-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KSEZpvZuFjd3oqtzSYAiFzwuKeGXhB/A2s1IBvyoN8f9Ph2OeLI/rwlHoXklYwzw BOpguBhc5G6rbP/SO9TnTg== 0000909518-07-000375.txt : 20070427 0000909518-07-000375.hdr.sgml : 20070427 20070427170515 ACCESSION NUMBER: 0000909518-07-000375 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070420 ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers FILED AS OF DATE: 20070427 DATE AS OF CHANGE: 20070427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMVERSE TECHNOLOGY INC/NY/ CENTRAL INDEX KEY: 0000803014 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 133238402 STATE OF INCORPORATION: NY FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15502 FILM NUMBER: 07796712 BUSINESS ADDRESS: STREET 1: 810 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212-739-1000 MAIL ADDRESS: STREET 1: 810 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 8-K 1 mm04-2707_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 27, 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 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. Comverse Technology, Inc. (the "Company") entered into (i) an amendment, dated April 27, 2007 (the "Robinson Amendment"), to the employment agreement, dated as of July 13, 2006 and amended as of November 22, 2006, by and between the Company and Paul Robinson, the Company's Executive Vice President, Chief Operating Officer and General Counsel, (ii) an amendment, dated as of April 27, 2007 (the "Aronovitz Amendment"), to the employment agreement, dated as of July 13, 2006, by and between the Company and Avi Aronovitz, the Company's Interim Chief Financial Officer, Vice President of Finance and Treasurer, and (iii) a Deferred Stock Award Agreement dated April 27, 2007 with Mr. Aronovitz (the "Aronovitz Deferred Stock Award Agreement"). The Robinson Amendment, the Aronovitz Amendment and the Aronovitz Deferred Stock Award Agreement reflect the changes in compensation arrangements for Messrs. Robinson and Aronovitz described in Item 5.02 of the Current Report on Form 8-K filed by the Company on April 26, 2007, are filed herewith as Exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference. 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. Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. 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 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 2 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. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (d) EXHIBITS: Exhibit No. Description ----------- ----------- 10.1 Amendment, dated April 27, 2007, to Employment Agreement, dated as of July 13, 2006 and amended as of November 22, 2006, by and between Comverse Technology, Inc. and Paul Robinson. 10.2 Amendment, dated April 27, 2007, to Employment Agreement, dated as of July 13, 2006, by and between Comverse Technology, Inc. and Avi Aronovitz. 10.3 Deferred Stock Award Agreement, dated April 27, 2007, between Comverse Technology, Inc. and Avi Aronovitz. 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 27, 2007 By: /s/ Paul L. Robinson ----------------------------------- Name: Paul L. Robinson Title: Executive Vice President, Chief Operating Officer and General Counsel 4 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 10.1 Amendment, dated April 27, 2007, to Employment Agreement, dated as of July 13, 2006 and amended as of November 22, 2006, by and between Comverse Technology, Inc. and Paul Robinson. 10.2 Amendment, dated April 27, 2007, to Employment Agreement, dated as of July 13, 2006, by and between Comverse Technology, Inc. and Avi Aronovitz. 10.3 Deferred Stock Award Agreement, dated April 27, 2007, between Comverse Technology, Inc. and Avi Aronovitz. 5 EX-10 2 mm04-2707_8ke101.txt EX.10.1 - ROBINSON EMPLOYMENT AGREEMENT EXHIBIT 10.1 ------------ SECOND AMENDMENT TO EMPLOYMENT AGREEMENT This Amendment (the "Amendment") to the Employment Agreement, dated July 13, 2006, as amended pursuant to an amendment dated as of November 22, 2006 (the "Employment Agreement"), by and between Comverse Technology, Inc., a New York corporation (the "Company"), and Paul L. Robinson (the "Executive") is entered into on April 27, 2007 by and between the Company and the Executive (collectively, the "Parties"). W I T N E S S E T H: ------------------- WHEREAS, the Executive and the Company previously entered into the Employment Agreement under which the Company continues to employ the Executive; WHEREAS, the Company wishes to amend the Employment Agreement in recognition of the extraordinary time, effort and commitment that has been required, and is expected to continue to be required, of the Executive; NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, covenant and agree as follows: 1. Amendments to Employment Agreement. The Employment Agreement is amended as follows: (a) The text of Section 1(j)(i) is deleted in its entirety and replaced by the following new text: "(i) any reduction in the Executive's Base Salary, "Salary Supplement" during the "Special Circumstances Period" (as such terms are defined in Section 4 hereof) or Bonus Opportunity, other than as part of an across-the-board reduction applicable to all senior executives of Comverse Technology, Inc.;" (b) The text of Section 4 is deleted in its entirety and replaced by the following new text: "As of the Effective Date and for the remainder of fiscal year 2006, the Executive shall be paid a Base Salary at the rate of five hundred fifty thousand dollars ($550,000) per annum, payable in accordance with the regular payroll practices of the Company. For fiscal year 2007 (and retroactive to February 1, 2007), the Executive shall be paid a Base Salary at the rate of five hundred fifteen thousand dollars ($515,000) per annum, payable in accordance with the regular payroll practices of the Company. In respect of fiscal year 2008 and future fiscal years, the Base Salary shall be reviewed and increased no less frequently than annually, though the amount of such increase shall be determined in the discretion of the Board or the Compensation Committee. The Base Salary (after giving effect to any increase) may not be decreased unless the Executive provides his prior written consent to such decrease. In addition, during the Special Circumstances Period (as hereinafter defined), and retroactive to February 1, 2007, the Executive shall be paid a salary supplement (the "Salary Supplement") at the rate of one hundred thirty-five thousand dollars ($135,000) per annum (which shall not constitute part of "Base Salary" for the purposes hereof). For purposes hereof, "Special Circumstances Period" shall mean 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 Form 10-Q with the Securities and Exchange Commission pursuant to Securities Exchange Act of 1934, as amended. (c) The words "(the "Special Retention Bonus")" are deleted from Section 5(b). (d) The following new subsections (c) and (d) are added to Section 5 as follows: "(c) In view of the fact that extraordinary time, effort and commitment may continue to be required of the Executive, the Company shall pay to the Executive (i) a special retention bonus of four hundred thousand dollars ($400,000), which shall be due and payable on September 15, 2007, and (ii) a special retention bonus of four hundred thousand dollars ($400,000), which shall be due and payable on January 31, 2008, provided that, with respect to each such bonus, the Executive remains employed by the Company on a continuous basis through the applicable payment date. (d) For purposes hereof, the special retention bonuses referred to in Sections 5(b) and 5(c) are referred to collectively as the "Special Retention Bonus."" (e) Each of Sections 11(a)(i), 11(b)(i), 11(c)(i) and 11(d)(i) is amended by adding the words "and Salary Supplement" following the words "Base Salary" where it appears therein. 2. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, and all of which taken together will constitute one and the same written agreement, which will be binding and effective as to all the Parties. 3. Binding Effect. This Agreement shall be binding upon each of the Parties hereto, and upon their respective successors and assigns, and shall inure to the benefit of each of the Parties hereto, and their respective 2 successors and assigns. Subject to the foregoing sentence, no person not a Party hereto shall have any right under or by virtue of this Agreement. IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the date first set forth above. COMVERSE TECHNOLOGY, INC. By: /s/ Avi Aronovitz ------------------------------- Name: Avi Aronovitz Title: Interim Chief Financial Officer, Vice President of Finance and Treasurer /s/ PAUL L. ROBINSON ------------------------------ PAUL L. ROBINSON 3 EX-10 3 mm04-2707_8ke102.txt EX.10.2 - ARONOVITZ EMPLOYMENT AGREEMENT EXHIBIT 10.2 ------------ AMENDMENT TO EMPLOYMENT AGREEMENT This Amendment (the "Amendment") to the Employment Agreement, dated July 13, 2006, (the "Employment Agreement"), by and between Comverse Technology, Inc., a New York corporation (the "Company"), and Avi Aronovitz (the "Executive") is entered into on April 27, 2007 by and between the Company and the Executive (collectively, the "Parties"). W I T N E S S E T H: ------------------- WHEREAS, the Executive and the Company previously entered into the Employment Agreement under which the Company continues to employ the Executive; WHEREAS, the Company wishes to amend the Employment Agreement in recognition of the extraordinary time, effort and commitment that has been required, and is expected to continue to be required, of the Executive; NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, covenant and agree as follows: 1. Amendments to Employment Agreement. The Employment Agreement is amended as follows: (a) The text of Section 1(k)(i) is deleted in its entirety and replaced by the following new text: "(i) any reduction in the Executive's Base Salary, "Salary Supplement" during the "Special Circumstances Period" (as such terms are defined in Section 4 hereof) or Bonus Opportunity, other than as part of an across-the-board reduction applicable to all senior executives of Comverse Technology, Inc.;" (b) The text of Section 4 is deleted in its entirety and replaced by the following new text: "As of the Effective Date and for the remainder of fiscal year 2006 and for fiscal year 2007, the Executive shall be paid a Base Salary at the rate of three hundred ten thousand dollars ($310,000), payable in accordance with the regular payroll practices of the Company. In respect of fiscal year 2008 and future fiscal years, the Base Salary shall be reviewed and increased no less frequently than annually, though the amount of such increase shall be determined in the discretion of the Board or the Compensation Committee. The Base Salary (after giving effect to any increase) may not be decreased unless the Executive provides his prior written consent to such decrease. In addition, during the Special Circumstances Period (as hereinafter defined, and retroactive to February 1, 2007), the Executive shall be paid a salary supplement (the "Salary Supplement") at the rate of forty thousand dollars ($40,000) per annum (which shall not constitute part of "Base Salary" for the purposes hereof). For purposes hereof, "Special Circumstances Period" shall mean 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 Form 10-Q with the Securities and Exchange Commission pursuant to Securities Exchange Act of 1934, as amended. (c) The words "(the "Special Retention Bonus")" are deleted from Section 5(b). (d) The following new subsections (c) and (d) are added to Section 5 as follows: "(c) In view of the fact that extraordinary time, effort and commitment may continue to be required of the Executive, the Company shall pay to the Executive (i) a special retention bonus of two hundred thousand dollars ($200,000), which shall be due and payable on October 15, 2007, and (ii) a special retention bonus of two hundred thousand dollars ($200,000), which shall be due and payable on January 31, 2008, provided that, with respect to each such bonus, the Executive remains employed by the Company on a continuous basis through the applicable payment date. (d) For purposes hereof, the special retention bonuses referred to in Section 5(b) and 5(c) are referred to collectively as the "Special Retention Bonus."" (e) Section 6 is amended as follows: by (i) designating subsections (b) and (c) as subsections (c) and (d), respectively, (ii) adding the words "and the 2007 Deferred Stock" following the words "Deferred Stock" in subsection (d) (following such designation) and (iii) adding the following new subsection (b): (b) The Parties acknowledge that, pursuant to the 2005 Plan and a Deferred Stock Award Agreement dated April 26, 2007 (the "2007 Deferred Stock Award Agreement"), the Board awarded to the Executive eleven thousand four hundred and ninety (11,490) shares of common stock of the Company in the form of deferred stock (the "2007 Deferred Stock"), which shall vest as to seventy-five percent (75%) of the original number of shares subject thereto on April 20, 2008 and as to twenty five percent (25%) of the original number of shares subject thereto on April 20, 2009, subject to accelerated vesting as otherwise provided herein. Shares of common stock in settlement of the 2007 Deferred Stock award (or, at the Company's election, cash in lieu of shares based on the fair market value thereof on the 2 applicable vesting date) shall be delivered to the Executive in accordance with the provision of the 2007 Deferred Stock Award Agreement. (f) Each of Sections 11(a)(i), 11(b)(i), 11(c)(i) and 11(d)(i) is amended by adding the words "and Salary Supplement" following the words "Base Salary" where it appears therein. 2. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, and all of which taken together will constitute one and the same written agreement, which will be binding and effective as to all the Parties. 3. Binding Effect. This Agreement shall be binding upon each of the Parties hereto, and upon their respective successors and assigns, and shall inure to the benefit of each of the Parties hereto, and their respective successors and assigns. Subject to the foregoing sentence, no person not a Party hereto shall have any right under or by virtue of this Agreement. IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the date first set forth above. COMVERSE TECHNOLOGY, INC. By: /s/ Paul L. Robinson --------------------------- Name: Paul L. Robinson Title: Executive Vice President, Chief Operating Officer and General Counsel /s/ AVI ARONOVITZ ------------------------------- AVI ARONOVITZ 3 EX-10 4 mm04-2707_8ke103.txt EX.10.3 EXHIBIT 10.3 ------------ COMVERSE TECHNOLOGY, INC. ------------------------- 2005 STOCK INCENTIVE COMPENSATION PLAN (THE "PLAN") --------------------------------------------------- DEFERRED STOCK AWARD AGREEMENT, DATED APRIL 27, 2007 Capitalized terms used herein but not otherwise defined herein shall have the meaning ascribed thereto in the Employment Agreement, dated July 13, 2006, as amended on April 27, 2007, between Comverse Technology, Inc. and Avi Aronovitz (the "Employment Agreement"). NAME OF GRANTEE: Avi Aronovitz ("Grantee") DATE OF GRANT: April 20, 2007 TYPE OF AWARD: Deferred Stock Award (this "Award"), each unit representing the right to receive on the terms and conditions of this Agreement and the Plan a share of Common Stock, $0.01 par value per share ("Share"), of Comverse Technology, Inc. (the "Company"), subject to adjustment thereto as provided under this Agreement or at the election of the Company a cash payment in lieu thereof. TOTAL NUMBER OF DEFERRED STOCK AWARDED: 11,490 Deferred Stock Shares. VESTING AND ACCELERATION OF AWARD: This Award shall vest in accordance with the vesting schedule set forth below unless, with respect to the portion thereof vesting on a particular vesting date, the Grantee's Continuous Service (as defined in the Plan) with the Company, a Subsidiary or a parent company has terminated prior to such vesting date; provided, however, that this Award shall vest on an accelerated basis, with respect to all shares of deferred stock awarded to the Grantee upon the first to occur of any of the following events: (i) death or termination due to Disability of Grantee; and (ii) the termination of the Term of Employment either by the Company for any reason other than Cause or by Grantee for Good Reason (each date on which this Award shall vest, by acceleration or otherwise, a "Vesting Date"). ------------------------ --------------------------- VESTING DATE VESTING PERCENTAGE ------------------------ --------------------------- April 20, 2008 75% ------------------------ --------------------------- April 20, 2009 25% ------------------------ --------------------------- SETTLEMENT OF AWARD: Shares in settlement of this Award (or, at the Company's election, cash in lieu of delivery of shares based on the fair market value thereof on the Settlement Date (as defined below)) shall be delivered to Grantee on the applicable Vesting Date. DIVIDEND EQUIVALENT RIGHTS NONE. TRANSFER RESTRICTIONS Shares issued in settlement of this Award shall not be subject to any additional transfer restrictions. REGISTRATION OF SHARES The Company shall use reasonable best efforts to register under the Securities Act a sufficient number shares of Common Stock to permit delivery to Grantee of all Shares that may be acquired by Grantee upon the vesting of the Deferred Stock Award; provided, however, that the Company shall only be so required to register the Shares on Form S-8 under the Securities Act (or any successor form) and, provided, further, that the Company shall not be required to file a resale prospectus with respect to such Shares to the extent such Shares may be resold pursuant to an exemption from the registration requirements of the Securities Act. MODIFICATIONS TO COMPLY WITH SECTION 409A. To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or guidance that may be issued after the date on which a Deferred Stock Award is granted. Without limiting the authority of the Committee under the terms of the Plan to make modifications to the Deferred Stock Award by reason of changes in law or circumstances that would result in any substantial dilution or enlargement of the rights granted to, or available for, Grantee in respect of a Deferred Stock Award or otherwise as a participant in the Plan or which otherwise warrants equitable adjustment to the terms and conditions of the Deferred Stock Award because such event interferes with the operation of the Plan, and notwithstanding any provision of this Agreement to the contrary, in the event that the Committee or an authorized officer of the Company determines that any amounts will be immediately taxable to the Grantee under Section 409A of the Code and related Department of Treasury guidance (or subject the Grantee to a penalty tax) in connection with the grant or vesting of the Deferred Stock Award or any other provision of this Agreement or this or the Plan, the Company may (a) adopt such amendments to the Deferred Stock Award, including amendments to this Agreement (having prospective or retroactive effect), that the Committee or authorized officer determines to be necessary or appropriate to preserve the intended tax treatment of the Deferred Stock Award and/or (b) take such other actions as the Committee or authorized officer determines to be necessary or appropriate to comply with the requirements of Section 409A of the Code and related Department of Treasury guidance, including such Department of Treasury guidance and other interpretive materials as may be issued after the date on which such Deferred Stock Award was awarded. Nothing contained in this Deferred Stock Award Agreement shall limit or impair the rights of Grantee under Section 28 of the Employment Agreement. 2 By signing your name below, you acknowledge and agree that this Award is governed by the terms and conditions of the Comverse Technology, Inc. 2005 Stock Incentive Compensation Plan and this Agreement ("Agreement"). GRANTEE: COMVERSE TECHNOLOGY, INC. /s/ Avi Aronovitz By: /s/ Paul L. Robinson - -------------------------------- -------------------------------- Avi Aronovitz Name: Paul L. Robinson Title: Executive Vice President, Chief Operating Officer and General Counsel 3 -----END PRIVACY-ENHANCED MESSAGE-----