CEO's dad, sis quit Comverse board

WOODBURY - At Comverse Technology Inc., board meetings soon will no longer be a family affair.

Zvi Alexander and Shaula Alexander Yemini father and sister of Comverse Chairman and Chief Executive Kobi Alexander, will be stepping down from the board, trimming the roster of directors from nine

The cut comes as Comverse moves to comply with the SarbanesOxley Act of 2002, said company spokesman Paul Baker. Under that law, the New York Stock Exchange and Nasdaq have proposed rules to the Securities and Exchange Commission requiring that listed companies phase in boards with a majority of independent directors.

The proposals rule out Zvi Alexander and Alexander Yemini as independent directors because of their family ties to Kobi Alexander. Alon Kapen, a partner at the law firm Farrell Fritz, said the new rules are expected to be adopted by year's end.

The new Comverse board will have three holdover independent directors-John Friedman, managing director of Easton Capital Corp., Ron Hiram, an advisor to the Palladin Group, an asset manager, and Sam Oolie, chairman of NoFire Technologies Inc., a manufacturer of fire retardant products.

The insiders will be company founder Kobi Alexander, Comverse President Itsik Danziger, Francis Girard and William Sorin. Girard was co-chief executive from Jan. 1998 to Jan. 2001 and now serves as a consultant. Sorin is the company's corporate secretary and a board member at affiliates Ulticom and Verint Systems.

The family connections don't stop at the door of Comverse. Kobi Alexander serves as a member of the board of Systems Management Arts Inc., or SMARTS, a private White Plains company that develops network management software. His sister, Alexander Yemini, a former senior manager at IBM's T.J. Watson Center and assistant professor of computer science at New York University, is president and chief executive of SMARTS.

Until June 2001, Alexander Yemini was a member of the Comverse remuneration and stock option committee.

In 2000, the total compensation for Kobi Alexander was $22.8 million and in 2001 it totaled $102.5 million, including $93.1 million in exercised stock options. In recent months, Alexander voluntarily waived his right to about $1.95 million, or 90 percent of his salary and bonus.

Robert Tango, an analyst with Chicago-based William Blair & Co., said that despite changes in the composition of the board, he didn't expect changes in the direction of the company.

Like other firms in the telecommunications industry, Comverse has hit some turbulence. The company has been posting losses, and in July it announced plans to eliminate about 1,200 jobs, or 21 percent of its work force. Meanwhile, Standard & Poor's Ratings Services trimmed its rating on Comverse's corporate credit and senior unsecured debt.

But Tango pointed to the company's pristine balance sheet-with about $1.9 billion in cash and less than $400 million in debt-as an indicator that Comverse will emerge stronger once telecom companies resume spending.

"The stock is down, but that's mainly because of the fallout from the telecom market," Tango said. "The large infrastructure providers like Nortel and Lucent have suffered far more than Comverse has."