Comverse Technology (Nasdaq:CMVT) yesterday announced a stock option exchange program for its eligible employees.

The company, which employs about 5,650 people, had announced its general intention to reprice stock options six months ago. The plan won assembly approval on February 25, 2002.

Under the options repricing program, participating employees have the opportunity to have unexercised stock options previously granted to them cancelled, in exchange for replacement options that will be granted at a future date.

Employees will be able to receive 85 new options for each 100 of the old options. More than 60% of Comverse's employees hold such old options, most of which are exercisable at prices ranging from $40 to $85, depending on the price of Comverse stock at the time of issue. Today Comverse stock trades at $12.7, pricing the company at $2.4 billion.

The exercise price will be equal to the fair market value of Comverse Technology stock on the date of the re-grant, which currently is expected to be December 23, 2002.

Participating employees will have until June 20, 2002 to submit options for cancellation. Any employee whose option exercise price exceeds 110% of the share price on June 20, 2002 will be able to replace it with a new option. That figure climbs to 120% for company executives.

The company's objective is to maintain the options as an incentive tool for employees, company chairman and CEO Kobi Alexander explained. During 2001 the company cut executive salaries by 10% and dismissed about 1,300 employees. Market sources estimate that hundreds more may face the sack this year.