<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the Fiscal Year ended December 31, 1994
Commission File Number 0-15502
COMVERSE TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 13-3238402
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
170 CROSSWAYS PARK DRIVE
WOODBURY, NY 11797
(Address of principal executive offices)
Registrant's telephone number, including area code: 516-677-7200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- --------------------
Not applicable Not applicable
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.10 PAR VALUE PER SHARE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes: [X] No: [_]
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<PAGE>
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
[X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant on April 25, 1995 was approximately $275,000,000. The closing price
of the registrant's Common Stock on the NASDAQ National Market System on April
25, 1995 was $14-3/4 per share.
There were 19,939,592 shares of the registrant's Common Stock outstanding on
April 25, 1995.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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Unless otherwise specified in this report, all information included herein with
respect to the registrant's Common Stock, including information appearing in
financial tables concerning numbers of shares and earnings per share, has been
adjusted to give effect to the combination, or "reverse split", of the Common
Stock at the rate of one new share of Common Stock, par value $0.10 per share,
for each ten shares of Common Stock, par value $0.01 per share, issued and
outstanding on February 26, 1993.
--------------------
TRILOGUE is a registered trademark and TRILOGUE INfinity and AUDIODISK are
trademarks of the Company.
ii
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
The following table sets forth certain information regarding the directors and
executive officers of the Company. Each director has been elected to serve
until the next annual meeting of shareholders and each executive officer serves
at the discretion of the Board of Directors.
<TABLE>
<CAPTION>
Name Age Position with the Company
- ---- --- -------------------------
<S> <C> <C>
Kobi Alexander(1)(2) 42 President, Chairman of the Board of Directors, Chief Executive Officer and Director
Carmel Vernia 42 Chief Operating Officer; Managing Director of Efrat Future Technology Ltd.
Igal Nissim 39 Vice President-Finance and Chief Financial Officer
Zvi Alexander 72 Director
John H. Friedman(2)(3)(4) 41 Director
Sam Oolie(1)(2)(3)(4) 58 Director
William F. Sorin(1)(4) 46 Secretary and Director
Yechiam Yemini(1)(3) 47 Director
</TABLE>
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(1) Member of Executive Committee of the Board of Directors.
(2) Member of Audit Committee of the Board of Directors.
(3) Member of Remuneration and Stock Option Committee of the Board of
Directors.
(4) Member of Corporate Planning and Structure Committee of the Board of
Directors.
Background of Directors and Executive Officers
Kobi Alexander. Mr. Alexander has served as Chairman of the Board of Directors
- --------------
of the Company since September 1986, as President and Chief Executive Officer
since April 1987 and as a director of the Company since its formation. Mr.
Alexander also served as Co-Managing Director of the Company's wholly-owned
Israeli subsidiary, Efrat Future Technology Ltd. ("Efrat") from its formation in
1982 until October 1986, and currently serves as Chairman of the Board of
Directors of Efrat. From October 1984 to September 1986, Mr. Alexander served
as Co-Chairman and Co-Chief Executive Officer of the Company. Prior to the
formation of Efrat, in 1980 and 1981, Mr. Alexander served as an independent
financial and business consultant to a number of multinational corporations.
Between 1978 and 1980, Mr. Alexander worked in the Corporate Finance Department
of Shearson Loeb Rhoades (currently Smith Barney Shearson). Mr. Alexander
received a B.A., magna cum laude, in Economics from the Hebrew University of
Jerusalem in 1977, and an M.B.A. in Finance from New York University in 1980.
He has served as the Chairman of the High-Tech Research and Development Section
of the Israeli Association of Industrialists.
<PAGE>
Carmel Vernia. Mr. Vernia serves as Chief Operating Officer of the Company and
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as Managing Director of Efrat, where he has been employed since 1984 in various
capacities, including Vice President, Manager of the Government Systems Division
and Manager of the Research and Development Division. Prior to joining Efrat,
he was employed by Elco Ltd. in Israel, where he headed the development of
advanced perimeter intrusion detection systems. Between 1980 and 1982, Mr.
Vernia was employed by Intel Corporation in Santa Clara, California, where he
served as applications engineer for digital signal processing, digital telephony
and data communications products. He received a B.Sc. in Electrical Engineering
from the Technion, Israel Institute of Technology, in 1974 and a M.Sc. in
Electrical and Computer Engineering from the University of California at Davis
in 1980.
Igal Nissim. Mr. Nissim has been employed by the Company since May 1986 and has
- -----------
served as Vice President-Finance and Chief Financial Officer of the Company
since January 1993. He previously served as Chief Financial Officer of Efrat.
Prior to joining the Company, he was employed by Gadot Industrial Enterprises
Ltd. for a period of two years as deputy controller, responsible for financial
and cost accounting. Mr. Nissim is a Certified Public Accountant in Israel and
was employed for four years with Kesselman & Kesselman, one of the largest
accounting firms in Israel. He received a B.A. in Economics and Accounting from
Tel Aviv University in 1981.
Zvi Alexander. Mr. Alexander has been a director of the Company since August
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1989. Mr. Alexander has been actively engaged in the energy industry for more
than 30 years. He served as Chief Executive Officer of the Israeli National Oil
Company and its successor from 1966 through 1976, and subsequently engaged in
activities in the energy industry as a consultant and independent entrepreneur.
He is currently Chairman of A&T Exploration Company Ltd. Zvi Alexander is the
father of Kobi Alexander and the father-in-law of Yechiam Yemini.
John H. Friedman. Mr. Friedman was elected a director of the Company on June
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29, 1994. He is the Managing Director of Easton Capital Corporation, a private
investment firm founded by Mr. Friedman in 1991. From 1989 to 1991, Mr.
Friedman was a Managing Director of Security Pacific Capital Investors. Prior
to joining that firm, he was a Managing Director of E. M. Warburg, Pincus & Co.,
Inc., where he was employed from 1981 to 1989. From 1978 to 1980, Mr. Friedman
practiced law with the firm of Sullivan & Cromwell in New York City. Mr.
Friedman is also a director of Alliance Entertainment Corporation. Mr. Friedman
received a B.A., magna cum laude, from Yale University and a J.D. from Yale Law
School.
Sam Oolie. Mr. Oolie has been a director of the Company since May 1986. He has
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been Chairman of Oolie Enterprises, an investment company, since July 1985. He
also has served as a director of CFC Associates, a venture capital firm, since
January 1984 and as Chairman of New Thermal Corp., an extruder of plastic
profiles for the window industry, since January 1991. He was Chairman of The
Nostalgia Network, a cable television network, from April 1987 to January 1990
and was Vice Chairman and director of American Mobile Communications, Inc., a
cellular telephone company, from February 1987 to July 1989. From February 1962
to July 1985, Mr. Oolie was Chairman, Chief Executive Officer and a director of
Food Concepts, Inc., a provider of food services to institutions and hospitals.
Mr. Oolie also serves as a director of Avesis, Inc., PNF Industries, Inc.,
Wayfinder, Inc. and Noise Cancellation Technologies, Inc. Mr. Oolie received a
B.Sc. from Massachusetts Institute of Technology in 1958 and an M.B.A. from
Harvard Business School in 1961.
William F. Sorin. Mr. Sorin, who has served as a director and the Corporate
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Secretary of the Company since its formation, is an attorney engaged in private
practice and is general counsel to the Company. Mr. Sorin received a B.A. from
Trinity College in 1970 and a J.D., cum laude, from Harvard Law School in 1973.
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<PAGE>
Yechiam Yemini. Professor Yemini, a director of the Company from October 1984
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to May 1986 and since May 1987, has been Chief Scientific Advisor to the Company
since its formation. He has been a professor in the computer science department
of Columbia University since 1980, where he is leading research projects in the
areas of distributed computing and communications and network management
systems. Professor Yemini received a Ph.D. in Computer Science from UCLA in
1978 in the area of computer networking. Professor Yemini is the brother-in-law
of Kobi Alexander and the son-in-law of Zvi Alexander.
Committees of the Board of Directors
The Board of Directors has four standing committees. The Executive Committee is
empowered to exercise the full authority of the Board of Directors in
circumstances when convening the full board is not practicable. The Audit
Committee is responsible for reviewing audit procedures and supervising the
relationship between the Company and its independent auditors. The Remuneration
and Stock Option Committee is responsible for approving compensation
arrangements for senior management of the Company and administering the
Company's stock option plans. The Corporate Planning and Structure Committee
reviews and makes recommendations to the board concerning issues of corporate
structure and planning, including the formation and capitalization of
subsidiaries of the Company, the structure of acquisition transactions, the
terms of any stock options and other compensation arrangements in respect of
subsidiaries of the Company, situations that might involve conflicts of interest
relative to the Company and its subsidiaries and the terms of significant
transactions between the Company and its subsidiaries.
Item 11. Executive Compensation.
The following table presents summary information regarding the compensation paid
or accrued by the Company for services rendered during the years 1992, 1993 and
1994 by those of its executive officers whose salary and bonus compensation
during 1994 exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Stock
Name and ------------------------------------------- Option All Other
Principal Position Year Salary(1) Bonus(2) Grants(3)(4) Compensation(5)
- ------------------ ---- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Kobi Alexander 1994 $348,643 $364,020 500,000 $102,877
President, Chief Executive 1993 $339,683 $425,000 - $238,247
Officer and Chairman of 1992 $258,701 $420,475 - $195,775
the Board of Directors
Carmel Vernia 1994 $121,436 $100,000 200,000 $ 30,973
Chief Operating Officer(6) 1993 $100,513 $ 40,000 25,000 $ 23,065
Managing Director, Efrat 1992 $ 87,132 $ 30,000 - $ 19,859
Igal Nissim 1994 $101,480 $ 17,500 10,000 -
Chief Financial Officer(7) 1993 $ 90,000 $ 15,000 10,000 -
1992 $ 69,111 - - $ 11,129
</TABLE>
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(Footnotes appear on the following page)
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<PAGE>
(Footnotes to table on preceding page)
(1) Includes salary and payments in lieu of earned vacation.
(2) Includes bonuses accrued for services performed in the year indicated,
regardless of the year of payment.
(3) Number of shares subject to options has been adjusted to reflect the one-
for-ten combination, or "reverse split", of the Company's shares on
February 26, 1993.
(4) See also "Security Ownership of Certain Beneficial Owners and Management -
Options to Purchase Subsidiary Shares."
(5) Consists of miscellaneous items not exceeding $10,000 in the aggregate for
any individual, premium payments and contributions under executive
insurance and training plans and, in the case of Mr. Alexander, $60,000,
$211,000 and $181,000 accrued in 1994, 1993 and 1992, respectively, for
payments due on termination of employment pursuant to the terms of his
employment agreements with the Company.
(6) Mr. Vernia was appointed Chief Operating Officer of the Company effective
January 1, 1994.
(7) Mr. Nissim was appointed Chief Operating Officer of the Company effective
January 1, 1993.
The following table sets forth information concerning options granted during
1994 to the executive officers of the Company under its employee stock option
plans:
STOCK OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants For Option Term*
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Percent of
Total
Options
Number of Granted to Exercise
Shares Employees Price
Subject to in Fiscal Per Expiration
Name Option Year Share Date 5% 10%
- ---- ---------- ---------- -------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Kobi Alexander 500,000 42.5% $10.000 September 22, 2004 $3,144,473 $7,968,712
Carmel Vernia 200,000 17.0% $10.000 September 22, 2004 $1,257,789 $3,187,485
Igal Nissim 10,000 0.9% $10.000 September 22, 2004 $ 62,889 $ 159,374
</TABLE>
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* Represents the gain that would be realized if the option were held for its
entire ten-year term and the value of the underlying shares increased at
compounded annual rates of 5% and 10% from the fair market value at the date
of option grant.
Each of these options has a term of ten years and becomes exercisable and vests
in annual increments over periods of up to four years from the year of grant.
The exercise price of each option is equal to the fair market value of the
underlying shares at the date of grant.
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<PAGE>
The following table sets forth certain information concerning options granted
during the past three fiscal years to the above-named executive officers of the
Company under its employee stock option plans:
STOCK OPTION GRANTS IN LAST THREE FISCAL YEARS
<TABLE>
<CAPTION>
Percent of
Total
Options
Number of Granted to Exercise
Shares Employees Price
Year of Subject to in Fiscal Per Expiration
Grant Name Option Year Share Date
---- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C>
1994:
Kobi Alexander 500,000 42.5% $10.000 September 22, 2004
Carmel Vernia 200,000 17.0% $10.000 September 22, 2004
Igal Nissim 10,000 0.9% $10.000 September 22, 2004
1993:
Kobi Alexander - - - -
Carmel Vernia 25,000 6.1% $13.375 September 15, 2003
Igal Nissim 10,000 2.4% $13.375 September 15, 2003
1992:
Kobi Alexander - - - -
Carmel Vernia - - - -
Igal Nissim - - - -
</TABLE>
The following table sets forth, as to each executive officer identified above,
the number of unexercised options held at December 31, 1994, currently
exercisable and subject to future vesting, and the value of such options based
on the closing price of the underlying shares on the NASDAQ National Market
System at that date, net of the associated exercise price. No options were
exercised by the executive officers of the Company during 1994.
OPTION EXERCISES AND YEAR-END VALUE TABLE
Aggregate Option Exercises in 1994 and
Value of Unexercised Options at December 31, 1994
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options Held In-the-Money Options
Acquired at December 31, 1994 Held at December 31, 1994
on Value ---------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kobi Alexander - - 563,750 500,000 $5,329,506 $937,500
Carmel Vernia - - 150,000 125,000 $ 648,750 $187,500
Igal Nissim - - 2,000 20,000 $ 19,350 $ 18,750
</TABLE>
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<PAGE>
See "Security Ownership of Certain Beneficial Owners and Management - Options to
Purchase Subsidiary Shares" for information regarding the grant to certain
executive officers of options to purchase shares of subsidiaries of the Company.
Employment Agreements
Mr. Alexander serves as Chairman of the Board, President and Chief Executive
Officer of the Company under an agreement extending through June 30, 1999 at a
current base annual salary of $293,600. Pursuant to the agreement, Mr.
Alexander received bonus compensation of $364,020 for services rendered during
1994 and is entitled to receive bonus compensation in 1995 and succeeding years
in an amount to be negotiated annually, but not less than 3% of the Company's
consolidated after tax net income in each year. Mr. Alexander also receives
various supplemental medical, insurance and other personal benefits from the
Company under the terms of his employment, including the use of an automobile
leased by the Company.
Upon the termination of his employment with the Company for any reason, Mr.
Alexander is entitled to receive a severance payment in an amount equal to
$60,000 times the number of years (plus any partial years) of his employment by
the Company commencing with 1983, increased by 5% per annum starting in 1995,
plus continued employment-related benefits for the period of 36 months following
termination. In the event that Mr. Alexander's employment is terminated by the
Company without cause, by Mr. Alexander as a result of a material breach by the
Company of its obligations under the agreement or by his resignation within the
period of six months following a change in control of the Company, Mr. Alexander
is entitled to an additional severance payment equal to 299% of the average
annual cash compensation (including salary and any bonus payments) received by
him from the Company during the most recent three fiscal years plus an amount
equal to the income tax liability to Mr. Alexander resulting from such payment.
The agreement also requires the Company to grant to Mr. Alexander an option to
purchase up to 7.5% of the shares of each subsidiary of the Company, other than
Efrat, for a price equal to the greater of the fair market value or the book
value of such shares at the date of option grant.
Mr. Alexander serves as Chairman of the Board of Efrat under an agreement that
extends through July 31, 1997 at a current basic salary (the "Basic Salary") of
$3,500 per month. Efrat has also agreed to reimburse Mr. Alexander for certain
business-related expenses, to provide him with the use of a company-owned
automobile and to pay certain amounts for his account into defined contribution
insurance and training funds in Israel. In addition, if Mr. Alexander conducts
business activities abroad, including in the United States, Efrat is required to
bear his reasonable lodging and living expenses, which shall in any event be not
less than the per diem allowance customarily provided to senior executive
managers of Israeli companies, and if the period of his stay abroad is in excess
of eight weeks, his Basic Salary during such period shall be increased to an
amount which will support a standard of living comparable to that provided in
Israel by the Basic Salary and other benefits afforded under the agreement.
Efrat is also required to pay any taxes incurred by Mr. Alexander in respect of
benefits provided to him under the agreement and certain professional fees
incurred for the benefit of Mr. Alexander. In the event that Efrat unilaterally
terminates or fundamentally breaches the agreement, it must pay, as liquidated
damages, an amount equal to the Basic Salary due for the remainder of the term
of the agreement plus an amount equal to the present value of all non-monetary
benefits under the agreement. The present value of the non-monetary benefits
under the agreement is not readily determinable but is estimated at
approximately 25% of such salary.
Mr. Vernia is employed as Managing Director of Efrat and Chief Operating Officer
of the Company under an agreement providing for a base monthly salary at a
current rate of
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<PAGE>
32,319 Israeli shekels, subject to Israeli statutory cost of living adjustment
(resulting in a current annual salary equal to approximately $130,144) and an
annual bonus in an amount to be determined. The agreement may be terminated by
either party only with prior notice of at least one year. Mr. Vernia is entitled
under the agreement to receive various insurance and supplemental benefits and
the use of an automobile owned or leased by Efrat. Mr. Nissim receives a base
annual salary from the Company of $100,170 and incidental benefits, including
the use of an automobile leased by the Company.
Compensation of Directors
Each director who is not an employee of the Company or otherwise compensated by
the Company for services rendered in another capacity, and whose position on the
Board of Directors is not attributable to any contract between the Company and
such director or any other entity with which such director is affiliated,
receives compensation in the amount of $2,250 for each meeting of the Board of
Directors and of certain committees of the Board of Directors attended by him
during the year. Each of such eligible directors is also entitled to receive an
annual stock option grant under the Company's Stock Option Plans entitling him
to purchase 6,000 shares of Common Stock at a price per share equal to the fair
market value of the Common Stock as reported on the NASDAQ System on the date
two business days after the publication of the audited year-end financial
statements of the Company. Such options are subject to forfeiture to the extent
of 1,200 shares per meeting in the event that the option holder, during the year
of grant, fails to attend at least five meetings of the Board of Directors and
any of its committees of which the option holder is a member. Each director who
resides outside of the United States and is not an officer or employee of the
Company is entitled to reimbursement of expenses incurred for attendance at
meetings of the Board, up to the amount of $2,000 for each meeting attended.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information concerning the beneficial
ownership of shares of Common Stock on the part of the executive officers and
directors of the Company and all persons known by the Company to be beneficial
owners of more than five percent of the outstanding Common Stock as at April 25,
1995.
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<PAGE>
<TABLE>
<CAPTION>
Number of Percent
Shares of Total
Beneficiall Outstanding
Beneficial Owner Relationship with the Company Owned Shares(1)
- ---------------- ----------------------------- ------------ -----------
<S> <C> <C> <C>
Kobi Alexander President, Chairman of the
Board, Chief Executive Officer
and Director 1,092,385(2) 5.3%
Ascom Holding Inc. Shareholder 1,010,000(3) 5.1%
Carmel Vernia Chief Operating Officer 158,748(4) *
Igal Nissim Vice President-Finance and
Chief Financial Officer 2,000(5)(6) *
Zvi Alexander Director 14,000(5) *
John H. Friedman Director 2,000(5) -
Sam Oolie Director 16,000(5) *
William F. Sorin Secretary and Director 25,000(5) *
Yechiam Yemini Director 23,000(7) *
All directors and executive
officers as a group (8 persons) 1,333,133(8) 6.4%
</TABLE>
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* Less than 1%.
(1) Based on 19,939,592 shares of Common Stock issued and outstanding on April
25, 1995, excluding, except as otherwise noted, shares of Common Stock
issuable upon the exercise of outstanding stock options.
(2) Includes 50,000 shares held directly by Mr. Alexander, 563,750 shares
issuable upon the exercise of stock options that were exercisable at or
within 60 days after April 25, 1995 and 478,635 shares held by other
persons, which Mr. Alexander has the sole right to vote pursuant to a
proxy. Does not include 500,000 shares issuable upon the exercise of
options that were not exercisable at or within 60 days after April 25,
1995.
(3) Ascom Holding Inc. ("Ascom"), 19 Forest Parkway, Shelton, CT 06484, is a
wholly-owned subsidiary of Ascom Holding AG, a Swiss telecommunications
company. Decisions concerning the voting and disposition of shares held by
Ascom are made by its Board of Directors.
(4) Includes 150,000 shares issuable upon the exercise of stock options that
were exercisable at or within 60 days after April 25, 1995. Does not
include 125,000 shares issuable upon the exercise of options that were not
exercisable at or within 60 days after April 25, 1995.
(5) Consists solely of shares issuable upon the exercise of stock options that
were exercisable at or within 60 days after April 25, 1995.
(6) Does not include 20,000 shares issuable upon the exercise of stock options
that were not exercisable at or within 60 days after April 25, 1995.
(7) Includes 16,000 shares issuable upon the exercise of stock options that
were exercisable at or within 60 days after April 25, 1995.
(8) Includes 788,750 shares issuable upon the exercise of stock options that
were exercisable at or within 60 days after April 25, 1995. Does not
include 645,000 shares issuable upon the exercise of options that were not
exercisable at or within 60 days after April 25, 1995.
Options to Purchase Subsidiary Shares
The Company has granted to certain key executives options to acquire shares of
certain of its subsidiaries, other than Efrat, as a means of providing
incentives directly tied to the performance of those business units for which
different executives have direct responsibility. Such options granted to date
consist of the following:
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<PAGE>
<TABLE>
<CAPTION>
Number of Percent of
Shares Total
Subject to Outstanding
Option Holder Subsidiary Option Shares
- ------------- ---------- ---------- -----------
<S> <C> <C> <C>
Kobi Alexander Telemesser Ltd. 10.125 7.50%
Applied Silicon Inc. (Canada) 1,402.650 7.50%
Startel Corporation 7.500 7.50%
Comverse Government Systems Corp. 7.500 7.50%
Interactive Information Systems Corporation 15.000 7.50%
CTI Capital Corp. 150.000 7.50%
Carmel Vernia Comverse Government Systems Corp. 3.250 3.25%
Interactive Information Systems Corporation 7.500 3.75%
Other employees Comverse Government Systems Corp. 4.250 4.25%
Applied Silicon Inc. (Canada) 467.550 2.50%
Interactive Information Systems Corporation 7.500 3.75%
Startel Corporation 3.000 3.00%
Telemesser Ltd. 7.105 5.00%
CTI Capital Corp. 273.000 12.00%
</TABLE>
Each of these options has a term of ten years and becomes exercisable and vests
in equal ratable annual increments over periods of up to five years following
the date of initial grant. The exercise price of each option is equal to the
higher of the book value of the underlying shares at the date of grant or the
fair market value of such shares at that date determined on the basis of an
arms'-length transaction with a third party or, if no such transactions had
occurred, on any other reasonable basis considered by the Remuneration and Stock
Option Committee of the Board of Directors. Upon the exercise in whole or in
part of any option, the Company will receive an irrevocable proxy to vote the
underlying shares and a right of first refusal to purchase the shares upon any
proposed sale, transfer or other disposition, until the shares shall have been
sold in a bona fide open market transaction.
These options (and any shares received by the holders upon exercise) provide the
option holders with a potentially larger equity interest in the respective
subsidiaries than in the Company, which, under certain circumstances, could
cause the option holders' interests to conflict with those of the Company's
shareholders generally.
Item 13. Certain Relationships and Related Transactions.
The Company paid William F. Sorin, a director of the Company, an aggregate of
approximately $309,000 for legal services rendered to the Company during the
year ended December 31, 1994.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
COMVERSE TECHNOLOGY, INC.
(Registrant)
By: /S/ KOBI ALEXANDER
------------------
Kobi Alexander, President
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