1
EXHIBIT 99.5
GEOTEL COMMUNICATIONS CORPORATION
STOCK OPTION AGREEMENT
AGREEMENT entered into this __th day of _______ 1998 by and between
GeoTel Communications Corporation, a Delaware corporation with a principal place
of business in Lowell, Massachusetts (the "Company"), and the undersigned
employee of the Company (the "Optionee").
WHEREAS, the Company desires to grant the Optionee a stock option under
the Company's 1998 Employee Stock Option Plan (the "Plan") to acquire shares of
the Company's common stock, $.01 par value per share (the "Common Stock").
WHEREAS, Section 5 of the Plan provides that each option is to be
evidenced by an option agreement, setting forth the terms and conditions of the
option.
ACCORDINGLY, in consideration of the premises and of the mutual
covenants and agreements contained herein, the Company and the Optionee hereby
agree as follows:
1. Grant of Option. The Company hereby irrevocably grants under the
Plan and subject to the terms and conditions of the Plan to the Optionee non
qualified stock option (the "Option") to purchase all or any part of an
aggregate of ______ shares of Common Stock (the "Shares") on the terms and
conditions hereinafter set forth. This option shall be treated for federal
income tax purposes as a Non-Qualified Option (rather than an incentive stock
option under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code")).
2. Purchase Price. The purchase price ( the "Purchase Price") for
the Shares covered by the Option shall be $____ per Share.
3. Time of Exercise of Option.
(a) The Option shall vest 100% upon the fourth anniversary
of the date of this agreement. However, upon the achievement of performance
goals as set forth in the Executive Incentive Plan prior to January 1, 1999,
said options shall be 100% vested and fully exercisable upon the first
anniversary of the date of this Agreement. The Compensation Committee (the
"Committee") will determine if the performance goals are achieved.
(b) Notwithstanding any other provisions of this section
(but subject to the provision at the end of this subsection), in the event of a
Change in Control, each Optionee with a minimum of six months service will
automatically receive twelve months accelerated Vesting; in the event of a
Change in Control of the Company not approved by the Board of Directors prior to
such Change of Control all of the Shares shall be fully Vested immediately upon
such Change of Control; provided, however, should any transaction occur which is
intended to be accounted for as a "pooling of interests" under generally
accepted accounting principles and the provisions of this Section 3(b) would
preclude accounting for the
2
transaction as a "pooling of interests" as determined by the Board Of Directors
upon advice from the Company's Independent Public Accountants then this Section
3(b) will be null. For purposes of this Agreement a "Change of Control" shall be
deemed to have occurred if any of the following conditions have occurred: (1)
the merger or consolidation of the Company with another entity other than with a
subsidiary or an affiliate, where the Company is not the surviving entity; (2)
the sale of all or substantially all of the Company assets to a third party who
is not prior thereto a stockholder or affiliate of the Company, or (3) a
transaction or series of related transactions whereby in excess of 51% of the
voting stock of the Company is transferred to parties who are not prior thereto
stockholders or affiliates of the Company.
4. Term of Options; Exerciseability.
(a) Term.
(1) The Option shall expire ten (10) years from the
date of this Agreement, but shall be subject to earlier termination as herein
provided.
(2) Except as otherwise provided in this Section 4,
the Option shall terminate thirty days following the date the Optionee ceases to
be an employee of the Company or one of its subsidiaries, or on the date on
which the Option expires by its terms, whichever occurs first; provided that the
Committee may, in its discretion, extend such thirty day period of
exercisability for such time period as it deems appropriate provided further
that such period of exercisability shall not exceed ninety (90) days.
(3) If such termination of employment is because the
Optionee has become permanently disabled (within the meaning of Section 22(e)(3)
of the Code), the Option shall terminate on the last day of the sixth month from
the date the Optionee ceases to be an employee, or on the date on which the
Option expires by its terms, whichever occurs first.
(4) In the event of the death of the Optionee, the
Option shall terminate twelve months from the date of death, or on the date on
which the Option expires on its terms, whichever occurs first.
(b) Exercisability. The Option shall be exercisable only to
the extent that the right to purchase shares under the Option has accrued and is
in effect on the date the Optionee ceases to be an employee of the Company.
5. Manner of Exercise of Option; Payment of Price.
(a) Manner of Exercise.
(1) To the extent that the right to exercise the
Option has accrued and is in effect, the Option may be exercised in full or in
part by giving written notice to the Company stating the number of Shares
exercised and accompanied by payment in full for such Shares. Upon such
exercise, delivery of a certificate for paid-up, non-assessable Shares
3
shall be made at the principal office of the Company to the person exercising
the Option, not more than thirty (30) days from the date of receipt of the
notice by the Company.
(2) The Company shall at all times during the term
of the Option reserve and keep available such number of Shares of its Common
Stock as will be sufficient to satisfy the requirements of the Option. The
Optionee shall not have any of the rights of a stockholder of the Company in
respect of the Shares until one or more certificates for such Shares shall be
delivered to him or her upon the due exercise of the Option.
(b) Payment of Price.
(1) Form of Payment. The option price shall be paid
in the following manner:
(i) in cash or by check;
(ii) subject to Section 5(b)(2) below, by
delivery of shares of the Company's Common Stock
having a fair market value (as determined by the
Committee) equal as of the date of exercise to
the option price;
(iii) by delivery of an assignment
satisfactory in form and substance to the
Company of a sufficient amount of the proceeds
from the sale of the Option Shares and an
instruction to the broker or selling agent to
pay that amount to the Company; or
(iv) by any combination of the foregoing.
(2) Limitations on Payment by Delivery of Common
Stock. If the Optionee delivers Common Stock held by the Employee ("Old Stock")
to the Company in full or partial payment of the option price, and the Old Stock
so delivered is subject to restrictions or limitations imposed by agreement
between the Optionee and the Company, an equivalent number of Option Shares
shall be subject to all restrictions and limitations applicable to the Old Stock
to the extent that the Optionee paid for the Option Shares by delivery of Old
Stock, in addition to any restrictions or limitations imposed by this Agreement.
Notwithstanding the foregoing, the Optionee may not pay any part of the exercise
price hereof by transferring Common Stock to the Company unless such Common
Stock has been owned by the Optionee free of any substantial risk of forfeiture
for at least six months.
6. Non-Transferability. The right of the Optionee to exercise the
Option shall not be assignable or transferable by the Optionee otherwise than by
will or the laws of descent and distribution or pursuant to a qualified domestic
relations order, as defined by the Code or Title I of the Employment Retirement
Income Security Act, or the rules thereunder.
4
The Option may be exercised during the lifetime of the Optionee only by him or
her. The Option shall be null and void and without effect upon the bankruptcy of
the Optionee or upon any attempted assignment or transfer, including without
limitation any purported assignment, whether voluntary or by operation of law,
pledge, hypothecation or other disposition contrary to the provisions hereof, or
levy of execution, attachment, trustee process or similar process, whether legal
or equitable, upon the Option.
7. Representation Letter and Investment Legend.
(a) In the event that for any reason the Shares to be issued
upon exercise of the Option shall not be effectively registered under the
Securities Act of 1933 (the "1933 Act"), upon any date on which the Option is
exercised in whole or in part, the person exercising the Option shall give a
written representation to the Company in the form attached hereto as Exhibit 1
and the Company shall place an investment legend, so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
(b) The Company shall be under no obligation to qualify
Shares or to cause a registration statement or a post-effective amendment to any
registration statement to be prepared for the purposes of covering the issue of
Shares.
8. Recapitalizations, Reorganizations, Changes in Control and the
Like. Adjustments and other matters relating to recapitalizations,
reorganizations, sale of assets of the Company, changes in control and the like
shall be made and determined in accordance with section 11 of the Plan, as is in
effect on the date of this Agreement.
9. No Special Employment Rights. Nothing contained in this
Agreement shall be construed or deemed by any person under any circumstances to
bind the Company to continue the employment of the Optionee for the period
within which this Option may be exercised. However, during the period of the
Optionee's employment, the Optionee shall render diligently and faithfully the
services which are assigned to the Optionee from time to time by the Board of
Directors or by the executive officers of the Company, provided that such
services are consistent with the services usually required to be performed by
the Optionee. The Optionee shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Withholding Taxes. If the Company or any Related Corporation in
its discretion determines that it is obligated to withhold any tax in connection
with the exercise of this option, or in connection with the transfer of, or the
lapse of restrictions on, any Common Stock or other property acquired pursuant
to this option, the Optionee hereby agrees that the Company or any Related
Corporation may withhold from the Optionee's wages or other remuneration the
appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash from
such wages or other remuneration or in kind from the Common Stock or other
property otherwise deliverable to the Optionee on exercise of this option. The
Optionee further agrees that, if the Company or Related Corporation does not
withhold an amount from the Optionee's wages or other remuneration sufficient to
satisfy the withholding obligation of
5
the Company or Related Corporation, the Optionee will make reimbursement on
demand, in cash, for the amount underwithheld.
11. Amendment and Waiver. This Agreement may be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may be given, provided that the same are in writing and signed by the parties.
12. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to
principles of conflicts of laws.
13. Notices. Any notices or other communications required to be
given hereunder shall be given by hand delivery or by first class mail with all
fees prepaid and addressed, if to the Company, to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.,
▇▇▇▇▇ ▇▇, ▇▇. 12, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn.: President, and if to Optionee, to him
at the address set forth in the signature page hereto.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its corporate seal to be hereto affixed by its officer thereunto duly
authorized, and the Optionee has hereunto set his or her hand and seal, all as
of the day and year first above written.
GEOTEL COMMUNICATIONS CORPORATION
By:________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President & CEO
OPTIONEE
____________________________________________
NAME
Address:
Social Security No.: ________
6
GeoTel Communications Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GeoTel Communications Corporation
Non Qualified Stock Option
Representation Letter
The undersigned, ___________________ (the "Optionee"), in connection
with the grant of an option to purchase _______ shares (the "Shares") of the
Common Stock, $.01 par value per share, of GeoTel Communications Corporation
(the "Company"), hereby represents and warrants to the Company that:
(1) The Optionee has exercised his or her options pursuant to the
provisions set forth in the Company's 1998 Stock Option Plan, as
amended (the "Plan").
(2) The Optionee is acquiring the Shares for his or her own account
as an investment and not with a view to, or for sale in
connection with, any distribution of the Shares.
(3) The Optionee is aware that the Shares have not been registered
with the Securities and Exchange Commission and are of an
illiquid nature and are subject to restrictions on
transferability set forth under the Securities Act of 1933, as
amended ( the "Securities Act").
(4) The Optionee is aware the Shares must be sold in compliance with
the registration requirements of the Securities Act or an
exemption therefrom. Accordingly, the Company may, pursuant to
Section 7(a) of the Plan, affix an investment legend on the
Shares in substantially the form as follows:
The Shares represented by this certificate have not been
registered under the Securities Act of 1933. These Shares have
been acquired for investment and not with a view to distribute
or resale, and may not be sold, mortgaged, pledged, hypothecated
or otherwise transferred without an effective registration
statement for such shares under the Securities Act of 1933, or
an opinion of Counsel for the Company that such registration is
not required under such act.
IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed as of the date first written below.
Dated: ____________ ______________
Optionee
