$60 million to be paid by former Comverse CEO Kobi Alexander; former general counsel and CFO also contributing, along with auditor Deloitte; additional corporate governance reforms undertaken

NEW YORK, Dec. 28 /PRNewswire/ -- Law firms representing shareholders of Comverse Technology have reached a $62 million settlement stemming from alleged stock option backdating practices by former directors and officers of the communications technology company, including Comverse's former CEO Jacob "Kobi" Alexander.

The settlement was announced by the firms Milberg LLP and Barroway Topaz Kessler Meltzer & Check, LLP, representing derivative plaintiffs in New York State Supreme Court, and Bernstein Litowitz, representing derivative plaintiffs in an action pending in the U.S. District Court for the Eastern District of New York. In addition to obtaining payments in excess of $62 million, Comverse agreed to undertake significant corporate governance reforms.

The bulk of the settlement, $60 million, will be paid to Comverse by Mr. Alexander, who fled to Namibia in 2006 to avoid federal fraud charges related to the options backdating scheme. His contribution will substantially assist Comverse in funding a $225 million class action settlement announced earlier this month.

In addition, Comverse's former General Counsel William Sorin and former Chief Financial Officer David Kreinberg will collectively pay more than one million dollars to Comverse. This amount is in addition to previous payments they made to the Securities and Exchange Commission. Mr. Sorin and Mr. Kreinberg will also relinquish certain counterclaims against the company. Several other defendants who were previously members of Comverse's compensation committee will collectively forfeit 155,500 outstanding unexercised options.

Other parties participating in the settlement include several former members of the company's board, and Comverse's auditor during the period of the backdating scheme, Deloitte and Touche LLP.

In addition to the monetary terms of the settlement, Comverse has agreed to adopt or keep in place new corporate governance policies including:

• The Chairman of the Board will be an independent director;
• The positions of Chairman of the Board and Chief Executive Officer will be held by different persons;
• At least one member of the Audit Committee will qualify as an "audit committee financial expert" as defined by the SEC;
• An internal audit unit that reports directly to the Audit Committee was created.

"The settlement of the derivative actions against Comverse concludes a major chapter in the stock options backdating saga that tarnished scores of leading companies and diminished millions of ordinary shareholders at the expense of self-interested executives and directors," the three law firms said in a joint statement.

"It is especially meaningful that a large piece of the settlement comes directly from several former key executives at Comverse, including Kobi Alexander, who became one of the more notorious symbols of the options scandal and who flaunted his excesses by fleeing the country rather than face a U.S. court for his own abuses of his company's compensation policies," the attorneys continued. "We believe the payments made by these individuals, along with the governance reforms now in place at Comverse, help return some of its deserved reputation as one of the world's great communications providers."

About Milberg

Milberg LLP has represented individual and institutional investors for over 40 years and serves as lead counsel in federal and state courts throughout the United States. Please visit the Milberg website (http://www.milberg.com) for more information about the firm.

About Barroway Topaz

Barroway Topaz Kessler Meltzer & Check, LLP represents institutional investors and shareholders internationally in securities class actions, corporate governance actions, as well as ERISA, consumer, antitrust and derivative litigation. The firm has recovered billions of dollars for shareholders in the last five years and was has been named among the top firms for shareholder recovery by RiskMetrics Group every year since 2003. For more information, please visit: www.btkmc.com

About Bernstein Litowitz

Bernstein Litowitz Berger & Grossmann LLP is one of the leading law firms worldwide advising individual and institutional investors on issues relating to corporate governance, shareholder rights, and securities litigation. For more information, please visit the firm's website at http://www.blbglaw.com.

    Contacts:    Dan Fleshler 212 515-1900 dfleshler@kreabgavinanderson.com
                 Allan Ripp 212-262-7477 arippnyc@aol.com

SOURCE Barroway Topaz Kessler Meltzer & Check, LLP

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