-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IlwCeYAfoL7jf6alcw0ofa7u7e46jJFUmyg9nlxFgLXsHm3FhARWSM2ZaXGMo13j JCTINzSNL12a9TtUuNpcYw== 0001213900-10-005094.txt : 20101203 0001213900-10-005094.hdr.sgml : 20101203 20101202175258 ACCESSION NUMBER: 0001213900-10-005094 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20101203 DATE AS OF CHANGE: 20101202 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: IDT CORP CENTRAL INDEX KEY: 0001005731 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 223415036 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC TO-I SEC ACT: 1934 Act SEC FILE NUMBER: 005-48167 FILM NUMBER: 101229262 BUSINESS ADDRESS: STREET 1: 520 BROAD ST CITY: NEWARK STATE: NJ ZIP: 07102 BUSINESS PHONE: 973 438 1000 MAIL ADDRESS: STREET 1: 520 BROAD STREET CITY: NEWARK STATE: NJ ZIP: 07102 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: IDT CORP CENTRAL INDEX KEY: 0001005731 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 223415036 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 13E3 SEC ACT: 1934 Act SEC FILE NUMBER: 005-48167 FILM NUMBER: 101229263 BUSINESS ADDRESS: STREET 1: 520 BROAD ST CITY: NEWARK STATE: NJ ZIP: 07102 BUSINESS PHONE: 973 438 1000 MAIL ADDRESS: STREET 1: 520 BROAD STREET CITY: NEWARK STATE: NJ ZIP: 07102 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: IDT CORP CENTRAL INDEX KEY: 0001005731 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 223415036 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC TO-I BUSINESS ADDRESS: STREET 1: 520 BROAD ST CITY: NEWARK STATE: NJ ZIP: 07102 BUSINESS PHONE: 973 438 1000 MAIL ADDRESS: STREET 1: 520 BROAD STREET CITY: NEWARK STATE: NJ ZIP: 07102 SC TO-I 1 sc13e1210_idt.htm SCHEDULE 13E-3 sc13e1210_idt.htm
 


UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


 
SCHEDULE TO
(RULE 14d-100)
 
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) or 13(e)(1)
 OF THE SECURITIES EXCHANGE ACT OF 1934
 
IDT CORPORATION
(Name of Subject Company (Issuer))
 
IDT CORPORATION
(Name of Filing Person (Offeror))
 
Common Stock, par value $.01 per share
 (Titles of Classes of Securities)

448947408
 (CUSIP Numbers of Classes of Securities)


 
SCHEDULE 13E-3
 
RULE 13E-3 TRANSACTION STATEMENT
 UNDER SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934
 
IDT CORPORATION
(Name of the Issuer)
 
IDT CORPORATION
(Name of Person(s) Filing Statement)
 
Common Stock, par value $.01 per share
 (Title of Classes of Securities)
 
448947408
 (CUSIP Number of Classes of Securities)


 
BILL PEREIRA
CHIEF FINANCIAL OFFICER
  IDT CORPORATION
520 BROAD STREET
NEWARK, NEW JERSEY 07102
(973) 438-1000
 
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Filing Person)
 
COPIES TO:
 
DOV T. SCHWELL, ESQ.
 OUTSIDE COUNSEL SOLUTIONS LLP
1430 BROADWAY, SUITE 1615
NEW YORK, NEW YORK  10018
 (646) 328-0795
 
 
 
 

 
 
CALCULATION OF FILING FEE
 
 
TRANSACTION VALUATION*
   
AMOUNT OF FILING FEE+
 
 
$80,277,921
   
$5,724
 

*
 
Estimated for purposes of calculating the amount of the filing fee only. The amount assumes the exchange of 3,728,654 shares of IDT Corporation (“IDT”) Common Stock, par value $.01 per share (“Common Stock”), for 3,728,654 shares of IDT Class B Common Stock, par value $.01 per share (“Class B Stock”). The amount is estimated based upon the product of (a) $21.53, which is the average of the high and the low price per share of the Class B Stock on December 1, 2010, as reported on the New York Stock Exchange and (b) 3,728,654, representing the number of shares outstanding as of December 1, 2010.
     
+
 
The amount of the filing fee, calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, and Fee Advisory # 2 for Fiscal Year 2011, issued September 29, 2010, equals $71.30 per million dollars of the transaction value.
 
o Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
Amount previously paid:                     
 Filing party:                     
 Form or registration No.:                     
 Date filed:                                         
 
o Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the statement relates:
o  Third-party tender offer subject to Rule 14d-1.
x  Issuer tender offer subject to Rule 13e-4.
x  Going-private transaction subject to Rule 13e-3.
o  Amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results of the tender offer o
 

 
 

 
 
 
TABLE OF CONTENTS
 

 
 
This Tender Offer Statement and Schedule 13E-3 Transaction Statement on Schedule TO (as amended from time to time, this “Schedule TO”) relates to the offer by IDT Corporation, a Delaware corporation (together with its subsidiaries, “IDT” or the “Issuer”), to exchange (the “Exchange Offer”) shares of its currently outstanding common stock, par value $.01 per share (the “Common Stock”) from the holders thereof (the “Holders”), for shares of IDT Class B Common Stock, par value $.01 per share (the “Class B Stock”),
 
Upon the terms and subject to the conditions of the Exchange Offer, the Issuer will issue one share of Class B Stock in exchange for each share of Common Stock, to the extent such shares are validly tendered and not properly withdrawn prior to the expiration of the Exchange Offer. For a more detailed description of the Class B Stock the Issuer is proposing to issue in the Exchange Offer, please see the section of the Offer to Exchange titled “Description of Class B Stock.” The Exchange Offer is open to all Holders and is subject to customary conditions, including the non-waivable Minimum Condition that at least 1,115,970 shares of Common Stock not beneficially owned by Howard S. Jonas, Chief Executive Officer and Chairman of IDT, or his affiliates, are tendered. Subject to applicable securities laws and the terms set f orth in the Offer to Exchange, the Issuer reserves the right to waive any and all conditions to the Exchange Offer, except the Minimum Condition described in the preceding sentence.
 
The Offer to Exchange and the letter of transmittal (together, as amended and supplemented from time to time, the “Disclosure Documents”) are attached to this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B), respectively.
 
This Schedule TO is intended to satisfy the requirements of a Tender Offer Statement on Schedule TO of IDT, a Schedule 13E-3 and a Transaction Statement of IDT. All information in the Disclosure Documents, including all schedules, is hereby expressly incorporated by reference in answer to all items in this Schedule TO, including, without limitation, all of the information required by Schedule 13E-3 that is not included in or covered by the items in Schedule TO and is supplemented by the information specifically provided herein, except as otherwise set forth below.
 
ITEM 4. TERMS OF THE TRANSACTION.
 
(a) The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet,” “Certain Questions and Answers About the Exchange Offer,” “Terms of the Exchange Offer,” “Special Factors,” “Certain United States Federal Income Tax Considerations,” “Selected Historical Financial and Operating Data,” and “Description of Class B Stock - Material Differences Between Common Stock and Class B Stock” is incorporated herein by reference.
 
(b) The information set forth in the sections of the Offer to Exchange titled “Special Factors—Reasons for the Board’s Position as to the Exchange Offer; Factors Considered” and “Interests of Certain Persons in the Exchange Offer” is incorporated herein by reference.
 
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
 
(a) The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet—Purpose of the Exchange Offer,” “Special Factors—Purpose of and Reasons for the Exchange Offer” and “Special Factors—Alternatives to the Exchange Offer” is incorporated herein by reference.
 
(b) The information set forth in the section of the Offer to Exchange titled “Summary Term Sheet—Use of Proceeds” is incorporated herein by reference.
 
(c) The information set forth in the section of the Offer to Exchange titled “Special Factors—Certain Effects of the Exchange Offer” is incorporated herein by reference.
 
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
 
(a) The information set forth in the section of the Offer to Exchange titled “Terms of the Exchange Offer—Source of Funds” is incorporated herein by reference.
 
(b) Not applicable.
 
(d) Not applicable.
 
ITEM 10. FINANCIAL STATEMENTS.
 
(a),(b) The information set forth in the section of the Offer to Exchange titled “Selected Historical Financial and Operating Data” and the financial statements and information contained in the reports set forth in the section of the Offer to Exchange titled “Documents Incorporated by Reference” are incorporated herein by reference. A copy of any or all of the documents containing such information and financial statements may be inspected, and copies thereof obtained, upon written or oral request. Requests should be directed to Bill Ulrey, Vice President–Investor Relations and External Affairs, by phone at (973) 438-3838, or by mail addressed to Bill Ulrey, Vice President–Investor Relations and External Affairs, at 520 Broad Street, Newark, NJ 07102.
 
 
 
ITEM 11. ADDITIONAL INFORMATION.
 
(a)(1) None.
 
(a)(2) None.
 
(a)(3) Not applicable.
 
(a)(4) Not applicable.
 
(a)(5) Not applicable.
 
(b) None.
 
ITEM 12. EXHIBITS.
 
The Exhibit Index attached hereto is incorporated by reference.
 
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
 
Schedule 13e-3 Item 1. Summary Term Sheet.
 
The information set forth in the section of the Offer to Exchange titled “Summary Term Sheet” is incorporated herein by reference.
 
Schedule 13e-3 Item 2. Subject Company Information.
 
(a) The issuer of the securities subject to the Exchange Offer is IDT Corporation, a Delaware corporation. The Issuer’s executive offices are located at 520 Broad Street, Newark, New Jersey 07102. The Issuer’s telephone number is (973) 438-1000.
 
(b) The subject security is the Issuer’s Common Stock. As of December 1, 2010, 3,728,654 shares of Common Stock were issued and outstanding.
 
(c) The information concerning the principal market in which the shares of Common Stock are traded and certain high and low sales prices for the shares of Common Stock in the principal market in which the shares of Common Stock are traded is set forth in the section of the Offer to Exchange titled “Markets and Market Price,” which is incorporated herein by reference.
 
(d) The information set forth in the section of the Offer to Exchange titled “Markets and Market Price” is incorporated herein by reference.
 
(e) None.
 
(f)  During the past two years, the Issuer and its affiliates purchased a total of 970,609 shares of Common Stock at a range of purchase prices from $1.05 to $3.97 per share. The following table sets forth the average purchase price paid by the Issuer and its affiliates for each quarter during the past two years:
 
           
Weighted Average
   
Amount of Shares
 
Purchase Price
Fiscal Quarter Ending
 
Purchased
 
Per Share of Common Stock
April 30, 2009
   
405,009
   
$
1.05
 
July 31, 2009
   
91,800
     
2.42
 
October 31, 2009
   
391,200
     
2.53
 
January 31, 2010
   
65,800
     
3.84
 
April 30, 2010
   
16,800
     
3.97
 
July 31, 2010
   
0
     
0
 
October 31, 2010
   
0
     
0
 
Current Quarter
   
0
     
0
 

All shares of Common Stock listed above were purchased by the Issuer pursuant to the Issuer’s stock repurchase program which was approved by its Board of Directors on June 13, 2006 and was amended on December 17, 2008 to increase the number of Class B Stock and Common Stock shares authorized to repurchase from the 3.3 million shares that then remained available for repurchase to 8.3 million shares.
 
Schedule 13e-3 Item 3. Identity and Background of Filing Person.
 
(a) IDT Corporation is the filing person and the subject company. The business address and telephone number of the Issuer are set forth under part (a) under the caption “Schedule 13e-3 Item 2. Subject Company Information” in this Item 13 of this Schedule TO. The information regarding the directors and executive officers of the Issuer is set forth in Schedule A of the Offer to Exchange, which is incorporated herein by reference.
 
(b) Not applicable.
 
(c) The information regarding the directors and executive officers of the Issuer is set forth in Schedule A of the Offer to Exchange, which is incorporated herein by reference. During the last five years, none of the Issuer or any of its directors or executive officers has (i) been convicted in a criminal proceeding (excluding minor traffic violations or similar misdemeanors), or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws.
 
 
Schedule 13e-3 Item 4. Terms of the Transaction.
 
(a) The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet,” “Certain Questions and Answers About the Exchange Offer,” “Terms of the Exchange Offer,” “Special Factors,” “Certain United States Federal Income Tax Considerations,” “Selected Historical Financial and Operating Data,” “Anticipated Accounting Treatment,” and “Description of Class B Stock - Material Differences Between Common Stock and Class B Stock” is incorporated herein by reference.
 
(c) The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet,” “Certain Questions and Answers About the Exchange Offer” and “Special Factors” is incorporated herein by reference.
 
(d) The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet” and “Appraisal Rights” is incorporated herein by reference.
 
(e) None.
 
(f) Not applicable.
 
Schedule 13e-3 Item 5. Past Contacts, Transactions, Negotiations and Agreements.
 
(a),(b),(c) The information set forth in the sections of the Offer to Exchange titled “Special Factors—Background of the Exchange Offer,” “Interests of Certain Persons in the Exchange Offer” and “Past Contacts, Transactions, Negotiations and Agreements” is incorporated herein by reference.
 
(e) The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet—Interest of  IDT Directors and Executive Officers with Respect to the Exchange Offer and Effect on Ownership Structure of IDT,” “Summary Term Sheet—Howard Jonas Limitation on Voting Power,” “Special Factors—Certain Effects of the Exchange Offer,” “Past Contacts, Transactions, Negotiations and Agreements,” and “Interests of Certain Persons in the Exchange Offer” is incorporated herein by reference.
 
Schedule 13e-3 Item 6. Purposes of the Transaction and Plans or Proposals.
 
(b) The information set forth in the section of the Offer to Exchange titled “Summary Term Sheet—Use of Proceeds” is incorporated herein by reference.
 
(c)(1-8) The information set forth in the sections of the Offer to Exchange titled “Special Factors—Certain Effects of the Exchange Offer” and “Terms of the Exchange Offer—Future Purchases” is incorporated herein by reference.
 
Schedule 13e-3 Item 7. Purposes, Alternatives, Reasons and Effects.
 
(a) The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet—Purpose of the Exchange Offer” and “Special Factors—Purpose of and Reasons for the Exchange Offer” is incorporated herein by reference.
 
(b) The information set forth in the section of the Offer to Exchange titled “Special Factors—Alternatives to the Exchange Offer” is incorporated herein by reference.
 
(c) The information set forth in the sections of the Offer to Exchange titled “Special Factors—Purpose of and Reasons for the Exchange Offer” and “Special Factors—Reasons for the Board’s Position as to the Exchange Offer; Factors Considered” is incorporated herein by reference.
 
(d) The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet— Interest of  IDT Directors and Executive Officers with Respect to the Exchange Offer and Effect on Ownership Structure of IDT,” “Interests of Certain Persons in the Exchange Offer—Interests of IDT Directors and Executive Officers in the Exchange Offer,” “Special Factors—Certain Effects of the Exchange Offer” and “Certain United States Federal Income Tax Considerations” is incorporated herein by reference.
 
Schedule 13e-3 Item 8. Fairness of the Transaction.
 
(a) The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet—Position of IDT as to Fairness of the Exchange Offer,” “Special Factors— Reasons for the Board’s Position as to the Exchange Offer; Factors Considered,” “Special Factors—Position of IDT as to the Fairness of the Exchange Offer,” and “Terms of the Exchange Offer—No Recommendation” is incorporated herein by reference.
 
(b) The information set forth in the section of the Offer to Exchange titled “Special Factors” is incorporated herein by reference.
 
(c) The transaction is structured so that the acceptance of the Exchange Offer by at least a majority of the unaffiliated security holders is a non-waivable condition to closing. The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet—Conditions to the Exchange Offer” and “Terms of the Exchange Offer—Conditions to the Exchange Offer” is incorporated herein by reference.
 
(d) An unaffiliated representative was not retained to act solely on behalf of unaffiliated security holders for purposes of negotiating the terms of the transactions or preparing a report concerning the fairness of the transactions. The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet—Position of IDT as to Fairness of the Exchange Offer,” “Special Factors—Background of the Exchange Offer,” “Special Factors—Reasons for the Board’s Position as to the Exchange Offer; Factors Considered,” and “Special Factors—Position of IDT as to the Fairness of the Exchange Offer” is incorporated herein by reference.
 
 
 
(e) The transaction was approved by all of the independent directors of the Issuer, including a majority of the directors who are not employees of the subject company. The information set forth in the sections of the Offer to Exchange titled “Special Factors—Background of the Exchange Offer” and “Special Factors—Reasons for the Board’s Position as to the Exchange Offer; Factors Considered” is incorporated herein by reference.
 
(f) None.
 
Schedule 13e-3 Item 9. Reports, Opinions, Appraisals and Negotiations.
 
(a)-(c) None.
 
Schedule 13e-3 Item 10. Source and Amounts of Funds or Other Consideration.
 
(a) The information set forth in the sections of the Offer to Exchange titled “Terms of the Exchange Offer—Source of Funds” is incorporated herein by reference.
 
(b) Not applicable.
 
(c) The information set forth in the sections of the Offer to Exchange titled “Summary Term Sheet—Fees and Expenses” and “Terms of the Exchange Offer—Fees and Expenses” is incorporated herein by reference.
 
(d) Not applicable.
 
Schedule 13e-3 Item 11. Interest in Securities of the Subject Company.
 
(a) The information set forth in the section of the Offer to Exchange titled “Security Ownership of Certain Beneficial Owners and Management” is incorporated herein by reference.
 
(b) The information set forth in the section of the Offer to Exchange titled “Transactions in IDT Common Stock” is incorporated herein by reference.
 
Schedule 13e-3 Item 12. The Solicitation or Recommendation.
 
(d) The information set forth in the sections of the Offer to Exchange titled “Terms of the Exchange Offer—No Recommendation” is incorporated herein by reference.
 
(e) The information set forth in the section of the Offer to Exchange titled “Terms of the Exchange Offer—No Recommendation” is incorporated herein by reference.
 
Schedule 13e-3 Item 13. Financial Statements.
 
(a)-(b) The information set forth in the section of the Offer to Exchange titled “Selected Historical Financial and Operating Data” and the financial statements and information contained in the reports set forth in the section of the Offer to Exchange titled “Documents Incorporated by Reference” are incorporated herein by reference. A copy of any or all of the documents containing such information and financial statements may be inspected, and copies thereof obtained, upon written or oral request. Requests should be directed to Bill Ulrey, Vice President–Investor Relations and External Affairs, by phone at (973) 438-3838, or by mail addressed to Bill Ulrey, Vice President–Investor Relations and External Affairs, at 520 Broad Street, Newark, NJ 07102.
 
Schedule 13e-3 Item 14. Persons/Assets, Retained, Employed, Compensated or Used.
 
(a) None.
 
(b) None.
 
Schedule 13e-3 Item 15. Additional Information.
 
(b) None.
 
Schedule 13e-3 Item 16. Exhibits.
 
The Exhibit Index attached hereto is incorporated by reference.
 
 
SIGNATURE
 
IDT Corporation is filing this statement as a combined Schedule TO and Schedule 13E-3. After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
 
 
IDT CORPORATION
  
 
By:  
/s/ Howard S. Jonas
 
Name:  
 
Howard S. Jonas
 
Title:
 
Chief Executive Officer
 
Date: December 2, 2010
 
 
EXHIBIT INDEX
 
     
Exhibit No.
 
Description
(a)(1)(A)
 
Offer to Exchange, dated December 2, 2010.
(a)(1)(B)
 
Letter of Transmittal, dated December 2, 2010.
(a)(1)(C)
 
Notice of Guaranteed Delivery, dated December 2, 2010.
(a)(1)(D)
 
Letter to Clients, dated December 2, 2010.
(a)(1)(E)
 
Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, December 2, 2010.
(a)(5)(A)
 
Press Release of IDT Corporation, dated December 2, 2010.
(d)(A)
 
Voting Agreement between IDT Corporation and Howard S. Jonas, dated December 2, 2010.
(g)
 
Not applicable.
(h)
 
Not applicable.
 
 
 
5

EX-99.(A)(1)(A) 2 sc13e1210ex99aia_idt.htm OFFER TO EXCHANGE sc13e1210ex99aia_idt.htm
Exhibit 99(a)(1)(A)
IDT CORPORATION
 
520 BROAD STREET
 
NEWARK, NEW JERSEY 07102
 
 
OFFER TO EXCHANGE
COMMON STOCK, PAR VALUE $.01 PER SHARE
FOR
CLASS B COMMON STOCK, PAR VALUE $.01 PER SHARE
 
THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M, NEW YORK CITY TIME,
 ON JANUARY 4, 2011, UNLESS THE OFFER IS EXTENDED (SUCH DATE AND
 TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE”).
 TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
 
IDT Corporation, a Delaware corporation (“IDT”), is offering to exchange shares of its currently outstanding common stock, par value $.01 per share (the “Common Stock”), for shares of IDT Class B Common Stock, par value $.01 per share (the “Class B Stock”), on the terms and subject to the conditions set forth in this offer to exchange (this “Offer to Exchange”) and in the accompanying letter of transmittal (the “Letter of Transmittal”). For each outstanding share of Common Stock, we are offering to exchange one share of Class B Stock. We refer to this offer, on the terms and subject to the conditions set forth in this Offer to Exchange, as the “Exchange Offer.”
 
The Exchange Offer is subject to the conditions discussed under “Terms of the Exchange Offer — Conditions to the Exchange Offer” on page 18.
 
The Exchange Offer will expire at 5:00 p.m., New York City time, on January 4, 2011, unless the offer is extended. You may withdraw tendered Common Stock at any time prior to the Expiration Date.
 
Each share of Class B Stock entitles its holder to one-tenth of a vote on all matters to be voted on by the stockholders of IDT, while each share of Common Stock entitles its holder to one vote on all matters to be voted on by the stockholders of IDT. Each share of Class B Stock has the same rights to dividends and distributions as a share of Common Stock. Please see the section entitled “Material Differences Between Common Stock and Class B Stock,” for a more complete description of the differences between the Common Stock and the Class B Stock.
 
Following the consummation of the Exchange Offer, if a sufficient number of shares of Common Stock are tendered, the New York Stock Exchange (the “NYSE”) may delist or we may seek to delist the Common Stock from the NYSE and de-register the Common Stock under the Securities Exchange Act of 1934 as amended and the rules and regulations thereunder (the “Exchange Act”).  Because the Class B Stock will remain registered, even if such steps were taken, IDT’s reporting obligations will remain primarily as they are now, but the benefits of such listing and registration will not be available to holders of Common Stock.
 
In addition, following the consummation of the Exchange Offer, if less than all of the Common Stock is tendered in the Exchange Offer, we intend to seek approval of our stockholders to amend our certificate of incorporation so that each remaining share of Common Stock will automatically be converted and reclassified into one share of Class B Stock. If the Exchange Offer and recapitalization are consummated, we will no longer have any shares of Common Stock authorized or outstanding and will only have two classes of common stock remaining – our Class A Common Stock, par value $.01 per share (“Class A Stock”), and Class B Stock.
 
As of December 1, 2010, 3,728,654 shares of Common Stock, 15,627,810 shares of Class B Stock and 3,272,326 shares of Class A Stock, were issued and outstanding, and all calculations of percentage ownership in this Offer to Exchange are based on such numbers of outstanding shares. The Class B Stock and the Common Stock are traded on the NYSE under the symbols “IDT” and “IDT.C”, respectively.
 
You should consider carefully the Risk Factors beginning on page 16 of this Offer to Exchange and the Special Factors beginning on page 11 of this Offer to Exchange before you decide whether to participate in the Exchange Offer. You must make your own decision as to whether to tender Common Stock in the Exchange Offer in light of your own particular circumstances, taking into account your determination as to the value of the consideration to be received. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE EXCHANGE OFFER, PASSED UPON THE MERITS OR FAIRNESS OF THE EXCHANGE OFFER OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURES IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
 
Newark, New Jersey
 
December 2, 2010
 
 
1

 
 
Table of Contents
 
 
         
   
Page
         
Summary Term Sheet
   
4
 
Certain Questions and Answers About the Exchange Offer
   
9
 
Special Factors
   
11
 
Purpose of and Reasons for the Exchange Offer
   
11
 
Certain Effects of the Exchange Offer
   
12
 
Alternatives to the Exchange Offer
   
13
 
Background of the Exchange Offer
   
13
 
Reasons for the Board’s Position as to the Exchange Offer; Factors Considered
   
14
 
Position of IDT as to the Fairness of the Exchange Offer
   
15
 
Risk Factors
   
16
 
Risks Related to Our Business
   
16
 
Interests of Certain Persons in the Exchange Offer
   
16
 
Interests of IDT Directors and Executive Officers in the Exchange Offer
   
16
 
Capitalization
   
17
 
Terms of the Exchange Offer
   
18
 
No Recommendation
   
18
 
General
   
18
 
Exchange Offer Consideration
   
18
 
Conditions to the Exchange Offer
   
18
 
Procedures for Tendering
   
19
 
Determination of Validity
   
20
 
Acceptance; Exchange of Common Stock
   
21
 
Expiration; Extensions; Termination; Amendment
   
21
 
Withdrawal Rights
   
21
 
Amendment of IDT Certificate of Incorporation
   
22
 
Fees and Expenses
   
22
 
Brokerage Commissions
   
22
 
Transfer Taxes
   
22
 
Future Purchases
   
22
 
Resale of Class B Stock Received in the Exchange Offer
   
22
 
Source of Funds
   
23
 
Householding of Stockholder Materials
   
23
 
Certain United States Federal Income Tax Considerations
   
23
 
Anticipated Accounting Treatment
   
24
 
Description of Class B Stock - Material Differences Between Common Stock and Class B Stock
   
24
 
Appraisal Rights
   
25
 
Past Contacts, Transactions, Negotiations and Agreements
   
25
 
Transactions In IDT Common Stock
   
25
 
IDT and Affiliates
   
25
 
IDT Directors and Executive Officers
   
25
 
Selected Historical Financial and Operating Data
   
25
 
Markets and Market Price
   
25
 
Security Ownership of Certain Beneficial Owners and Management
   
26
 
Where Stockholders Can Find More Information
   
27
 
Documents Incorporated By Reference
   
27
 
Schedule A Information Concerning Members of the Board of Directors and the Executive Officers of IDT
   
29
 
 
 
2

 
 
We are relying on Section 3(a)(9) of the Securities Act of 1933, as amended, which we refer to herein as the  “Securities Act,”  to exempt the Exchange Offer from the registration requirements of the Securities Act. Section 3(a)(9) provides that the registration requirements of the Securities Act will not apply to “any security exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange.” We have no contract, arrangement or understanding relating to, and will not, directly or indirectly, pay any commission or other remuneration to any broker, dealer, salesperson, agent or any other person for soliciting tenders in the Exchange Offer.
 
 No dealer, salesman or other person has been authorized to give any information or to make any representations with respect to the matters described in this Offer to Exchange, other than those contained in, or incorporated by reference into, this Offer to Exchange. If given or made, such information or representations may not be relied upon as having been authorized by us.
 
This Offer to Exchange is submitted to holders for informational use solely in connection with their consideration of the Exchange Offer. Its use for any other purpose is not authorized. The Offer to Exchange may not be copied or reproduced in whole or in part nor may it be distributed or any of its contents be disclosed to anyone other than the holder to whom it is submitted.
 
In making an investment decision, holders must rely on their own examination of us and the terms of the Exchange Offer, including the merits and risks involved. The information contained in this Offer to Exchange is correct in all material respects as of the date hereof. Neither the delivery of this Offer to Exchange nor the consummation of the Exchange Offer will create the implication that the information contained herein is correct at any time after the date hereof, however, if a material change occurs in the information contained in this Offer to Exchange, we will disseminate promptly disclosure of the change to you. Our business, financial condition, results of operations and prospects may change after that date. No representation is made to any holder regarding the legality of an investment in the Class B Stock under any applicable legal investment or similar laws or regulations. The contents of this Offer to Exchange are not to be construed as legal, financial or tax advice. Holders should consult their own attorneys, financial advisors or tax advisors as to legal, financial or tax advice with respect to the Exchange Offer.
 
Questions regarding the Exchange Offer, requests for assistance in tendering your Common Stock or requests for additional copies of this Offer to Exchange circular or the Letter of Transmittal should be directed to Bill Ulrey, Vice President–Investor Relations and External Affairs, at 973-438-3838. Holders of Common Stock may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Exchange Offer.
 
 
3

 
 
SUMMARY TERM SHEET
 
IDT is offering to exchange its outstanding shares of common stock, par value $.01 per share (which is referred to as the “Common Stock”), for shares of its Class B Common Stock, par value $.01 per share (which is referred to as the “Class B Stock”), as further described herein, upon the terms and subject to the conditions set forth in this Offer to Exchange and the accompanying Letter of Transmittal. This Summary Term Sheet highlights selected information contained in this Offer to Exchange and may not contain all of the information that is important to you. You are urged to read this entire Offer to Exchange carefully, including any Schedules.  In addition, we incorporate by reference important business and financial information about us into this Offer to Exchange. You may obtain the information incorporated by reference into this Offer to Exchange without charge by following the instructions in the section entitled “Documents Incorporated by Reference.” In this Offer to Exchange, the terms “we,” “us,”“our,””IDT,” and “Company” refer to IDT Corporation.  Stockholders of IDT, other than Mr. Howard S. Jonas and his affiliates are referred to as “IDT’s unaffiliated stockholders.”
 
About IDT
 
We are a multinational holding company with operations primarily in the telecommunications and energy industries. Our principal businesses consist of:
 
· IDT Telecom, which is comprised of Telecom Platform Services and Consumer Phone Services. Telecom Platform Services provides various telecommunications services including prepaid and rechargeable calling cards, a range of voice over Internet protocol (VoIP) communications services and wholesale carrier services. Consumer Phone Services provides consumer local and long distance services in the United States; and
 
· Genie Energy, which is comprised of IDT Energy and Genie Oil & Gas (formerly called “Alternative Energy”). IDT Energy operates our energy services company that resells electricity and natural gas to residential and small business customers in New York State, and, to a lesser degree, in New Jersey and Pennsylvania. Genie Oil & Gas consists of (1) American Shale Oil Corporation which holds and manages our 50% interest in American Shale Oil, LLC, our shale oil initiative in Colorado, and (2) our 89% interest in Israel Energy Initiatives, Ltd., our shale oil initiative in Israel.
 
We also hold assets including real estate and operate other smaller or early-stage initiatives and operations, such as Zedge.net and Fabrix T.V., Ltd.
 
   
Our principal executive office is located at 520 Broad Street, Newark, New Jersey 07102, and our phone number is 973-438-1000.
 
Purpose of the Exchange Offer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The purpose of the Exchange Offer is to allow our stockholders the opportunity to exchange their shares of Common Stock for shares of Class B Stock. The principal reason for the Exchange Offer is to provide our Common Stockholders with a class of stock which is more liquid, and which we feel better reflects the inherent value of a share of our capital stock, as there is a lack of liquidity in the Common Stock trading market, while the current trading volume of the Class B Stock is at substantially greater levels. During the year prior to our announcement of this Exchange Offer, the Common Stock on average had a closing price that was 18.7% below that of the Class B Stock. We do not believe that that the difference in value of the Common Stock and the Class B Stock is due to a difference in the relative fundamental rights of those classes of equity.  The Common Stock and Class B Stock share the same equity rights.  While the Common Stock has one vote per share and the Class B Stock has one-tenth of a vote per share (which, all other factors being equal, would argue for a relatively higher value on the Common Stock than the Class B Stock), due to the control by Howard Jonas, our Chairman and Chief Executive Officer, of approximately 76.1% of the voting rights of all of our outstanding shares of capital stock, and thereby over substantially all matters to be voted upon by our stockholders, we do not believe that the disparate voting rights is given significant weight by our stockholders. Rather, we attribute the difference in value of the Common Stock and Class B Stock to the disparity in trading volume and relative liquidity in the trading markets.
 
Further, IDT has been presented anecdotal evidence suggesting that there has been confusion about our capital structure and the identity of the Common Stock and Class B Stock.
 
 
4

 
 
 
   
For a detailed description of the purpose of the Exchange Offer, see “Special Factors — Purpose of and Reasons for the Exchange Offer” below. For a detailed description of differences between the Common Stock and the Class B Stock, seeDescription of Class B Stock - Material Differences Between Common Stock and Class B Stock” below.
 
 Terms of the Exchange Offer
 
For each share of Common Stock tendered, we are offering to exchange one share of Class B Stock listed on the NYSE and trading under the symbol “IDT”.
 
Position of IDT as to Fairness of the Exchange Offer
 
 
Our Board of Directors has determined that the Exchange Offer is fair to IDT’s unaffiliated stockholders who tender their shares for exchange. The Board believes that the Exchange Offer is fair for a number of reasons. Firstly, holders of Common Stock who tender their shares of Common Stock will receive shares of Class B Stock which, prior to our announcement of this Exchange Offer, traded at a premium to the price of the Common Stock. Additionally, the Board has determined that such price disparity between the Common Stock and the Class B Stock was not due to any fundamental differences between the two classes of stock, but rather a result of the relatively lower amount of outstanding shares of Common Stock and its low volume of trading activity. In the Board’s opinion, the Exchange Offer will help eliminate the confu sion and disparate market conditions for the Common Stock and Class B Stock, making it fairer for both holders of Common Stock and holders of Class B Stock. The Board has not made any specific determination as to the value of the consideration to be received by tendering stockholders. Accordingly, you must make your own decision as to whether to tender Common Stock in the Exchange Offer in light of your own particular circumstances, taking into account your determination as to the value of the consideration to be received.
 
   
None of IDT’s directors other than Mr. Jonas owns shares of Common Stock to tender in the Exchange Offer.
 
   
See “Special Factors — Reasons for the Board’s Position as to the Exchange Offer; Factors Considered” and “Special Factors — Position of IDT as to the Fairness of the Exchange Offer.”
 
Interest of  IDT Directors and Executive Officers with Respect to the Exchange Offer and Effect on Ownership Structure of IDT
 
 
Mr. Jonas has indicated that, except as set forth below, he will not tender his shares of Common Stock in the Exchange Offer.  In the event that all other shares of Common Stock have been validly tendered and not properly withdrawn in the Exchange Offer, Mr. Jonas has indicated that he will tender all shares of Common Stock he controls.  Further, depending on the number of shares of Common Stock that are validly tendered and not properly withdrawn, Mr. Jonas has indicated that he may tender some portion of the shares of Common Stock he controls so as to facilitate the contemplated recapitalization discussed below.  In any event, Mr. Jonas has indicated that he intends to vote all shares of Common Stock (as well as all shares of Class B Stock and Class A Stock) over which he exercises voting control in favor of an amendment to our certificate of incorporation, pursuant to which all remaining shares of Common Stock (including Mr. Jonas’) will be automatically converted and reclassified into shares of Class B Stock, which we intend to effect if the Minimum Condition is met and we consummate the Exchange Offer.
 
Joyce Mason, our Executive Vice President, General Counsel and Secretary and Mr. Jonas’ sister, has indicated that she will tender the 5,005 shares of Common Stock she beneficially holds.
 
Additionally, Mr. Jonas has agreed to ensure that his voting power will not increase due to the Exchange Offer and subsequent recapitalization, as described in Amendment of Certificate of Incorporation; Other Post-Exchange Offer Actions.
 
   
As of the date of the Offer to Exchange, Mr. Jonas directly and indirectly beneficially owned 1,491,713 shares of Common Stock, representing approximately 40% of the outstanding Common Stock (and 68% assuming conversion of all 3,272,326 shares of Class A Stock held by Mr. Jonas into Common Stock), 1,825,329 shares of Class B Stock, representing approximately 11.7% of the outstanding Class B Stock, and 3,272,326 shares of Class A Stock, representing 100% of the outstanding Class A Stock together, representing approximately 76.1% of the combined voting power of all of our outstanding equity securities .
 
 
5

 
 
   
See “Interests of Certain Persons in the Exchange Offer – IDT Directors and Executive Officers in the Exchange Offer.”
 
Minimum Condition
 
The Exchange Offer will not be consummated unless at least 1,115,970 shares of Common Stock are validly tendered and not properly withdrawn in the Exchange Offer by IDT’s unaffiliated stockholders (the “Minimum Condition”). The Minimum Condition is not waivable.
 
Amendment of Certificate of Incorporation
 
If the Minimum Condition is met and if all shares of Common Stock are not tendered in the Exchange Offer, following the Exchange Offer, we intend to seek approval of our stockholders to amend our certificate of incorporation so that each remaining share of Common Stock will automatically be converted and reclassified into one share of Class B Stock (the “Amendment”). If the Exchange Offer and recapitalization are consummated, we will no longer have any shares of Common Stock authorized or outstanding and will only have two classes of common stock remaining – our Class A Stock and Class B Stock (the “Recapitalization”).
 
Upon such automatic conversion, each share of Common Stock controlled by Mr. Jonas not tendered in the Exchange Offer would also be converted into one share of Class B Stock. Mr. Jonas has indicated that he intends to vote all of the shares of Common Stock not tendered in the Exchange Offer (as well as the shares of Class B Stock and Class A Common Stock) over which he exercises voting control in favor of the Amendment.
 
Howard Jonas Limitation on Voting Power
 
 
Mr. Jonas has agreed to ensure that his voting power will not increase due to the Exchange Offer and the Recapitalization. During the pendency of the Exchange Offer and Recapitalization, this will be accomplished through an agreement, whereby Mr. Jonas agrees not to exercise certain voting power of shares of Class A Stock over which he exercises voting control, to the extent that it would result in his exercising more than 76.1% of the total voting power of all outstanding capital stock of IDT.  Either in connection with, or immediately following the Exchange Offer and Recapitalization, Mr. Jonas will exchange all of the shares of Common Stock he controls for shares of Class B Stock and a number of shares of Class A Stock (which is entitled to three votes per share) for shares of Class B Stock so that, following all such steps, his percentage voting power will remain the same as it was immediately prior to the Exchange Offer.
 
Genie Spin-off
 
Our Board of Directors has directed our management to pursue a spin-off of our Genie Energy division (“Genie”), which we intend to consummate at some point after the consummation of the Exchange Offer and the contemplated recapitalization of our capital stock structure described above.  The spinoff of Genie under consideration is intended to be tax-free to IDT stockholders. The capital structure of Genie following its spin-off is intended to mirror our capital structure immediately prior to Genie’s spin-off – which will have two classes of common stock with shares outstanding if the Exchange Offer and/or recapitalization are consummated (eliminating the Common Stock altogether), or three classes of common stock if the Exchange Offer is not consummated and we do not amend our certificate of incorpo ration as described above. However, as we often explore potential transactions to benefit IDT and our stockholders, we cannot predict the precise method of such spin-off transaction, the ultimate class structure of the to-be spun-off entity or whether the contemplated spin-off transaction will be actually consummated. Therefore, by tendering your shares of Common Stock in the Exchange Offer, if you are a record holder of Class B Stock as of the record date of the Genie spin-off, you will be entitled to receive a Genie security with the rights of our Class B Stock. If you do not tender and the recapitalization is not consummated, upon the spin-off of Genie, you would receive shares of Genie with rights corresponding to our Common Stock.
 
Subsequent Offering Period
 
If a sufficient number of shares of Common Stock are tendered in the Exchange Offer by IDT’s unaffiliated stockholders such that the Common Stock may be delisted from the NYSE, then we may declare a subsequent offering period to allow all of IDT’s unaffiliated stockholders to tender before the Common Stock is delisted.
 
   
See “Special Factors — Certain Effects of the Exchange Offer — Effect on Ownership Structure of IDT.”
 
 
 
6

 
 
Terms of the Class B Stock
 
The Class B Stock generally has the same rights as the Common Stock except holders of shares of Class B Stock are entitled to one-tenth of one vote for each share on all matters to be voted on by stockholders while holders of Common Stock are entitled to one vote for each share on all matters to be voted on by stockholders. Further, each share of our Class A Stock may be converted, at any time and at the option of the holder, into one share of Common Stock while each share of Class B Stock may be converted, at any time and at our option into one fully paid non-assessable share of Common Stock, provided that all shares of Class B Stock are so converted. Holders of Class B Stock are also entitled to share ratably in dividends, if any, as may be declared from time to time by our Board of Directors, in its discretion, from funds legally available therefor.  Other than our right to so convert the Class B Stock, there are no conversion or redemption rights or sinking fund provisions with respect to the Class B Stock.  
 
See “Description of Class B Stock - Material Differences Between Common Stock and Class B Stock.”
 
Conditions to the Exchange Offer
 
The Exchange Offer is subject to the non-waivable Minimum Condition that at least 1,115,970 shares of Common Stock are validly tendered and not properly withdrawn by IDT’s unaffiliated stockholders, as well as other conditions. A more detailed discussion of the general conditions to consummation of the Exchange Offer is contained in “Terms of the Exchange Offer — Conditions to the Exchange Offer.”
 
Expiration of the Exchange Offer; Withdrawal Rights
 
The Exchange Offer will expire at 5:00 p.m., New York City time, on January 4, 2011, or any subsequent date to which we extend it (the “Expiration Date”). We, in our sole discretion, may extend the Expiration Date for any reason. We will extend the duration of the Exchange Offer as required by applicable law. We will announce any extensions by press release or other permitted means by no later than 9:00 a.m., New York City time, on the business day after the previously scheduled Expiration Date. A stockholder may withdraw shares of Common Stock tendered pursuant to the Exchange Offer at any time prior to the Expiration Date and, if not yet accepted for exchange, at any time after January 31, 2011, which is forty business days from the commencement of the Exchange Offer.
 
Acceptance of Tendered Common Stock and Exchange for Class B Stock
 
Upon the terms of the Exchange Offer and subject to the satisfaction or waiver of the conditions to the Exchange Offer specified herein under “Terms of the Exchange Offer — Conditions to the Exchange Offer,”  we will:
 
   
• accept for exchange all shares of Common Stock validly tendered (or defectively tendered, if we have waived such defect) and not properly withdrawn; and
 
   
• promptly issue one share of Class B Stock in consideration for each share of Common Stock accepted for exchange.
 
Certain United States Federal Income Tax Considerations
 
 
 
 
In general, if you exchange your Common Stock for Class B Stock you will not recognize gain or loss for United States federal income tax purposes.
 
For more information regarding the tax consequences to you as a result of the Exchange Offer, see “Certain United States Federal Income Tax Considerations.”
 
Appraisal Rights
 
Holders of Common Stock are not entitled to appraisal rights in connection with the Exchange Offer.
 
Waiver, Amendment and Termination
 
 
We reserve the right, subject to applicable law, to waive any and all conditions to the Exchange Offer, extend or terminate the Exchange Offer or otherwise amend, modify or interpret the terms of the Exchange Offer, other than the Minimum Condition which is not waivable.
 
Market/Trading
 
The Common Stock and Class B Stock are traded on the NYSE under the symbols “IDT.C” and “IDT”, respectively.  The last reported sale price of each of the Common Stock and Class B Stock on December 1, 2010 was $22.00 and $22.20 per share, respectively. We will submit a request to have the Class B Stock to be distributed in exchange for tendered shares of Common Stock, which are currently held in our treasury, to be re-listed on the NYSE.
 
Over the six months prior to the date of this Offer to Exchange, the closing price of the Common Stock was consistently lower than the Class B Stock. The closing price of the Common Stock on the last trading day of each of the preceding six months (June-November) was $9.95, $15.16, $11.90, $14.68 $11.56 and $20.64, respectively,  while the closing price of the Class B Stock on such days was $12.75,  $18.52, $14.50, $17.79 $14.68 and $20.79, respectively.
 
 
7

 
 
Brokerage Commissions
 
No brokerage commissions are payable by the holders of the Common Stock to the Exchange Agent or us. If your Common Stock is held through a broker or other nominee who tenders the Common Stock on your behalf, your broker may charge you a commission for doing so. You should consult with your broker or nominee to determine whether any charges will apply.
 
Fees and Expenses
 
We estimate that the total fees and expenses of the Exchange Offer will be approximately $54,748
 
Consequences of Not Tendering Common Stock
 
If you do not tender your shares of Common Stock in the Exchange Offer, you will continue to hold such shares. However, if we consummate the Exchange Offer, we intend to amend our certificate of incorporation so that each remaining share of Common Stock will automatically be converted and reclassified into one share of Class B Stock, thereby eliminating the Common Stock altogether. In the event we do not so amend our certificate of incorporation, there will be fewer shares of our Common Stock held by IDT’s unaffiliated stockholders, and there will therefore likely be fewer transactions in Common Stock. If the Common Stock does not meet the NYSE’s continued listing requirements, it may be delisted. A lack of an active trading market may have an adverse effect on the trading price of our Common Stock.  We may a lso seek to delist the Common Stock from the NYSE and de-register the Common Stock under the Exchange Act.  See “Special Factors — Certain Effects of the Exchange Offer — Effects on Listing, Registration and Status of IDT Common Stock.”
 
Use of Proceeds
 
We will not receive any cash proceeds from the Exchange Offer. Common Stock that is validly tendered and not properly withdrawn, and exchanged pursuant to the Exchange Offer, will be transferred into our treasury.  If the Recapitalization is consummated, such shares will be eliminated from our authorized capital.
 
Exchange Agent
 
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
(877) 248-6417
 
Further Information
 
If you have questions regarding the Exchange Offer, require assistance in tendering your Common Stock or require additional copies of the Offer to Exchange or the Letter of Transmittal, please contact Bill Ulrey, Vice President–Investor Relations and External Affairs, by phone at (973) 438-3838, or by mail addressed to Bill Ulrey, Vice President–Investor Relations and External Affairs, at 520 Broad Street, Newark, NJ 07102. Holders of Common Stock may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Exchange Offer.

 
8

 
 
CERTAIN QUESTIONS AND ANSWERS ABOUT THE EXCHANGE OFFER
 
The following questions and answers are for your convenience only, and briefly address some commonly asked questions about the Exchange Offer. You should still carefully read this entire Offer to Exchange, including the attached Schedule.
 
Q:
 
Why am I receiving these materials?
     
A:
 
We are providing these materials to provide you with information regarding our offer to exchange outstanding shares of our Common Stock that you currently hold for shares of our Class B Stock.
     
Q:
 
How many shares of Common Stock are sought to be tendered in the Exchange Offer? Is it a condition to the Exchange Offer?
     
A:
 
We are offering to exchange all outstanding shares of Common Stock.
   
 
The consummation of the Exchange Offer is conditioned upon the non-waivable Minimum Condition that at least 1,115,970 shares of Common Stock are validly tendered and not properly withdrawn by IDT’s unaffiliated stockholders.
 
Q:
 
What are the effects of the Exchange Offer on the ownership structure and voting power of IDT?
     
A:
 
Mr. Jonas has indicated that, except as set forth below, he will not tender his shares of Common Stock in the Exchange Offer.  In the event that all other shares of Common Stock have been validly tendered and not properly withdrawn in the Exchange Offer, Mr. Jonas has indicated that he will tender all shares of Common Stock he controls.  Further, depending on the number of shares of Common Stock that are validly tendered and not properly withdrawn, Mr. Jonas has indicated that he may tender some portion of the shares of Common Stock he controls so as to facilitate the Recapitalization. In any event, Mr. Jonas has indicated that he intends to vote all shares of Common Stock (as well as all shares of Class B Stock and Class A Stock) over which he exercises voting control in favor of the Amendment, pursuant to whi ch all remaining shares of Common Stock (including Mr. Jonas’) will be automatically converted and reclassified into shares of Class B Stock, which we intend to effect if the Minimum Condition is met and we consummate the Exchange Offer, as described below.
 
Additionally, Mr. Jonas has agreed to ensure that his voting power will not increase due to the Exchange Offer and the Recapitalization. During the pendency of the Exchange Offer and Recapitalization, this will be accomplished through an agreement, whereby Mr. Jonas agrees not to exercise certain voting power of shares of Class A Stock over which he exercises voting control, to the extent that it would result in his exercising more than 76.1% of the total voting power of all outstanding capital stock of IDT.  Either in connection with, or immediately following the Exchange Offer and Recapitalization, Mr. Jonas will exchange all of the shares of Common Stock he controls for shares of Class B Stock and a number of shares of Class A Stock (which is entitled to three votes per share) for shares of Class B Stock so that, foll owing all such steps, his percentage voting power will remain the same as it was immediately prior to the Exchange Offer.
 
   
As of the date of the Offer to Exchange, Mr. Jonas directly and indirectly beneficially owned 1,491,713 shares of Common Stock, representing approximately 40% of the outstanding Common Stock (and 68% assuming conversion of all 3,272,326 shares of Class A Stock held by Mr. Jonas into Common Stock), and 1,825,329 shares of Class B Stock, representing approximately 11.7% of the outstanding Class B Stock, and 3,272,326 shares of Class A Stock, representing 100% of the outstanding Class A Stock, together representing approximately 76.1% of the combined voting power of all of our outstanding equity securities.
     
Q:
 
What will I receive in the Exchange Offer if I tender my shares and they are accepted?
     
A:
 
You will receive one share of Class B Stock for each share of Common Stock tendered.
     
Q:
 
What are the terms of the Class B Stock?
     
A:
 
The Class B Stock generally has the same rights as the Common Stock except holders of shares of Class B Stock are entitled to one-tenth of one vote for each share on all matters to be voted on by the stockholders while holders of Common Stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Further, each share of Class A Stock may be converted, at any time and at the option of the holder, into one share of Common Stock while each share of Class B Stock may be converted, at any time and at our option into one fully paid non-assessable share of Common Stock, provided that all shares of Class B Stock are so converted. Holders of Class B Stock are also entitled to share ratably in dividends, if any, as may be declared from time to time by our Board of Directors, in its discretion, from funds legally available therefor.  Other than our right to so convert the Class B Stock, there are no conversion or redemption rights or sinking fund provisions with respect to the Class B Stock.  
 
 
 
9

 
 
Q:
 
Will the Class B Stock be freely tradable? Will it be listed on a securities exchange?
     
A:
 
Shares of Class B Stock will be freely tradable and are currently listed on the NYSE under the symbol “IDT”. We will submit a request to have the Class B Stock to be distributed in exchange for tendered shares of Common Stock, which are currently held in our treasury, to be re-listed on the NYSE.
     
Q:
 
What protections will I have if I decide I do not want to tender my shares?
     
A:
 
None.  If sufficient holders of shares of our Common Stock tender, then our Common Stock may be delisted from the NYSE and no public trading market will exist for our Common Stock. In addition, if the Minimum Condition is met, we intend to amend our certificate of incorporation so that each remaining share of Common Stock will automatically be converted and reclassified into one share of Class B Stock, thereby eliminating the Common Stock altogether.
     
Q:
 
Do I have a choice in whether to tender my shares?
     
A:
 
Yes. Holders of Common Stock are not required to tender their shares pursuant to the Exchange Offer.
     
Q:
 
How long do I have to decide if I want to tender my shares, or withdraw previously tendered shares?
     
A:
 
Unless extended or terminated, the Exchange Offer and withdrawal rights expire at 5:00 p.m., New York City time, on January 4, 2011.
     
Q:
 
Under what circumstances can the Exchange Offer be extended, and how will I be notified of such extension?
     
A:
 
We, in our sole discretion, may extend the Expiration Date for any reason. We will also extend the duration of the Exchange Offer as required by applicable law. We will announce any extensions by press release or other permitted means by no later than 9:00 a.m., New York City time, on the business day after the previously scheduled Expiration Date.
 
Additionally, if a sufficient number of shares of Common Stock are tendered in the Exchange Offer by IDT’s unaffiliated stockholders such that the Common Stock may be delisted from the NYSE, then we may declare a subsequent offering period to allow all of IDT’s unaffiliated stockholders to tender before the Common Stock is delisted.
     
Q:
 
Does IDT recommend that I tender shares in the Exchange Offer?
     
A:
 
The Board of Directors has approved the Exchange Offer. However, neither we nor our Board of Directors makes any recommendation as to whether or not stockholders should tender.
     
Q:
 
How do I tender my Common Stock?
     
A:
 
To tender shares of Common Stock, you must deliver a completed Letter of Transmittal and any other documents required by the Letter of Transmittal, together, in the case of certificated shares, with the certificates representing your shares, to American Stock Transfer & Trust Company, LLC, the Exchange Agent for the Exchange Offer, not later than the time the Exchange Offer expires. The Letter of Transmittal is enclosed with this Offer to Exchange. If your shares are held in street name (i.e., through a broker, dealer or other nominee), your shares can be tendered by your nominee by book-entry transfer through The Depository Trust Company (“DTC”). If you are unable to deliver any required document or instrument to the Exchange Agent by the expiration of the Exchange Offer, you may have a broker, a bank or other fiduciary that is an eligible guarantor institution guarantee that the missing items will be received by the Exchange Agent by using the enclosed Notice of Guaranteed Delivery. For the tender to be valid, however, the Exchange Agent must receive the missing items within three NYSE trading days after the date of execution of such Notice of Guaranteed Delivery. In all cases, tendered shares of Common Stock will be exchanged for shares of Common Stock only after timely receipt by the Exchange Agent of such shares (or of a confirmation of a book-entry transfer of such shares as described in “Terms of the Exchange Offer — Procedures for Tendering”) and a properly completed and duly executed Letter of Transmittal and any other required documents for such shares.
     
Q:
 
How do I withdraw previously tendered shares?
     
A:
 
A stockholder may withdraw shares of Common Stock tendered pursuant to the Exchange Offer at any time prior to the Expiration Date. For a withdrawal of shares of Common Stock to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Exchange Agent at its address set forth on the back cover of this Offer to Exchange. See “Terms of the Exchange Offer — Withdrawal Rights.”
 
 
10

 
 
     
Q:
 
What is the market value of my shares as of a recent date?
     
A:
 
The last reported closing sale price of our Common Stock as reported by the NYSE on December 1, 2010, the last trading day before the date of this Offer to Exchange, was $22.00 per share. The closing price of the Common Stock on the last trading day of each of the preceding six months (June-November) was $9.95, $15.16, $11.90, $14.68, $11.56 and $20.64, respectively.
     
Q:
 
How soon after the Expiration Date will the exchange take place?
     
A:
 
The exchange is expected to occur promptly following the Expiration Date, at which time we will issue one share of our Class B Stock in consideration for each share of Common Stock accepted for exchange in the Exchange Offer.
     
Q:
 
Who can answer my questions?
     
A:
 
If you would like additional copies, without charge, of this Offer to Exchange, or if you have questions regarding the Exchange Offer or require assistance in tendering your Common Stock, please contact Bill Ulrey, Vice President–Investor Relations and External Affairs, by phone at (973) 438-3838, or by mail addressed to Bill Ulrey, Vice President–Investor Relations and External Affairs, at 520 Broad Street, Newark, NJ 07102. Holders of Common Stock may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Exchange Offer.
 
 
SPECIAL FACTORS

Purpose of and Reasons for the Exchange Offer
 
The purpose of the Exchange Offer is to allow our stockholders the opportunity to exchange their shares of Common Stock for shares of our Class B Stock. The principal reason for the Exchange Offer is to provide holders of our Common Stock the opportunity to hold a class of stock which is more liquid than their current holdings in Common Stock, and which we feel better reflects the inherent value of a share of our capital stock.  There is currently, and for some time there has been, a lack of liquidity in the Common Stock trading market, due, we believe, to the relatively small number of shares of Common Stock that are held by non-affiliates and the resulting low volume of trading activity.  At the same time, the current trading volume of our Class B Stock is at substantially greater levels, due to the greater number of shares of Class B Stock that are outstanding and the greater number of shares of Class B Stock that are held by non-affiliates. As of October 21, 2010, there were 13,012,374 shares of Class B Stock held by non-affiliates and 2,236,942 shares of Common Stock held by non-affiliates.  The average daily trading volumes from November 24, 2009 through November 24, 2010 for the Common Stock and Class B Stock were 9,847 shares and 258,126 shares, respectively.  During that same time period the average adjusted closing prices for the Common Stock and Class B Stock were $8.83 and $10.66, respectively.  For the thirty and ninety trading day periods preceding our announcement of the Exchange Offer on November 5, 2010, the average daily trading volume of the Common Stock was 3,930 shares and 9,154 shares, respectively, while the average daily trading volume of the Class B Stock was 221,847 shares and 400,823 shares, respectively. Over the same time periods, the average closing prices for the Common Stock were $12.91 and $13.22, respectively while the average closing prices for the Class B Stock over the same periods were $15.99 and $16.24, respectively. We do not believe that that the difference in value of the Common Stock and the Class B Stock is due to a difference in the relative fundamental rights of those classes of equity. The Common Stock and Class B Stock share the same equity rights. While the Common Stock has one vote per share and the Class B Stock has one-tenth of a vote per share (which, all other factors being equal would argue for a relatively higher value on the Common Stock than the Class B Stock), due to the control by  Howard Jonas, our Chairman and Chief Executive Officer, of approximately 76.1% of the voting rights of all of our out standing shares of capital stock, and thereby  over substantially all matters to be voted upon by our stockholders, we do not believe that the disparate voting rights is given significant weight by our stockholders. We, therefore, concluded that the price disparity is related to relative illiquidity in the trading market for the Common Stock. We believe that this was a penalty being borne by the holders of Common Stock and that an exchange of shares of Class B Stock that are held in our treasury and which do not currently form a part of the public float of the Company for outstanding shares of Common Stock would benefit the Common Stockholders without any negative impact on the Class B Stockholders. In fact, following our announcement of the Exchange Offer (as well as several other items) on November 5, 2010, the closing price for the Common Stock increased from $11.85 on November 4, 2010, to $17.17 on November 8, 2010 (the first trading day after the announcement of the Exchange Offer) and to $22.00 on December 1, 2010, with no corresponding decrease in the closing price for the Class B Stock, which was $14.66 on November 4, 2010, $17.29 on November 8, 2010 and $22.20 on December 1, 2010.
 
In addition, anecdotal evidence suggests that there has been confusion among shareholders, potential shareholders, the financial media and other members of the financial community with respect to our capital structure and the identity of the Common Stock and Class B Stock. We believe that the use of different trading symbols for the Common Stock and Class B Stock (IDT.C and IDT) has contributed to the confusion, given that these trading symbols have been reproduced, recorded or described in different ways by various sources.  This confusion, we believe, has led to certain investors purchasing a class of stock they did not wish to own, particularly in light of the lower price for the Common Stock as compared to the Class B Stock.  Given the lack of liquidity in the trading market for the Common Stock and the in ability to convert from Common Stock to Class B Stock, this has resulted in frustrated investors.
 
 
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Opportunity to Exchange Common Stock for Class B Stock
 
As a result of the Exchange Offer, each stockholder will have the choice of retaining his, her or its shares of Common Stock or exchanging such shares for Class B Stock. However, if we consummate the Exchange Offer, we intend to amend (the “Amendment”) our certificate of incorporation so that each remaining share of Common Stock will automatically be converted and reclassified into one share of Class B Stock, thereby eliminating the Common Stock altogether. In the event we do not so amend our certificate of incorporation, there will be fewer shares of our Common Stock held by IDT’s unaffiliated stockholders, and there will therefore likely be fewer transactions in Common Stock. If the Common Stock does not meet the NYSE’s continued listing requirements, it may be delisted. A lack of an active trading marke t may have an adverse effect on the trading price of our Common Stock.  We may also seek to delist the Common Stock from the NYSE and de-register the Common Stock under the Exchange Act. Please see the section entitled “Material Differences Between Common Stock and Class B Stock” for a description of the differences between the Common Stock and the Class B Stock.

Certain Effects of the Exchange Offer
 
Effect on Ownership Structure of IDT and the Voting Power of Mr. Jonas

Mr. Jonas has indicated that, except as set forth below, he will not tender his shares of Common Stock in the Exchange Offer.  In the event that all other shares of Common Stock have been validly tendered and not properly withdrawn in the Exchange Offer, Mr. Jonas has indicated that he will tender all shares of Common Stock he controls.  Further, depending on the number of shares of Common Stock that are validly tendered and not properly withdrawn, Mr. Jonas has indicated that he may tender some portion of the shares of Common Stock he controls so as to facilitate the Recapitalization discussed below.  In any event, Mr. Jonas has indicated that he intends to vote all shares of Common Stock (as well as all shares of Class B Stock and Class A Stock) over which he exercises voting control in favor of th e Amendment, pursuant to which Mr. Jonas’ shares of Common Stock (as well as all other shares of remaining Common Stock) will be automatically converted and reclassified into shares of Class B Stock, provided the Minimum Condition is met and we consummate the Exchange Offer.

Additionally, Mr. Jonas has agreed to ensure that his voting power will not increase due to the Exchange Offer and the Recapitalization. During the pendency of the Exchange Offer and Recapitalization, this will be accomplished through an agreement, whereby Mr. Jonas agrees not to exercise certain voting power of shares of Class A Stock over which he exercises voting control, to the extent that it would result in his exercising more than 76.1% of the total voting power of all outstanding capital stock of IDT.  Either in connection with, or immediately following the Exchange Offer and Recapitalization, Mr. Jonas will exchange all of the shares of Common Stock he controls for shares of Class B Stock and a number of shares of Class A Stock (which is entitled to three votes per share) for shares of Class B Stock so that, fol lowing all such steps, his percentage voting power will remain the same as it was immediately prior to the Exchange Offer.
 
As of the date of the Offer to Exchange, Mr. Jonas directly and indirectly beneficially owned 1,491,713 shares of Common Stock, representing approximately 40% of the outstanding Common Stock (and 68% assuming conversion of all 3,272,326 shares of Class A Stock held by Mr. Jonas into Common Stock) and 1,825,329  shares of Class B Stock, representing approximately 11.7% of the outstanding Class B Stock, and 3,272,326 shares of Class A Stock representing, 100% of the outstanding Class A Stock, together representing approximately 76.1% of the combined voting power of all of our outstanding equity securities.
 
See “Interests of Certain Persons in the Exchange Offer — Interests of IDT Directors and Executive Officers in the Exchange Offer.”
 
Effects on Listing, Registration and Status of IDT Common Stock
 
If the Minimum Condition is met and the Exchange Offer consummated, we intend to effect the Amendment so that each remaining share of Common Stock will automatically be converted and reclassified into one share of Class B Stock. Upon such conversion, there would no longer be any Common Stock, and we would have it delisted from the NYSE and apply to the Securities and Exchange Commission (the “SEC”) to terminate its registration under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). If the Minimum Condition is not met, we will not consummate the Exchange Offer.
 
 
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Operations of IDT Following the Exchange Offer
 
Except as described in this Offer to Exchange, and in connection with the intended spin-off of Genie, described below, we have no current plans or proposals or negotiations which relate to or would result in an extraordinary corporate transaction, such as a change of control transaction, merger, reorganization, or liquidation; a purchase, sale or transfer of a material amount of assets; a material change in our present dividend policy, or indebtedness or capitalization; a change in our present Board of Directors or management; a material change in our corporate structure or business; the acquisition by any person of additional securities of ours or the disposition of any securities by us; or any change in our charter or bylaws, other than the possible de - -registration of the Common Stock under the Exchange Act and the possible delisting of the Common Stock from the NYSE.  Our management has been authorized by our Board of Directors to pursue a spin-off involving our Genie Energy division, whereby the ownership of such business segment will be distributed to our then stockholders of record on a pro rata basis, and which will likely result in changes to the composition of our Board of Directors and the movement of certain assets to Genie prior to the spin-off.  It is anticipated that the capital structure of the Genie entity to be spun-off will mirror our capital structure at the time of such spin-off.  However, as we often explore potential transactions to benefit IDT and our stockholders, we cannot predict the precise method of such spin-off transaction, the ultimate class structure of the to-be spun-off entity or whether the contemplated spin-off transaction will be actually consummated.  Thus, your decision whether t o tender Common Stock in the Exchange Offer may impact the equity you would receive in any future spin-off transaction effected by us. Therefore, by tendering your shares of Common Stock in the Exchange Offer, if the Exchange Offer is consummated and if you are a record holder of Class B Stock as of the record date of the Genie spin-off, you will be entitled to receive a Genie security with rights of our Class B Stock. If you do not tender and the recapitalization is not consummated, upon the spin-off of Genie, you would receive shares of Genie with rights corresponding to our Common Stock.

Other than two cash dividends of $0.375 per share paid in April and July 2007, and a cash dividend of $0.22 per share paid on November 23, 2010, on our Common Stock, Class A Stock and Class B Stock, we do not have any history of paying dividends on our Common Stock. However, on November 2, 2010, our Board of Directors authorized, in addition to the initial cash dividend of $0.22 per share to its Common Stock, Class A Stock and Class B Common Stockholders, its intention to announce an additional cash dividend of comparable magnitude during the second quarter of our 2011 fiscal year, the three months ending January 31, 2011. The Board’s intent is for us to pay future quarterly dividends based on operating performance and available resources.
 
Alternatives to the Exchange Offer
 
We had considered alternatives to the Exchange Offer in the past, including effecting the Recapitalization without an exchange offer, but are not currently considering any alternatives to the Exchange Offer.
 
Maintaining the Status Quo
 
Our Board of Directors considered the alternative of taking no action.
 
As discussed above in “Special Factors — Purpose of and Reasons for the Exchange Offer,” we believe the Exchange Offer is in the best interests of all our stockholders and the exchange will not increase the voting power of our controlling stockholder, Mr. Jonas. We believe it is in the best interests of IDT to provide our Common Stockholders with the opportunity to hold a class of stock which is more liquid than their current holdings in Common Stock and to eliminate the confusion about IDT’s capital structure and the identity of the Common Stock and Class B Stock.

Background of the Exchange Offer

Our Common Stock has historically been, and presently is, subject to a lack of liquidity in its trading market. In contrast, during the same periods, our Class B Stock had a substantially higher level of trading volume. We believe the discrepancy has been primarily due to the relatively small number of shares of Common Stock that are held by non-affiliates and the resulting low volume of trading activity, as opposed to the Class B Stock which has a greater number of shares outstanding and a greater number of shares held by non-affiliates. In addition, the Common Stock has consistently traded at a lower market price than the Class B Stock. During the year prior to our announcement of this Exchange Offer, the Common Stock on average had a closing price tha t was 18.7% below that of the Class B Stock. We do not believe that that the difference in value of the Common Stock and the Class B Stock is due to a difference in the relative fundamental rights of those classes of equity.  The Common Stock and Class B Stock share the same equity rights.  While the Common Stock has one vote per share and the Class B Stock has one-tenth of a vote per share (which, all other factors being equal would argue for a relatively higher value on the Common Stock than the Class B Stock), due to the control by  Howard Jonas, our Chairman and Chief Executive Officer, of approximately 76.1% of the voting rights of all of our outstanding shares of capital stock, and thereby over substantially all matters to be voted upon by our stockholders, we do not believe that the disparate voting rights is given significant weight by our stockholders. Rather, we have attributed the difference in value of the Common Stock and Class B Stock to the disparity in trading vo lume.
 
In addition, in the past, we have been presented with anecdotal evidence suggesting that there has been confusion among shareholders, potential shareholders, the financial media and other members of the financial community with respect to our capital structure and the identity of the Common Stock and Class B Stock. The use of different trading symbols for the Common Stock and Class B Stock (IDT.C and IDT) has contributed to the confusion, given that these trading symbols have been reproduced, recorded or described in different ways by various sources. This confusion, we believe, has led to certain investors purchasing a class of stock they did not wish to own, particularly in light of the lower price for the Common Stock as compared to the Class B Stock.  Given the lack of liquidity in the trading market for the Common Stock and the inability to convert from Common Stock to Class B Stock, this has resulted in frustrated investors.
 
 
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In order to try to rectify this disparity and confusion, as well as to remove what we believe is a penalty being borne by the holders of Common Stock, we have in the past considered attempts to provide our Common Stockholders with the opportunity to hold the more liquid Class B Stock, including the possibility of eliminating the Common Stock from our capital structure altogether. However, we were prevented from taking any action due to Rule 313 of the NYSE Listed Company Manual which restricts corporate actions that disparately reduce or restrict voting rights of shareholders of publicly traded common stock registered under Section 12 of the Exchange Act. We believed that an exchange of shares of Class B Stock that are held in our treasury and which do n ot currently form a part of the public float of the Company for outstanding shares of Common Stock would benefit the Common Stockholders without any negative impact on the Class B Stockholders and initiated contact again with the NYSE in August 2010 to seek its approval and confirmation that it would not object on the basis of Rule 313 to our taking such corporate action. On November 5, 2010, the NYSE notified us that it did not object to the Exchange Offer.
 
Reasons for the Board’s Position as to the Exchange Offer; Factors Considered
 
Our Board of Directors has authorized us to make the Exchange Offer and determined that the Exchange Offer is fair to IDT and IDT’s unaffiliated stockholders who tender their shares for exchange. The Board has also determined not to make any recommendation to IDT’s unaffiliated stockholders as to whether or not to tender their shares for exchange in the Exchange Offer, and has not made any specific determination as to the value of the consideration to be received by tendering stockholders. Accordingly, you must make your own decision as to whether to tender your shares of Common Stock in the Exchange Offer in light of your own particular circumstances, taking into account your determination as to the value of the consideration to be received. On November 3, 2010, our Board of Directors authorized management to engage in the Exchange Offer, in each case on the terms then proposed, subject to finalization of documentation relating to the Exchange Offer, and subsequently, our Board of Directors unanimously ratified its authorization to engage in the Exchange Offer and its determination that the Exchange Offer was fair to IDT’s unaffiliated stockholders and approved and authorized the Amendment. See Schedule A attached hereto for the name, business address, citizenship, present principal occupation and employment history for the past five years of each of the members of the Board of Directors and the executive officers of IDT. See “Interests of Certain Persons in the Exchange Offer” for additional information on certain persons’ interests in the Exchange Offer.
 
In reaching the determination to take no position as to the value of the consideration to be received by tendering stockholders and to make no recommendation to IDT’s unaffiliated stockholders as to whether they should tender their shares of Common Stock in the Exchange Offer, our Board of Directors primarily considered the fact that stockholders have different risk tolerances and varying time horizons, different interests as  to voting rights and a need for liquidity that the Class B Stock offers  and these decisions are personal to each stockholder. Accordingly, our Board of Directors has determined that the decision of any of IDT’s unaffiliated stockholders regarding whether or not to exchange his, her or its shares of Common Stock is a personal investment decision based on that stockholder̵ 7;s particular circumstances and must be made according to that stockholder’s evaluation of its own best interests after consideration of all of the information in this Offer to Exchange, including, without limitation, the information incorporated into this Offer to Exchange by reference. The Board of Directors also urges each stockholder to consult with its own financial and tax advisors regarding the Exchange Offer.
 
  
Except for Mr. Jonas and Joyce Mason, our Executive Vice President, General Counsel and Secretary and Mr. Jonas’ sister, who holds 5,005 shares of Common Stock, none of our directors and named executive officers own shares of Common Stock.  As of the date of the Offer to Exchange, Mr. Jonas directly and indirectly beneficially owned 1,491,713 shares of Common Stock, representing approximately 40% of the outstanding Common Stock (and 68% assuming conversion of all 3,272,326 shares of Class A Stock held by Mr. Jonas into Common Stock) and  1,825,329  shares of Class B Stock, representing approximately 11.7% of the outstanding Class B Stock, and 3,272,326 shares of Class A Stock, representing 100% of the outstanding Class A Stock, together representing approximately 76.1% of the combined voting power of all of our outstanding equity securities.

Mr. Jonas has indicated that, except as set forth below, he will not tender his shares of Common Stock in the Exchange Offer.  In the event that all other shares of Common Stock have been validly tendered and not properly withdrawn in the Exchange Offer, Mr. Jonas has indicated that he will tender all shares of Common Stock he controls.  Further, depending on the number of shares of Common Stock that are validly tendered and not properly withdrawn, Mr. Jonas has indicated that he may tender some portion of the shares of Common Stock he controls so as to facilitate the Recapitalization. In any event, Mr. Jonas has indicated that he intends to vote all shares of Common Stock (as well as all shares of Class B Stock and Class A Stock) over which he exercises voting control in favor of the Amendment, pursuant to wh ich all remaining shares of Common Stock (including Mr. Jonas’) will be automatically converted and reclassified into shares of Class B Stock, which we intend to effect if the Minimum Condition is met and we consummate the Exchange Offer.

Additionally, Mr. Jonas has agreed to ensure that his voting power will not increase due to the Exchange Offer and the Recapitalization. During the pendency of the Exchange Offer and Recapitalization, this will be accomplished through an agreement, whereby Mr. Jonas agrees not to exercise certain voting power of shares of Class A Stock over which he exercises voting control, to the extent that it would result in his exercising more than 76.1% of the total voting power of all outstanding capital stock of IDT.  Either in connection with, or immediately following the Exchange Offer and Recapitalization, Mr. Jonas will exchange all of the shares of Common Stock he controls for shares of Class B Stock and a number of shares of Class A Stock (which is entitled to three votes per share) for shares of Class B Stock so that, fol lowing all such steps, his percentage voting power will remain the same as it was immediately prior to the Exchange Offer.

 
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No unaffiliated representative was retained to act solely on behalf of IDT’s unaffiliated stockholders for purposes of negotiating the terms of the Exchange Offer or preparing a report concerning the fairness of the Exchange Offer.
 
Position of IDT as to the Fairness of the Exchange Offer

Our Board of Directors has determined that the Exchange Offer is fair to IDT’s unaffiliated stockholders who tender their shares for exchange. Firstly, holders of Common Stock who tender their shares of Common Stock will receive shares of Class B Stock which currently trade at a premium to the price of the Common Stock shares. The last reported sale price of each of the Common Stock and Class B Stock on December 1, 2010 was $22.00 and $22.20 per share, respectively, and the closing price of the Common Stock on the last trading day of each of the six months preceding this Offer to Exchange (June-November) was $9.95, $15.16, $11.90, $14.68, $11.56 and $20.64, respectively, while the closing price of the Class B Stock on such days was $12.75,  $18.52, $14.50, $17.79 $14.68 and $20.74, respectively. Historically, prio r to the announcement of the Exchange Offer, the Common Stock had consistently traded at a discount to the Class B Stock.

Additionally, the Board has determined that the current price disparity between the Common Stock and the Class B Stock is not due to any fundamental differences between the two classes of stock, but rather a result of the lower amount of outstanding shares of Common Stock and its low volume of trading activity.  In the Board’s opinion, the Exchange Offer will help eliminate the confusion and disparate market conditions for the Common Stock and Class B Stock, making it fairer for both holders of Common Stock and holders of Class B Stock.

Finally, the Exchange Offer will not result in an increase in Mr. Jonas’ percentage voting power, as he has agreed to take steps to ensure that it will remain the same as it was immediately prior to the Exchange Offer After careful consideration, our Board of Directors determined that the Exchange Offer is fair to IDT and IDT’s unaffiliated stockholders who tender their shares for exchange.
 
Our Board of Directors has determined not to make any recommendation to any of IDT’s unaffiliated stockholders as to whether or not to tender their shares for exchange in the Exchange Offer and has not made any specific determination as to the value of the consideration to be received by tendering stockholders, and, accordingly, the value of the consideration was not a factor in the Board’s reaching its determination that the Exchange Offer is fair to IDT and IDT’s unaffiliated stockholders who tender their shares for exchange. In that regard, the Board did not believe that it was legally required to consider the value of the consideration to be received by tendering stockholders in order to make such determination. The Board determined to offer IDT stockholders a choice to consider the Exchange Offer transactio n, which offered terms that could be found attractive, and may be beneficial, to individual IDT stockholders as well as to IDT, for the following reasons:
 
     
 
 
 
•  
to allow IDT stockholders the opportunity to exchange their shares of Common Stock for shares of Class B Stock, which is a more liquid security that may have characteristics that are more aligned with their risk profile and investment strategy;
 
to remove confusion and costs associated with maintaining two publicly traded securities in the market; and
     
 
• 
because each of IDT’s unaffiliated stockholders will be able to decide whether or not to voluntarily tender his, her or its shares of Common Stock in the Exchange Offer and that holders of Common Stock who wish to retain their shares may do so.
     
Our Board of Directors also considered a variety of risks and other potentially negative factors concerning the Exchange Offer. The material risks and potentially negative factors considered by our Board of Directors were as follows:
 
 
• 
depending on the number of stockholders who tender, the  fact that the completion of the Exchange Offer may result in a diminished public float for our Common Stock, which could adversely affect the liquidity and market value of our Common Stock and create uncertainty as to whether our Common Stock would remain eligible for listing on the NYSE; and
 
 
• 
depending on the number of stockholders who tender, the fact that the completion of the Exchange Offer may result in the Common Stock being de-registered under the Exchange Act.
     
 
 
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As indicated above, our Board of Directors has not made any specific determination as to the value of the consideration to be received by tendering stockholders. Accordingly, you must make your own decision as to whether to tender Common Stock in the Exchange Offer in light of your own particular circumstances, taking into account your determination as to the value of the consideration to be received. For the reasons expressed above, the Board did not consider the current stock prices of the Common Stock, the Company’s net book value, the going concern value of IDT, or the liquidation value of IDT. Our Board of Directors did not retain financial advisors or any other unaffiliated representative (as that term is used in Rule 13e-3 of the Exchange Act) to act solely on behalf of IDT’s unaffiliated stockholders for purposes of preparing a report concerning the fairness of the Exchange Offer. We are not aware of any firm offers made by a third party to acquire the Company during the past two years.
 
The foregoing discussion summarizes the material factors considered by our Board of Directors in its consideration of the Exchange Offer. After considering these factors, the Board of Directors concluded that the positive factors relating to the Exchange Offer and related transactions outweighed the potential negative factors to the Company and IDT’s unaffiliated stockholders. In view of the variety of factors considered by the Board of Directors, and the complexity of these matters, the Board of Directors did not find it practicable to quantify or otherwise assign relative weights to the foregoing factors. In addition, individual independent directors may have assigned different weights to various factors. The Board of Directors approved the Exchange Offer and related transactions based upon the totality of the information presented to and considered by its members. The Board of Directors’ view as to the fairness of the Exchange Offer to IDT’s unaffiliated stockholders should not be construed as a recommendation to any stockholder as to whether or not that stockholder should tender in the Exchange Offer.
 
 
RISK FACTORS
 
Risks Related to Our Business
 
For a discussion of risks associated with our business, please see the discussion of risks related to our business under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended July 31, 2010.

Certain other factors relating to the Class B Stock and risks relating to the Exchange Offer are fully discussed in the Section “Special Factors” above. 
 
 
INTERESTS OF CERTAIN PERSONS IN THE EXCHANGE OFFER
 
Interests of IDT Directors and Executive Officers in the Exchange Offer
 
Interests of IDT Directors/Executive Officers
 
Except for Mr. Jonas and Joyce Mason, our Executive Vice President, General Counsel and Secretary and Mr. Jonas’ sister, who holds 5,005 shares of Common Stock, none of our directors and named executive officers own shares of Common Stock.  As of the date of the Offer to Exchange, Mr. Jonas directly and indirectly beneficially owned 1,491,713 shares of Common Stock, representing approximately 40% of the outstanding Common Stock (and 68% assuming conversion of all 3,272,326 shares of Class A Stock held by Mr. Jonas into Common Stock) and 1,825,329 shares of Class B Stock, representing approximately 11.7% of the outstanding Class B Stock, and 3,272,326 shares of Class A Stock, representing 100% of the outstanding Class A Stock, to gether representing approximately 76.1% of the combined voting power of all of our outstanding equity securities.

Mr. Jonas has indicated that, except as set forth below, he will not tender his shares of Common Stock in the Exchange Offer.  In the event that all other shares of Common Stock have been validly tendered and not properly withdrawn in the Exchange Offer, Mr. Jonas has indicated that he will tender all shares of Common Stock he controls.  Further, depending on the number of shares of Common Stock that are validly tendered and not properly withdrawn, Mr. Jonas has indicated that he may tender some portion of the shares of Common Stock he controls so as to facilitate the Recapitalization. In any event, Mr. Jonas has indicated that he intends to vote all shares of Common Stock (as well as all shares of Class B Stock and Class A Stock) over which he exercises voting control in favor of the Amendment, pursuant to wh ich all remaining shares of Common Stock (including Mr. Jonas’) will be automatically converted and reclassified into shares of Class B Stock, which we intend to effect if the Minimum Condition is met and we consummate the Exchange Offer.

Additionally, Mr. Jonas has agreed to ensure that his voting power will not increase due to the Exchange Offer and the Recapitalization. During the pendency of the Exchange Offer and Recapitalization, this will be accomplished through an agreement, whereby Mr. Jonas agrees not to exercise certain voting power of shares of Class A Stock over which he exercises voting control, to the extent that it would result in his exercising more than 76.1% of the total voting power of all outstanding capital stock of IDT.  Either in connection with, or immediately following the Exchange Offer and Recapitalization, Mr. Jonas will exchange all of the shares of Common Stock he controls for shares of Class B Stock and a number of shares of Class A Stock (which is entitled to three votes per share) for shares of Class B Stock so that, fol lowing all such steps, his percentage voting power will remain the same as it was immediately prior to the Exchange Offer.
 
 
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Indemnification of Directors and Officers
 
Under Section 145 of the DGCL, a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including, without limitation, attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding (i) if such per son acted in good faith and in a manner that such person reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, if he or she had no reasonable cause to believe such conduct was unlawful. In actions brought by or in the right of the corporation, a corporation may indemnify such person against expenses (including, without limitation, attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner that such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue or matter as to which that person will have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought w ill determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses which the Court of Chancery or other such court will deem proper. To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defending any such action, suit or proceeding referred to above or any claim, issue or matter therein, he or she is entitled to indemnification for expenses (including, without limitation, attorneys’ fees) actually and reasonably incurred by such person in connection therewith. A corporation may pay expenses (including, without limitation, attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such di rector or officer to repay such amount if it will ultimately be determined that such person is not entitled to be indemnified by the corporation. Such expenses (including, without limitation, attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. The indemnification and advancement of expenses provided for or granted pursuant to Section 145 is not exclusive of any other rights of indemnification or advancement of expenses to which those seeking indemnification or advancement of expenses may be entitled, and a corporation may purchase and maintain insurance against liabilities asserted against any former or current director, officer, employee or agent of the corporation, or a person who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, whether or not th e power to indemnify is provided by the statute.
 
Article VIII of IDT’s bylaws provides for indemnification of the officers and directors of IDT to the fullest extent permitted by applicable law.
 
Section 8 of Article VIII of IDT’s bylaws allows IDT to maintain director and officer liability insurance on behalf of any person who is or was a director or officer of the Company, or such person who serves or served as a director, officer, employee or agent, of another corporation, partnership or other enterprise at the request of the Company. The indemnification and advancement of expenses will, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and will inure to the benefit of the heirs, executors and administrators of such a person.
 
Section 11 of Article VIII of IDT’s bylaws provides that except for proceedings to enforce rights to indemnification, IDT will not be obligated to indemnify any director or officer of the Company in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the board of directors of the Company.

Pursuant to Section 102(b)(7) of the DGCL, Article Sixth of IDT’s Second Restated Certificate of Incorporation provides that no director of the registrant will be personally liable to the registrant or any of its stockholders for monetary damages for breach of such director’s fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the registrant or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. Pursuant to Article Sixth of IDT’s certificate of incorporation, any repeal or modification of Article Sixth b y the stockholders of IDT will not adversely affect any right or protection of a director of the registrant existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
 
 
CAPITALIZATION
 
If the Minimum Condition is met and if all shares of Common Stock are not tendered in the Exchange Offer, following the Exchange Offer, we intend to seek approval of our stockholders to amend our certificate of incorporation so that each remaining share of Common Stock will automatically be converted and reclassified into one share of Class B Stock, thereby eliminating the Common Stock altogether. If the Exchange Offer and recapitalization are consummated, we will no longer have any shares of Common Stock authorized or outstanding and will only have two classes of common stock remaining – our Class A Stock and Class B Stock. Mr. Jonas has indicated that he intends to vote all shares of Common Stock (as well as all shares of Class B Stock and Class A Stock) over which he exercises voting control in favor of the amendment. However, on account of Rule 14c-2(b) under the Exchange Act, the amendment to the certificate of incorporation will not be effective until shortly after the expiration date of the Exchange Offer. However, there is no guarantee that the amendment will be effected.

 
17

 
 
TERMS OF THE EXCHANGE OFFER
 
No Recommendation
 
NEITHER IDT NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT YOU SHOULD TENDER ANY COMMON STOCK IN THE EXCHANGE OFFER AS THE BOARD OF DIRECTORS CONSIDERS THIS A PERSONAL INVESTMENT DECISION. HOWEVER, OUR BOARD OF DIRECTORS HAS AUTHORIZED US TO MAKE THE EXCHANGE OFFER AND HAS DETERMINED THAT THE EXCHANGE OFFER IS FAIR TO IDT AND IDT’S UNAFFILIATED STOCKHOLDERS WHO TENDER THEIR SHARES FOR EXCHANGE. THE BOARD HAS ALSO NOT MADE ANY SPECIFIC DETERMINATION AS TO THE VALUE OF THE CONSIDERATION TO BE RECEIVED BY TENDERING STOCKHOLDERS. ACCORDINGLY, YOU MUST MAKE YOUR OWN DECISION AS TO WHETHER TO TENDER COMMON STOCK IN THE EXCHANGE OFFER IN LIGHT OF YOUR OWN PARTICULAR CIRCUMSTANCES, TAKING INTO ACCOUNT YOUR DETERMINATION AS TO THE VALUE OF THE CONSIDERATION TO BE RECEIVED. PARTICIPATION IN THE EXCHANGE OFFER IS VOLUNTARY, AND YOU SHOULD CONSIDER CAREFULLY WHETHER TO PARTICIPATE. BEFORE YOU MAKE YOUR DECISION, WE URGE YOU TO CAREFULLY READ THIS OFFER TO EXCHANGE IN ITS ENTIRETY, INCLUDING THE INFORMATION SET FORTH IN THE SECTION OF THIS OFFER TO EXCHANGE ENTITLED “SPECIAL FACTORS” AND THE INFORMATION INCORPORATED BY REFERENCE HEREIN. WE ALSO URGE YOU TO CONSULT YOUR OWN LEGAL, FINANCIAL AND TAX ADVISORS IN MAKING YOUR OWN DECISIONS ON WHAT ACTION, IF ANY, TO TAKE.
 
General
 
We are making the Exchange Offer for our outstanding shares of Common Stock. Upon the terms and subject to the conditions set forth in this Offer to Exchange and in the Letter of Transmittal, we will accept for exchange any shares of Common Stock that are validly tendered and not properly withdrawn prior to the expiration of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m., New York City time, on January 4, 2011, unless extended or earlier terminated by us.
 
We will issue one share of Class B Stock in exchange for each validly tendered and not properly withdrawn, share of Common Stock promptly after the Expiration Date.
 
This Offer to Exchange is being sent to all beneficial holders of Common Stock. Shares of Common Stock tendered but not accepted because they were not validly tendered will remain outstanding upon completion of the Exchange Offer. Any tendered shares of Common Stock not accepted for exchange because of an invalid tender, the occurrence of other events set forth in this Offer to Exchange or otherwise, will promptly be returned, without expense, to the tendering holder after the Expiration Date. Our obligation to accept Common Stock tendered pursuant to the Exchange Offer is limited by the conditions listed below under  “Terms of the Exchange Offer — Conditions to the Exchange Offer.”  Shares of Common Stock that are not exchanged in the Exchange Offer will remain outstanding and will be entitled to all rights and benefits their holders have under our certificate of incorporation and bylaws and applicable law.
 
Under Delaware law, holders of Common Stock are not entitled to any appraisal rights in connection with the Exchange Offer.
 
We will be deemed to have accepted for exchange validly tendered shares of Common Stock when we have given oral or written notice of the acceptance to the Exchange Agent. The Exchange Agent will act as agent for the holders of Common Stock who tender their Common Stock in the Exchange Offer for the purposes of receiving shares of Class B Stock from us and delivering such shares of Class B Stock to the exchanging holders. We expressly reserve the right, subject to applicable law, to amend or terminate the Exchange Offer, and not to accept for exchange any Common Stock not previously accepted for exchange, upon the occurrence of any of the conditions specified below under “Terms of the Exchange Offer — Conditions to the Exchange Offer.”
 
Exchange Offer Consideration
 
We are offering to exchange for each outstanding share of Common Stock one share of Class B Stock. For a description of the Common Stock and a description of the material differences between the Common Stock and the Class B Stock, see “Description of Class B Stock - Material Differences Between Common Stock and Class B Stock.”
 
  
Conditions to the Exchange Offer
 
Notwithstanding any other provisions of this Offer to Exchange, our obligation to accept tendered shares of Common Stock and (subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act), provide shares of Class B Stock in exchange therefor, are subject to the following conditions:
 
 
• 
the Minimum Condition shall have been met by IDT’s unaffiliated stockholders validly tendering and not properly withdrawing at least 1,115,970 shares of Common Stock;
 
 
 
18

 
 
 
• 
no applicable law and no permanent injunction or other judgment, order or decree shall have been entered, enacted, promulgated, enforced or issued by any court or other governmental entity of competent jurisdiction in the United States or any material foreign jurisdiction that remains in effect which has the effect of prohibiting the consummation of the Exchange Offer;
     
 
• 
there will not be existing any temporary restraining order, preliminary injunction, pending or threatened any suit, action or proceeding by any governmental entity which challenges or seeks to enjoin the Exchange Offer; and
     
 
• 
there will not have occurred any change, effect, occurrence, state of facts or development that is or is reasonably likely to be material and adverse to the financial condition, assets, liabilities, business or results of operations of the Company and its subsidiaries taken as a whole.
 
Procedures for Tendering
 
Valid Tender of Shares of Common Stock.  To validly tender shares of Common Stock pursuant to the Exchange Offer, a Letter of Transmittal must be completed by registered stockholders either (i) if certificates are to be forwarded therewith or (ii) if tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth below under “— Book-Entry Transfer” and an Agent’s Message (as defined below) is not delivered. Tenders by book-entry transfer may also be made by delivering an Agent’s Message in lieu of a Letter of Transmittal. The term “Agent’s Message” means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by the Letter of Transmittal and that IDT may enforce the Letter of Transmittal against such participant. Certificates for all physically tendered shares of Common Stock, or Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed Letter of Transmittal (or manually signed facsimile hereof or Agent’s Message in lieu thereof) and any other documents required by the Letter of Transmittal, must be received by the Exchange Agent at the applicable address set forth in the Letter of Transmittal on or prior to the Expiration Date, or the tendering stoc kholder must comply with the guaranteed delivery procedures set forth below under  “— Guaranteed Delivery.”
 
Book-Entry Transfer.  The Exchange Agent will establish an account with respect to the shares of Common Stock at DTC for purposes of the Exchange Offer. Any financial institution that is a participant in DTC’s systems may make a book-entry transfer of shares of Common Stock by causing DTC to transfer such shares of Common Stock into the Exchange Agent’s account in accordance with DTC’s procedures for such transfer. However, although delivery of shares of Common Stock may be effected through book-entry transfer, either the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent’ s Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be transmitted to and received by the Exchange Agent at its address set forth on the back cover of this Offer to Exchange by the Expiration Date, or the tendering stockholder must comply with the guaranteed delivery procedures described below. The confirmation of a book-entry transfer of shares of Common Stock into the Exchange Agent’s account at DTC as described above is referred to herein as a  “Book-Entry Confirmation.”
 
Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the Exchange Agent.
 
Signature Guarantees and Stock Powers.  Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the NYSE Medallion Signature Program and the Stock Exchanges Medallion Program (each, an  “Eligible Institution” ). Signatures on a Letter of Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed by the registered owner(s) (which term, for purposes of this section, includes any participant in any of DTC’s systems whose name appears on a security position listing as the owner of the shares of Common Stock) of shares of Common Stock tendered therewith and such registered owner has not completed the box entitled “Special Issuance Instructions” or the box entitled “Special Delivery Instructions” on the Letter of Transmittal or (b) if such shares of Common Stock are tendered for the account of an Eligible Institution. See Instructions 1, 2 and 5 of the Letter of Transmittal. If the certificates for shares of Common Stock are registered in the name of a person other than the signer of the Letter of Transmittal, or if shares of Common Stock not tendered or not accepted for exchange or shares of Common Stock are to be issued to a person other than the registered owner of the certificates surrend ered, then the tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name or names of the registered owner(s) or holder(s) appear on the certificates, with the signatures on the certificates or stock powers guaranteed as described above. See Instructions 1, 2 and 5 of the Letter of Transmittal.
 
 
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If certificates representing shares of Common Stock are forwarded separately to the Exchange Agent, a properly completed and duly executed Letter of Transmittal (or facsimile) must accompany each delivery of certificates.
 
Guaranteed Delivery.  Any stockholder whose certificates for shares of Common Stock are not immediately available or who cannot deliver his, her or its certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender his, her or its shares of Common Stock by satisfying each of the requirements set forth below:
 
 
• 
such tender must be made through an Eligible Institution,
     
 
• 
prior to 5:00 p.m., New York City time, on the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by IDT (by mail, facsimile transmission or hand delivery), setting forth the name and address of the Holder and the amount of shares of Common Stock tendered, stating that the tender is being made thereby and guaranteeing that within three NYSE trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered shares of Common Stock (if any), in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent’s Message in lieu thereof) with any required signature guarantees and any other documents required by this Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent, and
     
 
• 
the certificates for all physically tendered shares of Common Stock (if any), in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent’s Message in lieu thereof) with any required signature guarantees and all other documents required by this Letter of Transmittal, are received by the Exchange Agent within three NYSE trading days after the date of execution of the Notice of Guaranteed Delivery.
 
 
THE METHOD OF DELIVERY OF SHARES OF COMMON STOCK, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT (INCLUDING IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT THE MAILING BE BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
 
Other Requirements.  We will exchange shares of Common Stock validly tendered and not properly withdrawn , prior to the Expiration Date only after timely receipt by the Exchange Agent of (a) certificates for (or a timely Book-Entry Confirmation with respect to) such shares of Common Stock, (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in lieu of the Letter of Transmittal), and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may receive shares of Common Stock at different times depending upon when certificates for shares of Common Stock or Book-Entry C onfirmations with respect to shares of Common Stock are actually received by the Exchange Agent.
 
Binding Agreement. Our acceptance of shares of Common Stock tendered pursuant to one of the procedures described above will constitute a binding agreement between the tendering stockholder and us upon the terms and subject to the conditions of the Exchange Offer.
 
Determination of Validity
 
All questions as to the validity, form, eligibility (including, without limitation, time of receipt) and acceptance of any tender of shares of Common Stock will be determined by us in our sole and absolute discretion, which determination will be final and binding. We reserve the absolute right to reject any and all tenders determined by us not to be in proper form or the acceptance for payment of or payment for which may, in our opinion, be unlawful. We also reserve the absolute right to waive any defect or irregularity in the tender of any shares of Common Stock of any particular stockholder whether or not similar defects or irregularities are waived in the case of any other stockholder. No tender of shares of Common Stock will be deemed to have been validly made until all defects and irregularities relating thereto have been cu red or waived. None of IDT, any of its affiliates or assigns, the Exchange Agent, or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Our interpretation of the terms and conditions of the Exchange Offer (including, without limitation, the Letter of Transmittal and the Instructions thereto and any other documents related to the Exchange Offer) will be final and binding.
 
 
20

 
 
Acceptance; Exchange of Common Stock
 
Upon the terms and subject to the satisfaction or waiver of the conditions of the Exchange Offer as of the Expiration Date (other than Minimum Condition which must be satisfied and is not waivable), promptly following the Expiration Date, we will accept any shares of Common Stock validly tendered and not properly withdrawn, prior to the Expiration Date and issue in consideration therefor shares of newly-issued Class B Stock. Unless the Exchange Offer is terminated in accordance with its terms, we may extend the Exchange Offer for any period at our sole discretion and must extend the Exchange Offer from time to time for such period as may be required by any applicable law, rule, regulation, interpretation or position if any applicable law, rule, regulation, interpretation or position of the SEC or its staff thereof or the NYSE app licable to the Exchange Offer requires such extension.
 
Expiration; Extensions; Termination; Amendment
 
The Exchange Offer will expire at 5:00 p.m., New York City time, on January 4, 2011, unless the Exchange Offer is extended or earlier terminated by us. We, in our sole discretion, may extend the Expiration Date and therefore delay acceptance for exchange of any shares of Common Stock for any reason. We will extend the duration of the Exchange Offer as required by applicable law. We will announce any extensions by press release or other permitted means by no later than 9:00 a.m., New York City time, on the business day after the previously scheduled Expiration Date. During any extension, all shares of Common Stock previously tendered will remain subject to the Exchange Offer unless properly withdrawn. In addition, we reserve the right to:
 
 
• 
terminate or amend the Exchange Offer and not to accept for exchange any shares of Common Stock not previously accepted for exchange upon the occurrence of any of the events specified above under  “Terms of the Exchange Offer — Conditions to the Exchange Offer”  that have not been waived by us; and
     
 
• 
amend the terms of the Exchange Offer in any manner permitted or not prohibited by law.
 
If we terminate or amend the Exchange Offer, we will notify the Exchange Agent by oral or written notice (with any oral notice to be promptly confirmed in writing) and will issue a timely press release or other public announcement regarding the termination or amendment. If we make a material change in the terms of the Exchange Offer or the information concerning the Exchange Offer, or waive a material condition of the Exchange Offer, we will promptly disseminate disclosure regarding the changes to the Exchange Offer and extend the Exchange Offer, each as and to the extent required by law, to ensure that the Exchange Offer remains open a minimum of five business days from the date we disseminate disclosure regarding the changes.
 
Withdrawal Rights
 
A stockholder may withdraw shares of Common Stock tendered pursuant to the Exchange Offer at any time prior to the Expiration Date and, if not yet accepted for exchange, at any time after January 31, 2011 which is forty business days from the commencement of the Exchange Offer.
 
For a withdrawal of shares of Common Stock to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Exchange Agent at one of its addresses set forth on the back cover of this Offer to Exchange. Any notice of withdrawal must specify the name of the person having tendered the shares of Common Stock to be withdrawn, the number of shares of Common Stock to be withdrawn and the name of the record holder of the shares of Common Stock to be withdrawn, if different from that of the person who tendered such shares of Common Stock. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such shares of Common Stock have been tendered for the account of any Eligible Institution. If shares of Common Stock have been tendered pursuant to the procedures fo r book-entry transfer as set forth in “Procedures for Tendering,” any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn shares of Common Stock. If certificates representing the shares of Common Stock have been delivered or otherwise identified to the Exchange Agent, the name of the registered owner and the serial numbers shown on such certificates must also be furnished to the Exchange Agent prior to the physical release of such certificates.
 
All questions as to the form and validity (including, without limitation, time of receipt) of any notice of withdrawal will be determined by us, in our sole discretion, which determination will be final and binding. No withdrawal of shares of Common Stock will be deemed to have been properly made until all defects and irregularities have been cured or waived. None of IDT, its affiliates or assigns, the Exchange Agent, or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tenders of shares of Common Stock may not be rescinded, and any shares of Common Stock properly withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer. However, withdrawn shares of Common Stock may be retendered by following one of the procedures for tendering shares of Common Stock described in  “Procedures for Tendering”  at any time prior to the Expiration Date.
 
 
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If we delay our acceptance for exchange of shares of Common Stock due to an extension of the Expiration Date, then, without prejudice to our rights under the Exchange Offer, the Exchange Agent may nevertheless, on our behalf, retain tendered shares of Common Stock, and such shares of Common Stock may not be withdrawn except to the extent that tendering stockholders exercise withdrawal rights as described in this Section prior to the Expiration Date.

Amendment of IDT Certificate of Incorporation

If the Minimum Condition is met and if all shares of Common Stock are not tendered in the Exchange Offer, following the Exchange Offer, we intend to seek approval of our stockholders to amend our certificate of incorporation so that each remaining share of Common Stock will automatically be converted and reclassified into one share of Class B Stock, thereby eliminating the Common Stock altogether. If the Exchange Offer and recapitalization are consummated, we will no longer have any shares of Common Stock authorized or outstanding and will only have two classes of common stock remaining – our Class A Stock and Class B Stock. Mr. Jonas has indicated that he intends to vote all shares of Common Stock (as well as all shares of Class B Stock and Class A Stock) over which he exercises voting control in favor of the amendment. Ho wever, on account of Rule 14c-2(b) under the Exchange Act, the amendment to the certificate of incorporation will not be effective until shortly after the expiration date of the Exchange Offer. However, there is no guarantee that the amendment will be effected.
 
Fees and Expenses
 
The following table sets forth the estimated expenses (all of which will be borne by us) incurred in connection with the Exchange Offer. All of the amounts shown are estimates, except the SEC filing fees.
 
         
SEC filing fees
 
$
5,748
 
Financial advisors
   
0
 
Printing and distributing
  $
12,000
 
Legal fees and expenses
   
32,000
 
Accounting fees and expenses
   
0
 
Miscellaneous
   
5,000
 
         
Total
 
$
54,748
 
 
 
Brokerage Commissions
 
No brokerage commissions are payable by the holders of the Common Stock to the Exchange Agent or us. If your Common Stock is held through a broker or other nominee who tenders the Common Stock on your behalf, your broker may charge you a commission for doing so. You should consult with your broker or nominee to determine whether any charges will apply.
 
 
Transfer Taxes
 
You will not be obligated to pay any transfer tax in connection with the tender of your shares of Common Stock in the Exchange Offer unless you instruct us to register your shares of Common Stock in the name of a person other than the registered tendering holder. In this case, you will be responsible for the payment of any applicable transfer tax.
 
 
Future Purchases
 
Following completion of the Exchange Offer, we or our affiliates may from time to time, depending upon market, pricing and other conditions, as well as cash balances and liquidity, seek to purchase shares of Common Stock in the open market, privately negotiated transactions, tender offers or otherwise. The amounts of any such purchases may be material. Future purchases of Common Stock that remains outstanding after the Exchange Offer may be on terms that are more or less favorable than the Exchange Offer.
 
 
Resale of Class B Stock Received in the Exchange Offer
 
The Exchange Offer is being made pursuant to an exemption from the registration requirements of the Securities Act contained in Section 3(a)(9) of the Securities Act. We are not filing a registration statement under the Securities Act or any other federal or state securities laws with respect to the Class B Stock that will be issued in the Exchange Offer. To the extent that Common Stock that is tendered in the Exchange Offer is freely tradable, Class B Stock issued in consideration therefor in the Exchange Offer will generally be freely transferable under U.S. federal securities laws.
 
 
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Source of Funds
 
We do not need any outside funds to effect the exchange of our Common Stock for Class B Stock.  The Class B Stock exchanged in the Exchange Offer will be distributed from our authorized shares of Class B Stock currently held in our treasury.
 
 
HOUSEHOLDING OF STOCKHOLDER MATERIALS
 
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” stockholder materials, such as proxy statements, information statements and annual reports. This means that only one copy of this Offer to Exchange may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of this Offer to Exchange to you if you write or call us at the following address or telephone number: Bill Ulrey, Vice President–Investor Relations and External Affairs, 520 Broad Street, Newark, NJ 07102, and by phone at (973) 438-3838. If you want to receive separate copies of stockholder materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above address or telephone number.
 
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
 
The following is a summary of the material United States federal income tax consequences of the Exchange Offer that may be relevant to United States holders (as defined below) of Common Stock. This summary applies only to our stockholders that hold their Common Stock as a capital asset within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). Further, this summary is for general information only, and does not purport to discuss all aspects of United States federal income taxation that may be relevant to you in light of your particular circumstances, or if you are a holder subject to special rules, such as:
 
 
• 
a bank or other financial institution;
     
 
• 
a holder other than a United States holder;
     
 
• 
a regulated investment company;
     
 
• 
a tax-exempt organization;
     
 
• 
an insurance company;
     
 
• 
a dealer in securities or foreign currencies;
     
 
• 
a person (including traders in securities) using a mark-to-market method of accounting;
     
 
• 
a person that holds shares of Common Stock or Common Stock as a hedge or as part of a straddle, constructive sale, conversion transaction or other risk reduction transaction;
 
 
• 
a taxpayer subject to the alternative minimum tax;
     
 
• 
a holder whose “functional currency” is not the United States dollar;
     
 
• 
a person that holds Common Stock on behalf of another person as nominee;
 
 
• 
a person that acquired shares of Common Stock upon the exercise of employee stock options, vesting of restricted stock or otherwise as compensation; or
     
 
• 
an entity that is treated as a partnership or a trust for United States federal income tax purposes.
 
A United States holder is any person that is not exempt from United States federal income taxation and is:
 
 
• 
a citizen or resident of the United States;
     
 
• 
a corporation (or entity treated as a corporation for United States federal income tax purposes) created or organized in the United States or under the laws of the United States, any state thereof, or the District of Columbia;
     
 
• 
an estate, the income of which is includable in gross income for United States federal income tax purposes regardless of its source; or
     
 
 
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• 
a trust if a United States court is able to exercise primary supervision over the administration of such trust and one or more United States fiduciaries have the authority to control all substantial decisions of the trust, or if the trust has a valid election in place under applicable United States Treasury Regulations to be treated as a United States person for United States federal income tax purposes.
 
If a partnership, including for this purpose any entity that is treated as a partnership for United States federal income tax purposes, holds Common Stock or Class B Stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A holder that is a partnership and the partners in such partnership should consult their tax advisors about the United States federal income tax consequences of the Exchange Offer and the ownership and disposition of our Class B Stock.

This summary is based upon the Code, the regulations promulgated by the United States Treasury Department, rulings and other administrative pronouncements issued by the Internal Revenue Service (the “IRS” ), and judicial decisions, all as currently in effect, and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. We have not sought and will not seek an advance ruling from the IRS or opinion of counsel regarding any matter discussed in the Exchange Offer.
 
The Exchange Offer
 
In general, if you exchange your Common Stock for Class B Stock pursuant to the Exchange Offer, you will not recognize gain or loss for United States federal income tax purposes.  Your adjusted tax basis in each share of Class B Stock received will equal your adjusted tax basis in the share of Common Stock exchanged for such share of Class B Stock. Your holding period for each share of Class B Stock received will include your holding period for the share of Common Stock exchanged.

THIS DISCUSSION IS OF GENERAL INFORMATION ONLY. YOU SHOULD CONSULT YOUR TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE EXCHANGE OFFER, INCLUDING THE APPLICATION OF FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS BASED ON YOUR PARTICULAR FACTS AND CIRCUMSTANCES.
 
ANTICIPATED ACCOUNTING TREATMENT
 
The Exchange Offer will be treated as an exchange of Common Stock for Class B Stock and will be classified as a liability for accounting purposes under U.S. generally accepted accounting principles and will initially be measured at fair value and subsequently measured at the present value of the amount to be paid at settlement, with any changes in value recognized as interest expense at the rate implicit at inception. The change in control special dividend will be measured at each reporting period at fair value with any changes in fair value recognized in earnings. In addition, dividends payable on the preferred stock will be recognized as interest expense.
 
DESCRIPTION OF CLASS B STOCK – MATERIAL DIFFERENCES BETWEEN COMMON STOCK AND CLASS B STOCK
 
As set forth in our Second Restated Certificate of Incorporation, the rights of holders of Common Stock and Class B Stock are identical except for voting rights and that at our option, each share of Class B Stock may be converted, at any time, into one fully paid nonassessable share of Common Stock, provided that all shares of Class B Stock are so converted. The holders of Class B Stock are entitled to one-tenth of a vote per share, while the holders of Common Stock are entitled to one vote per share on all matters to be voted on by our stockholders.

If the Minimum Condition is met and if all shares of Common Stock are not tendered in the Exchange Offer, following the Exchange Offer, we intend to seek approval of our stockholders to amend our certificate of incorporation so that each remaining share of Common Stock will automatically be converted and reclassified into one share of Class B Stock, thereby eliminating the Common Stock altogether. If the Exchange Offer and recapitalization are consummated, we will no longer have any shares of Common Stock authorized or outstanding and will only have two classes of common stock remaining – our Class A Stock and Class B Stock. Mr. Jonas has indicated that he intends to vote all shares of Common Stock (as well as all shares of Class B Stock and Class A Stock) over which he exercises voting control in favor of the amendment. Ho wever, on account of Rule 14c-2(b) under the Exchange Act, the amendment to the certificate of incorporation will not be effective until shortly after the expiration date of the Exchange Offer. However, there is no guarantee that the amendment will be effected.
 
 
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APPRAISAL RIGHTS
 
Under Delaware law, holders of Common Stock are not entitled to appraisal rights in connection with the Exchange Offer.
 
PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS

The information contained in the sections “Related Person Transactions–Transactions with Related Persons, Promoters and Certain Control Persons” and Executive Compensation–Employment Agreements” with respect to Mr. Jonas’ employment agreement with IDT (as amended) in our definitive Proxy Statement for our 2010 Annual Stockholders Meeting filed with the SEC on November 3, 2010, and in Note 18 to the Consolidated Financial Statements in the of our Annual Report on Form 10-K for the fiscal year ended July 31, 2010 filed with the SEC on October 28, 2010 are incorporated herein by reference.

Additionally, Mr. Jonas has agreed to ensure that his voting power will not increase due to the Exchange Offer and the Recapitalization. During the pendency of the Exchange Offer and Recapitalization, this will be accomplished through an agreement, whereby Mr. Jonas agrees not to exercise certain voting power of shares of Class A Stock over which he exercises voting control, to the extent that it would result in his exercising more than 76.1% of the total voting power of all outstanding capital stock of IDT.  Either in connection with, or immediately following the Exchange Offer and Recapitalization, Mr. Jonas will exchange all of the shares of Common Stock he controls for shares of Class B Stock and a number of shares of Class A Stock (which is entitled to three votes per share) for shares of Class B Stock so that, fol lowing all such steps, his percentage voting power will remain the same as it was immediately prior to the Exchange Offer.
 
TRANSACTIONS IN IDT COMMON STOCK
 
IDT and Affiliates
 
None of IDT or any of its affiliates, directors or executive officers has engaged in any transactions in IDT common stock in the 60-day period prior to the date of this Offer to Exchange.
 
IDT Directors and Executive Officers
 
No IDT Director or Executive Officer has engaged in any transactions in Common Stock in the 60-day period prior to the date of this Offer to Exchange.
 
SELECTED HISTORICAL FINANCIAL AND OPERATING DATA
 
The audited consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended July 31, 2010 are incorporated herein by reference.

MARKETS AND MARKET PRICE
 
 
The Common Stock is listed and traded on the NYSE under the symbol “IDT.C”.  As of December 1, 2010 there were 228 holders of record of Common Stock (which does not include the number of beneficial owners holding indirectly through a broker, bank or other nominee). Other than two cash dividends of $0.375 per share paid in April and July 2007, and a cash dividend of $0.22 per share paid on November 23, 2010, on our Common Stock, Class A Stock and Class B Stock, we do not have any history of paying dividends on our Common Stock. However, on November 2, 2010, our Board of Directors authorized, in addition to the initial cash dividend of $0.22 per share to its Common Stock, Class A Stock and Class B Common Stockholders, its intention to announce an additional cash dividend of comparable magnitude during the seco nd quarter of our 2011 fiscal year, the three months ending January 31, 2011. The Board’s intent is for us to pay future quarterly dividends based on operating performance and available resources.

The table below sets forth the high and low sales prices for our common stock as reported by the NYSE for the fiscal periods indicated.
 
 
25

 
 
   
High
   
Low
 
Fiscal year ended July 31, 2009
           
First Quarter
  $ 4.98     $ 1.02  
Second Quarter
  $ 4.32     $ .45  
Third Quarter
  $ 1.47     $ .70  
Fourth Quarter
  $ 2.44     $ 1.03  
                 
Fiscal year ended July 31, 2010
               
First Quarter
  $ 3.59     $ 2.25  
Second Quarter
  $ 3.92     $ 2.98  
Third Quarter
  $ 8.53     $ 3.67  
Fourth Quarter
  $ 16.38     $ 6.12  

On December 1, 2010, the last sales price reported on the NYSE for the Common Stock was $22.00 per share.
 
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
The following table sets forth certain information regarding the beneficial ownership of the Common Stock (and Class A Stock, assuming conversion of all shares of Class A Stock into Common Stock) and Class B Stock by (i) each person known by us to be the beneficial owner of more than 5% of the outstanding shares of the Common Stock, Class A Stock, or the Class B Stock, (ii) each of our directors and the Named Executive Officers, and (iii) all our directors and executive officers as a group. Unless otherwise noted in the footnotes to the table, to the best of our knowledge, the persons named in the table have sole voting and investing power with respect to all shares indicated as being beneficially owned by them.
 
Unless otherwise noted, the security ownership information provided below is given as of December 1, 2010 and all shares are owned directly. Percentage ownership information is based on the following amount of outstanding shares: (i) 7,000,980 shares of Common Stock and (ii) 15,627,810 shares of Class B Stock.
 
Name
 
Number of
Shares of
Common
Stock
   
Percentage
of
Ownership
of
Common
Stock
   
Number of
Shares of
Class B
Common
Stock
   
Percentage
of
Ownership
of Class B
Common
Stock
   
Percentage
of
Aggregate
Voting
Powerd
 
Howard S. Jonas
    4,764,039 (1)     68.0 %     1,825,329 (2)     11.7 %     76.1 %(3)
520 Broad Street
Newark, NJ 07102
                                       
Dimensional Fund Advisors, Inc.
    269,535 (4)     7.2 %     1,104,004 (4)     7.1 %     2.5 %
1299 Ocean Avenue
Santa Monica, CA 90401
                                       
Kahn Brothers & Co., Inc.
    657,213 (4)     17.6 %     42,221 (4)     *       4.4 %
555 Madison Avenue
22nd Floor
New York, NY 10022
                                       
Renaissance Technologies Corp.
    110,032 (4)     3.0 %     1,071,865 (4)     6.9 %     1.4 %
800 Third Avenue
33rd Floor
New York, NY 10022
                                       
James A. Courter
                630,592 (5)     4.0 %     *  
Liore Alroy
                3,976       *       *  
Claude Pupkin
                28,858 (6)     *       *  
Lawrence E. Bathgate, II
                8,333       *       *  
Eric F. Cosentino
                243       *       *  
W. Wesley Perry
                35,416 (7)     *       *  
Judah Schorr
                22,291       *       *  
All directors, Named Executive Officers and other executive officers as a group (13) persons)
    4,769,044 (8)     68.1 %     2,769,912 (9)     17.5 %     76.6 %
 


 *
Less than 1%.
 d
Voting power represents combined voting power of Common Stock (one vote per share), Class A Stock (three votes per share) and Class B Stock (one-tenth of one vote per share). Excludes stock options.
 
 
26

 
 
(1)
Consists of an aggregate of 3,272,326 shares of Class A Stock and 1,491,713 shares of Common Stock, consisting of (i) 1,469,706 shares of Class A Stock held by Mr. Jonas directly, (ii) 6,523 shares of Class A Stock held by the Jonas Family Limited Partnership, (iii) 486,813 shares of Class A Stock held by Howard S. Jonas 2009 Annuity Trust I, (iv) 1,309,284 shares of Class A Stock held by Howard S. Jonas 2009 Annuity Trust II, (v) 275,047 shares of Common Stock beneficially owned by the Jonas Foundation, (vi) 333,333 shares of Common Stock beneficially owned by the Howard S. and Deborah Jonas Foundation, Inc. and (vii) 883,333 shares of restricted Common Stock held by Mr. Jonas directly. Mr. Jonas is the General Partner of the Jonas Family Limited Partnership and, with his wife Deborah Jonas, is the co-trustee of each of The Jonas Foundation, the Howard S. and Deborah Jonas Foundation, the Howard S. Jonas 2009 Annuity Trust I and the Howard S. Jonas 2009 Annuity Trust II.
(2)
Consists of (i) 333,141 shares of Class B Stock held by Mr. Jonas directly, (ii) 300,000 shares of Class B Stock beneficially owned by the Howard S. and Deborah Jonas Foundation, Inc., (iii) 6,523 shares of Class B Stock beneficially owned by the Jonas Family Limited Partnership, (iv) an aggregate of 7,780 shares of Class B Stock beneficially owned by custodial accounts for the benefit of the children of Mr. Jonas (of which Mr. Jonas is the custodian), (v) 1,176,427 shares of restricted Class B Stock held by Mr. Jonas directly and (vi) 1,458 shares of Class B Stock held by Mr. Jonas in his 401(k) plan account as of September 30, 2010. Does not include an aggregate of 1,045,089 shares of Class B Stock beneficially owned by trusts for the benefit of the children of Mr. Jonas, as Mr. Jo nas does not exercise or share investment control of these shares.
(3)
In addition, by virtue of his voting control of the Company, Mr. Jonas is deemed to beneficially own 157,500 shares of common stock of IDT Telecom, Inc., which are owned by the Company. Mr. Jonas disclaims beneficial ownership of these shares.
(4)
According to Schedule 13F calculating the number of shares as of June 30, 2010.
(5)
Subject to certain conditions, 225,129 of these shares are convertible, at the option of Mr. Courter, into the number of shares of Genie Energy Corporation equal to 1% of the outstanding equity of Genie Energy Corporation at the time of conversion.
(6)
Consists of (a) 1,080 shares of Class B Stock held by Mr. Pupkin in his 401(k) plan account as of September 30, 2010 and (b) 27,778 shares of Class B Stock of the Company issuable upon the exercise of stock options exercisable within 60 days.
(7)
Consists of (a) 33,333 shares of Class B Stock held by Mr. Perry’s retirement plans and (b) 2,083 shares of Class B Stock held by Mr. Perry. In addition, Mr. Perry owns a 0.2% interest in Genie Energy Corporation, the Company’s subsidiary.
(8)
Consists of the shares set forth above with respect to the Named Executive Officers and directors and 5,005 shares of Common Stock held by the other executive officers.
(9)
Consists of the shares and options set forth above with respect to the Named Executive Officers and directors, 60,402 shares of Class B Stock held by the other executive officers, 154,472 shares of Class B Stock of the Company issuable upon the exercise of stock options exercisable within 60 days held by the other executive officers, and 5,042 shares of Class B Stock held by the other executive officers in their 401(k) plan account as of September 30, 2010.
 
WHERE STOCKHOLDERS CAN FIND MORE INFORMATION
 
We file reports and other information with the SEC in accordance with the Exchange Act. Such reports and other information (including, without limitation, the documents incorporated by reference into this Offer to Exchange) may be inspected and copied at the Public Reference Room of the SEC at 100 F Street, NE, Washington, DC 20549. Copies of such material can also be obtained at prescribed rates from the Public Reference Room of the SEC at its Washington address. The SEC also maintains a site on the World Wide Web (www.sec.gov) that contains reports, proxy statements and other information regarding companies like IDT that file electronically with the SEC. For your convenience, please note that current electronic printable copies of the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 1 0-Q, as well as a copy of this Offer to Exchange, are also available on the Company’s website at www.idt.net, under the heading  “Investor Relations — SEC Filings,”  as well as the SEC’s website at www.sec.gov through the Filings and Forms (EDGAR) pages. In addition, electronic printable copies of the Corporate Governance Guidelines, Code of Business Conduct, Executive and Director Stock Ownership Guidelines and IDT Corporation Whistleblower Procedure and the current charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available on the Company’s website at www.idt.net, under the heading  “Governance.”
 
The Company will provide stockholders with a copy of its Annual Report on Form 10-K for the fiscal year ended July 31, 2010 filed with the SEC on October 28, 2010, including, without limitation, financial statements and financial statement schedules, and any Quarterly Reports on Form 10-Q filed thereafter, as well as copies of the Corporate Governance Guidelines, Code of Business Conduct, Executive and Director Stock Ownership Guidelines and IDT Corporation Whistleblower Procedure Corporate Governance Guidelines, and the charters of the and the current charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, without charge, upon written request to Bill Ulrey, V ice President–Investor Relations and External Affairs, by phone at (973) 438-3838, by mail addressed to Bill Ulrey, Vice President–Investor Relations and External Affairs, at 520 Broad Street, Newark, NJ 07102, or may be requested through the Investor Relations section of our website: http://www.idt.net/about/ir/overview.asp under the Request Info tab.   

DOCUMENTS INCORPORATED BY REFERENCE
 
The SEC allows us to “incorporate by reference” into this Offer to Exchange information that we have filed with the SEC, which means important information may be disclosed to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this Offer to Exchange. The following documents we filed with the SEC are incorporated herein by reference and will be deemed to be a part hereof:
 
 
27

 
 
 
• 
our Annual Report on Form 10-K for the fiscal year ended July 31, 2010 filed with the SEC on October 28, 2010; and
     
 
• 
our Proxy Statement for our 2010 Annual Stockholders Meeting filed with the SEC on November 3, 2010.
 
Any statement contained herein or contained in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded for purposes of this Offer to Exchange to the extent that a statement contained herein modifies or supersedes such statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this Offer to Exchange. Statements contained in this Offer to Exchange as to the contents of any contract or other document referred to in this Offer to Exchange do not purport to be complete and, where reference is made to the particular provisions of such contract or other document, such provisions are qualified in all respects to all of the provisions of such contract or other document.

We will provide without charge, upon written or oral request, a copy of any or all of the documents that are incorporated by reference into this Offer to Exchange and a copy of any or all other contracts or documents which are referred to in this Offer to Exchange. Requests should be directed to Bill Ulrey, Vice President–Investor Relations and External Affairs, by phone at (973) 438-3838, by mail addressed to Bill Ulrey, Vice President–Investor Relations and External Affairs, at 520 Broad Street, Newark, NJ 07102, or may be requested through the Investor Relations section of our website: http://www.idt.net/about/ir/overview.asp under the Request Info tab.

 
28

 
 
SCHEDULE A
 
 
INFORMATION CONCERNING MEMBERS OF THE BOARD OF DIRECTORS AND THE
 EXECUTIVE OFFICERS OF IDT
 
 
Information About IDT
 
The following sets forth each of the directors and executive officers of the Company as of the date hereof and their respective current positions with the Company as of the date hereof. The business address of each of the directors and executive officers listed below, unless otherwise indicated, is c/o IDT Corporation at 520 Broad Street, Newark, New Jersey 07102. Each of the directors and executive officers listed below is a United States citizen.
 
Executive Officers
Howard S. Jonas—Chairman of the Board and Chief Executive Officer
 
Bill Pereira—Chief Financial Officer and Treasurer since January 2009. Previously, he served as Executive Vice President of Finance for the Company from January 2008 to January 2009. Mr. Pereira initially joined the Company in December 2001 when the Company bought Horizon Global Trading, a financial software firm where he was a managing partner. In February 2002, Mr. Pereira joined Winstar Communications, a subsidiary of the Company, as a Senior Vice President of Finance. Mr. Pereira was promoted to CFO of Winstar Communications, a position he held until 2006 when he was named a Senior Vice President of the Company responsible for financial reporting, budgeting and planning.
 
Samuel (Shmuel) Jonas—Chief Operating Officer since June 2010. Mr. Jonas joined the Company in June 2008 and served as a Vice President until June 2009 when he was elected to serve as the Company’s Vice President of Operations. From 2004 to the present, Mr. Jonas has been the managing member of Arlington Suites, LLC, manager of a thirty million dollar mixed-use ground up development project in the Bronx, New York. From 2006 through 2008, Mr. Jonas was a partner in a 160-unit garden apartment complex in Memphis, Tennessee. Between 2004 and 2005, Mr. Jonas owned and operated various businesses in the food industry, including BID Distribution, a distributor and marketer of frozen desserts to grocery stores and food service ope rations. From 2001 to 2005, Mr. Jonas owned and operated Dowry, Inc., a food service and off-premises catering company.
 
Ira A. Greenstein—President
 
Mitch Silberman—Chief Accounting Officer and Controller since June 2006. Mr. Silberman joined the Company in October 2002 and held various positions, including Director of Financial Reporting and Assistant Controller, until June 2006.
 
Joyce J. Mason—Executive Vice President, General Counsel and Secretary
 
Liore Alroy—Executive Vice President since December 2007. Mr. Alroy has also served as the Chief Executive Officer, President and Co-Chairman of IDT Telecom since April 2008. Since October 2004, he has served as the Chief Executive Officer and a Director of Net2Phone, which was an affiliate of the Company that was fully acquired by the Company in March 2006. Mr. Alroy joined the Company in 2001 and has since served in various capacities with the Company and its affiliates, including as a Senior Vice President for Strategic Initiatives.
 
Claude Pupkin—Executive Vice President since December 2008. Mr. Pupkin leads the Company’s Genie Oil & Gas division and has served as Chief Financial Officer of Genie Energy Corporation since September 2009. Mr. Pupkin joined the Company in early 2003 and has held several positions with the Company and its affiliates. Previously, Mr. Pupkin served as Senior Vice President of Corporate Development.
 
Directors
Howard S. Jonas
 
James A. Courter—Vice Chairman of the Board of Directors of IDT Corporation; Senior Partner in the law firm of Courter, Kobert & Cohen.
 
Lawrence E. Bathgate II—co-founder and partner at Bathgate, Wegener & Wolf, P.C. in Lakewood, New Jersey.
 
Eric F. Cosentino—Rector of the Episcopal Church of the Divine Love in Montrose, New York.
 
Judah Schorr—Founder of Judah Schorr MD PC, an anesthesia provider to hospitals, ambulatory surgery centers and medical offices, and has been its President and owner since its inception.
 
W. Wesley Perry—Owner of S.E.S. Investments, Ltd., an oil and gas investments company; the Mayor of Midland, Texas.
 
 
29

 
 
ADDITIONAL INFORMATION
 
The Letter of Transmittal and certificates for the shares and any other required documents should be sent or delivered by each stockholder or his broker, dealer, commercial bank, trust company or their nominee to the Exchange Agent at the following address:
 
The Exchange Agent for the Exchange Offer is:
 
If delivering by mail:
 
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
P.O. Box 2042
New York, New York 10272-2042
If delivering by hand or courier:
 
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219


By Facsimile
(for Eligible Institutions only):
(718) 234-5001
Fax cover sheets should provide a call back phone number and request a call back, upon receipt.
Confirm Receipt by Calling: (877) 248-6417 or (718) 921-8317
 
You are directed to contact Bill Ulrey, Vice President–Investor Relations and External Affairs of IDT Corporation at 520 Broad Street, Newark, New Jersey 07102, and phone number 973-438-3838 with any questions or requests for assistance or for additional copies of this Offer, the Letter of Transmittal, or the Notice of Guaranteed Delivery.

 
30
EX-99.(A)(1)(B) 3 sc13e1210ex99aib_idt.htm LETTER OF TRANSMITTAL sc13e1210ex99aib_idt.htm

 
Exhibit 99(a)(1)(B)
 
Letter of Transmittal To Tender Shares
 of
IDT CORPORATION
COMMON STOCK, PAR VALUE $.01 PER SHARE
FOR
CLASS B COMMON STOCK, PAR VALUE $.01 PER SHARE
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JANUARY 4, 2011 UNLESS EXTENDED OR EARLIER TERMINATED (THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

 
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF OR AN AGENT’S MESSAGE IN LIEU THEREOF (TOGETHER WITH THE CERTIFICATES, IF ANY, FOR SHARES OF COMMON STOCK (AS DEFINED BELOW) OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT (AS DEFINED BELOW) PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
 
 
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX BELOW.
 
 
 
 
If delivering by mail:
 
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
P.O. Box 2042
New York, New York 10272-2042
 
 
 
 
If delivering by hand or courier:
 
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219
 
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY OF THIS LETTER OF TRANSMITTAL.

DESCRIPTION OF SHARES SURRENDERED
Name(s) and Address(es) of Registered Owner(s)
(If blank, please fill in exactly as name(s) appear(s) on share certificate(s))
Common Shares Surrendered
(attached additional list if necessary)
Certificated Common Shares**
 
 
 
 
Certificate Number(s)*
Total Number of Common Shares Represented by Certificate(s)*
 
 
Number of Common Shares Surrendered**
 
 
Book Entry Common Shares Surrendered
       
       
       
       
       
       
       
       
       
       
       
Total Common Shares
     
 
*   Need not be completed by book-entry stockholders.
** Unless otherwise indicated, it will be assumed that all shares of common stock represented by certificates described above are being    surrendered hereby.

 
1

 
 
PLEASE READ THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL.
 
IF YOU WOULD LIKE ADDITIONAL COPIES OF THIS LETTER OF TRANSMITTAL OR ANY OF THE OTHER OFFERING DOCUMENTS, YOU SHOULD CONTACT BILL ULREY, VICE PRESIDENT–INVESTOR RELATIONS AND EXTERNAL AFFAIRS OF IDT, AT 973-438-3838.
 
You have received this Letter of Transmittal in connection with the offer by IDT Corporation, a Delaware corporation (“IDT”), to exchange each share of IDT common stock, par value $.01 per share (the “Common Stock”), from the holders thereof (the “Holders”) for one share of IDT Class B common stock, par value $.01 per share (the “Class B Stock”), as described in the Offer to Exchange, dated December 2, 2010 (as it may be amended or supplemented from time to time, the “Offer to Exchange” and, together with this Letter of Transmittal, as it may be amended or supplemented from time to time, the “Exchange Offer”).

Upon the terms and subject to the conditions of the Exchange Offer, IDT will issue up to 3,728,654 shares of Class B Stock (“Class B Shares”) in exchange for up to 3,728,654 shares of Common Stock (“Common Shares”), representing all of the outstanding Common Shares, to the extent such shares are properly tendered and not withdrawn prior to the expiration of the Exchange Offer. For a more detailed description of the Class B Stock IDT is proposing to issue in the Exchange Offer, please see the section of the Offer to Exchange titled “Description of Class B Stock.” The Exchange Offer is open to all Holders and is subject to customary conditions. Subject to applicable securities laws and the terms set forth in the Offer to Exchange, IDT reserves the right to waive any and all conditions to the Exchange Offer.
 
You should use this Letter of Transmittal to deliver to American Stock Transfer & Trust Company (the “Exchange Agent”) Common Shares represented by stock certificates, or held in book-entry form on the books of IDT, for tender. If you are delivering your Common Shares by book-entry transfer to an account maintained by the Exchange Agent at The Depository Trust Company (“DTC”), you must use an Agent’s Message (as defined in Instruction 2 below). In this Letter of Transmittal, stockholders who deliver certificates representing their Common Shares are referred to as “Certificate Stockholders,” and stockholders who deliver their Common Shares through book-entry transfer are referred to as “Book-Entry Stockholders.” Please note that on February 24, 2009, IDT carried out a 1-for-3 reverse stock split of each share of its Common Stock, Class B Stock and Class A common stock.   If you are holding a stock certificate representing Common Shares prior to the 1-for-3 reverse stock split, such Common Shares will be reverse split on a 1-for-3 basis prior to the issuance of Class B Shares.
 
If certificates for your Common Shares are not immediately available or you cannot deliver your certificates and all other required documents to the Exchange Agent prior to the Expiration Date or you cannot complete the book-entry transfer procedures prior to the Expiration Date, you may nevertheless tender your Common Shares according to the guaranteed delivery procedures set forth in the section of the Offer to Exchange titled “Terms of the Exchange Offer — Procedures for Tendering — Guaranteed Delivery.” See Instruction 2 below. Delivery of documents to DTC will not constitute delivery to the Exchange Agent.
 
o
CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING (ONLY FINANCIAL INSTITUTIONS THAT ARE PARTICIPANTS IN DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
 
 
Name of Tendering
Institution:
                                                                                                    
 
DTC Participant
Number:
 
Transaction Code
Number:
o
CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY):
 
 
Name(s) of Registered Owner(s):
 
Window Ticket Number (if any) or DTC Participant
Number:
 
Date of Execution of Notice of Guaranteed
Delivery:
 
Name of Institution which Guaranteed
Delivery:
 
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
 
 
2

 
 
Ladies and Gentlemen:
 
Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to IDT the shares of Common Stock indicated above. Upon the terms and subject to the conditions of the Exchange Offer, IDT will issue up to 3,728,654 Class B Shares in exchange for up to 3,728,654 Common Shares, representing all of the outstanding Common Shares, to the extent such shares are properly tendered and not withdrawn prior to the expiration of the Exchange Offer, on the terms and subject to the conditions set forth in the Offer to Exchange, receipt of which is hereby acknowledged, and this Letter of Transmittal. For a more detailed description of the Class B Stock that IDT is proposing to issue in the Exchange Offer, please see the section of the Offer to Exchange titled “Description of Class B Stock.” The Exch ange Offer is open to all Holders and is subject to customary conditions. Subject to applicable securities laws and the terms set forth in the Offer to Exchange, IDT reserves the right to waive any and all conditions to the Exchange Offer.
 
On the terms and subject to the conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of such extension or amendment), subject to, and effective upon, acceptance for exchange and exchange for the Common Shares validly tendered herewith, and not properly withdrawn, prior to the Expiration Date (unless the tender is made during a subsequent offering period (as set forth in the Offer to Exchange), if one is provided, in which case the Common Shares, the Letter of Transmittal and other documents must be accepted for exchange and validly tendered, and not properly withdrawn, prior to the expiration of the subsequent offering period) in accordance with the terms of the Exchange Offer, the undersigned hereby tenders, sells, assigns and transfers to, or upon the order of, IDT, all right, title and interest in and to all of the Common Shares being tendered hereby.  In addition, the undersigned hereby irrevocably appoints American Stock Transfer & Trust Company (the “Exchange Agent”) the true and lawful agent and attorney-in-fact and proxy of the undersigned with respect to such Common Shares with full power of substitution (such proxies and power of attorney being deemed to be an irrevocable power coupled with an interest in the tendered shares) to the full extent of such stockholder’s rights with respect to such Common Shares (a) to deliver certificates representing Common Shares (the “Share Certificates”), or transfer of ownership of such Common Shares on the account books maintained by DTC, together, in either such case, with all accompanying evidence of transfer and authenticity, to or upon the order of IDT, (b) to present such Common Shares for transfer on the books of IDT, and (c) to receive all benefits and otherwis e exercise all rights of beneficial ownership of such Common Shares, all in accordance with the terms and subject to the conditions of the Exchange Offer.
 
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Common Shares, and to acquire Class B Shares issuable upon the exchange of such tendered Common Shares, and that, when the same are accepted for exchange, IDT will acquire good and unencumbered title to such Common Shares, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by IDT. The undersigned hereby represents and warrants that the undersigned is the registered owner of the Common Shares, or the Share Certificate(s) have been endorsed to the undersigned in blank, or the undersigned is a participant in DTC whose name appears on a security position listing as the owner of the Common Shares. The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or IDT to be necessary or desirable to complete the sale, assignment and transfer of the Common Shares tendered hereby.
 
It is understood that the undersigned will not receive any Class B Shares in exchange for the Common Shares unless and until the Common Shares are accepted for exchange and until the Share Certificate(s) owned by the undersigned are received by the Exchange Agent at the address set forth above, together with such additional documents as the Exchange Agent may require, or, in the case of Common Shares held in book-entry form, ownership of Common Shares is validly transferred on the account books maintained by DTC, and until the same are processed for exchange by the Exchange Agent.
 
IT IS UNDERSTOOD THAT THE METHOD OF DELIVERY OF THE COMMON SHARES, THE SHARE CERTIFICATE(S) AND ALL OTHER REQUIRED DOCUMENTS (INCLUDING DELIVERY THROUGH DTC) IS AT THE OPTION AND RISK OF THE UNDERSIGNED AND THAT THE RISK OF LOSS OF SUCH COMMON SHARES, SHARE CERTIFICATE(S) AND OTHER DOCUMENTS SHALL PASS ONLY AFTER THE EXCHANGE AGENT HAS ACTUALLY RECEIVED THE COMMON SHARES OR SHARE CERTIFICATE(S) (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION (AS DEFINED BELOW)).  IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED.  IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
 
 
3

 
 
All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal shall not be affected by, and shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Exchange, this tender is irrevocable.
 
The undersigned understands that the acceptance for exchange by IDT of Common Shares tendered pursuant to one of the procedures described in the section of the Offer to Exchange titled “Terms of the Exchange Offer — Procedures for Tendering” and in the instructions hereto will constitute a binding agreement between the undersigned and IDT upon the terms and subject to the conditions of the Exchange Offer.
 
Unless otherwise indicated herein under “Special Issuance Instructions,” please issue the Class B Shares in the name(s) of, and/or return any Share Certificates representing Common Shares not tendered or accepted for exchange to, the registered owner(s) appearing under “Description of Common Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the certificate representing the Class B Shares and/or return any Share Certificates representing Common Shares not tendered or accepted for exchange (and accompanying documents, as appropriate) to the address(es) of the registered owner(s) appearing under “Description of Common Shares Tendered.” In the event that both the Special Delivery Instructions and the Special Issuance Ins tructions are completed, please issue the Class B Shares and/or return any Share Certificates representing Common Shares not tendered or accepted for exchange (and any accompanying documents, as appropriate) in the name of, and [deliver such Class B Shares and/or] return such Share Certificates (and any accompanying documents, as appropriate) to, the person or persons so indicated. Unless otherwise indicated herein in the box titled “Special Issuance Instructions,” please credit any Common Shares tendered hereby or by an Agent’s Message and delivered by book-entry transfer, but which are not accepted for exchange, by crediting the account at DTC designated above. The undersigned recognizes that IDT has no obligation pursuant to the Special Issuance Instructions to transfer any Common Shares from the name of the registered owner thereof if IDT does not accept for exchange any of the Common Shares so tendered.
 
 
4

 
 
SPECIAL ISSUANCE INSTRUCTIONS
 
 
(See Instructions 1, 4, 5 and 7)
 
 
To be completed ONLY if Share Certificate(s) not tendered or not accepted for exchange and/or the Class B Shares to be issued in exchange for the Common Shares accepted for exchange are to be issued in the name of someone other than the undersigned or if Common Shares tendered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at DTC other than that designated above.
 
 
Issue Share Certificates to:
 
 
Name:  
  (Please Print)
 
Address:  
   
   
 (Include Zip Code)
 
 

(Tax Identification or Social Security Number)
 
o            Credit Common Shares tendered by book-entry transfer that are not accepted for exchange to the DTC account set forth below.


 

(DTC Account Number)
 
 
 SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 4, 5 and 7)
 
To be completed ONLY if Share Certificate(s) not tendered or not accepted for exchange [and/or the Class B Shares to be issued in exchange for the Common Shares accepted for exchange are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown in the box titled “Description of Common Shares Tendered” above.
 
 
Deliver Share Certificates to:
 
Name:  
  (Please Print)
 
Address:  
   
   
 (Include Zip Code)
 
 
 
5

 
 
IMPORTANT—SIGN HERE
 
 


(Signature(s) of Stockholder(s))

Dated:                      , 20__
 
(Must be signed by registered owner(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered owner(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5. For information concerning signature guarantees, see Instruction 1.)
 
 
 
Name(s):  
  (Please Print)
 
Capacity (full title):  
 
Address:   
   
 (Include Zip Code)
 
Area Code and Telephone Number:  
 
Tax Identification or  
Social Security No.:  
   
 
 
GUARANTEE OF SIGNATURE(S)
(For use by Eligible Institutions only;
see Instructions 1 and 5)
 
Name of Firm:  
   
  (Include Zip Code)
 
Authorized Signature:   
 
Name:    
   
 
(Please Type or Print)
 
Area Code and Telephone Number:  
   
   
 
Dated:                      , 20__
 
 

Place medallion guarantee in space below:
 
 
6

 
 
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
 
1)  Guarantee of Signatures.  Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program (each, an “Eligible Institution”). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered owner(s) (which term, for purposes of this document, includes any part icipant in any of DTC’s systems whose name appears on a security position listing as the owner of the Common Shares) of Common Shares tendered herewith and such registered owner has not completed the box titled “Special Issuance Instructions” or the box titled “Special Delivery Instructions” on this Letter of Transmittal or (b) if such Common Shares are tendered for the account of an Eligible Institution. See Instruction 5.
 
2) Delivery of Letter of Transmittal and Certificates or Book-Entry Confirmations.  This Letter of Transmittal is to be completed by stockholders if Share Certificates are to be forwarded herewith.  If tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in the section of the Offer to Exchange titled “Terms of the Exchange Offer — Procedures for Tendering,” an Agent’s Message must be utilized. A manually executed facsimile of this document may be used in lieu of the original. Share Certificates representing all physically tendered Common Shares, or confirmation of any book-entry transfer into the Exchange Agent’s account at DTC of C ommon Shares tendered by book-entry transfer (“Book Entry Confirmation”), as well as this Letter of Transmittal properly completed and duly executed with any required signature guarantees, or an Agent’s Message in the case of a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein prior to the Expiration Date (unless the tender is made during a subsequent offering period, if one is provided, in which case the Common Shares, the Letter of Transmittal and other documents must be received prior to the expiration of the subsequent offering period) (as set forth in the Offer to Exchange). Please do not send your Share Certificates directly to IDT.
 
Stockholders whose Share Certificates are not immediately available or who cannot deliver all other required documents to the Exchange Agent prior to the Expiration Date or who cannot complete the procedures for book-entry transfer prior to the Expiration Date may nevertheless tender their Common Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in the section of the Offer to Exchange titled “Terms of the Exchange Offer — Procedures for Tendering — Guaranteed Delivery.” Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery substantiall y in the form provided by IDT must be received by the Exchange Agent prior to the Expiration Date (or prior to the expiration of the subsequent offering period, as applicable), and (c) Share Certificates representing all tendered Common Shares, in proper form for transfer (or a Book Entry Confirmation with respect to such Common Shares), this Letter of Transmittal (or facsimile thereof), properly completed and duly executed with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message), and all other documents required by this Letter of Transmittal, if any, must be received by the Exchange Agent within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery.
 
A properly completed and duly executed Letter of Transmittal (or facsimile thereof) must accompany each such delivery of Share Certificates to the Exchange Agent.
 
The term “Agent’s Message” means a message, transmitted through electronic means by DTC to, and received by, the Exchange Agent and forming part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering the Common Shares which are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of this Letter of Transmittal and that IDT may enforce such agreement against the participant.  The term “Agent’s Message” also includes any hard copy printout evidencing such message generated by a computer terminal maintained at the Exchange Agent’s office.  For Common Shares to be validly tendered during any subsequent offering period, the tendering stockho lder must comply with the foregoing procedures, except that the required documents and certificates must be received before the expiration of the subsequent offering period and no guaranteed delivery procedure will be available during a subsequent offering period.
 
 
7

 
 
THE METHOD OF DELIVERY OF THE COMMON SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL BE DEEMED MADE AND RISK OF LOSS OF THE SHARE CERTIFICATES SHALL PASS ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
 
No alternative, conditional or contingent tenders will be accepted and no fractional Common Shares will be exchanged. All tendering stockholders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive any notice of the acceptance of their Common Shares for exchange.
 
All questions as to validity, form and eligibility (including time of receipt) of the surrender of any Share Certificate hereunder, including questions as to the proper completion or execution of any Letter of Transmittal, Notice of Guaranteed Delivery or other required documents and as to the proper form for transfer of any certificate of Common Shares, will be determined by IDT in its sole and absolute discretion (which may delegate power in whole or in part to the Exchange Agent) which determination will be final and binding. IDT reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for exchange of or exchange for which may be unlawful.  IDT also reserves the absolute right to waive any defect or irregularity in the surrender of any Common Shares or Shar e Certificate(s) whether or not similar defects or irregularities are waived in the case of any other stockholder. A surrender will not be deemed to have been validly made until all defects and irregularities have been cured or waived. IDT and the Exchange Agent shall make reasonable efforts to notify any person of any defect in any Letter of Transmittal submitted to the Exchange Agent.
 
3) Inadequate Space.  If the space provided herein is inadequate, the certificate numbers and/or the number of Common Shares should be listed on a separate schedule attached hereto and separately signed on each page thereof in the same manner as this Letter of Transmittal is signed.
 
4)  Partial Tenders (Applicable to Certificate Stockholders Only).  If fewer than all the Common Shares evidenced by any Share Certificate delivered to the Exchange Agent are to be tendered, fill in the number of Common Shares which are to be tendered in the column titled “Number of Common Shares Tendered” in the box titled “Description of Common Shares Tendered.” In such cases, new certificate(s) for the remainder of the Common Shares that were evidenced by the old certificate(s) but not tendered will be sent to the registered owner, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Common Shares represented by Share Certificates delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated.
 
5)  Signatures on Letter of Transmittal; Stock Powers and Endorsements.  If this Letter of Transmittal is signed by the registered owner(s) of the Common Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificate(s) without alteration or any other change whatsoever.
 
If any Common Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.
 
If any tendered Common Shares are registered in the names of different holder(s), it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of such Common Shares.
 
 
8

 
 
If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to IDT of their authority so to act must be submitted.
 
If this Letter of Transmittal is signed by the registered owner(s) of the Common Shares listed and transmitted hereby, no endorsements of Share Certificates or separate stock powers are required unless exchange is to be made to, or Share Certificates representing Common Shares not tendered or accepted for exchange are to be issued in the name of, a person other than the registered owner(s), in which case the Share Certificates representing the Common Shares tendered by this Letter of Transmittal must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered owner(s) or holder(s) appear(s) on the Share Certificates. Signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution.
 
If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Share(s) listed, the Share Certificate(s) must be endorsed or accompanied by the appropriate stock powers, in either case, signed exactly as the name or names of the registered owner(s) or holder(s) appear(s) on the Share Certificate(s). Signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution.
 
6) Transfer Taxes.  You will not be obligated to pay any transfer taxes in connection with the tender of shares of Common Stock in the Exchange Offer unless you instruct the Exchange Agent to register Class B Shares in the name of, or request that Common Shares not tendered or not accepted in the Exchange Offer be registered in the name of a person other than the registered tendering Holder. In those cases, you will be responsible for the payment of any applicable transfer tax. If satisfactory evidence of payment of these taxes or an exemption from payment is not submitted with this Letter of Transmittal, no shares of Class B Stock will be issued until such evidence is received by the Exchange Agent.
 
Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificates listed in this Letter of Transmittal.
 
7) Special Issuance and Delivery Instructions.  If Class B Shares are to be issued, and/or Share Certificates representing Common Shares not tendered or accepted for exchange are to be issued or returned to, a person other than the signer(s) of this Letter of Transmittal or to an address other than that shown in the box titled “Description of Common Shares Tendered” above, the appropriate boxes on this Letter of Transmittal should be completed. Stockholders delivering Common Shares tendered hereby or by Agent’s Message by book-entry transfer may request that Common Shares not accepted for exchange be credited to an account maintained at DTC as such stockholder may designate in the box titled “Special Issuance Instructions” herein. If n o such instructions are given, all such Common Shares not accepted for exchange will be returned by crediting the same account at DTC as the account from which such Common Shares were delivered.
 
8)  Requests for Assistance or Additional Copies.  Questions or requests for assistance may be directed to Bill Ulrey, Vice President–Investor Relations and External Affairs of IDT, at 520 Broad Street, Newark, New Jersey 07102 and phone number 973-438-3838 or to your broker, dealer, commercial bank or trust company. Additional copies of the Offer to Exchange, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be obtained from Mr. Ulrey, as well, and will be furnished at IDT’s expense.
 
9)  Lost, Destroyed, Mutilated or Stolen Share Certificates.  If any Share Certificate has been lost, destroyed, mutilated or stolen, the stockholder should promptly notify IDT’s stock transfer agent, American Stock Transfer & Trust Company at (800) 937-5449. The stockholder will then be instructed as to the steps that must be taken in order to replace the Share Certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, mutilated, destroyed or stolen Share Certificates have been followed.
 
10)  Waiver of Conditions.  Subject to the terms and conditions of the Exchange Offer (as set forth in the Offer to Exchange) and the applicable rules and regulations of the Securities and Exchange Commission, the conditions of the Exchange Offer may be waived by IDT in whole or in part at any time and from time to time in its sole discretion.
 
 
9

 
 
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY EXECUTED FACSIMILE COPY THEREOF) OR AN AGENT’S MESSAGE, TOGETHER WITH SHARE CERTIFICATE(S) OR BOOK-ENTRY CONFIRMATION OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
 
 
 
The Exchange Agent for the Offer to Exchange is:
 

 
If delivering by mail:
 
American Stock Transfer & Trust Company
Operations Center
Attn: Reorganization Department
P.O. Box 2042
New York, New York 10272-2042
 
 
 
If delivering by hand or courier:
 
American Stock Transfer & Trust Company
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219
 
 
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE EXCHANGE AGENT.
 
Any questions or requests for assistance or additional copies of this Offer to Exchange and the Letter of Transmittal may be directed to Bill Ulrey, Vice President–Investor Relations and External Affairs of IDT, at 520 Broad Street, Newark, New Jersey 07102 and phone number 973-438-3838. You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Exchange Offer.
 
10
EX-99.(A)(1)(C) 4 sc13e1210ex99aic_idt.htm NOTICE OF GUARANTEED DELIVERY sc13e1210ex99aic_idt.htm
Exhibit (a)(1)(C)
 
 
NOTICE OF GUARANTEED DELIVERY
 
 
FOR THE TENDER OF
 COMMON STOCK, PAR VALUE $.01 PER SHARE
 OF
IDT CORPORATION
 
 
This form or one substantially equivalent hereto must be used to accept the exchange offer (the “Exchange Offer”) of IDT Corporation (“IDT” or the “Issuer”) made pursuant to the Offer to Exchange, dated December 2, 2010 (the “Offer to Exchange”), if certificates for shares of IDT’s common stock, par value $.01 per share (the “Common Stock”), are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to be received by American Stock Transfer & Trust Company, LLC, as exchange agent for the Exchange Offer (the “Exchange Agent”) prior to 5:00 p.m., New York City time, on the Expiration Date of the Exchange Offer. Such form may be delivered or tr ansmitted by mail, facsimile transmission, hand delivery or courier to the Exchange Agent as set forth below. In addition, in order to utilize the guaranteed delivery procedure to tender shares of Common Stock pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal (or facsimile thereof or Agent’s Message in lieu thereof) must also be received by the Exchange Agent, together with any other documents required by the Letter of Transmittal, prior to 5:00 p.m., New York City time, on the Expiration Date. Terms used but not defined herein shall have the respective meanings ascribed to them in the Offer to Exchange.
 
 
DELIVERY TO:

 
         
If delivering by mail:
 
By Facsimile Transmission
 (for eligible institutions only):
 
If delivering by hand or courier:
American Stock Transfer & Trust
Company, LLC
 Operations Center
 Attn: Reorganization Department
 P.O. Box 2042
 New York, New York 10272-2042
 
American Stock Transfer &
 Trust Company, LLC
 Attn: Reorganization Department
 877-248-6417 or 718-234-5001
 
American Stock Transfer & Trust Company, LLC
 Operations Center
 Attn: Reorganization Department
 6201 15th Avenue
 Brooklyn, New York 11219-5441
 
For assistance call (877) 248-6417 or (718) 921-8317
 
Delivery of this instrument to an address other than as set forth above, or transmission of this instrument via facsimile other than as set forth above, will not constitute a valid delivery.
 
This instrument is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution, such signature guarantee must appear in the applicable space provided on the Letter of Transmittal for guarantee of signatures.

 
 

 
 
Ladies and Gentlemen:
 
Upon the terms and conditions set forth in the Offer to Exchange and the accompanying Letter of Transmittal, the undersigned hereby tenders to the Issuer the shares of Common Stock set forth below pursuant to the guaranteed delivery procedure described in “Terms of the Exchange Offer — Procedures for Tendering — Guaranteed Delivery” section of the Offer to Exchange.
 
 
DESCRIPTION OF SHARES OF COMMON STOCK
Name(s) and Address(es) of Registered Owner(s)
 
 
(If blank, please fill in exactly as name(s)
 
Share Certificate(s) and Share(s) Tendered
 
appear(s) on share certificate(s))
(attach additional list if necessary)
 
Share
 
Total Number of
 
Number of
 
 
Certificate
 
Shares Represented
 
Shares
 
 
Number(s)*
by Certificate(s)*
Tendered**
       
       
       
       
       
       
       
       
       
       
       
       
       
       
 
Total Shares:
   
       
* Need not be completed by book-entry stockholders.
** Unless otherwise indicated in this table, all shares of Common Stock represented by the certificates described above are being tendered in the Exchange Offer.
 
 
o 
Check here if tendered shares of Common Stock are being delivered by book-entry transfer made to the account maintained by the Exchange Agent with The Depository Trust Company (the “Book-Entry Transfer Facility”) and complete the following:
 
     
 
Name of Tendering Institution 
 
 

 
     
 
Account Number 
 
 

 
     
 
Transaction Code Number 
 


 
 

 
 
PLEASE SIGN HERE
 
         
X
       
         
X
       
   
Signature(s) of Holder(s)
 or Authorized Signatory
 
Date
 
Area Code and Telephone Number: (     )
 
Must be signed by the holder(s) of shares of Common Stock as their name(s) appear(s) on certificates for shares of Common Stock or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. If shares of Common Stock will be delivered by book-entry transfer to the Book-Entry Transfer Facility, please provide account number.
 
Please print name(s) and address(es)
 
   
Name(s): 
 
 

 
   
Capacity: 
 
 

 
   
Address(es): 
 
 

 
   
Account: 
 
 

All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

 
 

 
 
GUARANTEE
 (Not to be used for signature guarantees)
 
The undersigned, a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including a participant in the Securities Transfer Agents Medallion Program, the NYSE Medallion Signature Program and the Stock Exchanges Medallion Program, hereby guarantees that the certificates representing the shares of Common Stock tendered hereby in proper form for transfer, or timely confirmation of the book-entry transfer of such shares of Common Stock into the Exchange Agent’s account at the Book-Entry Transfer Facility pursuant to the procedures set forth in “Terms of the Exchange Offer — Procedures for Tendering — Guaranteed Delivery” section of the Offer to Exchange, together with one or more properly and duly executed Letters of Transmittal (or facsimile thereof or Agent’s Message in lieu thereof) and any required signature guarantee and any other documents required by the Letter of Transmittal, will be received by the Exchange Agent at the address set forth above, no later than three NYSE trading days after the Expiration Date.
 
     
     
Name of Firm
 
Authorized Signature
     
     
Address
 
Title
     
     
Zip Code
 
Name:
     
     
     
Area Code and Tel. No. 
   
   
(Please Type or Print)
     
   
Dated: 
 
 
Note: Do not send the certificates representing shares of Common Stock with this form. Certificates representing shares of Common Stock should be sent only with a copy of your previously executed Letter of Transmittal.
EX-99.(A)(1)(D) 5 sc13e1210ex99aid_idt.htm LETTER TO CLIENTS sc13e1210ex99aid_idt.htm
Exhibit (a)(1)(D)

IDT CORPORATION
COMMON STOCK, PAR VALUE $.01 PER SHARE
FOR
CLASS B COMMON STOCK, PAR VALUE $.01 PER SHARE
 
 
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JANUARY 4, 2011 UNLESS EXTENDED OR EARLIER TERMINATED. TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

 
To Our Clients:
 
Enclosed for your consideration is an Offer to Exchange, dated December 2,  2010 (the “Offer to Exchange”), and the related Letter of Transmittal (the “Letter of Transmittal”), relating to the offer (the “Exchange Offer”) of IDT Corporation (“IDT” or the “Issuer”) to exchange each share of IDT’s common stock, par value $.01 per share (the “Common Stock”), for one share of IDT’s Class B common stock, par value $.01 per share (the “Class B Stock”), from the holders thereof (the “Holders”).
 
This material is being forwarded to you as the beneficial owner of the shares of Common Stock held by us for your account but not registered in your name.  A tender of such shares of Common Stock may only be made by us as the holder of record and pursuant to your instructions.
 
Accordingly, we request instructions as to whether you wish us to tender on your behalf the shares of Common Stock held by us for your account, pursuant to the terms and subject to the conditions set forth in the enclosed Offer to Exchange and Letter of Transmittal.
 
Your instructions should be forwarded to us as promptly as possible in order to permit us to tender the shares of Common Stock on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m., New York City time, on January 4, 2011, unless extended or terminated by the Issuer. Any shares of Common Stock tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date.
 
Your attention is directed to the following:
 
1. The Exchange Offer provides you the opportunity to exchange your shares of Common Stock on a one-for-one basis for the Class B Stock.
 
2. The Exchange Offer is subject to certain conditions set forth in the Offer to Exchange in the section captioned “Terms of the Exchange Offer — Conditions to the Exchange Offer.”
 
3. The Exchange Offer expires at 5:00 p.m., New York City time, on January 4, 2011, unless extended by the Issuer.
 
If you wish to have us tender your shares of Common Stock, please so instruct us by completing, executing and returning to us the instruction form on the back of this letter.  The Letter of Transmittal is furnished to you for information only and may not be used directly by you to tender shares of Common Stock.

 
 

 
 
INSTRUCTIONS WITH RESPECT TO
 THE EXCHANGE OFFER
 
 
The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer made by IDT Corporation with respect to its shares of Common Stock.
 
This will instruct you to tender the shares of Common Stock held by you for the account of the undersigned, upon and subject to the terms and conditions set forth in the Offer to Exchange and the related Letter of Transmittal.
 
The undersigned expressly agrees to be bound by the enclosed Letter of Transmittal and that such Letter of Transmittal may be enforced against the undersigned.
 
 
     
 
Number of shares of Common Stock to be tendered: 
*
 
 
     
 
Account Number: 
 
 

 
     
 
Dated: 
 
 

 
     
*
 
Unless otherwise indicated, we are authorized to tender all shares of Common Stock held by us for your account.
 
 
PLEASE SIGN HERE
 
 
   
Signature(s): 
 
 

 
   
Print Name(s) here: 
 
 

 
   
Print Address(es): 
 
 

 
   
Area Code and Telephone Number(s): 
 
 

 
   
Tax Identification or Social Security Number(s): 
 
 

 
None of the shares of Common Stock held by us for your account will be tendered unless we receive written instructions from you to do so. Unless a specific contrary instruction is given in the space provided, your signature(s) hereon shall constitute an instruction to us to tender all the shares of Common Stock held by us for your account.

EX-99.(A)(1)(E) 6 sc13e1210ex99aie_idt.htm LETTER TO BROKERS sc13e1210ex99aie_idt.htm
Exhibit (a)(1)(E)
 
 
IDT CORPORATION
 OFFER TO EXCHANGE
 COMMON STOCK, PAR VALUE $.01 PER SHARE
FOR
CLASS B COMMON STOCK, PAR VALUE $.01 PER SHARE
 
 
 
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JANUARY 4, 2011 UNLESS EXTENDED OR EARLIER TERMINATED. TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

 
 
To: Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
 
IDT Corporation (“IDT” or the “Issuer”) is offering, upon the terms and subject to the conditions set forth in the Offer to Exchange, dated December 2, 2010 (the “Offer to Exchange”), and the enclosed letter of transmittal (the “Letter of Transmittal”), to exchange (the “Exchange Offer”) each share of IDT’s common stock, par value $.01 per share (the “Common Stock”), for one share of IDT’s Class B common stock, par value $.01 per share (the “Class B Stock”), from the holders thereof (the “Holders”). Terms used but not defined herein shall have the respective meanings ascribed to them in the Offer to Exchange.
 
We are requesting that you contact your clients for whom you hold shares of Common Stock regarding the Exchange Offer. For your information and for forwarding to your clients for whom you hold shares of Common Stock registered in your name or in the name of your nominee, we are enclosing the following documents:
 
1. Offer to Exchange dated December 2, 2010;
 
2. The Letter of Transmittal for your use and for the information of your clients;
 
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer if certificates for shares of Common Stock are not immediately available or time will not permit all required documents to reach the American Stock Transfer & Trust Company, LLC, Exchange Agent for the Exchange Offer prior to the Expiration Date (as defined below) or if the procedure for book-entry transfer cannot be completed on a timely basis;
 
4. A form of letter which may be sent to your clients for whose account you hold shares of Common Stock registered in your name or the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Exchange Offer; and
 
5. Return envelopes addressed to American Stock Transfer & Trust Company, LLC, the Exchange Agent for the Exchange Offer.
 
Your prompt action is requested. The Exchange Offer will expire at 5:00 p.m., New York City time, on January 4, 2011, unless extended or terminated by the Issuer (the “Expiration Date”). Shares of Common Stock tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date.
 
To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal (or facsimile thereof or Agent’s Message in lieu thereof), with any required signature guarantees and any other required documents, should be sent to the Exchange Agent, and certificates representing the shares of Common Stock, if any, should be delivered to the Exchange Agent, all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Exchange.
 
If a registered Holder desires to tender shares of Common Stock, but certificates representing shares of Common Stock are not immediately available, or time will not permit such Holder’s shares of Common Stock or other required documents to reach the Exchange Agent before the Expiration Date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Offer to Exchange under the caption “Terms of the Exchange Offer — Procedures for Tendering — Guaranteed Delivery.”

 
 

 

The Issuer will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding the Offer to Exchange and the related documents to the beneficial owners of shares of Common Stock held by them as nominee or in a fiduciary capacity. The Issuer will pay or cause to be paid all stock transfer taxes applicable to the exchange of shares of Common Stock pursuant to the Exchange Offer, except as set forth in Instruction 5 of the Letter of Transmittal.
 
Any inquiries you may have with respect to Exchange Offer, or requests for additional copies of the enclosed materials, should be directed to American Stock Transfer & Trust Company, LLC, the Exchange Agent for the Exchange Offer, at its address and telephone number set forth on the front of the Letter of Transmittal.
 
Very truly yours,

IDT Corporation
 
 
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF THE ISSUER OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE OFFER TO EXCHANGE OR THE LETTER OF TRANSMITTAL.
 
 
Enclosures
EX-99.(A)(5)(A) 7 sc13e1210ex99ava_idt.htm PRESS RELEASE sc13e1210ex99ava_idt.htm
Exhibit 99 (a)(5)(a)
IDT CORPORATION COMMENCES EXCHANGE OFFER

Newark, N.J. – December 2, 2010:   IDT Corporation (NYSE: IDT, IDT.C) has initiated an offer to exchange shares of its outstanding Common Stock (NYSE: IDT.C) for shares of Class B Common Stock (NYSE: IDT). For each outstanding share of Common Stock, IDT is offering to exchange one share of Class B Common Stock.

As of December 1, 2010, there were 3,728,654 shares of Common Stock outstanding.  The Company previously stated that the exchange offer is being made to address the limited liquidity in the market for the Common Stock and the resulting disparity in the trading prices between the two classes of Common Stock -- despite the fact that the equity rights associated with the shares of each class are nearly identical.

Following the completion of the exchange offer, the Common Stock may be delisted from the New York Stock Exchange.

Howard Jonas, who controls approximately 76% of the combined voting power of IDT’s outstanding capital stock, will adjust his holdings of IDT Class A Common Stock and Common Stock so as not to increase his combined voting power as a result of the exchange offer.

The exchange offer is made upon the terms and conditions set forth in the Offer to Exchange dated December 2, 2010, and the related Letter of Transmittal, which have been filed with the Securities and Exchange Commission and are being made available to holders of IDT Common Stock (see below).  

The offer will expire at 5:00 p.m. EST, on Tuesday, January 4, 2011, unless extended by IDT. Tenders of shares of Common Stock must be made prior to the expiration of the exchange offer and may be withdrawn at any time prior to the expiration of the exchange offer.

The consummation of the exchange offer is conditioned on at least 1,115,970 shares of Common Stock being tendered and not properly withdrawn in the exchange offer by IDT stockholders other than Mr. Jonas and his affiliates.

This press release is for informational purposes only and is neither an offer to purchase nor a solicitation to buy any shares of our Common Stock, nor is it a solicitation for acceptance of the exchange offer. The exchange is only being made by, and pursuant to, the terms of the exchange offer documents, including the Offer to Exchange and the related Letter of Transmittal, that IDT is distributing to holders of its Common Stock. The Offer to Exchange and the related Letter of Transmittal have also been filed today with the SEC as an exhibit to IDT’s Schedule TO/Schedule 13E-3 and will be mailed to holders of its Common Stock.  Those documents contain details of the offer, including complete instructions on the exchange process procedure along with the transmittal forms and other data.
 
 
 

 
 
Holders of our Common Stock should read the exchange offer documents because they contain important information. Stockholders can get the exchange offer documents without charge from the website of the SEC at www.sec.gov.
 
Holders of our Common Stock will also be able obtain the exchange offer documents from IDT without charge by directing a request to IDT Corporation, 520 Broad Street, Newark, New Jersey 07102, Attention: Bill Ulrey, Vice President-Investor Relations and External Affairs, Telephone: (973) 438-3838.

IDT’s Board of Directors has approved the exchange offer. However, neither IDT, nor its Board of Directors, makes any recommendation to any stockholder as to whether to tender or refrain from tendering any shares. IDT has not authorized any person to make any such recommendation.

Forward-Looking Statements
In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate, “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described in our most recent report on SEC Form 10-K (under the headings “Risk Factors” and “Manage ment’s Discussion and Analysis of Financial Condition and Results of Operations”), which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K.  We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.
 
Exchange Offer Statement
This press release is for informational purposes only and is neither an offer to buy nor the solicitation of an offer to sell any shares. The exchange offer will be made solely by a definitive Offer to Exchange, related Letter of Transmittal and other related documents that IDT is sending to its holders of Common Stock. Each holder of our Common Stock is urged to consult their tax advisor as to the particular tax consequences of the exchange offer to such stockholder. The materials have been included as exhibits to IDT’s exchange offer statement on Schedule TO/ Schedule 13E-3, which was filed with the Securities and Exchange Commission. These exchange offer materials contain important information that stockholders are urged to read carefully before making any decision with respect to the offer. Investors may obtain copies of these documents for free from the Securities and Exchange Commission at its website (www.sec.gov)

 
 

 
 
About IDT Corporation:

IDT Corporation (www.idt.net) is a consumer services company with operations primarily in the telecommunications and energy industries.  IDT Corporation’s Class B Common Stock and Common Stock trade on the New York Stock Exchange under the ticker symbols IDT and IDT.C respectively.

Investor Relations
IDT Corporation
Bill Ulrey
Phone:  (973) 438-3838
E-mail:  invest@idt.net

EX-99.(D)(A) 8 sc13e1210ex99da_idt.htm VOTING AGREEMENT sc13e1210ex99da_idt.htm
Exhibit 99(d)(A)
VOTING AGREEMENT

THIS VOTING AGREEMENT (this “Agreement”), dated as of December 2, 2010, between IDT Corporation, a Delaware corporation (the “Company”), and Howard S. Jonas, the Corporation’s Chairman, Chief Executive Officer and controlling stockholder (“Jonas”).

RECITALS

WHEREAS, as of the date hereof, Jonas, directly and indirectly, has sole or shared voting power over (i) 1,491,713 shares of the Company’s common stock, par value $.01 per share (the “Common Stock”), representing approximately 40% of the outstanding Common Stock, (ii) 3,272,326 shares of the Company’s Class A common stock, par value $.01 per share (the “Class A Stock”) , representing 100% of the outstanding Class A Stock, and (iii) 1,825,329 shares of the Company’s Class B common stock, par value $.01 per share (the “Class B Stock”), representing approximately 11.7% of the ou tstanding Class B Stock, and together representing approximately 76.1% (the “Voting Limit”) of the combined voting power of all of the Company’s outstanding capital stock (“Voting Power”);
 
WHEREAS, the Board of Directors of the Company (the “Board”) has authorized the Company to engage in an offer (the “Exchange Offer”) to exchange one share of Class B Stock for each share of the Common Stock outstanding;

WHEREAS, subject to certain exceptions and conditions, Jonas does not intend to tender the shares of Common Stock owned or controlled by him in the Exchange Offer;

WHEREAS, if the Exchange Offer is consummated, but less than all of the outstanding shares of Common Stock held by Unaffiliated Stockholders have been tendered and not withdrawn in the Exchange Offer by the Unaffiliated Stockholders, the Corporation intends to seek approval of its stockholders to amend the Corporation’s Second Restated Certificate of Incorporation so that each remaining share of Common Stock will automatically be converted and reclassified into one share of Class B Stock (the “Amendment”);

WHEREAS, Jonas intends to vote all of the shares of Common Stock over which he exercises voting control not tendered in the Exchange Offer (as well as the shares of Class B Stock and Class A Stock over which he exercises voting control) in favor of the Amendment;

WHEREAS, Jonas has agreed that, following the consummation of the Exchange Offer and the recapitalization of the Company’s capital stock associated with the Amendment (the “Recapitalization”), he shall exchange shares (the “A-B Exchange”) of Class A Stock over which he exercises voting control for shares of Class B Stock so that his Voting Power will not then exceed the Voting Limit.
 
 
 

 
 
WHEREAS, in order to ensure that during the pendency of the Exchange Offer (the “Limitation Period”), and, if the Company determines to proceed with the Recapitalization, until the effectiveness of the Amendment and Recapitalization and Jonas’ conversion of shares of Class A Stock referred to in the prior recital, his Voting Power will not increase beyond the Voting Limit as a result of the Exchange Offer, Jonas is hereby agreeing to certain limitations on his right to vote shares of Class A Stock (which is entitled to three votes per share) which he owns or over which he exercises voting control if such vote would increase his Voting Power beyond the Voting Limit during the Limitation Period.

NOW, THEREFORE, the parties hereto agree as follows:

           1.   Restriction on Voting.  Jonas hereby agrees to refrain from voting or causing to be voted during the Limitation Period any shares of Class A Stock which he owns or controls if such vote will cause his Voting Power to exceed the Voting Limit. Notwithstanding the foregoing, Jonas shall have the right to vote shares of Class A Stock which he owns or controls so long as such vote does not cause his Voting Power to exceed the Voting Limit.

2.   No Other Restrictions. Other than as specifically set forth herein with respect to the limitation on his right to vote shares of Class A Stock, Jonas shall not be subject to any other limitations or restrictions on voting shares of Class A Stock, or any limitations or restrictions on voting shares of Common Stock or Class B Stock, over which he exercises voting control. Furthermore, there shall be no limitations or restrictions on Jonas from disposing, acquiring or otherwise transferring any shares of Common Stock, Class A Stock or Class B Stock, provided that such disposition, acquisition or transfer does not cause his Voting Power to exceed the Voting Limit.

3.  Termination. This Agreement shall automatically terminate upon the earliest of (a) Jonas’ consummation of the A-B Exchange, that results in his actual Voting Power under the Company’s certificate of incorporation as then in effect of all shares of capital stock of IDT to the Voting Limit, (b) the termination of the Exchange Offer prior to its consummation, and (c) the mutual agreement of Jonas and the Company, provided that at such time Jonas’ Voting Power is not greater than the Voting Limit. Upon termination of this Agreement, (i) all obligations of the parties under this Agreement will terminate, without any liability or other obligation on the part of any party hereto to any person in respect hereof or the transactions contemplate d hereby, and no party shall have any claim against another (and no person shall have any rights against such party), whether under contract, tort or otherwise, and (ii) Jonas shall have the right to vote any and all of the shares of the Company’s capital stock owned or controlled by him in any manner.

4.  Entire Agreement; No Third-Party Beneficiaries. This Agreement (i) constitutes the entire agreement and supersedes all prior agreements, understandings and representations, both written and oral, among the parties with respect to the subject matter hereof and (ii) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.
 
 
 

 
 
5.  Additional Matters. Jonas shall, from time to time, execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and other instruments as Company may reasonably request for the purpose of effectively carrying out the transactions contemplated by this Agreement.

6.  Amendments. This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto.

7.  Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the conflicts of laws principles of such State.

8.  Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by Company without the prior written consent of Jonas or by Jonas without the prior written consent of Company, and any purported assignment without such consent shall be void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

9.  Directors and Officers. Notwithstanding any provision of this Agreement to the contrary, nothing in this Agreement shall limit or restrict Jonas from acting in his capacity as a director or officer of the Company (it being understood that this Agreement shall apply to Jonas solely in his capacity as a holder of voting power over shares of Class A Stock).
 
[Signature page follows]
 
 
 

 

IN WITNESS WHEREOF, each party has duly executed this Agreement, all as of the date first written above.

 
 
 
/s/ Howard S. Jonas  
    Howard S. Jonas  
 
 
    IDT CORPORATION  
       
 
 
/s/ Joyce J. Mason  
    Joyce J. Mason  
    Executive Vice President  
       
 
 
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