8-K 1 mm04-2607_8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 20, 2007 COMVERSE TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) NEW YORK 0-15502 13-3238402 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 810 Seventh Avenue, New York, New York 10019 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (212) 739-1000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. (e) COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. The Board of Directors (the "Board") of Comverse Technology, Inc. (the "Company") approved changes to the compensation arrangements for Paul Robinson, the Company's Executive Vice President, Chief Operating Officer and General Counsel, on April 20, 2007. Pursuant to the revised arrangements, Mr. Robinson will be paid a base salary at the rate of $515,000 per annum for the fiscal year ending January 31, 2008 ("Fiscal 2007"). For the period commencing on February 1, 2007 and ending six months after the date that the Company becomes current in the filing of its periodic reports on Form 10-K and 10-Q with the Securities and Exchange Commission (the "Special Circumstances Period"), Mr. Robinson will also be paid a salary supplement at the rate of $135,000 per annum. In addition, Mr. Robinson shall receive special retention bonuses of $400,000 payable on each of September 15, 2007 and January 31, 2008, provided that Mr. Robinson remains employed with the Company on a continuous basis through the applicable payment date. Mr. Robinson's other employment terms, as reflected in his employment agreement dated as of July 13, 2006 (filed as Exhibit 10.3 to the Company's Current Report on Form 8-K filed on July 18, 2006), as amended by an amendment dated as of November 22, 2006 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on November 22, 2006), remain unchanged. The Company and Mr. Robinson have not yet entered into an agreement reflecting the changes indicated above. The Board also approved changes to the compensation arrangements for Avi Aronovitz, the Company's Interim Chief Financial Officer, Vice President of Finance and Treasurer on April 20, 2007 (the "Aronovitz Amendment"). Pursuant to the revised arrangements, Mr. Aronovitz will be paid a base salary at the rate of $310,000 per annum for Fiscal 2007. During the Special Circumstances Period, Mr. Aronovitz will also be paid a salary supplement at the rate of $40,000 per annum. In addition, Mr. Aronovitz will receive special retention bonuses of $200,000 payable on each of October 15, 2007 and January 31, 2008, provided that Mr. Aronovitz remains employed with the Company on a continuous basis through the applicable payment date. In addition, Mr. Aronovitz was granted a deferred stock award of 11,490 deferred stock units under the Company's 2005 Stock Incentive Compensation Plan. Each deferred stock unit represents the right to receive one share of common stock, $0.01 par value per share, of the Company as of the respective vesting dates. The deferred stock units awarded shall vest as follows: 75% on April 20, 2008 and 25% on April 20, 2009, subject to accelerated vesting as will be set forth in a deferred stock award agreement between the Company and Mr. Aronovitz. Mr. Aronovitz's other employment terms, as reflected in his employment agreement dated as of July 13, 2006 (filed as Exhibit 10.5 to the Company's Current Report on Form 8-K on July 18, 2006), remain unchanged. The Company and Mr. Aronovitz have not yet entered into any agreements reflecting the changes indicated above. CERTAIN RISKS AND UNCERTAINTIES ------------------------------- This Current Report contains "forward-looking statements" under the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. There can be no assurances that any forward-looking statements shall be achieved, and actual results could differ materially from forecasts and estimates. Important factors that could affect the Company include: the results of the investigation of the Special Committee, appointed by the Board of Directors on March 14, 2006, of matters relating to the Company's stock option grant practices and other accounting matters, including errors in revenue recognition, errors in the recording of deferred tax accounts, expense misclassification, the possible misuse of accounting reserves and the understatement of backlog; the impact of any restatement of financial statements of the Company or other actions that may be taken or required as a result of such reviews; the Company's inability to file reports with the Securities and 2 Exchange Commission; the effects of the delisting of the Company's Common Stock from NASDAQ and the quotation of the Company's Common Stock in the "Pink Sheets," including any adverse effects relating to the trading of the stock due to, among other things, the absence of market makers; risks relating to alleged defaults under the Indentures for the Company's convertible debt, known as ZYPS, including acceleration of repayment; risks of litigation (including pending securities class actions and derivative lawsuits) and of governmental investigations or proceedings arising out of or related to the Company's stock option practices or any other accounting irregularities or any restatement of the financial statements of the Company, including the direct and indirect costs of such investigations and restatement; risks related to the ability of Verint Systems Inc. to complete, and the effects of, the proposed merger with Witness Systems, Inc., including risks associated with integrating the businesses and employees of Witness if such merger is successfully completed; risks associated with integrating the businesses and employees of the Global Software Services division acquired from CSG Systems International, Netcentrex S.A. and Netonomy, Inc.; changes in the demand for the Company's products; changes in capital spending among the Company's current and prospective customers; the risks associated with the sale of large, complex, high capacity systems and with new product introductions as well as the uncertainty of customer acceptance of these new or enhanced products from either the Company or its competition; risks associated with rapidly changing technology and the ability of the Company to introduce new products on a timely and cost-effective basis; aggressive competition may force the Company to reduce prices; a failure to compensate any decrease in the sale of the Company's traditional products with a corresponding increase in sales of new products; risks associated with changes in the competitive or regulatory environment in which the Company operates; risks associated with prosecuting or defending allegations or claims of infringement of intellectual property rights; risks associated with significant foreign operations and international sales and investment activities, including fluctuations in foreign currency exchange rates, interest rates, and valuations of public and private equity; the volatility of macroeconomic and industry conditions and the international marketplace; risks associated with the Company's ability to retain existing personnel and recruit and retain qualified personnel; and other risks described in filings with the Securities and Exchange Commission. 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COMVERSE TECHNOLOGY, INC. Date: April 26, 2007 By: /s/ Paul L. Robinson -------------------------------- Name: Paul L. Robinson Title: Executive Vice President, Chief Operating Officer and General Counsel 4