provide that in the event the Company proposes to register any of its securities
under the Securities Act at any time or times, the Rightsholders, subject to
certain exceptions, shall be entitled to include Registrable Shares in such
registration. However, the managing underwriter of any such offering may exclude
for marketing reasons some or all of such Registrable Shares from such
registration. Certain Rightsholders have, subject to certain conditions and
limitations, additional rights to require the Company to prepare and file a
registration statement under the Securities Act with respect to their
Registrable Shares if Rightsholders holding at least a majority of the
Registrable Shares held by all such Rightsholders so request. The Company is
generally required to bear the expenses of all such registrations, except
underwriting discounts and commissions.
Employment Agreements and Change of Control Agreements. Messrs. Thibault,
Allen, Andrews, Volpe, Webber and Ms. Kelly are parties to change of control
agreements with the Company which provide for salary continuation and other
benefits upon the occurrence of certain events following a change of control.
These events will occur if such person is terminated without cause or
constructively terminated following a change of control. Upon the occurrence of
such events, the Company is required to continue to pay such person his or her
base salary for a period of twelve months (six months for Ms. Kelly) after
termination and provide medical benefits to such person for such period.
Other Relationships. W. Michael Humphreys, a director of the Company is a
general partner of Matrix III Management Company, a general partner of Matrix
Partners III, L.P., which, during a portion of fiscal 1997, was a greater than
5% stockholder of the Company. As of December 31, 1997, Matrix Partners III,
L.P. was no longer a greater than 5% stockholder of the Company.
Gardner C. Hendrie, a director of the Company, is a partner of Sigma
Management II, L.P., the general partner of Sigma Partners II, L.P., a greater
than 5% stockholder of the Company.
Fidelity Investors Limited Partnership, a greater than 5% stockholder of
the Company during a portion of fiscal 1997, is an affiliate of Fidelity
Investments ("Fidelity"), one of the Company's customers. The Company recognized
approximately $1,180,000 in revenue from Fidelity during the year ended December
31, 1997, representing approximately 6.3% of the Company's total revenues for
such period. The Company
9
<PAGE> 12
negotiated these transactions with Fidelity on an arms' length basis. As of
December 31, 1997, Fidelity Investors Limited Partnership was no longer a
greater than 5% stockholder of the Company.
The Company has adopted a policy pursuant to which all future transactions
between the Company and its officers, directors and affiliates will be on terms
no less favorable to the Company than could be obtained from unrelated third
parties and will be approved by a majority of the disinterested members of the
Company's Board of Directors.
10
<PAGE> 13
PERFORMANCE GRAPH(1)(2)
The graph set forth below compares the change in the Company's cumulative
total stockholder return on the Common Stock (as measured by dividing (i) the
sum of (A) the cumulative amount of dividends for the period indicated, assuming
dividend reinvestment, and (B) the difference between the Company's share price
at the end of the period and November 20, 1996, the date the Company's Common
Stock commenced trading on the Nasdaq National Market; by (ii) the share price
at November 20, 1996) with the cumulative total return of the Nasdaq Stock
Market (U.S.) Index and the Hambrecht & Quist Computer Software Index (assuming
the investment of $100 in the Company's Common Stock, the Nasdaq Stock Market
(U.S.) Index and the Hambrecht & Quist Computer Software Index on November 20,
1996, and reinvestment of all dividends). During fiscal year 1997, the Company
paid no dividends.
[PERFORMANCE GRAPH(1)(2)]
<TABLE>
<CAPTION>
GeoTel Hambrecht &
Measurement Period Communications Nasdaq Stock Quist Computer
(Fiscal Year Covered) Corporation Market - US Software
<S> <C> <C> <C>
11/20/96 - IPO price $100.00 $100.00 $100.00
12/31/96 108.33 102.06 98.23
12/31/97 130.21 124.14 118.67
</TABLE>
- ---------------
(1) Prior to November 20, 1996 the Company's Common Stock was not publicly
traded. Comparative data is provided only for the period since that date.
This chart is not "soliciting material", is not deemed filed with the
Securities and Exchange Commission and is not to be incorporated by
reference in any filings of the Corporation under the Securities Act of
1933, as amended or the Securities Exchange Act of 1934, as amended, whether
made before or after the date thereof and irrespective of any general
incorporation language in any such filing.
(2) The stock price performance shown on the graph is not necessarily indicative
of future price performance. Information used on this graph was obtained
from the Nasdaq Stock Market and Dow Jones News/Retrieval, sources believed
to be reliable, although the Company is not responsible for any errors or
omissions in such information.
11
<PAGE> 14
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by or
paid to the Company's Chief Executive Officer and each of the Company's four
most highly compensated executive officers (other than the Chief Executive
Officer) whose total annual salary and bonus exceeded $100,000 for all services
rendered in all capacities to the company and its subsidiaries for the Company's
fiscal year ended December 31, 1997 (the "Named Executive Officers"). The
Company made no awards of Restricted Stock and paid no compensation pursuant to
long-term incentive plans during fiscal 1997 to the Named Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
-------------------- STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(1) AWARD(s) OPTIONS# PAYOUTS COMPENSATION(2)
--------------------------- ---- --------- -------- ---------- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
John C. Thibault.............. 1997 $181,667 $104,500 103,026 $ 3,882(3)
President, Chief Executive 1996 165,000 49,500 126,594 68,249(4)
Officer and Director 1995 164,583 26,915 -- 224(5)
Louis J. Volpe................ 1997 144,167 294,224 8,274 278(5)
Senior Vice President of 1996 124,283 15,600 174,649 269(5)
Worldwide Sales and
Marketing(6) 1995 103,960 10,571 -- --
Timothy J. Allen.............. 1997 123,469 41,910 1,501 238(5)
Vice President of Finance, 1996 117,156 18,000 40,782 235(5)
Chief Financial Officer, 1995 100,625 14,071 -- 116(5)
Treasurer and Secretary
G. Wayne Andrews.............. 1997 122,935 34,375 26,970 5,034(7)
Vice President, Chief 1996 115,000 22,000 38,782 226(5)
Technology Officer and
Director 1995 115,000 10,571 -- 122(5)
Steven H. Webber.............. 1997 134,250 59,840 27,143 396(5)
Vice President of
Engineering 1996 125,625 18,200 73,782 5,432(8)
1995 115,000 10,571 -- 302(5)
</TABLE>
- ---------------
(1) Salary and bonus amounts are presented in the year earned, however, the
payment of such amounts may have occurred in other years.
(2) Does not include medical and group life insurance premiums paid for the
benefit of or other benefits received by the Named Executive Officers which
are generally available to all salaried employees of the Company.
(3) Represents $3,654 in paid vacation time and $228 in premiums paid on behalf
of Mr. Thibault for excess life insurance coverage. The life insurance
policy was canceled effective December 31, 1997.
(4) Represents $68,014 in forgiveness of a promissory note and related income
taxes to Mr. Thibault and $235 in premiums paid on behalf of Mr. Thibault
for excess life insurance coverage.
(5) Consists of premiums paid on behalf of Named Executive Officers for excess
life insurance coverage. The life insurance policies were canceled effective
December 31, 1997.
(6) Mr. Volpe's annual compensation was paid in 1995 and 1996 for his services
as a consultant to the Company prior to his becoming an employee of the
Company in April 1996.
12
<PAGE> 15
(7) Represents $4,808 in paid vacation time and $226 in premiums paid on behalf
of Mr. Andrews for excess life insurance coverage. The life insurance policy
was canceled effective December 31, 1997.
(8) Represents $5,000 in paid vacation time and $432 in premiums paid on behalf
of Mr. Webber for excess life insurance coverage. The life insurance policy
was canceled effective December 31, 1997.
On December 31, 1997, the number of remaining shares of Common Stock and
options to purchase Common Stock held by the Named Executive Officers that had
not vested and the value of such stock at that date was as follows: Mr.
Thibault -- 162,776 shares (at the market price on 12/31/97 of $15.625, valued
at $1,318,545); Mr. Volpe -- 127,024 (valued at $1,804,667); Mr. Allen -- 20,251
(valued at $166,407); Mr. Andrews -- 45,720 (valued at $298,730); and Mr.
Webber -- 64,643 (valued at $444,400). The foregoing amounts represent the
difference between the fair market value of the Common Stock underlying options
at December 31, 1997 ($15.625 per share) and the exercise price of the options,
multiplied by the applicable number of shares of Common Stock underlying the
options.
GRANTS OF STOCK OPTIONS
The following table sets forth certain information with respect to
individual grants of stock options to the Named Executive Officers during the
fiscal year ended December 31, 1997. In fiscal 1997, the Company granted an
aggregate of 921,558 stock options to its employees pursuant to the 1995 Stock
Option Plan and granted an aggregate of 28,145 shares of Common Stock pursuant
to the 1996 Employee Stock Purchase Plan. The Company granted no Stock
Appreciation Rights to the Named Executive Officers during fiscal 1997.
13
<PAGE> 16
OPTION/SAR GRANTS IN FISCAL YEAR 1997(1)
<TABLE>
<CAPTION>
POTENTIAL REALIZATION
VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL
--------------------------------------------------- RATES
NUMBER OF % OF TOTAL OF STOCK PRICE
SECURITIES Options/SARs APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTION/SARs EMPLOYEES IN EXERCISE EXPIRATION ---------------------
NAME GRANTED 1997 PRICE DATE 5% 10%
- ---- ----------- ------------ -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
John C. Thibault.................. 3,026(2) 0.3% $ 0.01 12-Mar-07 $ 76,967 $ 122,557
President and 36,566(3) 4.0 10.625 28-Apr-07 297,811 474,214
Chief Executive Officer 63,434(3) 6.9 10.625 28-Apr-07 516,637 822,657
------- ---- -------- ----------
Total............................. 103,026 11.2% $891,415 $1,419,428
======= ==== ======== ==========
Louis J. Volpe.................... 8,274(2) 0.9% $ 0.01 12-Mar-07 $210,451 $ 335,108
Senior Vice President of ======= ==== ======== ==========
Worldwide Sales and Marketing
Timothy J. Allen.................. 1,501(2) 0.2% $ 0.01 12-Mar-07 $ 38,178 $ 60,792
Vice President of Finance, ======= ==== ======== ==========
Chief Financial Officer,
Treasurer and Secretary
G. Wayne Andrews.................. 1,970(2) 0.2% $ 0.01 12-Mar-07 $ 50,107 $ 79,788
Vice President, Chief 23,994(3) 2.6 10.625 28-Apr-07 195,418 311,171
Technology Officer 1,006(3) 0.1 10.625 28-Apr-07 8,193 13,047
------- ---- -------- ----------
Total............................. 26,970 2.9% $253,718 $ 404,006
======= ==== ======== ==========
Steven H. Webber.................. 2,143(2) 0.2% $ 0.01 12-Mar-07 $ 54,508 $ 86,794
Vice President 1,006(3) 0.1 10.625 28-Apr-07 8,193 13,047
of Engineering 23,994(3) 2.6 10.625 28-Apr-07 195,418 311,171
------- ---- -------- ----------
Total............................. 27,143 2.9% $258,119 $ 411,012
======= ==== ======== ==========
</TABLE>
- ---------------
(1) Potential gains are net of exercise price, but before taxes associated with
exercise. These amounts represent certain assumed rates of appreciation
only, based on the Securities and Exchange Commission rules. Actual gains,
if any, on stock option exercises are dependent on the future performance of
the Common Stock, the timing of such exercises and the option holder's
continued employment through the vesting period. The amounts reflected in
this table may not accurately reflect or predict the actual value of the
stock options.
(2) On March 14, 1997 the Company granted options to acquire 16,914 shares of
Common Stock to certain Executive Officers at an exercise price below fair
market value pursuant to the Company's 1997 Executive Incentive Plan. These
options were to become fully exercisable on the earlier of (i) the first
anniversary of the date of grant if certain financial and strategic goals
were achieved or (ii) the fifth anniversary of the date of grant. The
options became fully exercisable on March 14, 1998 due to the achievement of
such financial and strategic goals. The Company recorded approximately
$215,000 in compensation expenses relating to these stock option grants in
1997.
(3) These options become exercisable over a four year period with 25% becoming
exercisable on the first anniversary of the grant date and 1/48th becoming
exercisable each month thereafter until the fourth anniversary of the grant
date.
14
<PAGE> 17
STOCK OPTION EXERCISES AND DECEMBER 31, 1997 STOCK OPTION VALUE
Set forth in the table below is information concerning the value of stock
options held at December 31, 1997 by the Named Executive Officers of the
Company.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND OPTION/SAR VALUES AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES DECEMBER 31, 1997 DECEMBER 31, 1997(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Thibault.......... 13,750 $147,813 25,250 162,776 $338,831 $1,318,545
President and Chief
Executive Officer
Louis J. Volpe............ 1,709(2) $ 5,787 45,117 127,024 $643,293 $1,804,667
Senior Vice President of
Worldwide Sales and
Marketing
Timothy J. Allen.......... 0 $ 0 11,250 20,251 $124,281 $ 166,407
Vice President of
Finance, Chief Financial
Officer, Treasurer and
Secretary
G. Wayne Andrews.......... 0 $ 0 9,250 45,720 $ 93,631 $ 298,730
Vice President and Chief
Technology Officer
Steven H. Webber.......... 1,335(2) $ 4,100 25,500 64,643 $294,538 $ 444,400
Vice President of
Engineering
</TABLE>
- ---------------
(1) The amounts set forth represent the difference between the fair market value
of the Common Stock underlying the options at December 31, 1997 ($15.625 per
share) and the exercise price of the options, multiplied by the applicable
number of shares of Common Stock underlying the options.
(2) Represents shares acquired pursuant to the Company's 1996 Employee Stock
Purchase Plan.
STOCK PLANS
1993 Restricted Stock Purchase Plan. The 1993 Restricted Stock Purchase
Plan (the "1993 Plan") was adopted by the Board of Directors in October 1993 and
approved by the stockholders of the Company in December 1993. A maximum of
1,324,063 shares of Common Stock may be issued and sold pursuant to the 1993
Plan. Under the 1993 Plan, shares of Common Stock may be sold to directors,
officers, consultants and other key personnel of the Company (collectively
"Participants") at a purchase price determined by the Compensation Committee of
the Board of Directors. All shares sold pursuant to the 1993 Plan are subject to
repurchase by the Company at the original purchase price for a period of up to
five years from the date of purchase, unless the shares become "vested" under
the terms of the 1993 Plan. None of the shares become vested until the first
anniversary of the date of purchase by the Participant. A Participant vests in
twenty percent of the shares on the first anniversary of the date of purchase
and, thereafter, the remaining shares become vested on a monthly basis through
the fifth anniversary of the date of purchase. In the event of a
15
<PAGE> 18
change in control, if the Participant has been employed by the Company for at
least six months, an additional twenty percent of the shares held by the
Participant pursuant to the 1993 Plan will become vested shares, unless such
change in control has not been approved by the Board of Directors, in which
event all shares held by the Participant pursuant to the 1993 Plan will become
vested shares.
As of December 31, 1997, 958,769 shares of Common Stock were outstanding
under the 1993 Plan.
1995 Stock Option Plan. The 1995 Stock Option Plan (the "1995 Plan") was
adopted by the Board of Directors in September 1995 and approved by the
stockholders of the Company in January 1996. A maximum of 2,574,585 shares of
Common Stock may currently be issued pursuant to the 1995 Plan upon exercise of
options. The number of shares of Common Stock available for grants under the
1995 Plan will be increased by the number of shares repurchased by the Company
from time to time under the 1993 Plan. The maximum number of shares will
increase, effective January 1, 1997 and each January 1 thereafter during the
term of the 1995 Plan, by an amount equal to four percent of the total number of
shares of Common Stock issued and outstanding as of the close of business on
December 31 of the preceding year. No more than an aggregate of 6,000,000 shares
of Common Stock may be issued pursuant to the exercise of options granted under
the 1995 Plan. Under the 1995 Plan, incentive stock options may be granted to
employees and officers of the Company and non-qualified stock options may be
granted to consultants, employees, directors and officers of the Company.
The 1995 Plan is administered by the Compensation Committee of the Board of
Directors, subject to the supervision and control of the entire Board. Subject
to the provisions of the 1995 Plan, the Compensation Committee has the authority
to select optionees and determine the terms of the options granted, including
(i) the number of shares subject to each option, (ii) when the option becomes
exercisable, (iii) the exercise price of the option (which in the case of an
incentive stock option cannot be less than the fair market value of the Common
Stock on the date of the grant, or less than 110% of fair market value in the
case of employees or officers holding 10% or more of the voting stock of the
Company), (iv) the duration of the option, and (v) the time, manner and form of
payment upon exercise of an option.
Options granted under the 1995 Plan for fiscal 1997 generally become
exercisable starting one year after the date of grant, with twenty-five percent
of the shares subject to an option becoming exercisable at that time and 1/48th
of the shares subject to the option becoming exercisable each month thereafter.
Options granted under the 1995 Plan for fiscal years 1996 and 1995 generally
become exercisable starting one year after the date of grant, with twenty
percent of the shares subject to an option becoming exercisable at that time and
1/60th of the shares subject to the option becoming exercisable each month
thereafter. The Option Agreements governing options granted under the 1995 Plan
provide that in the event of a change in control, if the optionee has been
employed by the Company for at least six months, vesting will accelerate by an
additional twelve months, unless such change in control has not been approved by
the Board of Directors, in which event all options will vest and become
immediately exercisable.
An option is not transferable by the optionee except by will, by the laws
of descent and distribution or pursuant to a qualified domestic relations order.
Options are exercisable only while the optionee remains in the employ of the
Company or for a short period of time thereafter. If an optionee becomes
permanently disabled or dies while in the employ of the Company, the option is
exercisable prior to the last day of the sixth or twelfth month, respectively,
following the date of termination of employment. If the optionee leaves the
employ of the Company for any reason, the option is exercisable for only thirty
days following the date of termination of employment, which time period may be
extended by up to 90 days by the Compensation
16
<PAGE> 19
Committee. Options which are exercisable following termination of employment are
exercisable only to the extent that the optionee was entitled to exercise such
options on the date of such termination.
As of December 31, 1997, options to purchase 1,625,957 shares of Common
Stock were outstanding under the 1995 Plan (including options to purchase 35,000
shares of Common Stock granted pursuant to the Director Option Policy discussed
below).
1996 Employee Stock Purchase Plan. The 1996 Employee Stock Purchase Plan
(the "1996 Purchase Plan") for employees of the Company was adopted by the Board
of Directors and approved by the stockholders of the Company in September 1996.
The 1996 Purchase Plan authorizes the issuance of a maximum of 250,000 shares of
Common Stock pursuant to the exercise of nontransferable options granted to
participating employees.
The 1996 Purchase Plan is administered by the Compensation Committee of the
Board of Directors. All employees of the Company whose customary employment is
24 hours or more per week and have been employed by the Company for at least six
months are eligible to participate in the 1996 Purchase Plan. Employees who own
5% or more of the voting stock of the Company and directors who are not
employees of the Company may not participate in the 1996 Purchase Plan. To
participate in the 1996 Purchase Plan, an employee must authorize the Company in
writing to deduct an amount (not less than 1% nor more than 10% of a
participant's base compensation) from his or her pay commencing on the first day
of each of the six-month periods beginning on January 1 and July 1 of each year
(each a "Purchase Period"). On the first day of each Purchase Period, the
Company grants to each participating employee an option to purchase up to 1,000
shares of Common Stock. The exercise price for the option for each Purchase
Period is the lower of 85% of the fair market value of the Common Stock on the
first or last day of the Purchase Period. The fair market value will be the
closing selling price of the Common Stock as quoted on the Nasdaq National
Market. If an employee is not a participant on the last day of the Purchase
Period, such employee is not entitled to exercise his or her option, and the
amount of his or her accumulated payroll deduction will be refunded to the
employee. An employee's rights under the 1996 Purchase Plan terminate upon his
or her voluntary withdrawal from the 1996 Purchase Plan at any time or upon
termination of employment.
Common Stock for the 1996 Purchase Plan will be made available either from
authorized but unissued shares of Common Stock or from shares of Common Stock
reacquired by the Company, including shares repurchased in the open market.
As of December 31, 1997, options to purchase 28,145 shares of Common Stock
were outstanding under the 1996 Purchase Plan.
1997 Non-Employee Director Stock Option Policy. The 1997 Non-employee
Director Stock Option Policy (the "Director Option Policy"), which was approved
by the Board of Directors in February 1997, provides for the grant of options to
purchase Common Stock of the Company to non-employee Directors of the Company
under the 1995 Plan. Subject to the availability of shares of Common Stock under
the 1995 Plan, the Director Option Policy authorizes the issuance of a maximum
of 100,000 shares of Common Stock in accordance with the terms of the 1995 Plan.
All terms and conditions regarding the grant of options to non-employee
Directors of the Company under the Director Option Policy are governed by the
1995 Plan.
Under the Director Option Policy, each non-employee Director of the Company
who was serving as a director as of the date of adoption of the Policy (a
"Continuing Director") was granted initially an option to acquire five thousand
(5,000) shares of Common Stock under the 1995 Plan which becomes exercisable on
the earlier of May 15, 1998 or on the date the 1998 Annual Meeting of
Stockholders is held. Additionally,
17
<PAGE> 20
beginning on the date of the Company's 1998 Annual Meeting of the Stockholders
and on the date of each subsequent Annual Meeting of the Stockholders held
thereafter, each Continuing Director, for so long as he is a director of the
Company and not otherwise employed by the Company or any subsidiary, shall be
granted an option to acquire five thousand (5,000) shares of Common Stock under
the 1995 Plan (the "Existing Director Options"). Furthermore, under the Director
Option Policy, each non-employee Director who is first elected as a member of
the Board of Directors of the Company after the adoption of the Director Option
Policy and during the term of the 1995 Plan will receive an option to purchase
20,000 shares of Common Stock (the "New Director Options"). The exercise price
of all options granted under the Director Option Policy will be equal to the
fair market value of the Common Stock as of the date of the grant. The Existing
Director Options vest in full on the first anniversary of the date of the grant.
The New Director Options vest annually in four equal installments beginning on
the first anniversary of the date of the grant. All other terms of the options
are governed by the provisions of the 1995 Plan.
As of December 31, 1997 options to purchase 35,000 shares of Common Stock
were outstanding under the 1997 Director Option Policy.
INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Coopers & Lybrand L.L.P. as
independent accountants to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 1998. Coopers & Lybrand L.L.P.
has served as independent accountants since 1995.
A representative of Coopers & Lybrand L.L.P. is expected to be present at
the Annual Meeting and will have the opportunity to make a statement if he or
she so desires and to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF COOPERS &
LYBRAND L.L.P.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons owning more than 10% of the outstanding
Common Stock of the Company to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% holders of Common Stock of the Company are required by
Securities and Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Mr. Volpe, a Named Executive Officer, made late Form 4 filings with respect
to two transactions. Mr. Webber, a Named Executive Officer, filed a late Form 4
with respect to one transaction. Mr. Bowen, a Director of the Company, filed a
late Form 3 with respect to the commencement of his position as Director.
Except as set forth above and based solely on copies of such forms
furnished as provided above, management believes that through the date hereof
all other Section 16(a) filing requirements applicable to its officers,
directors and owners of greater than 10% of its Common Stock were satisfied.
18
<PAGE> 21
TIME FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Under regulations adopted by the Securities and Exchange Commission, any
proposal submitted for inclusion in the Company's Proxy Statement relating to
the Annual Meeting of Stockholders to be held in 1999 must be received at the
Company's principal executive offices in Lowell, Massachusetts on or before
December 23, 1998. Receipt by the Company of any such proposal from a qualified
stockholder in a timely manner will not ensure its inclusion in the proxy
material because there are other requirements in the proxy rules for such
inclusions.
In addition to the Securities and Exchange Commission requirements
regarding stockholder proposals, the Company's By-laws contain provisions
regarding matters to be brought before stockholder meetings. If such matters are
to be included in the Company's proxy statement and form of proxy, notice
thereof must be delivered to the Company in accordance with the Securities and
Exchange Commission requirements set forth in the paragraph above. If such
matters are not to be included in the Company's proxy statement and form of
proxy, notice of them must be given by personal delivery or by United States
mail, postage prepaid, to the Secretary of the Company on or before February 21,
1999.
OTHER MATTERS
Management knows of no matters which may properly be and are likely to be
brought before the meeting other than the matters discussed herein. However, if
any other matters properly come before the meeting, the persons named in the
enclosed proxy will vote in accordance with their best judgment.
The cost of this solicitation will be borne by the Company. It is expected
that the solicitation will be made primarily by mail, but regular employees or
representatives of the Company (none of whom will receive any extra compensation
for their activities) may also solicit proxies by telephone, telecopier and in
person and arrange for brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to their principals at the
expense of the Company.
10-K REPORT
THE COMPANY WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A
COPY OF AN ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE COMPANY'S MOST RECENT FISCAL YEAR, WITHOUT CHARGE, UPON
RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE SENT TO
INVESTOR RELATIONS, GEOTEL COMMUNICATIONS CORPORATION, 900 CHELMSFORD STREET,
TOWER II, LOWELL, MASSACHUSETTS 01851.
19
<PAGE> 22
VOTING PROXIES
The Board of Directors recommends an affirmative vote on all proposals
specified. Proxies will be voted as specified. If signed proxies are returned
without specifying an affirmative or negative vote on any proposal, the shares
represented by such proxies will be voted in favor of the Board of Directors'
recommendations.
By order of the Board of Directors
/s/ Timothy J. Allen
TIMOTHY J. ALLEN
Vice President of Finance,
Chief Financial Officer,
Treasurer and Secretary
April 27, 1998
20
<PAGE> 23
GTL64 1 DETACH HERE
- --------------------------------------------------------------------------------
PROXY
GEOTEL COMMUNICATIONS CORPORATION
PROXY FOR THE ANNUAL MEETING FOR STOCKHOLDERS TO BE HELD MAY 28, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John C. Thibault and Timothy J. Allen, and
each of them, attorneys and proxies, with full power of substitution and
resubstitution, to vote at an annual meeting of stockholders of GeoTel
Communications Corporation (the "Company") to be held at Cross Point at 900
Chelmsford Street, Lowell, Massachusetts, in the Lowell conference room of Tower
3 on the first floor, on May 28, 1998 at 11:00 a.m., Eastern time, or at any
adjournments or postponements thereof, revoking all previous proxies, with all
powers the undersigned would possess if present, to act upon the following
matters and upon such other business as may properly come before the meeting or
any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2
AND AUTHORITY WILL BE DEEMED GRANTED UNDER PROPOSAL 3.
- ------------- -------------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ------------- -------------
<PAGE> 24
<TABLE>
<S> <C>
GTL64 2 DETACH HERE
- ---------------------------------------------------------------------------------------
___ PLEASE MARK
| X | VOTES AS IN
|___| THIS EXAMPLE.
1. Election of Directors: To elect 2. Ratification of Auditors: To ratify
two members to the Board of the selection of the firm of Coopers
Directors to serve for three-year & Lybrand L.L.P. as auditors for the
terms as Class II Directors. fiscal year ending December 31, 1998.
NOMINEES: Alexander V. d'Arbeloff FOR AGAINST ABSTAIN
and Gardner C. Hendrie ___ ___ ___
| | | | | |
FOR WITHHELD |___| |___| |___|
___ ___
| | | | 3. Transaction of Other Business: To
|___| |___| transact such other business as may
properly come before the meeting or
any postponements or adjournments
___ thereof.
| |
|___| ______________________________
For all nominees except ___
as noted above MARK HERE FOR ADDRESS | |
CHANGE AND NOTE AT LEFT |___|
PLEASE VOTE, DATE, SIGN AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your
name appears on the books of the
Company. Joint owners should each sign
personally. Trustees and other
fiduciaries should indicate the
capacity in which they sign, and where
more than one name appears, a majority
must sign. If a corporation, this
signature should be that of an
authorized officer who should state
his or her title.
Signature:______________ Date:____________ Signature:______________ Date:____________
</TABLE>
