GEOTEL COMMUNICATIONS CORP, PRE 14A, 1999-03-03

GEOTEL COMMUNICATIONS CORP
PRE 14A, 1999-03-03
PREPACKAGED SOFTWARE

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<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:
[X] Preliminary Proxy Statement
[ ] 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

1999 ANNUAL MEETING OF STOCKHOLDERS

To Our Stockholders:

The 1999 Annual Meeting of the Stockholders of GeoTel Communications
Corporation will be held on Wednesday, May 12, 1999 at 10:00 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 approve an amendment to the Company's Restated Certificate of
Incorporation increasing from 40,000,000 to 195,000,000 the number of
authorized shares of Common Stock, $0.01 par value, of the Company.

3. To consider and act upon a proposal to ratify, confirm and approve
the selection of PricewaterhouseCoopers LLP as the independent accountants
of the Company for fiscal year 1999.

4. 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 March 30, 1999,
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 6, 1999
<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 1999 Annual Meeting of Stockholders to be held on
Wednesday, May 12, 1999, 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
6, 1999.

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.

A majority in interest of the outstanding shares represented at the meeting
in person or by proxy shall constitute a quorum for the transaction of business.
Votes withheld from any nominee, abstentions and broker "non-votes" are counted
as present or represented for purposes of determining the presence or absence of
a quorum for the meeting. A "non-vote" occurs when a nominee holding shares for
a beneficial owner votes on one proposal, but does not vote on another proposal
because the nominee does not have discretionary voting power and has not
received instructions from the beneficial owner. Directors are elected by a
majority of the votes cast by stockholders entitled to vote at the meeting. The
approval of the amendment to the Company's Restated Certificate of Incorporation
will also be decided by majority vote. On all other matters being submitted to
stockholders, an affirmative vote of at least a majority of the shares present,
or represented, and entitled to vote at the meeting is required for approval. An
automated system administered by the Corporation's transfer agent tabulates the
votes. The vote on each matter submitted to stockholders is tabulated
separately. Abstentions are included in the number of shares present or
represented and voting on each separate matter. Broker "non-votes" are not so
included.

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 March 30, 1999 are
entitled to notice of and to vote at the meeting. On that date, the Company had
outstanding and entitled to vote 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.
<PAGE> 4

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 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.

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>
SERVING A TERM ENDING IN 2001:
Alexander V. d'Arbeloff........... 71 1994 Alexander V. d'Arbeloff has been a Director of
the Company since July 1994. He is Chairman
and a Director of Teradyne, Inc. He co-founded
Teradyne in 1960 and was President and Chief
Executive Officer from 1971 to 1997. Mr.
d'Arbeloff is Chariman of the MIT Corporation,
a trustee of Massachusetts General Hospital
and a trustee of the New England Conservatory.
He is a Director of PRI Automation, Inc.,
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 J. Bowen..................... 52 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.
Louis J. Volpe.................... 49 1998 Louis J. Volpe has been a Director of the
Company since April 1998 and 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. He also
serves on the board of a privately held
company.
</TABLE>

3
<PAGE> 6

INFORMATION CONCERNING THE BOARD OF DIRECTORS

During fiscal 1998, the Board of Directors of the Company met nine times
and took action by written consent five times. Mr. Andrews, who resigned from
the Board of Directors effective April 2, 1998, did not attend 75% of the total
number of the meetings of the directors, however, Mr. Andrews attended at least
75% of the meetings of the directors that occurred while he was in office. In
addition, Mr. d'Arbeloff did not attend 75% of the Audit Committee meetings. All
other 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 1998, none of the directors received compensation for
serving as directors of the Company, except Mr. Thibault and Mr. Volpe received
compensation as employees of the Company. Mr. Andrews, who was replaced by Mr.
Volpe on the Board of Directors effective April 1998, also received compensation
as an employee of the Company during fiscal 1998. 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
are 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 1998, there were five
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 and the results of the audit when completed. The Audit Committee also
recommends independent accountants to the Board of Directors and reviews with
management various matters related to its internal accounting controls and
accounting policies. During 1998, there were two meetings of the Audit
Committee.

4
<PAGE> 7

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 March 30, 1999 (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, 1998 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>
Putnam Investments, Inc.(1)................................. 2,823,631 10.5%
One P.O. Box Square
Boston, MA 01460
Pilgrim Baxter & Associates, Ltd.(2)........................ 2,418,100 9.0%
825 Duportail Road
Wayne, PA 19087
Essex Investment Management Company(3)...................... 2,073,230 7.7%
125 High Street
Boston, MA 02110
Alexander V. d'Arbeloff(4).................................. 464,556 1.7%
Gary J. Bowen(5)............................................ 30,000 *
Gardner C. Hendrie(6)....................................... 95,908 *
W. Michael Humphreys(7)..................................... 70,000 *
G. Wayne Andrews(8)......................................... 471,250 1.7%
John C. Thibault(9)......................................... 374,834 1.4%
Steven H. Webber(10)........................................ 531,445 2.0%
Louis J. Volpe(11).......................................... 455,932 1.7%
Timothy J. Allen(12)........................................ 150,093 *
All Executive Officers and Directors as a group (10
persons)(13).............................................. 2,671,517 9.9%
----
</TABLE>

- ---------------
* Less than 1%

(1) According to a Schedule 13G filed February 9, 1999. Consists of 2,348,703
shares of Common Stock held by Putnam Investment Management, Inc. and
474,928 shares of Common Stock held by Putnam Advisory Company, Inc., each
of which are wholly owned by Putnam Investments, Inc. All of the reporting
persons are Investment Advisers registered under Section 203 of the
Investment Advisers Act of 1940.

(2) According to a Schedule 13G filed January 19, 1999. Pilgrim Baxter &
Associates, Ltd. is an Investment Adviser registered under Section 203 of
the Investment Advisers Act of 1940.

(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 Advisers Act of 1940.

5
<PAGE> 8

(4) Includes 6,667 shares of restricted Common Stock which remain subject to
vesting and the Company's right to repurchase at cost and 20,000 shares of
Common Stock issuable pursuant to stock options which are either currently
exercisable or will become exercisable within 60 days.

(5) Consists of 30,000 shares of Common Stock issuable pursuant to stock
options which are either currently exercisable or will become exercisable
within 60 days.

(6) Includes 20,000 shares of Common Stock issuable pursuant to stock options
which are either currently exercisable or will become exercisable within 60
days.

(7) Includes 10,000 shares of Common Stock issuable pursuant to stock options
which are either currently exercisable or will become exercisable within 60
days.

(8) Includes 17,780 shares of Common Stock held by Mr. Andrews' children under
the Massachusetts Uniform Transfers to Minors Act and 98,274 shares of
Common Stock issuable pursuant to stock options which are either currently
exercisable or will become exercisable within 60 days.

(9) Includes 9,688 shares of Common Stock held by Mr. Thibault's children under
the Massachusetts Uniform Transfers to Minors Act and 138,386 shares of
Common Stock issuable pursuant to stock options which are either currently
exercisable or will become exercisable within 60 days.

(10) Includes 145,286 shares of Common Stock issuable pursuant to stock options
which are either currently exercisable or will become exercisable within 60
days.

(11) Includes 60,681 shares of restricted Common Stock which remain subject to
vesting and the Company's right to repurchase at cost and 270,949 shares of
Common Stock issuable pursuant to stock options which are either currently
exercisable or will become exercisable within 60 days.

(12) Includes (i) 25,667 shares of restricted Common Stock which remain subject
to vesting and the Company's right to repurchase at cost; (ii) 15,500
shares of Common Stock held by Mr. Allen's children under the Massachusetts
Uniform Transfers to Minors Act; and (iii) 56,335 shares of Common Stock
issuable pursuant to stock options which are either currently exercisable
or will become exercisable within 60 days.

(13) 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 March 30, 1999. Includes
816,729 shares of Common Stock which the directors and executive officers
as a group have the right to acquire by exercise of stock options which are
either currently exercisable or will become exercisable within 60 days
granted under the Company's stock plans and 93,015 shares of restricted
Common Stock which remain subject to vesting and the Company's right to
repurchase at cost.

6
<PAGE> 9

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 comprised 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.

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 1998 Executive Incentive
Program, the Company's executive officers were eligible to receive quarterly
cash and annual 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 1998, 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 1998, the Executive Incentive Program
also provided that options to purchase an aggregate of 140,000 shares at fair
market value on the date of grant to the executive participants, which would
otherwise vest on the fourth 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

7
<PAGE> 10

Company's performance in 1998 exceeded the objectives set by the Committee and
all of such 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
1998 annual base salary was $199,583, and Mr. Thibault's annual base salary is
subject to annual review and increase by the Board of Directors of the Company.
Mr. Thibault was paid a cash bonus of $209,898 under the 1998 Executive
Incentive Program. During fiscal 1998, Mr. Thibault was granted options to
purchase 30,000, 30,000, 4,284, 135,716, and 20,000 shares of Common Stock,
respectively. The two grants of 30,000 options were granted under the 1998
Executive Incentive Program and became fully exercisable on the first
anniversary of the date of grant due to the achievement of certain financial and
strategic initiatives in the 1998 fiscal year and job performance evaluations.
The two grants of 4,284 and 135,716 options become exercisable over a four year
period. The grant of 20,000 options on December 15, 1998, which was pursuant to
the 1999 Executive Incentive Program and would otherwise become fully
exercisable on the fourth anniversary of the date of grant, will become fully
exercisable on January 15, 2000 if certain performance criteria are satisfied in
1999.

Section 162(m) Limitation

In general, under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), the Company cannot deduct, for federal income tax
purposes, compensation in excess of $1,000,000 paid to certain executive
officers. This deduction limitation does not apply, however, to compensation
that constitutes "qualified performance-based compensation" within the meaning
of Section 162(m) of the Code and the regulations promulgated thereunder. The
Committee has considered the limitations on deductions imposed by Section 162(m)
of the Code, and it is the Committee's present intention that, for so long as it
is consistent with its overall compensation objective, substantially all tax
deductions attributable to executive compensation will not be subject to the
deduction limitations of Section 162(m) of the Code.

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 1998. Neither Messrs. d'Arbeloff, Hendrie nor
Humphreys was an officer or employee of the Company or any of its subsidiaries
during fiscal 1998.

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.

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., which,
during a portion of fiscal 1998, was a greater than 5% stockholder of the
Company. As of December 31, 1998, Sigma Partners II, L.P. 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.

9
<PAGE> 12

PERFORMANCE GRAPH(1)(2)(3)

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 1998, the Company
paid no dividends except for a 2-for-1 stock split in the form of a 100%
dividend effected on September 22, 1998.
PERFORMANCE GRAPH

<TABLE>
<CAPTION>
GEOTEL COMMUNICATIONS HAMBRECHT & QUIST
CORPORATION NASDAQ STOCK MARKET - US COMPUTER 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
12/31/98 620.85 173.34 154.99
</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.

10
<PAGE> 13

(3) The amounts set forth for 1998 reflect the payment of a 2-for-1 stock split
in the form of a 100% dividend effected on September 22, 1998.

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, 1998 (the "Named Executive Officers"). The
Company made no awards of Restricted Stock and paid no compensation pursuant to
long-term incentive plans during fiscal 1998 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#(2) PAYOUTS COMPENSATION(3)
--------------------------- ---- --------- -------- ---------- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
John C. Thibault.............. 1998 $199,583 $209,898 220,000 $ 2,000(4)
President and Chief
Executive 1997 181,667 104,500 103,026 3,882(5)
Officer 1996 165,000 49,500 126,594 68,249(6)
Louis J. Volpe................ 1998 164,375 176,349 15,000 2,000(4)
Senior Vice President of 1997 144,167 239,224 8,274 278(7)
Worldwide Sales and 1996 124,283 15,600 174,649 269(7)
Marketing(8)
Timothy J. Allen.............. 1998 139,917 62,300 80,000 2,000(4)
Vice President of Finance, 1997 123,469 41,910 1,501 238(7)
Chief Financial Officer, 1996 117,156 18,000 40,782 235(7)
Treasurer and Secretary
G. Wayne Andrews.............. 1998 131,667 49,920 75,000 2,000(4)
Vice President and Chief 1997 122,935 34,375 26,970 5,034(9)
Technology Officer 1996 115,000 22,000 38,782 226(7)
Steven H. Webber.............. 1998 142,000 61,450 80,000 2,000(4)
Vice President of
Engineering 1997 134,250 59,840 27,143 396(7)
1996 125,625 18,200 73,782 5,432(10)
</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) The amounts set forth reflect the payment of a 2-for-1 stock split in the
form of a 100% dividend effected on September 22, 1998.

(3) 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.

(4) Represents amount paid by the Company to match contributions made by the
Named Executive Officers pursuant to the Company's 401(k) plan.

11
<PAGE> 14

(5) 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.

(6) 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. The life insurance policy was cancelled
effective December 31, 1997.

(7) 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.

(8) 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.

(9) 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.

(10) 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, 1998, 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, 422,166 shares (at the market price on 12/31/98 of $37.25, valued at
$12,758,447); Mr. Volpe, 190,564 shares (valued at $6,562,572); Mr. Allen,
140,168 shares (valued at 4,248,133); Mr. Andrews, 131,666 shares (valued at
$3,914,927); and Mr. Webber, 164,166 shares (valued at $4,877,114). The
foregoing amounts represent the sum of (i) the difference between the fair
market value of the Common Stock underlying options at December 31, 1998 ($37.25
per share) and the exercise price of the options, multiplied by the applicable
number of shares of Common Stock underlying the options and (ii) the fair market
value of restricted Common Stock that remains subject to the Company's right to
repurchase at cost as of December 31, 1998.

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, 1998. In fiscal 1998, the Company granted an
aggregate of 1,574,750 stock options to its employees pursuant to the 1995 Stock
Option Plan, an aggregate of 1,339,200 stock options to its employees pursuant
to the 1998 Non-Executive Employee Stock Option Plan and an aggregate of 65,000
stock options to directors pursuant to the 1997 Director Policy and sold an
aggregate of 64,928 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 1998.

12
<PAGE> 15

OPTION/SAR GRANTS IN FISCAL YEAR 1998(1)(2)

<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 1998 PRICE DATE 5% 10%
- ---- ----------- ------------ -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
John C. Thibault................ 30,000(3) 1.0% $ 8.3750 15-Jan-08 $ 158,010 $ 400,428
30,000(3) 1.0 8.3750 15-Jan-08 158,010 400,428
4,284(4) 0.1 8.3750 15-Jan-08 22,564 57,181
135,716(4) 4.6 8.3750 15-Jan-08 714,815 1,811,482
20,000(5) 0.7 27.6875 15-Dec-08 348,250 882,535
------- --- ---------- ----------
Total........................... 220,000 7.4% $1,401,649 $3,552,054
======= === ========== ==========
Louis J. Volpe.................. 10,000(5) 0.3% $27.6875 15-Dec-08 $ 174,125 $ 441,267
5,000(6) 0.2 27.6875 15-Dec-08 87,063 220,634
------- --- ---------- ----------
Total........................... 15,000 0.5% $ 261,188 $ 661,901
======= === ========== ==========
Timothy J. Allen................ 20,000(3) 0.7% $ 8.3750 15-Jan-08 $ 105,340 $ 266,952
36,862(4) 1.2 8.3750 15-Jan-08 194,152 492,019
13,138(4) 0.4 8.3750 15-Jan-08 69,198 175,361
10,000(5) 0.3 27.6875 15-Dec-08 174,125 441,267
------- --- ---------- ----------
Total........................... 80,000 2.6% $ 542,815 $1,375,599
======= === ========== ==========
G. Wayne Andrews................ 18,358(4) 0.6% $ 8.3750 15-Jan-08 $ 96,691 $ 245,035
31,642(4) 1.1 8.3750 15-Jan-08 166,658 422,345
20,000(3) 0.7 8.3750 15-Jan-08 105,340 266,952
5,000(5) 0.2 27.6875 15-Dec-08 87,063 220,634
------- --- ---------- ----------
Total........................... 75,000 2.6% $ 455,752 $1,154,966
======= === ========== ==========
Steven H. Webber................ 18,358(4) 0.6% $ 8.3750 15-Jan-08 $ 96,691 $ 245,035
31,642(4) 1.1 8.3750 15-Jan-08 166,658 422,345
20,000(3) 0.7 8.3750 15-Jan-08 105,340 266,952
10,000(5) 0.3 27.6875 15-Dec-08 174,125 441,267
------- --- ---------- ----------
Total........................... 80,000 2.7% $ 542,814 $1,375,599
======= === ========== ==========
</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) The amounts set forth reflect the payment of a 2-for-1 stock split in the
form of a 100% dividend effected on September 22, 1998.

13
<PAGE> 16

(3) These options were granted pursuant to the Company's 1995 Stock Option Plan
and as part of the compensation to be awarded to such Named Executive
Officer pursuant to the Company's 1998 Executive Incentive Plan. The options
become 100% exercisable on the fourth anniversary date of the grant, except
that, if certain performance goals are attained in 1998, the options would
become 100% exercisable on the first anniversary date of the grant. The
performance goals were met.

(4) These options become exercisable over a four year period with 25% of the
shares becoming exercisable on the first anniversary of the grant date and
1/48th of the shares becoming exercisable monthly thereafter until the
fourth anniversary of the grant date.

(5) These options were granted pursuant to the Company's 1995 Stock Option Plan
and as part of the compensation to be awarded to such Named Executive
Officer pursuant to the Company's 1999 Executive Incentive Plan. The options
become exercisable 100% on the fourth anniversary date of the grant, except
that, if performance goals are attained in 1999, the options will become
exercisable 100% on the first anniversary date of the grant.

(6) This option was granted pursuant to the Company's 1995 Stock Option Plan and
it vests on the first anniversary date of the grant.

STOCK OPTION EXERCISES AND DECEMBER 31, 1998 STOCK OPTION VALUE

Set forth in the table below is information concerning the value of stock
options held at December 31, 1998 by the Named Executive Officers of the
Company.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND OPTION/SAR VALUES AS OF DECEMBER 31, 1998(1)

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES DECEMBER 31, 1998 DECEMBER 31, 1998(2)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Thibault..... 129,886(3) $1,829,387 44,552 422,166 $1,491,392 $12,758,447
Louis J. Volpe....... 1,445(4) $ 16,522 245,949 113,333 $9,040,482 $ 3,685,717
Timothy J. Allen..... -- -- 35,502 107,500 $1,230,934 $ 3,031,250
G. Wayne Andrews..... -- -- 53,274 131,666 $1,782,856 $ 3,914,927
Steven H. Webber..... 1,445(4) $ 16,522 96,120 164,166 $3,285,868 $ 4,877,114
</TABLE>

- ---------------
(1) The amounts set forth reflect the payment of a 2-for-1 stock split in the
form of a 100% dividend effected on September 22, 1998.

(2) The amounts set forth represent the difference between the fair market value
of the Common Stock underlying the options at December 31, 1998 ($37.25 per
share) and the exercise price of the options, multiplied by the applicable
number of shares of Common Stock underlying the options.

(3) Includes shares acquired pursuant to the Company's 1996 Employee Stock
Purchase Plan.

(4) Consists of shares acquired pursuant to the Company's 1996 Employee Stock
Purchase Plan.

14
<PAGE> 17

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
2,648,126 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 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, 1998, 1,905,288 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 5,426,380 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 grant 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 12,000,000 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 1998 and 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 year 1996 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

15
<PAGE> 18

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 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, 1998, options to purchase 4,181,536 shares of Common
Stock were outstanding under the 1995 Plan (including options to purchase
125,000 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 500,000 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 either authorize the
Company in writing to deduct an amount or pay a lump sum 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"). In addition,
employees whose six month anniversary of employment with the Company occurs
between January 1 and March 31 can participate in the then ongoing Purchase
Period for the period from April 1 to June 30 and employees whose six month
anniversary of employment with the Company occurs between July 1 and September
30 can participate in the then ongoing Purchase Period for the period from
October 1 to December 31. 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, if any, 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.

16
<PAGE> 19

As of December 31, 1998, a total of 121,218 shares of Common Stock have
been purchased 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 and amended in December 1998,
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 200,000 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, on the date of each Annual Meeting of the
Stockholders, each non-employee Director of the Company, for so long as he is a
director of the Company and not otherwise employed by the Company or any
subsidiary (a "Continuing Director"), shall be granted an option to acquire five
thousand (5,000) shares of Common Stock under the 1995 Plan (the "Existing
Director Options"). In connection with the 1998 Annual Meeting of Stockholders,
each Continuing Director was granted 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, 1999 or on the date the 1999 Annual Meeting of Stockholders
is held. In lieu of the grant of Existing Director Options that each Continuing
Director is to receive on the date of the Company's 1999 Annual Meeting of
Stockholders, the Company granted such 1999 Existing Director Options on
December 15, 1998. 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, 1998 options to purchase 125,000 shares of Common Stock
were outstanding under the Director Option Policy.

AMENDMENT OF THE CORPORATION'S RESTATED CERTIFICATE OF INCORPORATION

By a Board of Directors resolution dated February 26, 1999, the Board of
Directors recommends to the stockholders that the Company amend the Company's
Restated Certificate of Incorporation to increase the number of authorized
shares of Common Stock, par value $0.01 per share, from 40,000,000 to
195,000,000 shares. Shares of the Company's Common Stock, including the
additional shares proposed for authorization, do not have preemptive or similar
rights. The full text of the proposed amendment to the Restated Certificate of
Incorporation is attached to this proxy statement as Exhibit A.

As of the Record Date, there were approximately shares of
Common Stock issued and outstanding and approximately shares
reserved for future issuance pursuant to outstanding options granted under the
Company's stock plans. If the amendment to the Restated Certificate of
Incorporation is approved, the Board of Directors will have the authority to
issue approximately 155,000,000 additional shares of Common Stock without
further stockholder approval. The Board of Directors believes the authorized
number of shares of Common Stock should be increased to provide sufficient
shares for such corporate purposes as may be determined by the Board of
Directors to be necessary or desirable. These

17
<PAGE> 20

purposes may include, without limitation: entering into collaborative research
and development arrangements with other companies in which Common Stock or the
right to acquire Common Stock are part of the consideration; facilitating
broader ownership of the Company's Common Stock by effecting a stock split or
issuing a stock dividend; raising capital through the sale of Common Stock;
attracting and retaining valuable employees by the issuance of additional stock
options, including additional shares reserved for future option grants under the
Company's existing stock plans or future plans; and acquiring other businesses
in exchange for shares of the Company's Common Stock. While the Company
continually evaluates potential acquisitions, the Company has no present
agreements or commitments with respect to using shares of Common Stock as part
of any acquisition, nor are any negotiations regarding any such acquisition
currently ongoing. The Board of Directors considers the authorization of
additional shares of Common Stock advisable to ensure prompt availability of
shares for issuance should the occasion arise.

The issuance of additional shares of Common Stock could have the effect of
diluting earnings per share and book value per share, which could adversely
affect the Company's existing stockholders. In addition, the Company's
authorized but unissued shares of Common Stock could be used to make a change in
control of the Company more difficult or costly. Issuing additional shares of
Common Stock could have the effect of diluting stock ownership of the persons
seeking to obtain control of the Company. The Company is not aware, however, of
any pending or threatened efforts to obtain control of the Company, and the
Board of Directors has no current intention to use the additional shares of
Common Stock in order to impede a takeover attempt.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION.

INDEPENDENT ACCOUNTANTS

The Board of Directors has appointed PricewaterhouseCoopers LLP as
independent accountants to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 1999. PricewaterhouseCoopers LLP
has served as independent accountants since 1995.

A representative of PricewaterhouseCoopers LLP 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
PRICEWATERHOUSECOOPERS LLP

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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. Thibault, a Named Executive Officer, made a late Form 4 filing with
respect to one transaction. Mr. d'Arbeloff, a Director of the Company, made a
late Form 4 filing with respect to one transaction.

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

Proposals of stockholders intended for inclusion in the Company's proxy
materials to be furnished to all stockholders entitled to vote at the 2000
Annual Meeting of Stockholders pursuant to SEC Rule 14a-8 must be received at
the Company's principal executive offices in Lowell, Massachusetts not later
than December 7, 1999. 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.

Under the Company's By-Laws, stockholders who wish to make a proposal at
the 2000 Annual Meeting -- other than one that will be included in the Company's
proxy materials -- must notify the Company no later than February 5, 2000. If a
stockholder who wishes to present a proposal fails to notify the Company by
February 5, 2000, the stockholder would not be entitled to present the proposal
at the meeting. If, however, notwithstanding the requirements of the Company's
by-laws, the proposal is brought before the meeting, then under the SEC's proxy
rules the proxies solicited by management with respect to the 2000 Annual
Meeting will confer discretionary voting authority with respect to the
stockholder's proposal on the persons selected by management to vote the
proxies. If a stockholder makes a timely notification, the proxies may still
exercise discretionary voting authority under circumstances consistent with the
SEC's proxy rules. All notices of proposals by stockholders should be given by
personal delivery or by United States mail, postage prepaid, to the Secretary of
the Company.

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 6, 1999

20
<PAGE> 23
EXHIBIT A

RESTATED CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GEOTEL COMMUNICATIONS CORPORATION

Geotel Communications Corporation (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of
the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation adopted resolutions
proposing and declaring advisable the following amendment to the Restated
Certificate of Incorporation of the Corporation:

RESOLVED: That the first paragraph of Article FOURTH of the
Corporation's Restated Certificate of Incorporation shall be amended
to read in its entirety as follows:

"FOURTH. The total number of shares of all classes of classes of
capital stock which the Corporation shall have authority to issue is
200,000,000 shares, consisting of 195,000,000 shares of common stock
with a par value of $0.01 per share (the "Common Stock") and 5,000,000
shares of preferred stock with a par value of $0.01 per share (the
"Preferred Stock")."

SECOND: The foregoing amendment to the Restated Certificate of
Incorporation of the Corporation was duly adopted by the stockholders of the
Corporation in accordance with the applicable provisions of Section 242 of the
General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be executed by John Thibault, its President and Chief Executive
Officer, this th day of May, 1999.

--------------------------------------
John Thibault,
President and Chief Executive Officer

<PAGE> 24

GEOTEL COMMUNICATIONS CORPORATION

PROXY FOR THE ANNUAL MEETING FOR STOCKHOLDERS TO BE HELD MAY 12, 1999

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 12, 1999 at 10:00 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 3
AND AUTHORITY WILL BE DEEMED GRANTED UNDER PROPOSAL 4.
<PAGE> 25
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE

- -------------------------------------------
GEOTEL COMMUNICATIONS CORPORATION
- -------------------------------------------

RECORD DATE SHARES:

Please be sure to sign and date this Proxy. Date
- ---------------------------------------------------------------

_________Stockholder sign here_______________Co-owner sign here______

<TABLE>
<S> <C> <C> <C>
1. Election of Directors: To elect two members to the Board of
Directors to serve for three-year terms as Class III Directors. For All With- For All
Nominees: Nominees hold Except
W. MICHAEL HUMPHREYS / / / / / /
JOHN C. THIBAULT

NOTE: If you do not wish your shares voted "For" a particular nominee, mark the
"For All Except" box and strike a line through the name of the nominee. Your
shares will be voted for the remaining nominee.

2. Amendment of Restated Certificate of Incorporation: To approve an For Against Abstain
amendment to the Company's Restated Certificate of Incorporation / / / / / /
increasing from 40,000,000 to 195,000,000 the number of authorized shares of
Common Stock, $0.01 par value, of the Company.

For Against Abstain
/ / / / / /
3. Ratification of Auditors: To ratify the selection of the firm
PricewaterhouseCoopers LLP as auditors for the fiscal year ending December
31, 1999.

For Against Abstain
/ / / / / /

4. Transaction of Other Business: To transact such other business as may
properly come before the meeting or any postponements or adjournments
thereof.
</TABLE>

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.

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