<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                        
                                  FORM 10-K/A
                                        
                               Amendment No. 1 to
                                        
               Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                for the One Month Period ended January 31, 1998

                         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: [ ]



                                      -i-
<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 May 6, 1998 was approximately $1,960,000,000.  The closing
price of the registrant's common stock on the NASDAQ National Market System on
May 6,  1998 was $46.8125 per share.

    There were 43,582,212 shares of the registrant's common stock outstanding on
May 6, 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.
 
 
   NAME                         AGE        POSITION WITH THE COMPANY
  ------                        ---  ------------------------------------       
  
   Kobi Alexander/(1)(2)/        46  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)/   45  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

   _______________
   (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 

                                      -2-
<PAGE>
 
Industrial Enterprises Ltd. for a period of two years as deputy controller,
responsible for financial 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 and the one month ended January 31, 1998 by those of
its executive officers whose salary and bonus compensation during 1997 exceeded
$100,000:

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                          LongTerm
                                                                        Compensation
                                                                            Stock
                                Name and      ANNUAL COMPENSATION          OPTION            ALL OTHER
                                            -----------------------
Principal Position               PERIOD     SALARY/(1)/  BONUS/(2)/  GRANTS/(3)/        COMPENSATION/(4)/
----------------------------  ------------  -----------  ----------  ------------------------------------
<S>                           <C>           <C>          <C>         <C>                  <C>
 
Kobi Alexander                     1998-Jan.   $ 29,192           -              500,000         $ 15,771
President, Chief Executive         1997        $370,458  $1,344,150              150,000         $249,661
Officer and Chairman of            1996        $379,944  $  864,829              100,000         $235,906
the Board of Directors             1995        $342,950  $  526,845                    -         $324,454
 
Carmel Vernia                      1998-Jan.   $ 12,356           -              125,000         $  2,985
Chief Operating Officer            1997        $150,162  $  150,000               70,000         $ 36,048
Managing Director, Efrat           1996        $129,889  $  150,000               25,000         $ 31,763
                                   1995        $130,394  $  100,000                    -         $ 29,921
 
Francis E. Girard/(5)/             1998-Jan.   $ 32,083           -              150,000         $  2,000
President and Chief                1997(6)     $330,007  $  291,250                    -         $ 24,000
Executive Officer,                 1996(6)     $312,000  $  157,500              227,500         $ 24,500
Comverse Network Systems           1995(6)     $200,000  $   63,000               55,250         $ 13,500
 
Igal Nissim                        1998-Jan.   $  8,333           -               25,000         $  1,972
Chief Financial Officer            1997        $101,272  $   27,800                5,000         $ 24,277
                                   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,
    $7,773, $211,750, $184,800 and $281,000 accrued in January 1998 and the
    years 1997, 1996 and 1995, respectively, for payments due on termination of
    employment pursuant to the terms of his employment agreements with the
    Company.

       /footnotes continued on following page/

                                      -5-
<PAGE>
 
       /continuation of footnotes/


(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.
(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 January 1998 to the executive officers of the Company under its employee
stock option plans:

                    STOCK OPTION GRANTS IN TRANSITION PERIOD
<TABLE>
<CAPTION>
 
Potential Realizable Value
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
                                          Individual Grants                FOR OPTION TERM*
                                 ------------------------------------  -------------------------
                                  Percent of
                                  Total
                     Number of    Options     Exercise
                       Shares     Granted to  Price
                     Subject to   Employees   Per    Expiration
Name                 OPTION       IN PERIOD   SHARE   DATE                 5%           10%
-------------------  ----------  ---------   ------  ----------------  ----------   -----------
<S>                  <C>         <C>         <C>     <C>               <C>          <C>
 
Kobi Alexander          500,000       16.1%  $31.25  January 27, 2008  $9,826,479   $24,902,226
Carmel Vernia           125,000        4.0%  $31.25  January 27, 2008  $2,456,620   $ 6,225,556
Francis E. Girard       150,000        4.8%  $31.25  January 27, 2008  $2,947,944   $ 7,470,668
Igal Nissim              25,000        0.8%  $31.25  January 27, 2008  $  491,324   $ 1,245,111
</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, as to each executive officer
identified above, the shares acquired on exercise of options during the one
month period ended January 31, 1998, value realized, number of unexercised
options held at January 31, 1998, 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 January 1998 and
                VALUE OF UNEXERCISED OPTIONS AT JANUARY 31, 1998
<TABLE>
<CAPTION>
 
 
                                           Number of Unexercised        Value of Unexercised
                      Shares                    OPTIONS HELD            IN-THE-MONEY OPTIONS
                     ACQUIRED               AT JANUARY 31, 1998       HELD AT JANUARY 31, 1998
                        On      Value    --------------------------  --------------------------
       Name          EXERCISE  REALIZED  EXERCISABLE  UNEXERCISABLE  EXERCISABLE  UNEXERCISABLE
-------------------  --------  --------  -----------  -------------  -----------  -------------
<S>                  <C>       <C>       <C>          <C>            <C>          <C>
 
Kobi Alexander            -          -       794,250        875,000  $21,921,357     $5,173,438
Carmel Vernia             -          -       206,250        220,000  $ 4,864,460     $  553,125
Igal Nissim               -          -        12,500         42,500  $   261,719     $  270,781
Francis E. Girard      10,908  $222,796       43,332        352,043  $   335,370     $1,753,586
 
</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
employment-related 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 

                                      -7-
<PAGE>
 
its obligations under the agreement or by his resignation within the period
of six 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 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.

                                      -8-
<PAGE>
 
       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.

                                      -9-
<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 May 6, 1998.
<TABLE>
<CAPTION>
                                                                                  NUMBER OF          PERCENT
                                                                                   Shares           of Total
                                                                                Beneficially       Outstanding
Beneficial Owner                           RELATIONSHIP WITH THE COMPANY            OWNED          SHARES/(1)/
--------------------------------------  ------------------------------------  -----------------  ---------------
<S>                                     <C>                                   <C>     <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                       President, Comverse Network Systems
                                        and 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 43,582,212 shares of common stock issued and outstanding on May 6,
     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/

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<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 May 6, 1998.  Does not include
     875,000 shares issuable upon the exercise of options that were not
     exercisable at or within 60 days after May 6, 1998.

 (4) Consists solely of shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after May 6, 1998.

 (5) Does not include 220,000 shares issuable upon the exercise of options that
     were not exercisable at or within 60 days after May 6, 1998.

 (6) Includes 83,416 shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after May 6, 1998. Does not include
     311,959 shares issuable upon the exercise of stock options that were not
     exercisable at or within 60 days after May 6, 1998.

 (7) Does not include 40,000 shares issuable upon the exercise of stock options
     that were not exercisable at or within 60 days after May 6, 1998.

 (8) Includes 17,000 shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after May 6, 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 May 6, 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 May 6, 1998.

(11) Includes 13,400 shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after May 6, 1998.

(12) Includes 1,177,316 shares issuable upon the exercise of stock options that
     were exercisable at or within 60 days after May 6, 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 May 6, 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
sale, transfer or other 

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<PAGE>
 
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.

                                      -12-
<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

                                      -13-