<PAGE>
 
================================================================================

                       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, 1997

                         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:[ ] 

================================================================================
<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 20, 1998 was approximately $1,940,000,000.  The closing
price of the registrant's common stock on the NASDAQ National Market System on
April 20,  1998 was $46.375 per share.

    There were 43,549,205 shares of the registrant's common stock outstanding on
April 20, 1998.


                      DOCUMENTS INCORPORATED BY REFERENCE
                                        
    None.



                          ____________________________


 



              TRILOGUE and Access NP are registered trademarks and
              TRILOGUE INfinity, AUDIODISK, ULTRA, and SignalWare
                         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)/            45         President, Chairman of the Board of               
                                                Directors, Chief Executive Officer and  
                                                Director
                               
   Carmel Vernia                     45         Chief Operating Officer, Managing Director of
                                                Efrat Future Technology Ltd. and Director
                               
   Francis E. Girard                 59         President and Chief Executive Officer of
                                                Comverse Network Systems Division and Director
                               
   Igal Nissim                       42         Chief Financial Officer
                               
   Zvi Alexander                     75         Director
                               
   Gregory C. Carr /(3)/             38         Director
                               
   John H. Friedman/(2)(3)(4)/       44         Director
                               
   Sam Oolie/(1)(2)(3)(4)/           61         Director
                               
   William F. Sorin/(1)(4)/          49         Secretary and Director
                               
   Shaula A. Yemini, Ph.D./(3)/      50         Director
</TABLE>

   _______________
   (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.

                                     - 1 -
<PAGE>
 
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 in
October 1984.  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 Salomon Smith
Barney, Inc.).  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.

       Carmel Vernia.  Mr. Vernia has served as Chief Operating Officer of the
       -------------                                                          
Company since January 1994 and as a director since August 1997.  He is also
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 research and development.  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.

       Francis E. Girard.  Mr. Girard has served as President and Chief
       -----------------                                               
Executive Officer of Comverse Network Systems Division ("Comverse Network
Systems") and a director of the Company since January 14, 1998.  From May 1996
to January 1998, he served as President, Chief Executive Officer and a director
of Boston Technology, Inc. ("Boston"), a company that was merged into the
Company on January 14, 1998.  Prior to that, he served as Boston's Executive
Vice President of World Sales.  He joined Boston in January 1989 as Senior Vice
President of Sales and assumed the position of Senior Vice President and General
Manager of North American Markets in January 1994.  Previously, he was Vice
President of Sales, Marketing and Support of NEC Information Systems, Inc., a
U.S. distributor of NEC computers and peripherals, from 1985 to 1989.  Mr.
Girard has also served as Director of Marketing for the National Independent
Sales Organization and Reseller Marketing Programs at Wang Laboratories, Inc.
from1983 to 1985, in addition to several other sales and marketing management
positions.  Mr. Girard holds a B.S. degree in Business from Merrimack College.

       Igal Nissim.  Mr. Nissim has been employed by the Company since May 1986
       -----------                                                             
and has served as 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 

                                     - 2 -
<PAGE>
 
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 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.  Mr. Alexander is currently Chairman of A&T Exploration Company
Ltd.  Zvi Alexander is the father of Kobi Alexander and Shaula A. Yemini.

       Gregory C. Carr.  Mr. Carr has been a director of the Company since
       ---------------                                                    
January 14, 1998.  He was a co-founder of Boston, and served as President and
Chief Executive Officer of Boston from April 1986 to August 1992.  He served as
a director of Boston from its formation in April 1986 and as Chairman of its
Board from April 1992 until the merger of Boston with the Company.  Mr. Carr is
also Chairman of Prodigy, Inc., a global Internet service provider.  He holds a
B.S. degree in history from Utah State University and  Masters Degree in Public
Policy from Harvard University.

       John H. Friedman.  Mr. Friedman has been a director of the Company since
       ----------------                                                        
June  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 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 been Chairman and Chief Executive Officer of NoFire Technologies, Inc., a
manufacturer of high performance fire retardant products, since August 1995.  He
has also 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.  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. and Noise Cancellation Technologies, Inc. Mr.
Oolie received a B.S. from Massachusetts Institute of Technology in 1958 and an
M.B.A. from Harvard Business School in 1961.

       William F. Sorin.  Mr. Sorin has served as a director and the Corporate
       ----------------                                                       
Secretary of the Company since its formation in October 1984.  He 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.

                                     - 3 -
<PAGE>
 
       Shaula A. Yemini, Ph.D.   Dr. Yemini has served as a director of the
       -----------------------                                             
Company since August 1997.  She is President and Chief Executive Officer of
Systems Management Arts Incorporated ("SMARTS"), a developer of automated
network problem diagnosis software.  Prior to the formation of SMARTS in 1993,
Dr. Yemini held various research and managerial positions at International
Business Machines Corporation ("IBM") since June 1982, most recently serving as
Senior Manager at IBM's T. J. Watson Center, where she built and managed the
Distributed Systems Software Technology Department. Prior to that, she taught
computer science at the Courant Institute of New York University. Dr. Yemini
received a B.Sc. in Mathematics and Physics in 1972 and an M.Sc. in Applied
Mathematics cum laude in 1974, both from the Hebrew University in Jerusalem, and
a Ph.D. in Computer Science from the University of California at Los Angeles in
1980. Dr. Yemini is the sister of Kobi Alexander and the daughter 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.

                                     - 4 -
<PAGE>
 
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 1995, 1996 and 1997 by those of its executive officers whose salary and
bonus compensation during 1997 exceeded $100,000:

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                    LongTerm                      
                                                                  Compensation                    
                                      ANNUAL COMPENSATION             Stock                       
     Name and                 ----------------------------------     OPTION        ALL OTHER       
Principal Position              YEAR     SALARY/(1)/  BONUS/(2)/  GRANTS/(3)/    COMPENSATION/(4)/
----------------------------  ---------  -----------  ----------  -----------    -----------------
<S>                           <C>        <C>          <C>         <C>            <C>
 
Kobi Alexander                  1997       $370,458   $1,344,150    150,000           $249,661
President, Chief Executive      1996       $379,944   $  864,829    100,000           $235,906
Officer and Chairman of         1995       $342,950   $  526,845                      $324,454
the Board of Directors                                                               
                                                                                     
Carmel Vernia                   1997       $150,162   $  150,000     70,000           $ 36,048
Chief Operating Officer         1996       $129,889   $  150,000     25,000           $ 31,763
Managing Director, Efrat        1995       $130,394   $  100,000                      $ 29,921
                                                                                     
Francis E. Girard/(5)/          1997/(6)/  $330,007   $  291,250                      $ 24,000
President and Chief             1996/(6)/  $312,000   $  157,500    227,500           $ 24,500
Executive Officer,              1995/(6)/  $200,000   $   63,000     55,250           $ 13,500 
Comverse Network Systems                                                             
                                                                                     
Igal Nissim                     1997       $101,272   $   27,800      5,000           $ 24,277
Chief Financial Officer         1996       $115,342   $   23,070      5,000           $ 19,699
                                1995       $ 98,988   $   15,000     10,000          
-------------------
</TABLE>
(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) See also "Security Ownership of Certain Beneficial Owners and Management -
    Options to Purchase Subsidiary Shares."
(4) Consists of miscellaneous items not exceeding $25,000 in the aggregate for
    any individual, including premium payments and contributions under executive
    insurance and training plans and, in the case of Mr. Alexander, $211,750,
    $184,800 and $281,000 accrued in 1997, 1996 and 1995, respectively, for
    payments due on termination of employment pursuant to the terms of his
    employment agreements with the Company.
(5) Mr. Girard began serving as President and Chief Executive Officer of
    Comverse Network Systems, effective January 14, 1998. Previously, from May
    31, 1996, Mr. Girard served as President and Chief Executive Officer of
    Boston. Prior to that, Mr. Girard served as Executive Vice President of
    World Sales of Boston.

                                     - 5 -
<PAGE>
 
(6) Boston had a January 31 fiscal year. Accordingly, the information presented
    for Mr. Girard is for the 11 months ended December 31, 1997 and the 12
    months ended January 31, 1997 and 1996, respectively.




 
       The following table sets forth information concerning options granted
during 1997 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*
------------------------------------------------------------------  -------------------------
                                 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          150,000        16.7%  $44.25  May 28, 2007  $4,174,288   $10,578,466
Carmel Vernia            70,000         7.8%  $44.25  May 28, 2007  $1,948,001   $ 4,936,617
Francis E. Girard             -           -        -             -           -             -
Igal Nissim               5,000         0.6%  $44.25  May 28, 2007  $  139,143   $   352,616
</TABLE>
________________________

    * Represents the gain that would be realized if the options were held for
      their 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 grants.



       The options have a term of ten years and become exercisable and vest in
annual increments over the period of four years from the year of grant.  The
exercise price of the options is equal to the fair market value of the
underlying shares at the date of grant.

                                     - 6 -
<PAGE>
 
       The following table sets forth certain information concerning options
granted during the past three fiscal years to the executive officers of the
Company under its employee stock option plans:


                 STOCK OPTION GRANTS IN LAST THREE FISCAL YEARS
<TABLE>
<CAPTION>
                                                  % 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>
 
1997:      Kobi Alexander                150,000        16.7%    $44.25       May 28, 2007
           Carmel Vernia                  70,000         7.8%    $44.25       May 28, 2007
           Francis E. Girard/(1)/           -             -        -               -
           Igal Nissim                     5,000         0.6%    $44.25       May 28, 2007
 
1996:      Kobi Alexander                100,000         9.2%    $23.75      July 15, 2006
           Carmel Vernia                  25,000         2.3%    $23.75      July 15, 2006
           Francis E. Girard/(1)/        130,000  17.2%/(2)/     $22.89     April 28, 2006
                                          97,500  12.9%/(2)/     $37.51  December 31, 2006
           Igal Nissim                     5,000         0.5%    $23.75      July 15, 2006
 
1995:      Kobi Alexander                   -             -        -               -
           Carmel Vernia                    -             -        -               -
           Francis E. Girard/(1)/         22,750   3.9%/(2)/     $21.54       May 15, 2005
                                          32,500   5.6%/(2)/     $21.92  November 29, 2005
           Igal Nissim                    10,000         1.5%    $13.50       May 25, 2005
</TABLE>
___________________

(1)  Represents grants to Mr. Girard for the 11 months ended December 31, 1997
     and the 12 months ended January 31, 1997 and 1996, respectively.
(2)  Represents percent of total options granted to employees of Boston.

                                     - 7 -
<PAGE>
 
       The following table sets forth, as to each executive officer identified
above, the shares acquired on exercise of options during 1997, value realized,
number of unexercised options held at December 31, 1997, 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.


                   OPTION EXERCISES AND YEAR-END VALUE TABLE
                                        
                     AGGREGATE OPTION EXERCISES IN 1997 AND
               VALUE OF UNEXERCISED OPTIONS AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
                                             NUMBER OF UNEXERCISED        VALUE OF UNEXERCISED
                      SHARES                      OPTIONS HELD            IN-THE-MONEY OPTIONS
                     ACQUIRED                 AT DECEMBER 31, 1997     HELD AT DECEMBER 31, 1997
                        ON       VALUE     --------------------------  --------------------------
       NAME          EXERCISE   REALIZED   EXERCISABLE  UNEXERCISABLE  EXERCISABLE  UNEXERCISABLE
-------------------  --------  ----------  -----------  -------------  -----------  -------------
<S>                  <C>       <C>         <C>          <C>            <C>          <C>
 
Kobi Alexander        100,000  $4,356,563      794,250        375,000  $26,140,810     $5,150,000
Carmel Vernia          18,750  $  601,844      206,250         95,000  $ 5,960,164     $  381,250
Igal Nissim            10,000  $  348,125       12,500         17,500  $   328,125     $  276,250
Francis E. Girard      99,905  $2,536,489       54,240        202,043  $   805,227     $2,169,339
</TABLE>

       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,
2000 at a current base annual salary of $308,300.  Pursuant to the agreement,
Mr. Alexander received bonus compensation of $1,344,150 for services rendered
during 1997 and is entitled to receive bonus compensation in 1998 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
$93,170 times the number of years (plus any partial years) of his employment by
the Company commencing with 1983, increased by 10% per annum, plus continued
employmentrelated 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 

                                     - 8 -
<PAGE>
 
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 at a current basic
salary (the "Basic Salary") of $3,500 per month.  Efrat has also agreed to
reimburse Mr. Alexander for certain businessrelated expenses, to provide him
with the use of an automobile owned or leased by Efrat, 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 nonmonetary benefits
under the agreement.  The present value of the nonmonetary 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 50,000 Israeli shekels, subject to Israeli statutory cost of
living adjustment (resulting in a current annual salary equal to approximately
$162,000) and an annual bonus in an amount to be determined each year.  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. Vernia has also been granted options to purchase up to 3.5% of
the shares of certain subsidiaries of the Company 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. Girard is employed by the Company pursuant to an employment agreement
providing for his services in the capacity of President and Chief Executive
Officer of Comverse Network Systems for a three year term commencing January 14,
1998.  The agreement provides Mr. Girard an annual base salary of $385,000
(subject to periodic review), a bonus which is to be based on goals for Mr.
Girard and Comverse Network Systems (not to exceed Mr. Girard's annual base
salary), and an expense stipend and generally available fringe benefits.  Mr.
Girard is 

                                     - 9 -
<PAGE>
 
entitled to a payment equal to one year of his base salary (plus accrued
bonuses) in the event that his employment is terminated without cause.

       Mr. Nissim receives a base monthly salary from the Company of 33,500
Israeli shekels, subject to Israeli statutory cost of living adjustment
(resulting in a current annual salary equal to approximately $109,000)  and an
annual bonus in an amount to be determined.  Mr. Nissim is entitled to receive
various insurance and supplemental benefits and the use of an automobile owned
or leased by Efrat.

       The Company retains the services of Mr. Carr under a consulting agreement
for a term of five years commencing January 14, 1998.  Pursuant to the
agreement, Mr. Carr receives an annual consulting fee starting at $100,000 and
declining to $50,000 over the term of the agreement for providing consulting,
advisory and related services to the Company in connection with strategic
planning, customer relations and the integration of Boston and the Company.  Mr.
Carr also will be reimbursed for reasonable expenses incurred in performing his
obligations under the consulting agreement.


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.

                                     - 10 -
<PAGE>
 
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 20, 1998.

<TABLE>
<CAPTION>
                                                                                  NUMBER OF           PERCENT
                                                                                    Shares           of Total
                                                                                 Beneficially       Outstanding
Beneficial Owner                           RELATIONSHIP WITH THE COMPANY            OWNED           SHARES/(1)/
----------------                           -----------------------------         ------------       -----------  
<S>                                     <C>                                   <C>                 <C>        
The Equitable Companies Incorporated
     1299 Avenue of the Americas
     New York, NY 10104                 Shareholder                                   3,755,030       /(2)/  8.6%
 
Pilgrim Baxter & Associates Ltd.        Shareholder                                   2,304,500       /(2)/  5.3%
     1255 Drummers Lane
     Wayne, PA  19087
 
 
Kobi Alexander                          President, Chairman of the Board,
                                        Chief Executive Officer and Director            888,750    /(3)/     2.0%
Carmel Vernia                           Chief Operating Officer and Director            206,250    /(4)(5)/    *
Francis E. Girard                       Director                                        142,155    /(6)/       *
Igal Nissim                             Chief Financial Officer                          15,000    /(4)(7)/    *
Zvi Alexander                           Director                                         25,000    /(8)(9)/    *
Gregory C. Carr                         Director                                      1,525,225              3.4%
John H. Friedman                        Director                                         13,000    /(4)(9)/    *
Sam Oolie                               Director                                         10,000    /(4)(9)/    *
William F. Sorin                        Secretary and Director                           25,000   /(4)(10)/    *
Shaula A. Yemini, Ph.D.                 Director                                         16,900   /(9)(11)/    *
All directors and executive
  officers as a group (10 persons)                                                    2,867,280   /(12)/     6.2%
-----------------
</TABLE>
*    Less than 1%.

 (1) Based on 43,549,205 shares of common stock issued and outstanding on April
     20, 1998, excluding, except as otherwise noted, shares of common stock
     issuable upon the exercise of outstanding stock options.
 (2) Based on Schedule 13G filings with the Securities and Exchange Commission
     reflecting data as of December 1997.

                                         /footnotes continued on following page/

                                     - 11 -
<PAGE>
 
                                                     /continuation of footnotes/


 (3) Includes 794,250 shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after April 20, 1998. Does not
     include 875,000 shares issuable upon the exercise of options that were not
     exercisable at or within 60 days after April 20, 1998.
 (4) Consists solely of shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after April 20, 1998.
 (5) Does not include 220,000 shares issuable upon the exercise of options that
     were not exercisable at or within 60 days after April 20, 1998.
 (6) Includes 83,416 shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after April 20, 1998. Does not
     include 311,959 shares issuable upon the exercise of stock options that
     were not exercisable at or within 60 days after April 20, 1998.
 (7) Does not include 42,500 shares issuable upon the exercise of stock options
     that were not exercisable at or within 60 days after April 20, 1998.
 (8) Includes 17,000 shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after April 20 1998.
 (9) Does not include 6,000 shares issuable upon the exercise of stock options
     that were not exercisable at or within 60 days after April 20, 1998.
(10) Does not include 80,000 shares issuable upon the exercise of stock options
     that were not exercisable at or within 60 days after April 20, 1998.
(11) Includes 13,400 shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after April 20, 1998.
(12) Includes 1,177,316 shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after April 20, 1998. Does not
     include 1,553,459 shares issuable upon the exercise of stock options that
     were not exercisable at or within 60 days after April 20, 1998.


OPTIONS TO PURCHASE SUBSIDIARY SHARES

       The Company has granted to certain key executives options to acquire
shares of certain subsidiaries, other than Efrat, as a means of providing
incentives directly tied to the performance of those subsidiaries for which
different executives have direct responsibility.  Such options have been granted
to executive officers of the Company as set forth under "Employment Agreements".
Options have been granted to other key employees which, upon exercise, would
represent in the aggregate up to approximately 23.6% of the outstanding shares
of the relevant subsidiaries.  In general, these options have terms of up to ten
years, become exercisable and vest in equal ratable annual increments over
periods ranging from three to five years from the first anniversary of the date
of initial grant, and have exercise prices 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 have occurred, on a reasonable basis
as determined by the Board of Directors. Upon the exercise, in whole or in part,
of any option, Comverse will receive an irrevocable proxy to vote the underlying
shares and a right of first refusal to purchase the shares upon any proposed

                                     - 12 -
<PAGE>
 
sale, transfer or other disposition, until such time as 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 or accrued legal fees to William F. Sorin, a director of
the Company, in the amount of approximately $422,000 for legal services rendered
to the Company during the year ended December 31, 1997.

                                     - 13 -
<PAGE>
 
                                    PART IV
                                        
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
          AND REPORTS ON FORM 8-K.

                                                                 Page(s)
                                                                 -------
       (a) Documents filed as part of this report.
           -------------------------------------- 

          (1)  Financial Statements.
               ---------------------
 
               Index to Consolidated Financial Statements           F-1
 
               Independent Auditors' Report                         F-2
 
               Consolidated Balance Sheets -
                    December 31, 1996 and 1997                      F-3
 
               Consolidated Statements of Income -
                    Years ended December 31,
                      1995, 1996 and 1997                           F-4
 
               Consolidated Statements of Stockholders' Equity -
                    Years ended December 31,
                      1995, 1996 and 1997                           F-5
 
               Consolidated Statements of Cash Flows -
                    Years ended December 31,
                      1994, 1995 and 1996                           F-6
 
               Notes to Consolidated Financial Statements           F-7

          (2)  Financial Statement Schedules.
               ----------------------------- 

               None

          (3)  Exhibits.
               -------- 

               The Index of Exhibits commences on the following page. Exhibits
               numbered 10.3 through 10.8, 10.13 through 10.16 and 10.24 through
               10.30 comprise material compensatory plans and arrangements of
               the registrant.
                          
                                    - 14 -
<PAGE>
 
EXHIBITS
--------

NO.  DESCRIPTION
---  -----------

2.1* Agreement and Plan of Merger dated as of August 20, 1997, between
     Registrant and Boston Technology, Inc. (Incorporated by reference to the
     Definitive Proxy Materials for the Registrant's Annual Meeting of
     Stockholders held January 13, 1998.)

3    Articles of Incorporation and By-Laws:

     3.1*  Certificate of Incorporation. (Incorporated by reference to the
           Registrant's Annual Report on Form 10-K under the Securities Exchange
           Act of 1934 for the year ended December 31, 1987.)

     3.2*  Certificate of Amendment of Certificate of Incorporation effective
           February 26, 1993. (Incorporated by reference to the Registrant's
           Annual Report on Form 10-K under the Securities Exchange Act of 1934
           for the year ended December 31, 1992.)

     3.3*  Certificate of Amendment of Certificate of Incorporation effective
           January 12, 1995. (Incorporated by reference to the Registrant's
           Annual Report on Form 10-K under the Securities Exchange Act of 1934
           for the year ended December 31, 1994.)

     3.4*  By-Laws, as amended. (Incorporated by reference to the Registrant's
           Annual Report on Form 10-K under the Securities Exchange Act of 1934
           for the year ended December 31, 1987.)


4    Instruments defining the rights of security holders including indentures:

     4.1*  Excerpts from Certificate of Incorporation. (Incorporated by
           reference to the Registrant's Registration Statement on Form S-1
           under the Securities Exchange Act of 1933, Registration No. 33-9147.)

     4.2*  Excerpt from Certificate of Amendment of Certificate of Incorporation
           effective February 26, 1993. (Incorporated by reference to the
           Registrant's Annual Report on Form 10-K under the Securities Exchange
           Act of 1934 for the year ended December 31, 1992.)

     4.3*  Excerpt from Certificate of Amendment of Certificate of Incorporation
           effective January 12, 1995. (Incorporated by reference to the
           Registrant's Annual Report on Form 10-K under the Securities Exchange
           Act of 1934 for the year ended December 31, 1994.)

     4.4*  Excerpts from By-Laws, as amended. (Incorporated by reference to the
           Registrant's Annual Report on Form 10-K under the Securities Exchange
           Act of 1934 for the year ended December 31, 1992.)

                                     - 15 -
<PAGE>
 
     4.5*  Specimen stock certificate. (Incorporated by reference to the
           Registrant's Annual Report on Form 10-K under the Securities Exchange
           Act of 1934 for the year ended December 31, 1992.)

     4.6*  Indenture dated as of October 4, 1996 from Comverse Technology, Inc.
           to The Chase Manhattan Bank, N.A., Trustee. (Incorporated by
           reference to the Registrant's Current Report on Form 8-K under the
           Securities Exchange Act of 1934 filed October 10, 1996.)

     4.7*  Specimen 5 3/4% Convertible Subordinated Debenture due 2006.
           (Incorporated by reference to the Registrant's Current Report on Form
           8-K under the Securities Exchange Act of 1934 filed October 10,
           1996.)


10   Material contracts:

     10.1* Proxy Agreement dated as of September 5, 1991 by and among Comverse
           Government Systems Corporation, James R. Allen, Robert W. Bazley,
           Robert T. Marsh and Comverse Technology, Inc. (Incorporated by
           reference to the Registrant's Annual Report on Form 10-K under the
           Securities Exchange Act of 1934 for the year ended December 31,
           1991.)

     10.2* Visitation Approval Procedure Agreement dated as of September 5, 1991
           by and among Comverse Government Systems Corporation, James R. Allen,
           Robert W. Bazley, Robert T. Marsh and Comverse Technology, Inc.
           (Incorporated by reference to the Registrant's Annual Report on Form
           10-K under the Securities Exchange Act of 1934 for the year ended
           December 31, 1991.)

     10.3* Form of Stock Option Agreement pertaining to shares of certain
           subsidiaries of Comverse Technology, Inc. (Incorporated by reference
           to the Registrant's Annual Report on Form 10-K under the Securities
           Exchange Act of 1934 for the year ended December 31, 1993.)

     10.4* Employment Agreement effective as of July 1, 1994 by and between
           Comverse Technology, Inc. and Kobi Alexander. (Incorporated by
           reference to the Registrant's Annual Report on Form 10-K under the
           Securities Exchange Act of 1934 for the year ended December 31,
           1994.)

     10.5* 1994 Stock Option Plan. (Incorporated by reference to the
           Registrant's Annual Report on Form 10-K under the Securities Exchange
           Act of 1934 for the year ended December 31, 1994.)

     10.6* 1995 Stock Option Plan. (Incorporated by reference to the
           Registrant's Annual Report on Form 10-K under the Securities Exchange
           Act of 1934 for the year ended December 31, 1995.)

     10.7* 1996 Stock Option Plan. (Incorporated by reference to the
           Registrant's Annual Report on Form 10-K under the Securities Exchange
           Act of 1934 for the year ended December 31, 1996.)

                                     - 16 -
<PAGE>
 
     10.8*  Form of Incentive Stock Option Agreement. (Incorporated by reference
            to the Registrant's Registration Statement on Form S-1 under the
            Securities Act of 1933, Registration No. 33-9147.)

     10.9*  Deed of Guarantee from Comverse Technology, Inc. to Bank Hapoalim
            B.M. dated July 30, 1986. (Incorporated by reference to the
            Registrant's Registration Statement on Form S-1 under the Securities
            Act of 1933, Registration No. 33-9147.)

     10.10* Continuing Guarantee from Comverse Technology, Inc. to Bank Leumi 
            le-Israel B.M. (Incorporated by reference to the Registrant's
            Registration Statement on Form S-1 under the Securities Act of 1933,

     10.11* Patent License Agreement by and between Efrat Future Technology Ltd.
            and VMX, Inc. (Incorporated by reference to the Registrant's
            Registration Statement on Form S-1 under the Securities Act of 1933,
            Registration No. 33-9147.)

     10.12* Form of Indemnity Agreement between Comverse Technology, Inc. and
            its Officers and Directors. (Incorporated by reference to the
            Registrant's Annual Report on Form 10-K under the Securities
            Exchange Act of 1934 for the year ended December 31, 1987.)

     10.13* 1987 Stock Option Plan, as amended. (Incorporated by reference to
            the Registrant's Annual Report on Form 10-K under the Securities
            Exchange Act of 1934 for the year ended December 31, 1987.)

     10.14* Form of Stock Option Agreement for options other than Incentive
            Stock Options. (Incorporated by reference to the Registrant's Annual
            Report on Form 10-K under the Securities Exchange Act of 1934 for
            the year ended December 31, 1987.)

     10.15* 1997 Employee Stock Purchase Plan. (Incorporated by reference to the
            Definitive Proxy Materials for the Registrant's Annual Meeting of
            Stockholders held January 13, 1998.)

     10.16* 1997 Stock Incentive Compensation Plan. (Incorporated by reference
            to the Definitive Proxy Materials for the Registrant's Annual
            Meeting of Stockholders held January 13, 1998.)

     10.17* Memorandum of Agreement dated November 22, 1995 between Boston
            Technology, Inc. and AT&T. (Incorporated by reference to the Annual
            Report of Boston Technology, Inc. on Form 10-K under the Securities
            Exchange Act of 1934 for the year ended January 31, 1996,
            confidential treatment requested as to certain portions.)

     10.18* Lease dated November 5, 1990 between Boston Technology, Inc. and
            Wakefield Park Limited Partnership. (Incorporated by reference to
            the Annual Report of Boston Technology, Inc. on Form 10-K under the
            Securities Exchange Act of 1934 for the year ended January 31,
            1991.)

                                     - 17 -
<PAGE>
 
     10.19* First Amendment dated as of March 31, 1993 to Lease dated November
            5, 1990 between Boston Technology, Inc. and Wakefield Park Limited
            Partnership. (Incorporated by reference to the Quarterly Report of
            Boston Technology, Inc. on Form 10-Q under the Securities Exchange
            Act of 1934 for the quarter ended October 31, 1993.)

     10.20* Second Amendment dated as of August 31, 1994 to Lease dated November
            5, 1990 between Boston Technology, Inc. and Wakefield Park Limited
            Partnership. (Incorporated by reference to the Annual Report of
            Boston Technology, Inc. on Form 10-K under the Securities Exchange
            Act of 1934 for the year ended January 31, 1995.)

     10.21* License Agreement dated November 15, 1988 between Boston Technology,
            Inc. and VMX, Inc. (Incorporated by reference to the Registration
            Statement of Boston Technology, Inc. on Form S-1 under the
            Securities Act of 1933, Registration No. 33-32134.)

     10.22* License Agreement dated January 22, 1990 between Boston Technology,
            Inc. and Dytel Corporation. (Incorporated by reference to the Annual
            Report of Boston Technology, Inc. on Form 10-K under the Securities
            Exchange Act of 1934 for the year ended January 31, 1990.)

     10.23* Settlement Agreement dated December 28, 1993 between the Boston
            Technology, Inc. and Theis Research, Inc. and Peter F. Theis.
            (Incorporated by reference to the Annual Report of Boston
            Technology, Inc. on Form 10-K under the Securities Exchange Act of
            1934 for the year ended January 31, 1994.)

     10.24* Boston Technology, Inc. 1995 Director Stock Option Plan.
            (Incorporated by reference to the Quarterly Report of Boston
            Technology, Inc. on Form 10-Q under the Securities Exchange Act of
            1934 for the quarter ended July 31, 1995.)

     10.25* Boston Technology, Inc. 1992 Directors' Stock Option Plan, as
            amended. (Incorporated by reference to the Annual Report of Boston
            Technology, Inc. on Form 10-K under the Securities Exchange Act of
            1934 for the year ended January 31, 1994.)

     10.26* Boston Technology, Inc. 1994 Stock Incentive Plan. (Incorporated by
            reference to the Annual Report of Boston Technology, Inc. on Form 
            10-K under the Securities Exchange Act of 1934 for the year ended
            January 31, 1994.)

     10.27* Boston Technology, Inc. 1989 Incentive Stock Option Plan, as
            amended. (Incorporated by reference to the Definitive Proxy
            Materials for Boston Technology, Inc.'s Annual Meeting of
            Stockholders held July 14, 1992.)

     10.28* Boston Technology, Inc. Employee Savings and Profit Sharing Plan.
            (Incorporated by reference to Registration Statement of Boston
            Technology, Inc. on Form S-1 under the Securities Act of 1933,
            Registration No. 33-32134.)

     10.29* Boston Technology, Inc. Employee Severance Benefit Plan.
            (Incorporated by reference to the Current Report of Boston
            Technology, Inc. on Form 8-K under the Securities Exchange Act of
            1934 dated May 9, 1991.)

                                     - 18 -
<PAGE>
 
     10.30* Boston Technology, Inc. 1996 Stock Incentive Plan. (Incorporated by
            reference to the Definitive Proxy Materials for Boston Technology,
            Inc.'s Annual Meeting of Stockholders held June 25, 1996.)

     10.31* Lease dated June 7, 1996 between Boston Technology, Inc. and WBAM
            Limited Partnership. (Incorporated by reference to the Annual Report
            of Boston Technology, Inc. on Form 10-K under the Securities
            Exchange Act of 1934 for the year ended January 31, 1997.)

     Subsidiaries of Registrant.

23   Consent of Deloitte & Touche LLP

27   Financial Data Schedule

- ----------------
* Incorporated by reference.

                                     - 19 -
<PAGE>
 
                                   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, Chairman of the Board
                                  and Chief Executive Officer

                                     - 20 -