10-12G

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1

TO

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934

CTM MEDIA HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	26-4831346
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

11 Largo Drive South, Stamford, CT 06907

(Address of principal executive offices, zip code)

(203) 323-5161

 (Registrant’s telephone number, including area code)

With copies to:

CTM Media Holdings, Inc. 11 Largo Drive South Stamford, CT 06907 Dov T. Schwell, Esq. c/o Outside Counsel Solutions 1430 Broadway, Suite 1615 New York, NY 10018 (646) 328-0795

Securities to be registered pursuant to Section 12(b) of the Act:

Title of each class to be registered N/A Name of each exchange on which registered N/A

Securities registered pursuant to section 12(g) of the Act:

Class A common stock, par value $0.01 per share

Class B common stock, par value $0.01 per share

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	Accelerated filer                        o
Non-accelerated filer    o	Smaller reporting company      x

INFORMATION INCLUDED IN INFORMATION STATEMENT

AND INCORPORATED BY REFERENCE IN FORM 10

CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10

This registration statement on Form 10 (the “Form 10”) incorporates by reference information contained in the information statement filed as exhibit 99.1 hereto (the “information statement”). The cross-reference table below identifies where the items required by Form 10 can be found in the information statement.

Item No.	Item Caption	Location in Information Statement
1.	Business	“Executive Summary” and “Business”
1A.	Risk Factors	“Risk Factors”
2.	Financial Information	“Unaudited Pro Forma Consolidated Financial Data;” “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
3.	Properties	“Executive Summary” and “Business”
4.	Security Ownership of Certain Beneficial Owners and Management	“Security Ownership by Certain Beneficial Owners and Management”
5.	Directors and Executive Officers	“Management”
6.	Executive Compensation	“Executive Compensation”
7.	Certain Relationships and Related Transactions, and Director Independence	“Our Relationship with IDT After the Spin-Off and Related Person Transactions” and “Corporate Governance”
8.	Legal Proceedings	“Legal Proceedings”
9.	Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters	“Executive Summary;” “Risk Factors;” “The Spin-Off;” “Dividend Policy;” and “Description of Our Capital Stock”
10.	Recent Sale of Unregistered Securities	None
11.	Description of Registrant’s Securities to be Registered	“Description of Our Capital Stock”
12.	Indemnification of Directors and Officers	“Description of Our Capital Stock;” and “Our Relationship with IDT After the Spin-Off and Related Person Transactions”
13.	Financial Statements and Supplementary Data including the Consolidated Financial Statements	“Unaudited Pro Forma Consolidated Financial Data;” “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and “Index to Consolidated Financial Statements”
14.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	None
15.	Financial Statements and Exhibits	“Unaudited Pro Forma Consolidated Financial Data”; “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; Index to Financial Statements” and the financial statements referenced there

(a)           List of Financial Statements

The following historical and pro forma consolidated financial statements of CTM Media Group are included in the information statement and filed as part of this registration statement on Form 10:

(1)             Audited Consolidated Financial Statements, including Report of Independent Registered Public Accounting Firm, as of July 31, 2008 and 2007 and for the years ended July 31, 2008 and 2007;

(2)             Unaudited Consolidated Balance Sheet as of April 30, 2009;

(3)             Unaudited Consolidated Statements of Operations for the nine months ended April 30, 2009 and 2008; and

(4)             Unaudited Pro Forma Consolidated Balance sheet as of April 30, 2009 and Unaudited Pro Forma Consolidated Statements of Operations for the nine months ended April 30, 2009 and for the fiscal year ended July 31, 2008.

(b)           Exhibits

The following exhibits are filed herewith unless otherwise indicated:

Exhibit Number	Exhibit Description
2.1	Form of Separation and Distribution Agreement between IDT Corporation and CTM Media Holdings, Inc.
3.1	Restated Certificate of Incorporation of CTM Media Holdings, Inc.
3.2	By-Laws of CTM Media Holdings, Inc.#
4.1	Specimen common stock certificate of CTM Media Holdings, Inc.**
10.1	Form of 2009 Stock Option and Incentive Plan*
10.2	Form of Services Agreement between IDT Corporation and CTM Media Holdings, Inc.
10.3	Form of Tax Separation Agreement between IDT Corporation and CTM Media Holdings, Inc.
21.1	List of Subsidiaries of CTM Media Holdings, Inc.**
99.1	Preliminary Information Statement of CTM Media Holdings, Inc., subject to completion, dated July 7, 2009

__________________________

# Previously filed.

* Management contract or compensatory plan or arrangement

** To be filed by amendment

SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

	CTM Media Holdings, Inc.
Dated: July 7, 2009	By:	/s/ Marc Knoller
		Name: Marc Knoller
		Title: Chief Executive Officer

INDEX TO EXHIBITS
Exhibit Number	Exhibit Description
2.1	Form of Separation and Distribution Agreement between IDT Corporation and CTM Media Holdings, Inc.
3.1	Restated Certificate of Incorporation of CTM Media Holdings, Inc.
3.2	By-Laws of CTM Media Holdings, Inc.#
4.1	Specimen common stock certificate of CTM Media Holdings, Inc.**
10.1	Form of 2009 Stock Option and Incentive Plan*
10.2	Form of Services Agreement between IDT Corporation and CTM Media Holdings, Inc.
10.3	Form of Tax Separation Agreement between IDT Corporation and CTM Media Holdings, Inc.
21.1	List of Subsidiaries of CTM Media Holdings, Inc.**
99.1	Preliminary Information Statement of CTM Media Holdings, Inc., subject to completion, dated July 7, 2009

__________________________

# Previously filed.

* Management contract or compensatory plan or arrangement

** To be filed by amendment

EX-2.1

Exhibit 2.1

THIS IS THE FORM OF SEPARATION AND DISTRIBUTION AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

SEPARATION AND DISTRIBUTION AGREEMENT

by and between

IDT CORPORATION

And

CTM MEDIA HOLDINGS, INC.

Dated as of [____ __,] 2009

          This SEPARATION AND DISTRIBUTION AGREEMENT (this “Agreement”), dated as of [___ __], 2009, by and between IDT Corporation, a Delaware corporation (“IDT”), and CTM Media Holdings, Inc., a Delaware corporation (“CTM”; and together with IDT, the “Parties”, and each individually, a “Party”).

RECITALS

WHEREAS, on or prior to the Distribution Date and effective as of the Effective Time, all of the outstanding stock of (i) CTM Media Group, Inc., a New York corporation (“CTM Media”), (ii) Beltway Acquisition Corporation d/b/a WMET, a Delaware corporation (“Beltway”), (iii) IDT Local Media, Inc., a Delaware corporation (“Local Media”) and (iv) IDT Internet Mobile Group, Inc., a Delaware corporation, which holds all of IDT’s interests in IDW (“IIMG”; and together with CTM, Beltway and Local Media,  the “Transferred Subsidiaries”) will be contributed by IDT to CTM.

WHEREAS, the Board of Directors of IDT has determined that it is in the best interests of IDT and its stockholders to (a) effect a split (the “Stock Split”) of the then outstanding shares of CTM Common Stock into the number and class of shares necessary to effect the Distribution, and (b) thereafter make a distribution (the “Distribution”) to the holders of IDT Common Stock of all of the outstanding shares of CTM Common Stock at the rate of (i) one (1) share of CTM Class A common stock for every three (3) shares of IDT common stock, (ii) one (1) share of CTM Class B common stock for every three (3) shares of IDT Class B common stock, and (iii) one (1) share of CTM Class C common stock for every three (3) shares of IDT Class A common stock, each outstanding as of the Record Date; and

WHEREAS, the Parties have determined that it is necessary and desirable to set forth the principal corporate transactions required to effect the Distribution and to set forth other agreements that will govern certain other matters following the Distribution.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements and covenants contained in this Agreement and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Definitions. As used herein, the following terms have the following meaning:

“Action” means any claim, suit, arbitration, inquiry, proceeding, or investigation by or before any court, governmental or other regulatory or administrative agency or commission or any other tribunal.

“Affiliate” means, when used with respect to a specified Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such specified Person. For the purposes of this definition, “control”, when used with respect to any specified Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract or otherwise.

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“Amended Financial Report” is defined in Section 4.05(b).

“Ancillary Agreements” means all of the written agreements, instruments, understandings, assignments and other arrangements (other than this Agreement) entered into in connection with the transactions contemplated hereby, including, but not limited to, the Tax Separation Agreement and Master Services Agreement.

“Assets” means all properties, rights, contracts, leases and claims, of every kind and description, wherever located, whether tangible or intangible, and whether real, personal or mixed.

“Audited Party” is defined in Section 4.05(a)(ii).

“Benefit Plan” means, with respect to an entity, each plan, program, arrangement, agreement or commitment that is an employment, change in control/severance, consulting, non-competition or deferred compensation agreement, or an executive compensation, incentive bonus or other bonus, employee pension, profit-sharing, savings, retirement, supplemental retirement, stock option, stock purchase, stock appreciation rights, restricted stock, other equity-based compensation, severance pay, salary continuation, life, health, hospitalization, sick leave, vacation pay, disability or accident insurance plan, corporate-owned or key-man life insurance or other benefit plan, program, arrangement, agreement or commitment, including any “employee benefit plan” (as defined in Section 3(3) of ERISA), sponsored or maintained by such entity (or to which such entity contributes or is required to contribute).

“Beltway” is defined in the recitals to this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commission” means the United States Securities and Exchange Commission.

“Confidential Information” means all business or operational information concerning a Party and/or its subsidiaries (the disclosing party) (including (i) earnings reports and forecasts, (ii) macro-economic reports and forecasts, (iii) business and strategic plans, (iv) general market evaluations and surveys, (v) litigation presentations and risk assessments, (vi) budgets, (vii) financing and credit-related information, (viii) specifications, ideas and concepts for products and services, (ix) quality assurance policies, procedures and specifications, (x) customer information, (xi) Software, (xii) training materials and information, and (xiii) all other know-how, methodology, procedures, techniques and trade secrets related to design, development and operational processes) which, prior to or following the Effective Time, has been disclosed by the disclosing party to the other Party or its subsidiaries (the receiving party), in written, oral (including by recording), electronic, or visual form to, or otherwise has come into the possession of, the other (except to the extent that such information can be shown to have been (i) in the public domain through no action of the receiving party, (ii) lawfully acquired from other sources by the receiving party  or (iii) independently developed by the receiving party; provided, however, in the case of clause (ii) that, to the receiving party’s knowledge, such sources did not provide such information in breach of any confidentiality obligations).

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“CTM” is defined in the Preamble to this Agreement.

“CTM Accounts” is defined in Section 4.01(a).

“CTM Action” means any current or future Action relating primarily to the CTM Business in which one or more members of the IDT Group is a defendant or the party against whom a claim or investigation is directed, but excluding any Joint Action.

“CTM Articles” means the certificate of incorporation of CTM in the form filed as an exhibit to the Form 10 at the time it becomes effective.

“CTM Business” means the business comprised of the CTM Media, IDW, Local Media and WMET businesses and other entities included in the CTM Group.

“CTM Business Balance Sheet” means the consolidated balance sheet of CTM as of April 30, 2009, as set forth in the Information Statement.

“CTM Bylaws” means the bylaws of CTM in the form filed as an exhibit to the Form 10 at the time it becomes effective.

“CTM Common Stock” means the outstanding shares of (i) Class A common stock, $0.01 par value per share, (ii) Class B common stock, $0.01 par value per share, and (iii) Class C common stock, $0.01 par value per share, of CTM.

“CTM Group” means CTM and its subsidiaries, affiliates, joint ventures and partnerships, excluding any member of the IDT Group.

“CTM Group Employee” means an active employee or an employee on vacation or on approved leave of absence (including maternity, paternity, family, sick leave, salary continuation, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act and other approved leaves) who, after the Effective Time, is employed by or will be employed by any member of the CTM Group.

“CTM Indemnitee” is defined in Section 6.02.

“CTM Liabilities” means:

(i)           the Liabilities listed or described on Schedule 1.01(c) and any and all Liabilities that are expressly contemplated by this Agreement, the Tax Separation Agreement or any other Ancillary Agreement as Liabilities to be retained, assumed or retired by any member of the CTM Group;

(ii)           any and all Liabilities of IDT, CTM, or any of their respective Affiliates, primarily relating to, arising out of or resulting from the operation or conduct of the CTM Business or any other business, or the ownership or use of the Assets of the CTM Group, as conducted at any time on or after the Effective Time (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative of IDT, CTM, or any of their respective Affiliates (whether or not such act or failure to act is or was within such Person’s authority));

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(iii)           except as otherwise expressly provided in this Agreement or any Ancillary Agreement, Liabilities set forth on the CTM Business Balance Sheet;

(iv)           any and all Liabilities to the extent relating to, arising out of or resulting from any termination, sale, discontinuance or divesture of any entity, business, real property, or Asset formerly and primarily owned or managed by, or associated with any member of the CTM Group or the CTM Business which occurs after the Effective Time, or arising out of such entity, business, real property, or Asset.

(v)           any and all Liabilities, including those Liabilities listed on Schedule 1.01(d), relating to, arising out of or resulting from any Indebtedness (including debt securities and asset-backed debt) of any member of the CTM Group (whether incurred prior to, on or after the Effective Time);

(vi)           any and all Liabilities which IDT becomes liable for, or may incur or be compelled to pay by reason of any actions, whether of omission or commission, that may be committed by CTM or any of its directors, officers, agents, or affiliates in connection with CTM’s use of the Mark or any products and services developed, created, published, distributed, sold, licensed, or advertised by CTM, irrespective of whether any prior approvals shall have been given by IDT with respect thereto; and

(vii)           any and all Liabilities relating to, resulting from, or arising out of any Action that is primarily related to the operation of the CTM Business following the Effective Time, including any CTM Action.

Notwithstanding the foregoing, the CTM Liabilities shall in any event not include:

(A)           any Liabilities that (i) are expressly contemplated by this Agreement or any Ancillary Agreement as Liabilities to be retained or assumed by any member of the IDT Group or (ii) are set forth on Schedule 1.01(a) (collectively, the “Retained Liabilities”); and

(B)           any Liabilities related or attributable to, or arising in connection with, Taxes or Tax returns relating to periods prior to the Effective Time.

FOR THE AVOIDANCE OF DOUBT, NO LIABILITY SHALL BE A CTM LIABILITY SOLELY AS A RESULT OF CTM OR ANY OTHER MEMBER OF THE CTM GROUP BEING NAMED AS PARTY TO, OR IN, ANY ACTION.

“CTM Media” is defined in the recitals to this Agreement.

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“CTM Stock Plan” means the CTM Media Holdings, Inc. 2009 Stock Option and Incentive Plan.

“CTM 401(k) Plan” is defined in Section 7.02(a).

“Disputes” is defined in Section 11.15(a).

“Distribution” is defined in the recitals to this Agreement.

“Distribution Agent” means American Stock Transfer & Trust Company, in its capacity as agent for IDT in connection with the Distribution.

“Distribution Date” means the date upon which the Distribution shall be effective, as determined by the Board of Directors of IDT, or such committee of such Board of Directors as shall be designated by the Board of Directors of IDT.

“Effective Time” means 11:59 p.m., New York City time, on the Distribution Date.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Force Majeure” means, with respect to a Party, an event beyond the reasonable control of such Party (or any Person acting on its behalf), which by its nature could not have been foreseen by such Party (or such Person), or, if it could have been foreseen, was unavoidable, and includes acts of G-d, storms, floods, earthquakes, hurricanes, riots, pandemics, fires, sabotage, strikes, lockouts, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) or armed hostilities or other national or international calamity or one or more acts of terrorism.

“Form 10” means the registration statement on Form 10 filed by CTM with the Commission to effect the registration of the CTM Class A common stock and CTM Class B common stock pursuant to the Exchange Act, as such registration statement may be amended from time to time.

“Governmental Entity” means any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, commission, department, board, bureau or court, whether domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any official thereof.

“Group” means the IDT Group or the CTM Group, as the context so requires.

“IDT” is defined in the Preamble to this Agreement.

“IDT Accounts” is defined in Section 4.01(a).

“IDT Business” means the business now or formerly conducted by IDT and its present and former subsidiaries, joint ventures and partnerships, other than the CTM Business.

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“IDT Common Stock” means the outstanding shares of (i) common stock, $0.01 par value per share, (ii) Class A common stock, $0.01 par value per share, and (iii) Class B common stock, $0.01 par value per share, of IDT.

“IDT Group” means IDT and its subsidiaries, affiliates, joint ventures and partnerships, excluding any member of the CTM Group.

“IDT Group Employee” means an active employee or an employee on vacation or on approved leave of absence (including maternity, paternity, family, sick leave, salary continuation, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act and other approved leaves) who, after the Effective Time, is employed by or will be employed by any member of the IDT Group.

“IDT Indemnitees” is defined in Section 6.01.

“IDT Liabilities” means, other than those Liabilities which are designated as CTM Liabilities hereunder, (i) Liabilities of any member of the IDT Group under this Agreement, the Tax Separation Agreement or any Ancillary Agreement or otherwise and (ii) any Liabilities of any member of the CTM Group arising, or related to the period, prior to the Effective Time.

FOR THE AVOIDANCE OF DOUBT, NO LIABILITY SHALL BE AN IDT LIABILITY SOLELY AS A RESULT OF IDT OR ANY OTHER MEMBER OF THE IDT GROUP BEING NAMED AS PARTY TO, OR IN, ANY ACTION.

“IDT Welfare Plans” means the health and welfare plans maintained by the IDT Group set forth on Schedule 7.03.

“IDW” means Idea and Design Works, LLC d/b/a IDW Publishing, a California limited liability company and subsidiary of IIMG.

“Indebtedness” means (i) any indebtedness for borrowed money or the deferred purchase price of property as evidenced by a note, bonds or other instruments, (ii) obligations as lessee under capital leases, (iii) obligations secured by any mortgage, pledge, security interest, encumbrance, lien or charge of any kind existing on any asset owned or held by any Person, whether or not such Person has assumed or becomes liable for the obligations secured thereby, (iv) any obligation under any interest rate swap agreement, (v) accounts payable, (vi) reimbursement obligations with respect to surety and performance bonds or letters of credit, and (vii) obligations under direct or indirect guarantees of (including obligations, contingent or otherwise, to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i), (ii), (iii), (iv), (v) and (vi) above.

“IIMG” is defined in the recitals to this Agreement.

“Indemnifiable Loss” means any and all damage, loss, liability, and expense (including, without limitation, reasonable expenses of investigation and reasonable attorneys’ fees and expenses) in connection with any and all Actions or threatened Actions.

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“Indemnified Party” is defined in Section 6.06.

“Indemnifying Party” is defined in Section 6.06.

“Indemnity Payment” is defined in Section 6.05(a).

“Information” means information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), communications and materials otherwise related to or made or prepared in connection with or in preparation for any legal proceeding, and other technical, financial, employee or business information or data.

“Information Statement” means the information statement required by the Commission to be sent to each holder of IDT Common Stock in connection with the Distribution, and prepared in accordance with the Exchange Act.

“Insurance Proceeds” means those monies (i) received by an insured from an unaffiliated third-party insurer under any Third Party Policy, or (ii) paid by such third-party insurer on behalf of an insured under any Third Party Policy, in either case net of any applicable premium adjustment, retrospectively-rated premium, deductible, self-insured retentions, or cost of reserve paid or held by or for the benefit of such insured.

“Intercompany Accounts” means any receivable, payable or loan between any member of the IDT Group, on the one hand, and any member of the CTM Group, on the other hand, that exists prior to the Effective Time and is reflected in the Records of the relevant members of the IDT Group and the CTM Group, except for any such receivable, payable or loan that arise pursuant to this Agreement or any Ancillary Agreement.

“Joint Action” means any current or future Action with respect to which it is unclear at the onset of such Action whether Liabilities will arise primarily in connection with the CTM Business or the IDT Business, including any of the Actions listed on Schedule 5.01(e).

“Law” means any United States or non-United States federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

“Liabilities” means any and all claims, debts, liabilities and obligations, absolute or contingent, matured or not matured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, including all costs and expenses relating thereto, and including, without limitation, those debts, liabilities and obligations arising under this Agreement or any Ancillary Agreement, any law, rule, regulation, action, order or consent decree of any Governmental Entity or any award of any arbitrator of any kind, and those arising under any contract, commitment or undertaking.

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“License” is defined in Section 4.04(d).

“Mark” is defined in Section 4.04(d).

“Master Services Agreement” means the Master Services Agreement, dated as of the date hereof, entered into by and between IDT and CTM, substantially in the form of Exhibit A hereto.

“Materials” is defined in Section 4.04(d)(iv).

“Other Party’s Auditors” is defined in Section 4.05(a)(ii).

“Other Party Marks” is defined in Section 4.04(a).

“Party” is defined in the Preamble to this Agreement.

“Person” means any natural person, firm, individual, corporation, business trust, joint venture, association, company, limited liability company, partnership or other organization or entity, whether incorporated or unincorporated, or any Governmental Entity.

“Policies” means insurance policies and insurance agreements or arrangements of any kind (other than life and benefits policies, agreements or arrangements), including primary, excess and umbrella policies, comprehensive general liability policies, director and officer liability, fiduciary liability, automobile, aircraft, property and casualty, business interruption, workers’ compensation and employee dishonesty insurance policies, bonds and self-insurance company arrangements, together with the rights, benefits and privileges thereunder.

“Record Date” means the date designated by or under the authority of IDT’s Board of Directors as the record date for determining the stockholders of IDT entitled to receive the Distribution.

“Record Holder” means the Party or its agent in possession or control of the Shared Record for storage or archival purposes. Each Party shall be deemed to be the Record Holder for any Shared Record that is possessed or controlled by a member of such Party’s respective Group.

“Records” means any Information, agreements, documents, books, records or files.

“Retained Liabilities” is defined in this Section 1.01 as set forth in the definition of “CTM Liabilities.”

“Shared Record(s)” means those Records set forth on Schedule 10.02, as amended from time to time by written agreement of the Parties.

“Software” means all computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, and technology supporting the foregoing, and all documentation, including flowcharts and other logic and design diagrams, technical, functional and other specifications, and user and training materials related to any of the foregoing.

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“Spinoff” means the transaction in which CTM will be separated from IDT and become a separately-traded public company.

“Stock Split” is defined in the recitals to this Agreement.

“Tax(es)” means all taxes, charges, duties, fees, levies, or other assessments, including income, gross receipts, excise, property, sales, transfer, ad valorem, profits, windfall profits, use, license, payroll, franchise, value-added, production, severance, withholding, payroll, employment, social security, and other taxes, however denominated, imposed by any Governmental Entity, whether disputed or not, and includes any estimated taxes, interest, penalties or additions to tax that are payable or may become payable in respect thereof.

“Tax Separation Agreement” means the Tax Separation Agreement, dated as of the date hereof, entered into by and between IDT and CTM, substantially in the form of Exhibit B hereto.

“Third Party Claim” means a claim or demand made against an IDT Indemnitee or a CTM Indemnitee by any Person who is not a Party or an Affiliate of a Party as to which such IDT Indemnitee or CTM Indemnitee, as applicable, is or may be entitled to indemnification pursuant to this Agreement.

“Third Party CTM Policies” means all Policies, whether or not in force on the Effective Time, issued by unaffiliated third-party insurers to IDT, CTM, or any of their respective Affiliates that cover risks that relate to the CTM Business.

“Third Party Proceeds” is defined in Section 6.05(a).

“Trademarks” means all United States and foreign trademarks, service marks, corporate names, trade names, domain names, logos, slogans, designs, trade dress and other similar identifiers of source or origin, whether registered or unregistered, together with the goodwill connected with the use of and symbolized by any of the foregoing.

“Transferred Subsidiaries” is defined in the recitals to this Agreement.

“Transferring Party” is defined in Section 11.05(a).

“WMET” means the WMET-AM radio station in the Washington, D.C. metropolitan area.

ARTICLE II

REORGANIZATION

Section 2.01. Reorganization. On or prior to the Distribution Date and effective as of the Effective Time, IDT shall transfer and assign to CTM all of the outstanding stock of the Transferred Subsidiaries then held by IDT.

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Section 2.02. Limitation of Liability.

(a)           Except as provided in Section 9.01 or as set forth in subsection (b) below, (i) neither Party nor any member of such Party’s Group shall have any Liability to any other Party or any member of such other Party’s Group based upon, arising out of or resulting from any agreement, arrangement, course of dealing or understanding existing on or prior to the Effective Time (other than this Agreement or any Ancillary Agreement or any agreement entered into in connection herewith or therewith in order to consummate the transactions contemplated hereby or thereby), and (ii) each Party hereby terminates, and shall cause all members in its Group to terminate, any and all agreements, arrangements, course of dealings or understandings between it or any members in its Group and the other Party, or any members of its Group, effective as of the Effective Time (other than this Agreement or any Ancillary Agreement or any agreement entered into in connection herewith or in order to consummate the transactions contemplated hereby or thereby), unless such agreement, arrangement, course of dealing or understanding is set forth in any Ancillary Agreement or on Schedule 2.02(b). Any Liability, whether or not in writing, which is not reflected in any Ancillary Agreement or on Schedule 2.02(b), is hereby irrevocably cancelled, released and waived effective as of the Effective Time. All such terminated agreements, arrangements, courses of dealing and understandings (including any provision thereof which purports to survive termination) shall no longer be of any further force or effect after the Effective Time.

(b)           The provisions of Section 2.02(a) shall not apply to any of the following agreements, arrangements, course of dealings or understandings (or to any of the provisions thereof), other than those agreements, arrangements, course of dealings or understandings set forth on Schedule 2.02(b):

(i)           any agreement or arrangement to which any Person other than the Parties and their respective Affiliates is a Party; and

(ii)           any agreements, arrangements, commitments or understandings to which any non-wholly-owned subsidiary or non-wholly-owned Affiliate of IDT or CTM is a Party.

ARTICLE III

THE DISTRIBUTION

Section 3.01. Cooperation Prior to the Distribution.

(a)           IDT and CTM shall prepare, and IDT shall mail to the holders of IDT Common Stock, the Information Statement, which shall set forth appropriate disclosure concerning CTM, the Distribution and any other appropriate matters. IDT and CTM shall also prepare, and CTM shall file with the Commission, the Form 10, which shall include the Information Statement. IDT and CTM shall use commercially reasonable efforts to cause the Form 10 to become effective under the Exchange Act.

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(b)           IDT shall, as the sole stockholder of CTM, approve and adopt the CTM employee benefit plans listed on Schedule 3.01(c).

Section 3.02. Conditions Precedent to the Distribution. In no event shall the Distribution occur unless the following conditions shall have been satisfied (or waived, other than clause (iii) which shall not be waivable):

(i)           the Commission has declared the Form 10 effective under the Exchange Act and no stop order relating to the Form 10 is in effect;

(ii)           no action, proceeding or investigation shall have been instituted or threatened before any court or administrative body to restrain, enjoin or otherwise prevent the consummation of the Spinoff, and no restraining order or injunction issued by any court of competent jurisdiction shall be in effect restraining the consummation of the Spinoff;

(iii)           the receipt by IDT of the opinion by Stern & Kilcullen, LLC as to the satisfaction of certain required qualifying conditions for the application of Section 355 of the Code to the Spinoff; and

(iv)           the IDT Board of Directors shall not have determined to abandon or modify the Spinoff.

Section 3.03. The Distribution. On or before the Distribution Date, subject to satisfaction or waiver of the conditions set forth in this Agreement, IDT shall (a) effect a stock split of the outstanding shares of CTM Common Stock so that the number and class of such shares that are outstanding shall equal the amount necessary to effect the distribution described in this Section 3.03, and (b) deliver to the Distribution Agent a certificate or certificates representing all of the then outstanding shares of CTM Common Stock held by the IDT Group, endorsed in blank, and shall instruct the Distribution Agent to distribute to each holder of record of IDT Common Stock on the Record Date (i) one (1) share of CTM Class A common stock for every three (3) shares of IDT common stock, (ii) one (1) share of CTM Class B common stock for every three (3) shares of IDT Class B common stock, and (iii) one (1) share of CTM Class C common stock for every three (3) shares of IDT Class A common stock, each outstanding as of the Record Date, by crediting the holder’s brokerage account. CTM agrees to provide all certificates for shares of CTM Common Stock that the Distribution Agent shall require in order to effect the Distribution, including physical certificated for shares of Class C common stock of CTM and for those holders of Class A common stock and Class B common stock of CTM who request physical certificates.

ARTICLE IV

COVENANTS

Section 4.01. Bank Accounts.

(a)           The Parties agree to take, or cause the respective members of their respective Groups to take, at the Effective Time (or such earlier time as the Parties may agree), all actions necessary to amend all agreements or arrangements governing each bank and brokerage account owned by CTM or any other member of the CTM Group (the “CTM Accounts”), including all CTM Accounts listed or described on Schedule 4.01(a), so that such CTM Accounts, if currently linked (whether by automatic withdrawal, automatic deposit, or any other authorization to transfer funds from or to, hereinafter “linked”) to any bank or brokerage account owned by IDT or any other member of the IDT Group (the “IDT Accounts”) are de-linked from the IDT Accounts. From and after the Effective Time, no current or former employee of any member of the IDT Group shall have any authority to access, control or sign in connection with any CTM Account other than those who will be authorized CTM employees.

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(b)           The Parties agree to take, or cause the respective members of their respective Groups to take, at the Effective Time (or such earlier time as the Parties may agree), all actions necessary to amend all agreements or arrangements governing the IDT Accounts so that such IDT Accounts, if currently linked to a CTM Account, are de-linked from the CTM Accounts. From and after the Effective Time, no current or former employee of any member of the CTM Group shall have any authority to access, control or sign in connection with any IDT Account other than those who will be authorized IDT employees.

(c)           With respect to any outstanding checks issued by IDT, CTM, or any of their respective subsidiaries prior to the Effective Time, such outstanding checks shall be honored following the Effective Time by the entity or Group owning the account on which the check is drawn.

(d)           As between the two Parties (and the members of their respective Groups) all payments and reimbursements received after the Effective Time by any Party (or member of its Group) that relate to a business, Asset or Liability of another Party (or member of its Group), shall be held by such Party in trust for the use and benefit of the Party entitled thereto (at the expense of the Party entitled thereto) and, promptly upon receipt by such Party of any such payment or reimbursement, such Party shall pay over, or shall cause the applicable member of its Group to pay over to the other Party the amount of such payment or reimbursement without right of set-off.

Section 4.02. Insurance.

(a)           Following the cessation of any member of the CTM Group’s coverage under a Third Party CTM Policy, if (i) an occurrence for which coverage is available under any such Third Party CTM Policy happens prior to the Effective Time and (ii) a claim arising therefrom has been or is eventually asserted against CTM or any other member of the CTM Group (including any officer, director, employee or agent thereof), so long as such claim is reported by CTM to the carrier (with a copy to IDT), in accordance with the reporting provision of the applicable policy, then IDT will, or will cause the members of the IDT Group that are insured thereunder to, (A) continue to provide CTM and any other member of the CTM Group with access to and coverage under the applicable Third Party CTM Policies and (B) reasonably cooperate with CTM and take commercially reasonable actions as may be necessary or advisable to assist CTM in submitting such claims under the applicable Third Party CTM Policies, provided that CTM shall be responsible for its portion of any deductibles or self-insured retentions or co-payments legally due and owing relating to such claims. For the avoidance of doubt, if an occurrence for which coverage is available under any such Third Party CTM Policy happens after the Effective Time (and is not attributable and related to an occurrence which occurred prior to the Effective Time), or a claim arising from an occurrence prior to the Effective Time is not reported by CTM to IDT on or before the date when such occurrence must be reported to the carrier under the applicable Third Party CTM Policy, then, other than as provided herein, no payment for any damages, costs of defense, or other sums with respect to such claim shall be available to CTM under such Third Party CTM Policies.

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(b)           With respect to all Third Party CTM Policies, CTM agrees and covenants (on behalf of itself and each other member of the CTM Group, and each other Affiliate of CTM) (i) not to make any claim or assert any rights against IDT and any other member of the IDT Group, or the unaffiliated third-party insurers of such Third Party CTM Policies, except as expressly provided under this Section 4.02, and (ii) to otherwise reasonably cooperate with IDT and take commercially reasonable actions as may be necessary or advisable to assist IDT in fulfilling its obligations under the applicable Third Party CTM Policies as set forth in this Section 4.02.

Section 4.03. No Hire; No Solicit.

(a)           Subject to subsection (b) below, none of IDT or CTM or any member of their respective Groups will from the Effective Time through and including the 18-month anniversary of the Effective Time, without the prior written consent of the other Party, either directly or indirectly, on their own behalf or in the service or on behalf of others, (i) solicit, aid, induce or encourage any individual who is an employee of a member of the other Party’s Group to leave his or her employment, or (ii) hire any individual who, at the time of solicitation, is an employee of a member of the other Party’s Group.

(b)           Nothing in this Section 4.03 shall be deemed to prohibit any solicitation of any employee or employment of any employee of one Party or its Group who (i) responded to a solicitation directed at the public in general through advertisement or similar means not targeted specifically at such employee, the Party or member of the Party’s Group employing such employee, (ii) was referred to such Party’s Human Resources department by search firms, employment agencies or other similar entities provided that such entities have not been specifically instructed by such Party, a member of such Party’s Group or their representatives to solicit the employee, or (iii) was terminated by the other Party or a member of the other Party’s Group prior to such solicitation.

Section 4.04. Legal Names and Signage.

(a)           Except as otherwise specifically provided in any Ancillary Agreement or in paragraph (d) below, each Party shall exercise commercially reasonable efforts to cease (and cause all of the other members of its Group to cease), as soon as reasonably practicable after the Distribution Date, but in any event within six (6) months thereafter: (i) making any use of any names or Trademarks that include (A) any of the Trademarks of the other Party or such other Party’s subsidiaries or Affiliates (including, in the case of CTM, “IDT Corporation” or any other name or Trademark containing the word “IDT”) and (B) any names or Trademarks related thereto including any names or Trademarks confusingly similar thereto or dilutive thereof (with respect to each Party, such Trademarks of the other Party or any of such other Party’s subsidiaries or Affiliates, the “Other Party Marks”), and (ii) holding themselves out as having any affiliation with the other Party or such other Party’s subsidiaries or Affiliates; provided, however, that the foregoing shall not prohibit any Party or any member of a Party’s Group from (1) stating in any advertising or any other communication that it is formerly an IDT affiliate, (2) making use of any Other Party Mark in a manner that would constitute “fair use” under applicable Law if any unaffiliated third party made such use or would otherwise be legally permissible for any unaffiliated third party without the consent of the Party owning such Other Party Mark or (3) as may be required in any regulatory filing or submission or as may otherwise be required by law.

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In furtherance of the foregoing, other than with respect to the License, as soon as practicable, but in no event later than six (6) months following the Effective Time, each Party shall (and cause all of the other members of its Group to) remove, strike over or otherwise obliterate all Other Party Marks from all of such Party’s and its subsidiaries’ and Affiliates’ assets and other materials, including any vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, websites, email, computer software and other materials and systems. Any use by any Party or any of such Party’s Subsidiaries or Affiliates of any of the Other Party Marks as permitted in this Section 4.04 is subject to their compliance with all quality control and related requirements and guidelines in effect for the Other Party Marks as of the Effective Time.

(b)           Other than with respect to the License, notwithstanding the foregoing requirements of Section 4.04(a), if any Party or any member of such Party’s Group exercised good faith efforts to comply with Section 4.04(a) but is unable, due to regulatory or other circumstance beyond its reasonable control, to effect a legal name change or other change in compliance with applicable Law such that an Other Party Mark remains in such Party’s or its Group member’s legal name, then such Party or its relevant Group member will not be deemed to be in breach hereof as long as it continues to exercise good faith efforts to effectuate such name change and does effectuate such name change within nine (9) months after the Effective Time, and, in such circumstances, such Party or Group member may continue to include in its assets and other materials references to the Other Party Mark that is in such Party’s or Group member’s legal name which includes references to “IDT” as applicable, but only to the extent necessary to identify such Party or Group member and only until such Party’s or Group member’s legal name can be changed to remove and eliminate such references.

(c)           Notwithstanding the foregoing requirements of Section 4.04(a), CTM shall not be required to change any name including the word “IDT” in any third-party contract or license, or in property records with respect to real or personal property, if an effort to change the name is commercially unreasonable; provided, however, that (i) CTM on a prospective basis from and after the Effective Time shall change the name in any new or amended third-party contract or license or property record and (ii) CTM shall not advertise or make public any continued use of the “IDT” name permitted by this Section 4.04(c).

(d)   License.

(i)           IDT hereby grants to CTM the limited, revocable, non-exclusive, non-transferable and non-sublicensable (except to a wholly-owned subsidiary of CTM), worldwide, royalty-free right and license (the “License”) to use the “IDT” trademark in text form (with U.S. trademark registration number 2118811) and in logo form (with U.S. trademark registration number 2075108 as set forth on Exhibit C attached hereto) (collectively, the “Mark”) during the term specified in clause (iii) below and exclusively in conjunction with the names “IDT Local Media” and “IDT Local Pull”. Any use by CTM of the Mark not expressly provided for in this Agreement is prohibited without the prior written consent of IDT, and all such uses are reserved to IDT.

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(ii)           Whenever CTM uses the Mark, CTM shall attribute such Mark by using the “®” symbol. Such symbol shall be used immediately following the Mark in all prominent uses of the Mark, including the first use in body copy or text of, for example, marketing material, and press releases. In addition, CTM shall use, at the bottom of text that appears on any marketing materials, the following trademark legend: “IDT is the registered trademark of IDT Corporation in the United States and other countries, and is used under license.”

(iii)           Term. The License shall commence on the Effective Time and, unless terminated as hereinafter provided, shall continue for six (6) months, following which CTM shall have an option to renew the License for an additional (six) months; provided that CTM must provide IDT with notice of such renewal within ten (10) days following such initial six (6) period or such renewal right shall be forfeited by CTM. Following such second six (6) month period, the License may be renewed only by mutual agreement of IDT and CTM.

(iv)           Trademark Usage.

(A)           In using the Mark, CTM shall not (i) do anything that might reasonably be expected to harm the reputation or goodwill of IDT or the Mark; (ii) take any action inconsistent with IDT’s ownership of the Mark; (iii) challenge IDT’s rights or interests in the Mark, or attempt to register the Mark or any mark or logo substantially similar thereto; or (iv) incorporate the Mark, except as otherwise expressly permitted herein, in any of CTM’s trademarks, service marks, logos, trade names, internet addresses, domain names or any other designations of origin. All goodwill that derives from CTM’s use of the Mark inures solely to IDT’s benefit.

(B)           If at any time CTM acquires, other than the License granted hereunder, any rights in, or trademark registrations or applications for, the Mark or similar trademarks, by operation of law or otherwise, CTM (at its own cost) shall immediately assign such rights, registrations or applications to IDT, along with any and all associated goodwill.

(C)           CTM agrees to cooperate with IDT and take, at IDT’s expense, reasonable actions required to vest and secure in IDT the ownership rights and appurtenant interests as provided in this paragraph (d), and shall assist IDT to the extent necessary to protect and maintain the Mark worldwide, including, but not limited to, (i) giving prompt notice to IDT of any actual or potential infringement of the Mark known to it, and (ii) cooperating with IDT in the preparation, execution or recording of any documents necessary to register or otherwise protect the Mark, including, but not limited to, recording this Agreement with the appropriate authorities of any country.

(D)           In its sole discretion, IDT may commence, prosecute or defend any action or claim concerning the Mark, in the name of IDT or CTM, or join CTM as a party thereto at (unless the action involves misconduct by CTM) the cost of IDT. IDT shall give CTM reasonable prior notice of any such action. IDT shall have the right to control any such litigation, and CTM shall reasonably cooperate with IDT in any such litigation at (unless the action involves misconduct by CTM) IDT’s cost. CTM shall not commence any action regarding the Mark (except the defense of any suit or threatened action, if IDT fails to so defend such action within a reasonable time of its becoming aware thereof) without IDT’s prior written consent, which IDT may withhold in its sole discretion.

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(iv)           Quality Standards. CTM shall furnish to IDT prior to any use that was not earlier approved, for the approval of IDT’s legal department, copies of any such uses of the Mark, including copies of formats of all advertising and promotional material on which the Mark appears and products on which the Mark will appear (the “Materials”); provided, that in the event IDT does not respond to CTM’s request for approval within seven (7) days after such request, such approval shall be deemed to have been granted by IDT. IDT shall have the right to approve or disapprove any or all Materials and IDT’s approval shall not be unreasonably withheld or delayed. CTM’s use of the Mark shall at all times be in compliance with IDT’s trademark guidelines as in effect from time to time if and as any updates thereto hereafter have previously been provided to CTM.

(v)           No Liability. Except as otherwise provided herein, in no event shall IDT be liable for any damages, whether direct, indirect, incidental, special, consequential or punitive (including, without limitation loss of profits, revenue, business, data or other economic advantage), regardless of the theory of liability, arising from or relating to CTM’s use of the Mark, or termination of the License (with respect to a termination by IDT, in accordance with its terms), even if IDT has been advised of the possibility of such damages.

(vi)           Termination.

(a)           IDT shall have the right to terminate the License (i) effective immediately upon CTM’s receipt of written notice if CTM sells or otherwise disposes of substantially all of its business or assets to an unaffiliated third party or parties, or if control or ownership of CTM is in any manner transferred to an unaffiliated third party or parties, or (ii) if CTM defaults in the performance or observance of any of the material terms or conditions of this Agreement or any Ancillary Agreement and such default is not remedied within fifteen (15) calendar days after receipt of written notice specifying the nature of the default.

(b)           Either Party shall have the right to terminate the License by written notice to the party affected by such occurrence, if any of the following events occur: (1) insolvency or the making by a Party of an assignment for the benefit of creditors; (2) the filing by or against a Party of, or the entry of an order for relief against a Party in, any voluntary or good faith involuntary proceeding under any bankruptcy, insolvency, reorganization, or receivership law, or an admission seeking relief as therein allowed, which filing or order shall not have been vacated within sixty (60) calendar days from the entry thereof; (3) the appointment of a receiver for all or a substantial portion of such party’s property and such appointment shall not be discharged or vacated within sixty (60) calendar days of the date thereof; or (4) the assumption of custody, attachment, or sequestration by a court of competent jurisdiction of all or a significant portion of such party’s property. No assignee for the benefit of creditors, receiver, liquidator, trustee in bankruptcy, sheriff, or any other officer of the court or official charged with taking over custody of the assets or business of a Party shall have any right to continue performance of the License, and the License may not be assigned by operation of law.

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(c)           CTM shall have the right to terminate this Agreement by written notice to IDT at any time and without cause and without liability of any kind whatsoever, except for its indemnification obligations hereunder.

(d)           The exercise of any right of termination under this clause (vii) shall not affect any rights which have accrued prior to termination, and shall be without prejudice to any other legal or equitable remedies to which the terminating party may be entitled by reason of such rights.

(vii)           Effects of and Procedure on Termination.  Upon the termination of the License, all rights of CTM under the License shall terminate and automatically revert to IDT, and CTM shall immediately discontinue the use of the Mark and thereafter shall no longer use or have the right to use the Mark or any variation or simulation thereof, or any word or mark similar thereto, or to (directly or indirectly) develop, create, market, distribute, sell, license or sublicense, or advertise any products using the Mark. CTM acknowledges that CTM’s failure to cease the use of the Mark upon termination of the License, as required herein, may result in immediate and irreparable damage to IDT. CTM acknowledges and admits that there may not be adequate remedy at law for such failure, and agrees that in the event of such failure, IDT shall be entitled to equitable relief by way of temporary and permanent injunction and such other and further relief as any court with jurisdiction may deem just and proper.

Section 4.05. Auditors and Audits; Annual and Quarterly Financial Statements and Accounting.

(a)           Each Party agrees to the following:

(i)           Annual Financial Statements. For the period ending one hundred and twenty (120) days following the Effective Time and in any event solely with respect to the preparation and audit of each of the Party’s financial statements for any of the years ended July 31, 2009, 2008 and 2007, each Party shall provide to the other Party on a timely basis all information reasonably required (A) to meet its schedule for the preparation, printing, filing, and public dissemination of its annual financial statements, (B) to the extent applicable to such Party, for management’s assessment of the effectiveness of its disclosure controls and procedures and its internal control over financial reporting in accordance with all applicable provisions of Regulation S-K, including, without limitation, Items 307 and 308 of Regulation S-K, and (C) to the extent applicable to such Party, for its auditor’s audit of its internal control over financial reporting and management’s assessment thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and the Commission’s and Public Company Accounting Oversight Board’s rules and auditing standards thereunder (such assessments and audit being referred to as the “Internal Control Audit and Management Assessments”). Without limiting the generality of the foregoing, each Party will provide all required financial and other Information with respect to itself and its subsidiaries to its auditors in a sufficient and reasonable time and in sufficient detail to permit its auditors to take all steps and perform all reviews necessary to provide sufficient assistance to the other Party’s auditors with respect to information to be included or contained in the other Party’s annual financial statements and to permit the other Party’s auditors and management to complete the Internal Control Audit and Management Assessments.

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(ii)           Access to Personnel and Records. With respect to the fiscal year 2009, and any future fiscal year of each of IDT and CTM, each Party (the “Audited Party”) shall authorize its auditors, and use commercially reasonable efforts to cause its auditors, to make available to the other Party’s auditors (the “Other Party’s Auditors”), at the sole cost and expense of the other Party, both the personnel who performed or are performing the annual audits of the Audited Party and work papers related to the annual audits of the Audited Party, in all cases within a reasonable time prior to such Other Audited Party’s auditors’ opinion date, so that the Other Party’s Auditors are able to perform the procedures they consider necessary to take responsibility for, or otherwise to review to the extent deemed required, the work of the Audited Party’s auditors as it relates to the Other Party’s Auditors’ report on or review of such other Party’s financial statements, all within sufficient time to enable such other Party to meet its timetable for the printing, filing and public dissemination of its annual or interim financial statements.  In such an event, the Audited Party shall make available to the Other Party’s Auditors and management its personnel and Records, at the sole cost and expense of the other Party, in a reasonable time prior to the Other Party’s Auditors’ opinion or review date and the other Party’s management’s assessment date so that the Other Party’s Auditors and the other Party’s management are able to prepare its annual or interim financial statements or to perform the procedures they consider necessary to conduct the Internal Control Audit and Management Assessments.

(b)           In the event a Party (the first party) restates any of its financial statements that include its audited or unaudited financial statements with respect to any balance sheet date or period of operation between August 1, 2006 and July 31, 2009, the first party will deliver to the other Party (the second party) a substantially final draft, as soon as the same is prepared, of any report to be filed by the  first party with the Commission that includes such restated audited or unaudited financial statements (the “Amended Financial Report”); provided, however, that the first party may continue to revise its Amended Financial Report prior to its filing thereof with the Commission, which changes will be delivered to the second party as soon as reasonably practicable; provided, further, however, that the first party’s financial personnel will actively consult with the second party’s financial personnel regarding any changes which the first party may consider making to its Amended Financial Report and related disclosures prior to the anticipated filing of such report with the Commission, with particular focus on any changes which would have an effect upon the second party’s financial statements or related disclosures.  Each Party will reasonably cooperate with, and permit and make any necessary employees available to, the other Party, in connection with the other Party’s preparation of any Amended Financial Reports.

(c)           If any Party or member of its respective Group is required, pursuant to Rule 3-09 of Regulation S-X or otherwise, to include in its Exchange Act filings audited financial statements or other information of the other Party or member of the other Party’s Group, the other Party shall use commercially reasonable efforts (i) to provide such audited financial statements or other information, and (ii) to cause its outside auditors to consent to the inclusion of such audited financial statements or other information in the Party’s Exchange Act filings.

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(d)           Nothing in this Section 4.05 shall require any Party to violate any agreement with any third party regarding the confidentiality of confidential and proprietary information relating to that third party or its business; provided, however, that in the event that a Party is required under this Section 4.05 to disclose any such information, such Party shall use commercially reasonable efforts to seek to obtain such third party’s consent to the disclosure of such information.

Section 4.06. No Restrictions on Post-Closing Competitive Activities; Corporate Opportunities.  Except as expressly provided herein or in any of the Ancillary Agreements, it is the explicit intent of each of the Parties that this Agreement shall not include any non-competition or other similar restrictive arrangements with respect to the range of business activities that may be conducted by the Parties. Accordingly, each of the Parties acknowledges and agrees that nothing set forth in this Agreement shall be construed to create any explicit or implied restriction or other limitation on (i) the ability of the other Party or any member of its Group to engage in any business or other activity that competes with the business of such Party or any member of its Group, or (ii) the ability of the other Party or any member of its Group to engage in any specific line of business or engage in any business activity in any specific geographic area.

Section 4.07. Right of Offset.

(a)           To the extent IDT or any other member of the IDT Group has the right to receive any amounts hereunder, including under the provisions of Article VI, or under any Ancillary Agreement or under any other arrangement between any member of the IDT Group and CTM or any other member of the CTM Group, then following notice of such proposed offset IDT may satisfy such amounts out of and shall have a right of off-set against any amounts then currently due to CTM or any other member of the CTM Group from IDT or any other member of the IDT Group hereunder or thereunder.

(b)           To the extent CTM or any other member of the CTM Group has the right to receive any amounts hereunder, including under the provisions of Article VI, or under any Ancillary Agreement or under any other arrangement between any member of the CTM Group and IDT or any other member of the IDT Group, then following notice of such proposed offset CTM may satisfy such amounts out of and shall have a right of off-set against any amounts then currently due to IDT or any other member of the IDT Group from CTM or any other member of the CTM Group hereunder or thereunder.

ARTICLE V

LITIGATION MATTERS

Section 5.01. Litigation cooperation.

(a)           Each of IDT and CTM agrees that at all times from and after the Effective Time, if an Action currently exists or is commenced by a third-party with respect to which a Party (or any member of such Party’s Group) is a named defendant but such Action is otherwise not a Liability allocated to such named Party under this Agreement or any Ancillary Agreement, then the other Party shall use commercially reasonable efforts to cause such named but not liable defendant to be removed from such Action and such defendant shall not be required to make any payments or contribution in connection therewith.

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(b)           IDT and CTM shall each use commercially reasonable efforts to make available to the other, upon written request, its officers, directors, employees and agents, and the officers, directors, employees and agents of any member of its Group, as witnesses to the extent that such individuals may reasonably be required in connection with any legal, administrative or other proceedings in which the requesting Party or a member of its Group may be involved.  The requesting Party shall bear all out-of-pocket expenses in connection therewith.  On and after the Effective Time, in connection with any matter contemplated by this Section 5.01(b), the Parties will maintain any attorney-client privilege or work product immunity of any member of any Group as required by this Agreement or any Ancillary Agreement.

ARTICLE VI

INDEMNIFICATION

Section 6.01. CTM Indemnification of the IDT Group.

On and after the Distribution Date, CTM shall indemnify, defend and hold harmless each member of the IDT Group, and each of their respective directors, officers, employees and agents (the “IDT Indemnitees”) from and against any and all Indemnifiable Losses incurred or suffered by any of the IDT Indemnitees and arising out of, or due to, (a) the failure of CTM or any member of the CTM Group to pay, perform or otherwise discharge, any of the CTM Liabilities, and (b) any breach by CTM or any member of the CTM Group of this Agreement.

Section 6.02. IDT Indemnification of CTM Group.

On and after the Distribution Date, IDT shall indemnify, defend and hold harmless each member of the CTM Group and each of their respective directors, officers, employees and agents (the “CTM Indemnitees”) from and against any and all Indemnifiable Losses incurred or suffered by any of the CTM Indemnitees and arising out of, or due to, (a) the failure of IDT or any member of the IDT Group to pay, perform or otherwise discharge, any of the IDT Liabilities, and (b) any breach by IDT or any member of the IDT Group of this Agreement.

Section 6.03. Contribution.

In circumstances in which the indemnity agreements provided for in Sections 6.01 and 6.02 are unavailable or insufficient, for any reason, to hold harmless an Indemnified Party in respect of any Indemnifiable Losses arising thereunder, each Indemnifying Party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Indemnifiable Losses, in proportion to the relative fault of the Indemnifying Party or Parties on the one hand and the Indemnified Party or Parties on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such Indemnifiable Losses, as well as any other relevant equitable considerations.  The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by CTM or IDT, the Parties’ relative intents, knowledge, access to information and opportunity to correct or prevent such statement or omission, and any other equitable considerations appropriate in the circumstances.

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Section 6.04. Insurance and Third Party Obligations. No insurer or any other third party shall be, by virtue of the foregoing indemnification provisions, (a) entitled to a benefit it would not be entitled to receive in the absence of such provisions, (b) relieved of the responsibility to pay any claims to which it is obligated, or (c) entitled to any subrogation rights with respect to any obligation hereunder.

Section 6.05. Indemnification Obligations Net of Insurance Proceeds and Other Amounts on a Net Tax Benefit Basis.

(a)           Any Liability subject to indemnification or contribution pursuant to this Article VI, will (i) be net of Insurance Proceeds that actually reduce the amount of the Liability, (ii) be net of any proceeds received by an Indemnified Party from any third party for indemnification for such Liability that actually reduce the amount of the Liability (“Third Party Proceeds”), (iii) be reduced by any Tax benefit actually realized by the Indemnified Party (calculated on a with and without basis) arising from the incurrence or payment of any such Liability and (iv) be increased by any Tax detriment actually incurred by the Indemnified Party (calculated on a with and without basis) as a result of the receipt or accrual of the Indemnity Payment in respect of such Liability. Accordingly, the amount which any Indemnifying Party is required to pay pursuant to this Article VI to any Indemnified Party will be reduced by any Insurance Proceeds, Tax benefits actually realized or Third Party Proceeds theretofore actually recovered by or on behalf of the Indemnified Party in respect of the related Liability, and shall be increased by any Tax detriments actually incurred. If an Indemnified Party receives a payment required by this Agreement from an Indemnifying Party in respect of any Liability (an “Indemnity Payment”) and subsequently receives Insurance Proceeds or Third Party Proceeds, then the Indemnified Party will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds or Third Party Proceeds had been received, realized or recovered before the Indemnity Payment was made.

If a Tax benefit or Tax detriment is actually realized or incurred after the payment of any Indemnity Payment hereunder, the Indemnified or Indemnifying Party, as the case may be, shall pay to the other the amount of any such Tax benefit or Tax detriment when actually realized or incurred. Adjustments will made if any such Tax benefits are disallowed or such Tax detriments are not ultimately incurred

(b)           An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification and contribution provisions hereof, have any subrogation rights with respect thereto. The Indemnified Party shall use commercially reasonable efforts to seek to collect or recover any third-party Insurance Proceeds and any Third Party Proceeds to which the Indemnified Party is entitled in connection with any Liability for which the Indemnified Party seeks contribution or indemnification pursuant to this Article VI; provided that the Indemnified Party’s inability to collect or recover any such Insurance Proceeds or Third Party Proceeds shall not limit the Indemnifying Party’s obligations hereunder.

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Section 6.06. Notice and Payment of Claims.

If any IDT or CTM Indemnitee (the “Indemnified Party”) determines that it is or may be entitled to indemnification by a Party (the “Indemnifying Party”) under this Article VI (other than in connection with any Action or claim subject to Section 6.07), the Indemnified Party shall deliver to the Indemnifying Party a written notice specifying, to the extent reasonably practicable, the basis for its claim for indemnification and the amount for which the Indemnified Party reasonably believes it is entitled to be indemnified. After the Indemnifying Party shall have been notified of the amount for which the Indemnified Party seeks indemnification, the Indemnifying Party shall, within thirty (30) days after receipt of such notice, pay the Indemnified Party such amount in cash or other immediately available funds (or reach agreement with the Indemnified Party as to a mutually agreeable alternative payment schedule) unless the Indemnifying Party objects to the claim for indemnification or the amount thereof. If the Indemnifying Party does not give the Indemnified Party written notice objecting to such claim and setting forth the grounds therefor within the same thirty (30) day period, the Indemnifying Party shall be deemed to have acknowledged its liability for such claim and the Indemnified Party may exercise any and all of its rights under applicable law to collect such amount.

Section 6.07. Notice and Defense of Third Party Claims.

Promptly following the earlier of (a) receipt of notice of the commencement by a third party of any Action against or otherwise involving any Indemnified Party or (b) receipt of information from a third party alleging the existence of a claim against an Indemnified Party, in either case, with respect to which indemnification may be sought pursuant to this Agreement (a “Third Party Claim”), the Indemnified Party shall give the Indemnifying Party written notice thereof. The failure of the Indemnified Party to give notice as provided in this Section 6.07 shall not relieve the Indemnifying Party of its obligations under this Agreement, except to the extent that the Indemnifying Party is materially prejudiced by such failure to give notice. Within thirty (30) days after receipt of such notice, the Indemnifying Party shall, by giving written notice thereof to the Indemnified Party, (a) acknowledge, as between the parties hereto, liability for, and at its option elect to assume the defense of such Third Party Claim at its sole cost and expense or (b) object to the claim of indemnification set forth in the notice delivered by the Indemnified Party pursuant to the first sentence of this Section 6.07 setting forth the grounds therefor; provided that if the Indemnifying Party does not within the same thirty (30) day period give the Indemnified Party written notice acknowledging liability or objecting to such claim and setting forth the grounds therefor, the Indemnifying Party shall be deemed to have acknowledged, as between the parties hereto, its liability to the Indemnified Party for such Third Party Claim. Any contest of a Third Party Claim as to which the Indemnifying Party has elected to assume the defense shall be conducted by attorneys employed by the Indemnifying Party and reasonably satisfactory to the Indemnified Party; provided that the Indemnified Party shall have the right to participate in such proceedings and to be represented by attorneys of its own choosing at the Indemnified Party’s sole cost and expense. If the Indemnifying Party assumes the defense of a Third Party Claim, the Indemnifying Party may settle or compromise the claim without the prior written consent of the Indemnified Party if such settlement or compromise is solely for monetary damages for which the Indemnifying Party shall be responsible for; in all other events, the Indemnifying Party may not agree to any settlement or compromise without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld or delayed.  If the Indemnifying Party does not assume the defense of a Third Party Claim for which it has acknowledged liability for indemnification under Article VI, the Indemnified Party may require the Indemnifying Party to reimburse it on a current basis for its reasonable expenses of investigation, reasonable attorney’s fees and reasonable out-of-pocket expenses incurred in defending against such Third Party Claim, and the Indemnifying Party shall be bound by the result obtained with respect thereto by the Indemnified Party; provided that the Indemnifying Party shall not be liable for any settlement effected without its consent, which consent shall not be unreasonably withheld or delayed.  

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The Indemnifying Party shall pay to the Indemnified Party in cash the amount for which the Indemnified Party is entitled to be indemnified (if any) within 15 days after the final resolution of such Third Party Claim (whether by the final nonappealable judgment of a court of competent jurisdiction or otherwise), or, in the case of any Third Party Claim as to which the Indemnifying Party has not acknowledged liability, within 15 days after such Indemnifying Party’s objection has been resolved by settlement, compromise or the final nonappealable judgment of a court of competent jurisdiction.

ARTICLE VII

EMPLOYEE MATTERS

Section 7.01.  General Principles.

(a)           On or before the Distribution Date, IDT shall transfer, or caused to be transferred, the CTM Group Employees to the CTM Group.

(b)           CTM Group Employee Participation in IDT Benefit Plans. Except as otherwise expressly provided for in this Agreement or as otherwise expressly agreed to in writing between the Parties, effective as of the Effective Time (i) CTM Media and each member of the CTM Group shall cease to be a Participating Company in any IDT Benefit Plan, and (ii) each CTM Group Employee and any other CTM Group service provider (including any individual who is an independent contractor, consultant, leased employee, on-call worker, or non-payroll worker of any member of the CTM Group or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the CTM Group) shall cease to actively participate in, be covered by, accrue benefits under, be eligible to contribute to or have any rights as an active participant under any IDT Benefit Plan (except to the extent of obligations that accrued on or before the Effective Time, including benefits that are not otherwise addressed herein), and IDT and CTM shall take all necessary action to effectuate each such cessation.

Section 7.02. IDT 401(k) Plan and CTM 401(k) Plan.

(a)           Establishment of the CTM 401(k) Plan. As of the Effective Time, CTM shall, or shall cause one of its Affiliates to, establish a defined contribution plan and trust for the benefit of the CTM Group Employees (the “CTM 401(k) Plan”), which initially shall include a provision allowing for the acceptance of rollovers and participant investment direction. CTM shall be responsible for taking all necessary, reasonable and appropriate action to establish, maintain and administer the CTM 401(k) Plan so that it is qualified under Section 401(a) of the Code and meets the requirements of Section 401(k) of the Code and that the related trust thereunder is tax-exempt under Section 501(a) of the Code. CTM (acting directly or through its Affiliates) shall be responsible for any and all Liabilities (including Liability for funding) and other obligations with respect to the CTM 401(k) Plan. IDT shall have no funding obligations with respect to the CTM 401(k) Plan.

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(b)           Vesting and Distribution of CTM Group Employees’ Account Balances. As of the Effective Time, CTM Group Employees participating in the IDT 401(k) Plan shall become vested in their entire account balances under the IDT 401(k) Plan. As of the Effective Time, members of the CTM Group shall cease to be participating companies in the IDT 401(k) Plan, each CTM Group Employee shall cease to accrue any benefits under the IDT 401(k) Plan, and each CTM Group Employee shall be treated as having incurred a severance from employment under the IDT 401(k) Plan as of the Effective Time, making each CTM Group Employee eligible for a distribution under the IDT 401(k) Plan of his or her entire account balance. As soon as reasonably practicable, CTM shall permit CTM Group Employees to elect a direct rollover of cash from the IDT 401(k) Plan into the CTM 401(k) Plan.

Section 7.03. Health and Welfare Plans.  Effective no later than January 1, 2010, CTM shall adopt, for the benefit of eligible CTM Group employees, CTM Welfare Plans in form and substance substantially similar to the IDT Welfare Plans maintained as of the day immediately prior to the Distribution Date. Eligible CTM Group Employees shall be eligible to continue participating under the IDT Welfare Plans as provided under the terms of the Master Services Agreement until the earlier of (i) the effective date of the CTM Welfare Plans and (ii) December 31, 2009.

Section 7.04.  Service Recognition. CTM shall give each CTM Participant full credit for purposes of eligibility, vesting, determination of level of benefits, and, to the extent applicable, benefit accruals under any CTM Benefit Plan, respectively, for such CTM Participant’s service with any member of the IDT Group to the same extent such service was recognized by the applicable IDT Benefit Plans; provided, that such service shall not be recognized to the extent that such recognition would result in the duplication of benefits.

Section 7.05. Approval by IDT as Sole Stockholder. On or prior to the Distribution Date, CTM shall have adopted the CTM Stock Plan, which shall permit the issuance of equity based awards that have material terms and conditions substantially similar to those awards that may be issued under the IDT Stock Plan. The CTM Stock Plan shall be approved prior to the Distribution Date by IDT as the sole stockholder of CTM.

ARTICLE VIII

TAX MATTERS

Section 8.01. Tax Separation Agreement. All matters relating to Taxes shall be governed exclusively by the Tax Separation Agreement, except as may be expressly stated herein. In the event of any inconsistency with respect to such matters between the Tax Separation Agreement and this Agreement or any Ancillary Agreement, the Tax Separation Agreement shall govern to the extent of the inconsistency.

ARTICLE IX

ACCOUNTING MATTERS

Section 9.01. Intercompany Accounts.  Each Intercompany Account outstanding immediately prior to the Effective Time, in any general ledger account of IDT, CTM or any of their respective Affiliates, shall be satisfied and/or settled by the relevant members of the IDT Group and the CTM Group no later than the Effective Time by capitalization of the entire balance of the amounts payable or receivable to/from the respective entities.

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ARTICLE X

INFORMATION; SEPARATION OF DATA

Section 10.01. Provision of Corporate Records. As soon as practicable following the Effective Time, IDT and CTM shall each arrange for the provision to the other of a copy of existing Records in its possession significantly relating to the other Party or its business and affairs or to any other entity that is part of such other Party’s respective Group or to the business and affairs of such other entity; provided that each Party may redact such information that it deems reasonably necessary to protect its interests prior to the delivery of a copy such Records.

Section 10.02. Access to Information. From and after the Effective Time, IDT and CTM shall each afford the other and its accountants, counsel and other designated representatives reasonable access (including using commercially reasonable efforts to give access to Persons possessing information) and duplicating rights, upon prior reasonable notice during normal business hours, to all Records in its possession relating to the business and affairs of the other Party or a member of its Group (other than data and information subject to an attorney/client or other privilege), including, but not limited to, the Shared Records, insofar as such access is reasonably required by the other including, without limitation, for audit, accounting, regulatory and litigation purposes; provided that each Party may redact such information that it deems reasonably necessary to protect its interests prior to granting access or duplicating rights to such other Party.

Section 10.03. Retention of Records. Except as otherwise required by law or agreed to in writing, each Party shall, and shall cause the members of its Group to, retain all information relating to the other Party’s business and affairs in accordance with the past practice of such Party. Notwithstanding the foregoing, either Party may destroy or otherwise dispose of any information at any time in accordance with the corporate record retention policy maintained by such Party with respect to its own records. Notwithstanding anything herein to the contrary, the Parties agree that in the event of a conflict or inconsistency between the provisions of this Section 10.03 or Section 10.02 and the provisions of Section 3.6 of the Tax Separation Agreement, then the provisions of such Section 3.6 of the Tax Separation Agreement shall prevail to the extent of such conflict or inconsistency.

Section 10.04. Confidentiality.

(a)           Notwithstanding any termination of this Agreement, the Parties (the receiving party) shall hold, and shall cause each of the members of their Group to hold, and shall  cause each of their respective officers, employees, agents, consultants and advisors to hold, in strict confidence, and not to disclose or release or use, without the prior written consent of the other Party (the disclosing party), any and all Confidential Information of the disclosing party; provided, that the receiving party may disclose, or may permit disclosure of, Confidential Information of the disclosing party (i) to its auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such information for  the receiving party’s auditing and other non-commercial purposes and are informed of their obligation to, and agree to, hold such information confidential to the same extent as is applicable to the receiving party and in respect of whose failure to comply with such obligations, the receiving party  will be responsible,

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(ii) if the receiving party or any member of its Group are required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule, or (iii) as reasonably necessary in order to permit the receiving party to prepare and disclose its financial statements under the applicable requirements of Law or stock exchange rule, or other disclosures required under applicable Law or stock exchange rule; provided, further, that the receiving party (and members of its Group as necessary) may use, or may permit use of, Confidential Information of the disclosing party in connection with the receiving party performing its obligations, or exercising its rights, under this Agreement or any Ancillary Agreement.  Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made pursuant to clause (iii) above, the receiving party, to the extent not prohibited by any applicable Laws, shall promptly notify the disclosing party of the existence of such request or demand and shall provide the other a reasonable opportunity to seek an appropriate protective order or other remedy, which the receiving party will cooperate in obtaining.  In the event that such appropriate protective order or other remedy is not obtained, the receiving party shall furnish only that portion of the Confidential Information that is legally required to be disclosed and shall take commercially reasonable steps, at the sole cost and expense of the disclosing party, to ensure that confidential treatment is accorded such information.

(b)           Notwithstanding anything to the contrary set forth herein, (i) the Parties shall be deemed to have satisfied their obligations hereunder with respect to Confidential Information if they exercise the same degree of care (but no less than a reasonable degree of care) as they take to preserve confidentiality for their own similar information and (ii) confidentiality obligations provided for in any agreement between each Party or members of its Group and their respective employees shall remain in full force and effect. Notwithstanding anything to the contrary set forth herein, Confidential Information of any Party in the possession of and used by any other Party as of the Effective Time may continue to be used by such Party in possession of the Confidential Information in and only in the operation of the IDT Business or the CTM Business, as the case may be; provided, such Confidential Information may be used only so long as the Confidential Information is maintained in confidence and not disclosed in violation of this Section 10.04(a). Such continued right to use may not be transferred (directly or indirectly) to any third party without the prior written consent of the applicable Party, except pursuant to Section 11.05(b).

(c)           Each Party acknowledges that it and the other members of its Group may have in their possession confidential or proprietary information of third parties that was received under confidentiality or non-disclosure agreements with such third party prior to the Effective Time. Such Party will hold, and will cause the other members of its Group and their respective representatives to hold, in strict confidence the confidential and proprietary information of third parties to which they or any other member of their respective Groups has access, in accordance with the terms of any agreements entered into prior to the Effective Time between one or more members of the such Party’s Group (whether acting through, on behalf of, or in connection with, the separated businesses) and such third parties.

(d)           Upon the written request of a Party, the other Party shall promptly (i) deliver to such requesting Party all original Confidential Information (whether written or electronic) concerning such requesting Party and/or members of its Group, and (ii) if specifically requested by such requesting Party, destroy any copies of such Confidential Information (including any extracts there from). Upon the written request of such requesting Party, the other Party shall cause one of its duly authorized officers to certify in writing to such requesting Party that the requirements of the preceding sentence have been satisfied in full.

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Section 10.05. Privileged Matters.

(a)           The Parties recognize that legal and other professional services that have been and will be provided prior to the Effective Time have been and will be rendered for the collective benefit of each of the members of the IDT Group and the CTM Group, and that each of the members of the IDT Group and the CTM Group should be deemed to be the client with respect to such pre-separation services for the purposes of asserting all privileges which may be asserted under applicable Law.

(b)           The Parties recognize that legal and other professional services will be provided following the Effective Time which will be rendered solely for the benefit of IDT or CTM, as the case may be. With respect to such post-separation services, the Parties agree as follows:

(i)           IDT shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the IDT Business, whether or not the privileged information is in the possession of or under the control of IDT or CTM. IDT shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting IDT Liabilities, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by IDT, whether or not the privileged information is in the possession of or under the control of IDT or CTM; and

(ii)           CTM shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the CTM Business, whether or not the privileged information is in the possession of or under the control of IDT or CTM. CTM shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting CTM Liabilities, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by CTM, whether or not the privileged information is in the possession of or under the control of IDT or CTM.

(c)           The Parties agree that they shall have a shared privilege, with equal right to assert or waive, subject to the restrictions in this Section 10.05, with respect to all privileges not allocated pursuant to the terms of Section 10.05(b). All privileges relating to any claims, proceedings, litigation, disputes, or other matters which involve both IDT and CTM in respect of which both Parties retain any responsibility or Liability under this Agreement shall be subject to a shared privilege among them.

(d)           No Party may waive any privilege which could be asserted under any applicable Law, and in which any other Party has a shared privilege, without the consent of the other Party, which shall not be unreasonably withheld or delayed or as provided in subsections (e) or (f) below. Consent shall be in writing, or shall be deemed to be granted unless written objection is made within twenty (20) days after notice upon the other Party requesting such consent. Each Party shall use its reasonable best efforts to preserve any privilege held by the other Party if that privilege is a shared privilege or has been allocated to the other Party pursuant to Section 10.05(b).

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(e)           In the event of any litigation or dispute between or among any of the Parties, or any members of their respective Groups, either such Party may waive a privilege in which the other Party or member of such other Party’s Group has a shared privilege, without obtaining the consent of the other Party; provided, that such waiver of a shared privilege shall be effective only as to the use of information with respect to the litigation or dispute between the relevant Parties and/or the applicable members of their respective Groups, and shall not operate as a waiver of the shared privilege with respect to third parties.

(f)           If a dispute arises between the Parties or members of their Group regarding whether a privilege should be waived to protect or advance the interest of either Party, each Party agrees that it shall negotiate in good faith, shall endeavor to minimize any prejudice to the rights of the other Party, and shall not unreasonably withhold consent to any request for waiver by the other Party. Each Party specifically agrees that it will not withhold consent to waiver for any purpose except to protect its own legitimate interests.

(g)           Upon receipt by either Party or by any member of its Group of any subpoena, discovery or other request which arguably calls for the production or disclosure of information subject to a shared privilege or as to which the other Party has the sole right hereunder to assert a privilege, or if either Party obtains knowledge that any of its or any member of its Group’s current or former directors, officers, agents or employees have received any subpoena, discovery or other requests which arguably calls for the production or disclosure of such privileged information, such Party shall promptly notify the other Party of the existence of the request and shall provide the other Party a reasonable opportunity to review the information and to assert any rights it or they may have under this Section 10.05 or otherwise to prevent the production or disclosure of such privileged information.

(h)           The transfer of all Information pursuant to this Agreement is made in reliance on the agreement of IDT and CTM as set forth in Section 10.04 and this Section 10.05, to maintain the confidentiality of privileged information and to assert and maintain all applicable privileges. Nothing provided for herein or in any Ancillary Agreement shall be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

Section 10.06. Ownership of Information. Any Information owned by one Party or any member of its Group that is provided to a requesting Party pursuant to Article VI, this Article X, or Article XI shall be deemed to remain the property of the providing party. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such information.

Section 10.07. Separation of Data. CTM acknowledges and agrees that IDT may, after the Effective Time, delete or cause to be deleted any Information which does not relate to the CTM Business which is contained in, stored in or accessible through any Software provided to CTM by IDT. The foregoing will not be deemed to be a violation of any provision of this Agreement. The provisions of Section 10.04 apply to CTM’s use of any such Information prior to its deletion.

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ARTICLE XI

MISCELLANEOUS

Section 11.01. Expenses. Except as set forth on Schedule 11.01(a) or as specifically provided in this Agreement or any Ancillary Agreement, IDT shall pay (a) all costs and expenses incurred in connection with the spin-off and the transactions contemplated by this Agreement (including, without limitation, the costs and expenses set forth on Schedule 11.01(b), transfer taxes and the fees and expenses of the Distribution Agent and of all counsel, accountants and financial and other advisors), (b) all costs and expenses incurred in connection with the preparation, execution, delivery and implementation of this Agreement and the Ancillary Agreements and (c) all legal, filing, accounting, printing, and other expenses in connection with the preparation, printing and filing of the Form 10 and the Information Statement.

Section 11.02. Notices. All notices and communications under this Agreement shall be in writing and shall be deemed to have been given (a) when received, if such notice or communication is delivered by facsimile, hand delivery or overnight courier, and (b) three (3) business days after mailing if such notice or communication is sent by United States registered or certified mail, return receipt requested, first class postage prepaid. All notices and communications, to be effective, must be properly addressed to the Party to whom the same is directed at its address as follows:

               If to IDT, to:

IDT Corporation

550 Broad Street

Newark New Jersey 07102

Fax: 973-438-1010

Attention: Bill Pereira

               With copies to:

IDT Corporation

550 Broad Street

Newark New Jersey 07102

Fax: 973-438-1456

Attention: Legal Department

               If to CTM, to:

CTM Media Group, Inc.

11 Largo Drive

South Stamford, CT 06907

Fax: 203-724-2397

Attention: Marc E. Knoller

Either Party may, by written notice delivered to the other Party in accordance with this Section 11.02, change the address to which delivery of any notice shall thereafter be made.

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Section 11.03. Amendment and Waiver. This Agreement may not be altered or amended, nor may any rights hereunder be waived, except by an instrument in writing executed by the Party or Parties to be charged with such amendment or waiver. No waiver of any terms, provision or condition of or failure to exercise or delay in exercising any rights or remedies under this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, provision, condition, right or remedy or as a waiver of any other term, provision or condition of this Agreement.

Section 11.04. Entire Agreement. This Agreement, together with the Ancillary Agreements, constitutes the entire understanding of the Parties with respect to the subject matter hereof, superseding all negotiations, prior discussions and prior agreements and understandings relating to such subject matter. To the extent that the provisions of this Agreement are inconsistent with the provisions of any Ancillary Agreement with respect to the subject matter thereof, the provisions of such Ancillary Agreement shall prevail to the extent of the inconsistency.

Section 11.05. Consolidation, Merger, Etc.; Parties in Interest; Termination.

(a)           Neither Party (referred to in this Section 11.05(a) as a “Transferring Party”) shall consolidate with or merge into any other entity or convey, transfer or lease all or any substantial portion of its Assets to any entity, unless, in each case, the other party to such transaction expressly assumes, by a written agreement, executed and delivered to the other Party, in form reasonably satisfactory to such other Party, all of the Liabilities of the Transferring Party under this Agreement and the Ancillary Agreements and the due and punctual performance or observance of every agreement, obligation and covenant of this Agreement and Ancillary Agreements on the part of the Transferring Party to be performed or observed.

(b)           Neither of the Parties may assign its rights or delegate any of its duties under this Agreement without the prior written consent of the other Party. This Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respective successors and permitted assigns. Nothing contained in this Agreement, express or implied, is intended to confer any benefits, rights or remedies upon any Person other than members of the IDT Group and the CTM Group and the IDT Indemnitees and CTM Indemnitees under Article VI hereof.

(c)           This Agreement (including Article VI hereof) may be terminated and the Distribution may be amended, modified or abandoned at any time prior to the Distribution by and in the sole discretion of IDT without the approval of CTM or the stockholders of IDT. In the event of such termination, neither Party shall have any liability of any kind arising from such termination to the other Party or any other Person. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by the Parties; provided, however, that Article VI shall not be terminated or amended after the Distribution in respect of any IDT Indemnitee or CTM Indemnitee without the consent of such Person.

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Section 11.06. Further Assurances and Consents. In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties will use commercially reasonable efforts to (a) execute and deliver such further instruments and documents and take such other actions as the other Party may reasonably request in order to effectuate the purposes of this Agreement and to carry out the terms hereof and (b) take, or cause to be taken, all actions, and do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable laws, regulations and agreements or otherwise to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, using commercially reasonable efforts to obtain any consents and approvals, make any filings and applications and remove any liens, claims, equity or other encumbrance on an Asset of the other Party necessary or desirable in order to consummate the transactions contemplated by this Agreement; provided that no Party shall be obligated to pay any consideration therefor (except for filing fees and other similar charges) to any third party from whom such consents, approvals and amendments are requested or to take any action or omit to take any action if the taking of or the omission to take such action would be unreasonably burdensome to the Party or its Group or the business thereof.

Section 11.07. Severability. In the event that any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, and the Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 11.08. Governing Law; Jurisdiction. This Agreement shall be construed in accordance with, and governed by, the laws of the State of New Jersey, without regard to the conflicts of law rules of such state. Each of the Parties (a) consents to submit itself to the personal jurisdiction of the courts of the State of New Jersey or any federal court with subject matter jurisdiction located in the District of New Jersey (and any appeals court therefrom) in the event any dispute arises out of this Agreement or any Ancillary Agreement or any transaction contemplated hereby or thereby, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (c) agrees that it will not bring any action relating to this Agreement or any Ancillary Agreement or any transaction contemplated hereby or thereby in any court other than such courts.

Section 11.09. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same Agreement.

Section 11.10. Third Party Beneficiaries. Except as provided in Article VI and except as specifically provided in any Ancillary Agreement, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

Section 11.11. Specific Performance. The Parties agree that irreparable damage would occur in the event that the provisions of this Agreement were not performed in accordance with their specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to provisional or temporary injunctive relief in accordance therewith in any court of the United States, this being in addition to any other remedy or relief to which they may be entitled.

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Section 11.12. Limitations of Liability. Notwithstanding anything in this Agreement to the contrary, no Indemnifying Party shall be liable to an Indemnified Party for any special, indirect, incidental, punitive, consequential, exemplary, statutorily-enhanced or similar damages in excess of compensatory damages (provided that any such liability with respect to a Third Party Claim shall be considered direct damages) arising in connection with the transactions contemplated by this Agreement or the Ancillary Agreements.

Section 11.13. Force Majeure. No Party (or any Person acting on its behalf) shall have any liability or responsibility for failure to fulfill any obligation (other than a payment obligation) under this Agreement or, unless otherwise expressly provided therein, any Ancillary Agreement, so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event: (a) notify the other Party of the nature and extent of any such Force Majeure condition, and (b) use due diligence to remove any such causes in its control and resume performance under this Agreement as soon as reasonably practicable.

Section 11.14. Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

Section 11.15. Disputes.

The Parties shall use good faith efforts to resolve any disputes arising out of this Agreement within fifteen (15) days of receipt of a Party’s written notice of a dispute. All disputes under this Agreement shall be referred to the Chief Financial Officer or his/her designee of each of IDT and CTM.  The executives shall meet as required for the purpose of resolving any pending dispute referred to them under this Agreement and shall consider the disputes in the order such disputes are brought before them.  In the event that such executives are unable to resolve a dispute within thirty (30) business days (or such longer period as the executives may mutually determine), they shall submit the matter to binding arbitration according to the rules of the American Arbitration Association for commercial disputes. The arbitration shall be conducted by one arbitrator, expert in matters relating to commercial law, mutually selected by the Parties. If the Parties fail to mutually agree upon one arbitrator within ten (10) days of submission of the dispute to arbitration, one will be appointed in accordance with the commercial rules and practices of the American Arbitration Association.  Any award, order or judgment pursuant to such arbitration shall be deemed final and binding and may be enforced in any court of competent jurisdiction. The Parties agree that the arbitrator shall only have the power and authority to make awards and issue orders as expressly permitted herein and shall not, in any event, make any award that provides for punitive damages. The schedule and rules for the arbitration proceedings shall be as set by the arbitrator and the arbitration proceedings shall be held in Newark, New Jersey. Each Party shall bear its own costs of participating in the arbitration proceedings, but shall share the costs of the arbitrator.

[Signatures appear on following page.]

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written.

CTM MEDIA HOLDINGS, INC.
By:
	Name:	Marc E. Knoller
	Title:	CEO
IDT CORPORATION
By:
	Name:	Bill Pereira
	Title:	CFO

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EXHIBIT A

[Master Services Agreement]

EXHIBIT B

[Tax Separation Agreement]

EXHIBIT C

IDT TEXT AND LOGO

Text form U.S. trademark, registration number 2118811

IDT

Logo form U.S. trademark, registration number 2075108

EX-3.1

Exhibit 3.1

Delaware                          

The First State

 I, JEFFEREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND

CORRECT COPY OF THE CERTIFICATE OF "CTM MEDIA HOLDINGS, INC.", FILED IN THIS OFFICE ON THE SIXTH DAY OF

JULY, A,D. 2009, AT 5:36 O'CLOCK P.M.

 A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

4683230     8100 090676216   /s/ Jeffrey W Bullock Jeffrey W Bullock, Secretary of State AUTHENTICATION: 7402680 DATE: 07-06-09

RESTATED CERTIFICATE OF INCORPORATION

OF

CTM MEDIA HOLDINGS, INC.

CTM Media Holdings, Inc., a Delaware corporation (the "Corporation"), the original Certificate of Incorporation of which was filed with the Secretary of State of Delaware on May 8, 2009, HEREBY CERTIFIES:

FIRST: The Restated Certificate of Incorporation, amending and restating the Certificate of Incorporation of the Corporation, was duly authorized by the Corporation's Board of Directors and adopted by written consent of the Corporation's stockholders in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware.

SECOND: That the Restated Certificate of Incorporation shall become effective

upon filing.

THIRD: That the Restated Certificate of Incorporation, as amended and restated hereby, reads in its entirety as follows:

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RESTATED CERTIFICATE OF INCORPORATION

OF

CTM MEDIA HOLDINGS, INC.

FIRST: The name of the Corporation is CTM Media Holdings, Inc. (the "Corporation").

SECOND: The address of the registered office of the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400 in the City of Wilmington, County of New Castle. The name of its registered agent at such address is Corporation Service Company.

THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the "GCL").

FOURTH: The aggregate number of shares of all classes of capital stock which the Corporation shall have the authority to issue is one hundred and twenty-five million (125,000,000) shares, consisting of (a) 35,000,000 shares of Class A Common Stock, par value $0.01 per share ("Class A Stock"), (b) 65,000,000 shares of Class B Common Stock, par value $0.01 per share ("Class B Stock"), (c) 15,000,000 shares of Class C Common Stock, par value $0.01 per share (the "Class C Stock"; the Class A Stock, Class B Stock and Class C Common Stock are referred to herein as the "Common Shares"), and (d) 10,000,000 shares of preferred stock, par value $0.01 per share ("Preferred Stock").

1.Preferred Stock

The Board of Directors is hereby expressly authorized, by resolution or resolutions, to provide, out of the unissued and undesignated shares of Preferred Stock, for one or more series of Preferred Stock. Before any shares of any such series are issued, the Board of Directors shall fix, and hereby is expressly empowered to fix, by resolution or resolutions, the following provisions of the shares thereof:

(a)the designation of such series, the number of shares to constitute such series, and the stated value thereof if different from the par value thereof;

(b)whether the shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be general or limited;

(c)            the dividends, if any, payable on such series, whether any such dividends shall be

cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any shares of stock of any other class or any other series of this class;

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(d)whether the shares of such series shall be subject to redemption by the Corporation, and, if so, the terms and conditions of such redemption, including the manner of selecting shares for redemption if less than all shares of such series are to be redeemed, the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

(e)the amount or amounts payable upon shares of such series upon, and the rights of the holders of such series in, the voluntary or involuntary liquidation, dissolution or winding up, or upon any distribution of the assets, of the Corporation, and whether such rights shall be in preference to, or in another relation to, the comparable rights of any other class or classes or series of stock;

(f)            whether the shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof;

(g)whether the shares of such series shall be convertible into, or exchangeable for, shares of stock of any other series of this class or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange;

(h)the limitations and restrictions, if any, to be effective while any shares of such series are outstanding upon the payments of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Corporation of the Common Shares or shares of stock of any other class or any other series of this class;

(i)the conditions or restrictions, if any, upon the creation of indebtedness of the Corporation or upon the issue of any additional stock, including additional shares of such series or of any other series of this class or of any other class; and

(j)any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof.

The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations of restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. All shares of any one series of Preferred Stock shall be identical in all respects with all other shares of such series, except that shares of any one series issued at different times may differ as to the dates from which dividends thereon shall accrue and/or be cumulative.

2.Common Shares

(a)            General. Except as hereinafter expressly set forth in Section 2, and subject to the

rights and preferences of the holders of Preferred Stock at any time outstanding, the Class A Stock, the Class B Stock and the Class C Stock, all of which are classes of common stock, shall have the same rights and privileges and shall rank equally, share ratably and be identical in respects as to all matters, including rights in liquidation.

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(b)            Voting Rights. Except as otherwise provided in this Restated Certificate of Incorporation or as expressly provided by law, and subject to any voting rights provided to holders of Preferred Stock at any time outstanding, the Common Shares have exclusive voting rights on all matters requiring a vote of the Corporation.

The holders of Class A Stock shall be entitled to one vote per share on all matters to be voted on by the stockholders of the Corporation. The holders of Class B Stock shall be entitled to one-tenth (1 /10) of a vote per share on all matters to be voted on by the stockholders of the Corporation. The holders of Class C Stock shall be entitled to three votes per share on all matters to be voted on by the stockholders of the Corporation.

Except as otherwise provided in this Restated Certificate of Incorporation or as required by law, and subject to any voting rights provided to holders of Preferred Stock at any time outstanding, the holders of Class A Stock, the holders of Class B Stock and the holders of the Class C Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

(c)            Dividends and Distributions

(1)Subject to the rights of the holders of Preferred Stock, and subject to any

other provisions of this Restated Certificate of Incorporation, as it may be amended from time to time, holders of Class A Stock, holders of Class B Stock and holders of Class C Stock shall share ratably, in accordance with the number of shares held by each such holder, in all dividends or distributions payable in cash or (subject to paragraph (2) of this Section 2(c)) other property (other than Common Shares) as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor. All dividends or distributions declared on the Common Shares which are payable in Common Shares shall be declared at the same rate on all classes of Common Shares, but shall be payable in Class A Stock to holders of Class A Stock, Class B Stock to holders of Class B Stock and Class C Stock to holders of Class C Stock. If the Corporation shall in any manner subdivide, combine or reclassify the outstanding shares of Class A Stock, Class B Stock or Class C Stock, the outstanding shares of the other classes of stock shall be subdivided, combined or reclassified proportionately in the same manner and on the same basis as the outstanding shares of Class A Stock, Class B Stock or Class C Stock, as the case may be, have been subdivided, combined or reclassified.

(2)Notwithstanding anything else in this Restated Certificate of Incorporation

to the contrary, nothing shall restrict the declaration or payment of any dividend or distribution by the Corporation to holders of Common Shares, which are made or paid in securities of another entity, if the securities distributed to the holders of differing classes of Common Shares have disparate voting rights, so long as (i) such shares bear the same rights in the property of the entity whose securities are being distributed and (ii) the voting rights are not, in the aggregate among the classes of shares, materially different than the voting rights of the Common Shares.

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                (d)             Optional Conversion.

(1)The shares of Class A Stock and Class B Stock are not convertible into or exchangeable for shares of Class C Stock.

(2)Each share of Class C Stock may be converted, at any time and at the option of the holder thereof, into one fully paid and nonassessable share of Class A Stock.

(3) Each share of Class B Stock may be converted, at any time and at the

option of the Corporation, into one fully paid and nonassessable share of Class A Stock, provided that all shares of Class B Stock are so converted.

(e)             Mandatory Conversion.

(1)Upon a Transfer by a Holder, other than to a "Permitted Transferee" of such Holder, shares of Class C Stock so transferred shall, effective on the date of such Transfer, be automatically converted, without further act on anyone's part, into an equal number of shares of Class A Stock, and the stock certificates formerly representing such shares of Class C Stock shall thereupon and thereafter be deemed to represent the like number of shares of Class A Stock.

(2)   For purposes of this Section 2(e): A "Permitted Transferee" of a Holder shall mean the following:

(i)In the case of any Holder, the Corporation or any one or more of its directly or indirectly wholly owned subsidiaries;

(ii)In the case of a Holder who is a natural person:

(A)The spouse of such Holder (the "Spouse"), any lineal ancestor of such Holder or of the Spouse, and any person who is a lineal descendant of a grandparent of such Holder or of the Spouse, or a spouse of any such lineal descendent or such lineal ancestor (collectively, the "Family Members");

(B)A trust (including a voting trust) exclusively for the benefit of one or more of (x) such Holder, (y) one or more of his or her Family Members or (z) an organization to which contributions are deductible under 501(c)(3) of the Internal Revenue Code of 1986, as amended, or any successor provision (the "Internal Revenue Code") or for estate or gift tax purposes (a "Charitable Organization"); provided that such trust may include a general or special power of appointment for such Holder or Family Members (a "Trust"); provided, further, that if by reason of any change in the beneficiaries of such Trust, such Trust would not have qualified, at the time of the Transfer of Class C Stock to such Trust (forpurposes of this sub-paragraph (B), the "Transfer Date"),

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as a Permitted Transferee, all shares of Class C Stock so transferred to such Trust shall, effective on the date of such change of beneficiary, be automatically converted, without further act on anyone's part, into an equal number of shares of Class A Stock, and the stock certificates formerly representing such shares of Class C Stock shall thereupon and thereafter be deemed to represent the like number of shares of Class A Stock;

(C)A Charitable Organization established solely by one or more of such Holder or a Family Member;

(D)An Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, of which such Holder is a participant or beneficiary, provided that such Holder has the power to direct the investment of funds deposited into such Individual Retirement Account and to control the voting of securities held by such Individual Retirement Account (an "IRA");

(E)A pension, profit sharing, stock bonus or other type of plan or trust of which such Holder is a participant or beneficiary and which satisfies the requirements for qualification under Section 401(k) of the Internal Revenue Code, provided that such Holder has the power to direct the investment of funds deposited into such plan or trust and to control the voting of securities held by such plan or trust (a "Plan");

(F)Any corporation or partnership directly or indirectly controlled, individually or as a group, only by such Holder and/or any of his Permitted Transferees as determined under this clause (ii); provided, that if by reason of any change in the direct or indirect control of such corporation or partnership, such corporation or partnership would not have qualified, at the time of the Transfer of Class C Stock to such corporation or partnership, as a Permitted Transferee of such Holder, all shares of Class C Stock so transferred to such corporation or partnership shall, effective on the date of such direct or indirect change in control, be automatically converted, without further act on anyone's part, into an equal number of shares of Class A Stock, and the stock certificates formerly representing such shares of Class C Stock shall thereupon and thereafter be deemed to represent the like number of shares of Class A Stock; and

(G) The estate, executor, executrix or other personal representative, custodian, administrator or guardian of such Holder.

(iii) In the case of a Holder holding the shares of Class C Stock in question as trustee of an IRA, a Plan or a Trust, "Permitted Transferee" means (x) the person who transferred Class C Stock to such IRA, such Plan or such Trust, (y) any Permitted Transferee of any such person determined pursuant to this Section 2(e) and (z) any successor trustee or trustees in such capacity of such IRA, such Plan or such Trust;

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(iv)In the case of a Holder which is a partnership, "Permitted Transferee" means any other person, directly or indirectly controlling, controlled by or under direct or indirect common control with such partnership, provided that, if by reason of any change in the direct or indirect control of such person, such person would not have qualified, at the time of the Transfer of the Class C Stock to such person, as a Permitted Transferee of such partnership, all shares of Class C Stock so transferred to such person shall, effective on the date of such direct or indirect change in control, be automatically converted, without further act on anyone's part, into an equal number of shares of Class A Stock, and the stock certificates formerly representing such shares of Class C Stock shall thereupon and thereafter be deemed to represent the like number of shares of Class A Stock;

(v)In the case of a Holder which is a corporation (other than a Charitable Organization) "Permitted Transferee" means any other person directly or indirectly controlling, controlled by or under direct or indirect common control with such corporation; provided that if by reason of any change in the direct or indirect control of such person, such person would not have qualified, at the time of the Transfer of the Class C Stock to such person, as a Permitted Transferee of such corporation, all shares of Class C Stock so transferred to such person shall, effective on the date of such direct or indirect change in control be automatically converted, without further act on anyone's part, into an equal number of shares of Class A Stock, and the stock certificates formerly representing such shares of Class C Stock shall thereupon and thereafter be deemed to represent the like number of shares of Class A Stock; and

(vi) In the case of a Holder which is the estate of a deceased Holder or who is the executor, executrix or other personal representative, custodian or administrator of such Holder, or guardian of a disabled or adjudicated incompetent Holder or which is the estate of a bankrupt or insolvent Holder, which owns the shares of Class C Stock in question, "Permitted Transferee" means a Permitted Transferee of such deceased, or adjudicated incompetent, disabled, bankrupt or insolvent Holder as otherwise determined pursuant to this Section 2(e).

As used in this Section 2(e), the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the controlled person or entity.

As used in this Section 2(e), the term "Holder" means any holder of Class C Stock or of the proxy to vote shares of Class C Stock.

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As used in this Section 2(e), the term "person" shall mean both natural persons and legal entities, unless otherwise specified. The relationship of any person that is derived by or through legal adoption shall be considered a natural relationship.

Each joint owner of shares or owner of a community property interest in shares of Class C Stock shall be considered a "Holder" of such shares. A minor for whom shares of Class C Stock are held pursuant to a Uniform Transfer to Minors Act or similar law shall be considered a Holder of such shares.

As used in this Section 2(e), a "Transfer" shall mean any type of transfer of shares of Class C Stock, whether by sale, exchange, gift, operation of law, pledge, or otherwise, and shares of Class C Stock shall refer to either (i) such shares of Class C Stock so transferred, (ii) the power to vote such shares so transferred or (iii) shares of Class C Stock for which the power to vote was so transferred, as the case may be.

(3)Notwithstanding anything to the contrary set forth herein, any Holder may pledge the shares of Class C Stock belonging to such Holder to a pledgee pursuant to a bona fide pledge of such shares as collateral security for indebtedness due to the pledgee, provided that such pledgee does not have the power to vote such shares and such shares remain subject to the provisions of this Section. In the event of foreclosure or other similar action by the pledgee, such shares, at midnight on the thirtieth day after delivery of notice by the Corporation to the pledgor of such foreclosure or other similar action (for purposes of this paragraph (3) the "Conversion Time"), shall be automatically converted, without further act on anyone's part, into an equal number of shares of Class A Stock and the stock certificates formerly representing such shares of Class C Stock shall thereupon and thereafter be deemed to represent the like number of shares of Class A Stock; provided, however, that such automatic conversion of such shares of Class C Stock shall not occur if, prior to the Conversion Time, (x) such pledged shares of Class C Stock are transferred to a Permitted Transferee of the pledgor or (y) such foreclosure or other similar action is cancelled or annulled so that the pledgor retains the right to vote such shares.

(4)A good faith determination by the Board of Directors of the Corporation (x) that a transferee of shares of Class C Stock is or is not a Permitted Transferee of the transferor of such shares to such transferee on the date of Transfer, or (y) that, by reason of any change in the direct or indirect control of such transferee subsequent to such Transfer, such person would have or have not qualified at the time of the Transfer of the Class C Stock to such person as a Permitted Transferee shall be conclusive and binding upon all the stockholders of the Corporation.

(5) The Corporation may, as a condition to the transfer or the registration of transfer of shares of Class C Stock to a purported Permitted Transferee, require the furnishing of such affidavits or other proof as it deems necessary to establish that such transferee is a Permitted Transferee. Each certificate representing shares of Class C Stock shall be endorsed with a legend that states that shares of Class C Stock are not transferable other than to certain transferees and are subject to certain restrictions as set forth in this Restated Certificate of Incorporation of the Corporation.

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(6) This Section 2(e) may not be amended without the affirmative vote of holders of the majority of the shares of the Class A Stock, the affirmative vote of holders of the majority of the shares of the Class B Stock and the affirmative vote of holders of the majority of the shares of the Class C Stock, each voting separately as a class.

                (f)              Conversion Procedures

(1)Each conversion of shares pursuant to Section 2(d) hereof will be effected by the surrender of the certificate or certificates, duly endorsed, representing the shares to be converted at the principal office of the transfer agent of the Class C Stock, in the case of conversion pursuant to Section 2(d)(2), or of the Class B Stock, in the case of conversion pursuant to Section 2(d)(3), at any time during normal business hours, together with a written notice by the holder stating the number of shares that such holder desires to convert and the names or name in which he wishes the certificate or certificates for the Class A Stock to be issued. Such conversion shall be deemed to have been effected as of the close of business on the date on which such certificate or certificates have been surrendered, and at such time, the rights of any such holder with respect to the converted shares of such holder will cease and the person or persons in whose name or names the certificate or certificates for shares are to be issued upon such conversion will be deemed to have become the holder or holders of record of such shares represented thereby.

Promptly after such surrender, the Corporation will issue and deliver in accordance with the surrendering holder's instructions the certificate or certificates for the Class A Stock issuable upon such conversion and a certificate representing any Class C Stock, in the case of conversion pursuant to Section 2(d)(2) which was represented by the certificate or certificates delivered to the Corporation in connection with such conversion, but which was not converted.

(2)The issuance of certificates upon conversion of shares pursuant to Section 2(d) hereto will be made without charge to the holder or holders of such shares for any issuance tax (except stock transfer tax) in respect thereof or other costs incurred by the Corporation in connection therewith.

(3)The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Stock or its treasury shares, solely for the purpose of issuance upon the conversion of the Class B Stock and Class C Stock, such number of shares of Class A Stock as may be issued upon conversion of all outstanding Class B Stock and Class C Stock.

(4)Shares of the Class B Stock and Class C Stock surrendered for conversion as above provided or otherwise acquired by the Corporation shall be canceled according to law and shall not be reissued.

(5)             All shares of Class A Stock which may be issued upon conversion of shares of Class B Stock and Class C Stock will, upon issue, be fully paid and nonassessable.

FIFTH: The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors consisting of not less than two and not more than seventeen directors, the exact number of which shall be fixed from time to time by the Board of Directors; provided, however, that at any time the Corporation shall have any class of stock registered under the Securities Exchange Act of 1934, as amended, the Board of Directors shall consist of not less than three and not more than seventeen directors.

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A director shall hold office until the next occurring annual meeting of stockholders following his or her election and until his or her successor shall be elected and shall qualify, subject, however, to prior death or incapacity, resignation, retirement, disqualification or removal from office.

The directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the GCL, this Restated Certificate of Incorporation, and any By-Laws adopted by the stockholders; provided, however, that no By-Laws hereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such By-Laws had not been adopted.

Subject to the terms of any one or more classes or series of Preferred Stock, newly created directorships resulting from any increase in the number of directors and any vacancies in the Board of Directors resulting from death or incapacity, resignation, retirement, disqualification or removal from office may be filled only by the affirmative vote of a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and directors so elected shall hold office until the next occurring annual meeting of stockholders following appointment and until their successors are duly elected and qualified, or until their earlier death or incapacity, resignation, retirement, disqualification or removal from office.

SIXTH: No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for any breach of fiduciary duty as a director, except for liability (i) for breach of the director's duty of loyalty to the Corporation or its stockholders,

(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the GCL or (iv) for any transaction from which the director derived an improper personal benefit. Any alteration, amendment or repeal of this Article SIXTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such alteration, amendment or repeal with respect to acts or omissions occurring prior to such alteration, amendment or repeal.

SEVENTH: The Corporation is to have perpetual existence.

EIGHTH: The By-Laws of the Corporation may be altered, amended or repealed in whole or in part, or new By-Laws may be adopted, by the stockholders or by the affirmative vote of the directors of the Corporation as provided therein.

NINTH: Special meetings of stockholders may be called by any of (i) the Chairman of the Board of Directors, (ii) the President, (iii) any Vice President, (iv) the Secretary, or (v) any Assistant Secretary, and shall be called by any such officer at the request in writing of a majority of the entire Board of Directors or at the request in writing of stockholders owning a majority of the capital stock of the Corporation issued and outstanding and entitled to vote. As

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used in this Restated Certificate of Incorporation, the term "entire Board of Directors" means the total number of directors which the Corporation would have if there were no vacancies.

TENTH: The Corporation elects not to be governed by Section 203 of the GCL.

ELEVENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, and all rights conferred upon stockholders hereby are granted subject to this reservation.

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IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be executed on its behalf this 6th day of July 2009.

CTM MEDIA HOLDINGS, INC.

By: /s/ Marc E. Knoller

Name: Marc E. Knoller

Title: Chief Executive Officer

Address: 11 Largo Drive South

Stamford, CT 06907

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EX-10.1

Exhibit 10.1

THIS IS A FORM STOCK OPTION AND INCENTIVE PLAN AND HAS NOT YET BEEN ADOPTED BY CTM MEDIA HOLDINGS, INC.’S BOARD OF DIRECTORS AND STOCKHOLDER

CTM MEDIA HOLDINGS, INC.

2009 STOCK OPTION AND INCENTIVE PLAN

1.Purpose; Types of Awards; Construction.

The purpose of the CTM Media Holdings, Inc. 2009 Stock Option and Incentive Plan (the “Plan”) is to provide incentives to executive officers, employees, directors and consultants of CTM Media Holdings, Inc. (the “Company”), or any subsidiary of the Company which now exists or hereafter is organized or acquired by the Company, to acquire a proprietary interest in the Company, to continue as officers, employees, directors or consultants, to increase their efforts on behalf of the Company and to promote the success of the Company’s business. The provisions of the Plan are intended to satisfy the requirements of Section 16(b) of the Securities Exchange Act of 1934, as amended, and of Section 162(m) of the Internal Revenue Code of 1986, as amended, and shall be interpreted in a manner consistent with the requirements thereof.

2.Definitions.

As used in this Plan, the following words and phrases shall have the meanings indicated:

(a)“Agreement” shall mean a written agreement entered into between the Company and a Grantee in connection with an award under the Plan.

(b)“Board” shall mean the Board of Directors of the Company.

(c)“Change in Control” means a change in ownership or control of the Company effected through either of the following:

(i)any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, (C) any corporation or other entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of common stock, or (D) any person who, immediately prior to the Initial Public Offering, owned more than 25% of the combined voting power of the Company’s then outstanding voting securities), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or any of its affiliates other than in connection with the acquisition by the Company or its affiliates of a business) representing 25% or more of the combined voting power of the Company’s then outstanding voting securities; or

(ii)during any period of not more than two consecutive years, not including any period prior to the initial adoption of this Plan by the Board, individuals who at the beginning of such period constitute the Board, and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to a consent solicitation, relating to the election of directors of the Company) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof.

(d)“Class A Common Stock” shall mean shares of Class A Common Stock, par value $.01 per share, of the Company.

(e)“Class B Common Stock” shall mean shares of Class B  Common Stock, par value $.01 per share, of the Company.

(f)“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

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(g)“Committee” shall mean the Compensation Committee of the Board or such other committee as the Board may designate from time to time to administer the Plan.

(h)“Common Stock” shall mean shares of Common Stock, par value $.01 per share, of the Company.

(i)“Company” shall mean CTM Media Holdings, Inc., a corporation incorporated under the laws of the State of Delaware, or any successor corporation.

(j)“Continuous Service” means that the provision of services to the Company or a Related Entity in any capacity of officer, employee, director or consultant is not interrupted or terminated. Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers between locations of the Company or among the Company, any Related Entity or any successor in any capacity of officer, employee, director or consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of officer, employee, director or consultant (except as otherwise provided in the applicable Agreement). An approved leave of absence shall include sick leave, maternity leave, military leave (including without limitation service in the National Guard or the Army Reserves) or any other personal leave approved by the Committee. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days unless reemployment upon expiration of such leave is guaranteed by statute or contract.

(k)“Corporate Transaction” means any of the following transactions:

(i)a merger or consolidation of the Company with any other corporation or other entity, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) 80% or more of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “person” (as defined in the Exchange Act) acquired 25% or more of the combined voting power of the Company’s then outstanding securities; or

(ii)a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of its assets (or any transaction having a similar effect).

(l)“Deferred Stock Units” mean a Grantee’s rights to receive shares of  Class A Common Stock or Class B Common Stock, as applicable, on a deferred basis, subject to such restrictions, forfeiture provisions and other terms and conditions as shall be determined by the Committee.

(m)“Disability” shall mean a Grantee’s inability to perform his or her duties with the Company or any of its affiliates by reason of any medically determinable physical or mental impairment, as determined by a physician selected by the Grantee and acceptable to the Company.

(n)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(o)“Fair Market Value” per share as of a particular date shall mean (i) the closing sale price per share of Class A Common Stock or Class B Common Stock, as applicable, on the national securities exchange on which the Class A Common Stock or Class B Common Stock, as applicable, is principally traded for the last preceding date on which there was a sale of such Class A Common Stock or Class B Common Stock, as applicable, on such exchange, or (ii) if the shares of Class A Common Stock or Class B Common Stock, as applicable, are then traded in an over-the-counter market, the average of the closing bid and asked prices for the shares of Class A Common Stock or Class B Common Stock, as applicable, in such over-the-counter market for the last preceding date on which there was a sale of such Class A Common Stock or Class B Common Stock, as applicable, in such market, or (iii) if the shares of Class A Common Stock or Class B Common Stock, as applicable, are not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Committee, in its sole discretion, shall determine.

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(p)“Grantee” shall mean a person who receives a grant of Options, Stock Appreciation Rights, Limited Rights, Deferred Stock Units or Restricted Stock under the Plan.

(q)“Incentive Stock Option” shall mean any option intended to be, and designated as, an incentive stock option within the meaning of Section 422 of the Code.

(r)“Insider” shall mean a Grantee who is subject to the reporting requirements of Section 16(a) of the Exchange Act.

(s)“Insider Trading Policy” shall mean the Insider Trading Policy of the Company, as may be amended from time to time.

(t)“Limited Right” shall mean a limited stock appreciation right granted pursuant to Section 10 of the Plan.

(u)“Nonqualified Stock Option” shall mean any option not designated as an Incentive Stock Option.

(v)“Option” or “Options” shall mean a grant to a Grantee of an option or options to purchase shares of Class A Common Stock or Class B Common Stock, as applicable,.

(w)“Option Agreement” shall have the meaning set forth in Section 6 of the Plan.

(x)“Option Price” shall mean the exercise price of the shares of Class A Common Stock or Class B Common Stock, as applicable, covered by an Option.

(y)“Parent” shall mean any company (other than the Company) in an unbroken chain of companies ending with the Company if, at the time of granting an award under the Plan, each of the companies other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain.

(z)“Plan” means this CTM Media Holdings, Inc. 2009 Stock Option and Incentive Plan, as amended or restated from time to time.

(aa)“Related Entity” means any Parent, Subsidiary or any business, corporation, partnership, limited liability company or other entity in which the Company, a Parent or a Subsidiary holds a substantial ownership interest, directly or indirectly.

(bb)“Related Entity Disposition” means the sale, distribution or other disposition by the Company of all or substantially all of the Company’s interest in any Related Entity effected by a sale, merger or consolidation or other transaction involving such Related Entity or the sale of all or substantially all of the assets of such Related Entity.

(cc)“Restricted Period” shall have the meaning set forth in Section 11(b) of the Plan.

(dd)“Restricted Stock” means shares of Class A Common Stock or Class B Common Stock, as applicable, issued under the Plan to a Grantee for such consideration, if any, and subject to such restrictions on transfer, rights of refusal, repurchase provisions, forfeiture provisions and other terms and conditions as shall be determined by the Committee.

(ee)“Retirement” shall mean a Grantee’s retirement in accordance with the terms of any tax-qualified retirement plan maintained by the Company or any of its affiliates in which the Grantee participates.

(ff)“Rule 16b-3” shall mean Rule 16b-3, as from time to time in effect, promulgated under the Exchange Act, including any successor to such Rule.

(gg)“Stock Appreciation Right” shall mean the right, granted to a Grantee under Section 9 of the Plan, to be paid an amount measured by the appreciation in the Fair Market Value of a share of Class A Common Stock or Class B Common Stock, as applicable, from the date of grant to the date of exercise of the right, with payment to be made in cash or Class A Common Stock or Class B Common Stock, as applicable,, as specified in the award or determined by the Committee.

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(hh)“Subsidiary” shall mean any company (other than the Company) in an unbroken chain of companies beginning with the Company if each of the companies other than the last company in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain.

(ii)“Tax Event” shall have the meaning set forth in Section 17 of the Plan.

(jj)“Ten Percent Stockholder” shall mean a Grantee who at the time an Incentive Stock Option is granted, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary.

3.Administration.

(a)The Plan shall be administered by the Committee, the members of which may be composed of (i) “non-employee directors” under Rule 16b-3 and “outside directors” under Section 162(m) of the Code, or (ii) any other members of the Board.

(b)The Committee shall have the authority in its discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority to grant Options, Stock Appreciation Rights, Limited Rights, Deferred Stock Units and Restricted Stock; to determine which options shall constitute Incentive Stock Options and which Options shall constitute Nonqualified Stock Options; to determine which Options (if any) shall be accompanied by Limited Rights; to determine the purchase price of the shares of Class A Common Stock or Class B Common Stock, as applicable, covered by each Option; to determine the persons to whom, and the time or times at which awards shall be granted; to determine the number of shares to be covered by each award; to interpret the Plan and any award under the Plan; to reconcile any inconsistent terms in the Plan or any award under the Plan; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the Agreements (which need not be identical) and to cancel or suspend awards, as necessary; and to make all other determinations deemed necessary or advisable for the administration of the Plan.

(c)All decisions, determination and interpretations of the Committee shall be final and binding on all Grantees of any awards under this Plan. No member of the Board or Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any award granted hereunder.

(d)The Committee may delegate to one or more executive officers of the Company the authority to (i) grant awards under the Plan to employees of the Company and its Subsidiaries who are not officers or directors of the Company, (ii) execute and deliver documents or take such other ministerial actions on behalf of the Committee with respect to awards and (iii) to make interpretations of the Plan. The grant of authority in this Section 3(d) shall be subject to such conditions and limitations as may be determined by the Committee. If the Committee delegates authority to any such executive officer or executive officers of the Company pursuant to this Section 3(d), and such executive officer or executive officers grant awards pursuant to such delegated authority, references in this Plan to the “Committee” as they relate to such awards shall be deemed to refer to such executive officer or executive officers, as applicable.

4.Eligibility.

Awards may be granted to executive officers, employees, directors and consultants of the Company or of any Subsidiary. In determining the persons to whom awards shall be granted and the number of shares to be covered by each award, the Committee shall take into account the duties of the respective persons, their present and potential contributions to the success of the Company and such other factors as the Committee shall deem relevant in connection with accomplishing the purposes of the Plan.

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5.Stock.

(a)The maximum number of shares of Class A Common Stock reserved for the grant of awards under the Plan shall be ___________, subject to adjustment as provided in Section 13 of the Plan. Such shares may, in whole or in part, be authorized but unissued shares or shares that shall have been or may be reacquired by the Company.

(b)The maximum number of shares of Class B Common Stock reserved for the grant of awards under the Plan shall be ___________, subject to adjustment as provided in Section 13 of the Plan. Such shares may, in whole or in part, be authorized but unissued shares or shares that shall have been or may be reacquired by the Company.

(c)If any outstanding award under the Plan should, for any reason expire, be canceled or be forfeited (other than in connection with the exercise of a Stock Appreciation Right or a Limited Right), without having been exercised in full, the shares of Class A Common Stock or Class B Common Stock, as applicable, allocable to the unexercised, canceled or terminated portion of such award shall (unless the Plan shall have been terminated) become available for subsequent grants of awards under the Plan, unless otherwise determined by the Committee.

(d)In no event may a Grantee be granted during any calendar year Options to acquire more than an aggregate of ________ shares of Class A Common Stock and Class B Common Stock,, or more than ________ shares of Restricted Stock or Deferred Stock Units, subject to adjustment as provided in Section 13 of the Plan.

6.Terms and Conditions of Options.

(a)OPTION AGREEMENT.  Each Option granted pursuant to the Plan shall be evidenced by a written agreement between the Company and the Grantee (the “Option Agreement”), in such form and containing such terms and conditions as the Committee shall from time to time approve, which Option Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Option Agreement. For purposes of interpreting this Section 6, a director’s service as a member of the Board or a consultant’s service shall be deemed to be employment with the Company.

(b)NUMBER OF SHARES.  Each Option Agreement shall state the number of shares of Class A Common Stock or Class B Common Stock, as applicable, to which the Option relates.

(c)TYPE OF OPTION.  Each Option Agreement shall specifically state that the Option constitutes an Incentive Stock Option or a Nonqualified Stock Option. In the absence of such designation, the Option will be deemed to be a Nonqualified Stock Option.

(d)OPTION PRICE.  Each Option Agreement shall state the Option Price, which, in the case of an Incentive Stock Option, shall not be less than one hundred percent (100%) of the Fair Market Value of the shares of Class A Common Stock or Class B Common Stock, as applicable, covered by the Option on the date of grant. The Option Price shall be subject to adjustment as provided in Section 13 of the Plan.

(e)MEDIUM AND TIME OF PAYMENT.  The Option Price shall be paid in full, at the time of exercise, in cash or in shares of Class A Common Stock or Class B Common Stock, as applicable, having a Fair Market Value equal to such Option Price or in a combination of cash and Class A Common Stock or Class B Common Stock, as applicable, including a cashless exercise procedure through a broker-dealer; provided, however, that in the case of an Incentive Stock Option, the medium of payment shall be determined at the time of grant and set forth in the applicable Option Agreement.

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(f)TERM AND EXERCISABILITY OF OPTIONS.  Each Option Agreement shall provide the exercise schedule for the Option as determined by the Committee, provided, that, the Committee shall have the authority to accelerate the exercisability of any outstanding option at such time and under such circumstances as it, in its sole discretion, deems appropriate. The exercise period will be ten (10) years from the date of the grant of the option unless otherwise determined by the Committee; provided, however, that in the case of an Incentive Stock Option, such exercise period shall not exceed ten (10) years from the date of grant of such Option. The exercise period shall be subject to earlier termination as provided in Sections 6(g) and 6(h) of the Plan. An Option may be exercised, as to any or all full shares of Class A Common Stock or Class B Common Stock, as applicable, as to which the Option has become exercisable, by written notice delivered in person or by mail to the administrator designated by the Company, specifying the number of shares of Class A Common Stock or Class B Common Stock, as applicable, with respect to which the Option is being exercised.

(g)TERMINATION.  Except as provided in this Section 6(g) and in Section 6(h) of the Plan, an Option may not be exercised unless the Grantee is then in the employ of or maintaining a director or consultant relationship with the Company or a Subsidiary thereof (or a company or a Parent or Subsidiary of such company issuing or assuming the Option in a transaction to which Section 424(a) of the Code applies), and unless the Grantee has remained in Continuous Service with the Company or any Subsidiary since the date of grant of the Option. In the event that the employment or consultant relationship of a Grantee shall terminate (other than by reason of death, Disability or Retirement), all Options of such Grantee that are exercisable at the time of Grantee’s termination may, unless earlier terminated in accordance with their terms, be exercised within 180 days after the date of termination (or such different period as the Committee shall prescribe).

(h)DEATH, DISABILITY OR RETIREMENT OF GRANTEE.  If a Grantee shall die while employed by, or maintaining a director or consultant relationship with, the Company or a Subsidiary thereof, or within thirty (30) days after the date of termination of such Grantee’s employment, director or consultant relationship (or within such different period as the Committee may have provided pursuant to Section 6(g) of the Plan), or if the Grantee’s employment, director or consultant relationship shall terminate by reason of Disability, all Options theretofore granted to such Grantee (to the extent otherwise exercisable) may, unless earlier terminated in accordance with their terms, be exercised by the Grantee or by the Grantee’s estate or by a person who acquired the right to exercise such Options by bequest or inheritance or otherwise by result of death or Disability of the Grantee, at any time within 180 days after the death or Disability of the Grantee (or such different period as the Committee shall prescribe). In the event that an Option granted hereunder shall be exercised by the legal representatives of a deceased or former Grantee, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent proof of the right of such legal representative to exercise such Option. In the event that the employment or consultant relationship of a Grantee shall terminate on account of such Grantee’s Retirement, all Options of such Grantee that are exercisable at the time of such Retirement may, unless earlier terminated in accordance with their terms, be exercised at any time within one hundred eighty (180) days after the date of such Retirement (or such different period as the Committee shall prescribe).

(i)OTHER PROVISIONS.  The Option Agreements evidencing awards under the Plan shall contain such other terms and conditions not inconsistent with the Plan as the Committee may determine.

7.Nonqualified Stock Options.

Options granted pursuant to this Section 7 are intended to constitute Nonqualified Stock Options and shall be subject only to the general terms and conditions specified in Section 6 of the Plan.

8.Incentive Stock Options.

Options granted pursuant to this Section 8 are intended to constitute Incentive Stock Options and shall be subject to the following special terms and conditions, in addition to the general terms and conditions specified in Section 6 of the Plan:

(a)LIMITATION ON VALUE OF SHARES.  To the extent that the aggregate Fair Market Value of shares of Class A Common Stock or Class B Common Stock, as applicable, subject to Options designated as Incentive Stock Options which become exercisable for the first time by a Grantee during any calendar year (under all plans of the Company or any Subsidiary) exceeds $100,000, such excess Options, to the extent of the shares covered thereby in excess of the foregoing limitation, shall be treated as Nonqualified Stock Options. For this purpose, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the shares of Class A Common Stock or Class B Common Stock, as applicable, shall be determined as of the date that the Option with respect to such shares was granted.

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(b)TEN PERCENT STOCKHOLDER.  In the case of an Incentive Stock Option granted to a Ten Percent Stockholder, (i) the Option Price shall not be less than one hundred ten percent (110%) of the Fair Market Value of the shares of Class A Common Stock or Class B Common Stock, as applicable, on the date of grant of such Incentive Stock Option, and (ii) the exercise period shall not exceed five (5) years from the date of grant of such Incentive Stock Option.

9.Stock Appreciation Rights.

The Committee shall have authority to grant a Stock Appreciation Right, either alone or in tandem with any Option. A Stock Appreciation Right granted in tandem with an Option shall, except as provided in this Section 9 or as may be determined by the Committee, be subject to the same terms and conditions as the related Option. Each Stock Appreciation Right granted pursuant to the Plan shall be evidenced by a written Agreement between the Company and the Grantee in such form as the Committee shall from time to time approve, which Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Agreement:

(a)TIME OF GRANT.  A Stock Appreciation Right may be granted at such time or times as may be determined by the Committee.

(b)PAYMENT.  A Stock Appreciation Right shall entitle the holder thereof, upon exercise of the Stock Appreciation Right or any portion thereof, to receive payment of an amount computed pursuant to Section 9(d) of the Plan.

(c)EXERCISE.  A Stock Appreciation Right shall be exercisable at such time or times and only to the extent determined by the Committee, and will not be transferable. A Stock Appreciation Right granted in connection with an Incentive Stock Option shall be exercisable only if the Fair Market Value of a share of Class A Common Stock or Class B Common Stock, as applicable, on the date of exercise exceeds the purchase price specified in the related Incentive Stock Option. Unless otherwise approved by the Committee, no Grantee shall be permitted to exercise any Stock Appreciation Right during the period beginning two weeks prior to the end of each of the Company’s fiscal quarters and ending on the second business day following the day on which the Company releases to the public a summary of its fiscal results for such period.

(d)AMOUNT PAYABLE.  Upon the exercise of a Stock Appreciation Right, the Optionee shall be entitled to receive an amount determined by multiplying (i) the excess of the Fair Market Value of a share of Class A Common Stock or Class B Common Stock, as applicable, on the date of exercise of such Stock Appreciation Right over the exercise or other base price of the Stock Appreciation Right or, if applicable, the Option Price of the related Option, by (ii) the number of shares of Class A Common Stock or Class B Common Stock, as applicable, as to which such Stock Appreciation Right is being exercised.

(e)TREATMENT OF RELATED OPTIONS AND STOCK APPRECIATION RIGHTS UPON EXERCISE.  Upon the exercise of a Stock Appreciation Right, the related Option, if any, shall be canceled to the extent of the number of shares of Class A Common Stock or Class B Common Stock, as applicable, as to which the Stock Appreciation Right is exercised. Upon the exercise or surrender of an option granted in connection with a Stock Appreciation Right, the Stock Appreciation Right shall be canceled to the extent of the number of shares of Class A Common Stock or Class B Common Stock, as applicable, as to which the Option is exercised or surrendered.

(f)METHOD OF EXERCISE.  Stock Appreciation Rights shall be exercised by a Grantee only by a written notice delivered to the Company in accordance with procedures specified by the Company from time to time. Such notice shall state the number of shares of Class A Common Stock or Class B Common Stock, as applicable, with respect to which the Stock Appreciation Right is being exercised. A Grantee may also be required to deliver to the Company the underlying Agreement evidencing the Stock Appreciation Right being exercised and any related Option Agreement so that a notation of such exercise may be made thereon, and such Agreements shall then be returned to the Grantee.

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(g)FORM OF PAYMENT.  Payment of the amount determined under Section 9(d) of the Plan may be made solely in whole shares of Class A Common Stock or Class B Common Stock, as applicable, in a number based upon their Fair Market Value on the date of exercise of the Stock Appreciation Right or, alternatively, at the sole discretion of the Committee, solely in cash, or in a combination of cash and shares of Class A Common Stock or Class B Common Stock, as applicable, as the Committee deems advisable. If the Committee decides to make full payment in shares of Class A Common Stock or Class B Common Stock, as applicable, and the amount payable results in a fractional share, payment for the fractional share will be made in cash.

10.Limited Stock Appreciation Rights.

The Committee shall have authority to grant a Limited Right, either alone or in tandem with any Option. Each Limited Right granted pursuant to the Plan shall be evidenced by a written Agreement between the Company and the Grantee in such form as the Committee shall from time to time approve, which Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Agreement:

(a)TIME OF GRANT.  A Limited Right may be granted at such time or times as may be determined by the Committee.

(b)EXERCISE.  A Limited Right may be exercised only (i) during the ninety-day period following the occurrence of a Change in Control or (ii) immediately prior to the effective date of a Corporate Transaction. A Limited Right shall be exercisable at such time or times and only to the extent determined by the Committee, and will not be transferable except to the extent any related Option is transferable or as otherwise determined by the Committee. A Limited Right granted in connection with an Incentive Stock Option shall be exercisable only if the Fair Market Value of a share of Class A Common Stock or Class B Common Stock, as applicable, on the date of exercise exceeds the purchase price specified in the related Incentive Stock Option.

(c)AMOUNT PAYABLE.  Upon the exercise of a Limited Right, the Grantee thereof shall receive in cash whichever of the following amounts is applicable:

(i)in the case of the realization of Limited Rights by reason of an acquisition of common stock described in clause (i) of the definition of “Change in Control” (Section 2(c) above), an amount equal to the Acquisition Spread as defined in Section 10(d)(ii) below; or

(ii)in the case of the realization of Limited Rights by reason of stockholder approval of an agreement or plan described in clause (i) of the definition of “Corporate Transaction” (Section 2(j) above), an amount equal to the Merger Spread as defined in Section 10(d)(iv) below; or

(iii)in the case of the realization of Limited Rights by reason of the change in composition of the Board described in clause (ii) of the definition of “Change in Control” or stockholder approval of a plan or agreement described in clause (ii) of the definition of Corporate Transaction, an amount equal to the Spread as defined in Section 10(d)(v) below.

Notwithstanding the foregoing provisions of this Section 10(c) (or unless otherwise approved by the Committee), in the case of a Limited Right granted in respect of an Incentive Stock Option, the Grantee may not receive an amount in excess of the maximum amount that will enable such option to continue to qualify under the Code as an Incentive Stock Option.

(d)DETERMINATION OF AMOUNTS PAYABLE.  The amounts to be paid to a Grantee pursuant to Section 10 (c) shall be determined as follows:

(i)The term “Acquisition Price per Share” as used herein shall mean, with respect to the exercise of any Limited Right by reason of an acquisition of common stock described in clause (i) of the definition of Change in Control, the greatest of (A) the highest price per share shown on the Statement on Schedule 13D or amendment thereto filed by the holder of 25% or more of the voting power of the Company that gives rise to the exercise of such Limited Right, (B) the highest price paid in any tender or exchange offer which is in effect at any time during the ninety-day period ending on the date of exercise of the Limited Right, or (C) the highest Fair Market Value per share of common stock during the ninety day period ending on the date the Limited Right is exercised.

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(ii)The term “Acquisition Spread” as used herein shall mean an amount equal to the product computed by multiplying (A) the excess of (1) the Acquisition Price per Share over (2) the exercise or other base price of the Limited Right or, if applicable, the Option Price per share of common stock at which the related Option is exercisable, by (B) the number of shares of common stock with respect to which such Limited Right is being exercised.

(iii)The term “Merger Price per Share” as used herein shall mean, with respect to the exercise of any Limited Right by reason of stockholder approval of an agreement described in clause (i) of the definition of Corporate Transaction, the greatest of (A) the fixed or formula price for the acquisition of shares of common stock specified in such agreement, if such fixed or formula price is determinable on the date on which such Limited Right is exercised, (B) the highest price paid in any tender or exchange offer which is in effect at any time during the ninety-day period ending on the date of exercise of the Limited Right, (C) the highest Fair Market Value per share of common stock during the ninety-day period ending on the date on which such Limited Right is exercised.

(iv)The term “Merger Spread” as used herein shall mean an amount equal to the product. computed by multiplying (A) the excess of (1) the Merger Price per Share over (2) the exercise or other base price of the Limited Right or, if applicable, the Option Price per share of common stock at which the related Option is exercisable, by (B) the number of shares of common stock with respect to which such Limited Right is being exercised.

(v)The term “Spread” as used herein shall mean, with respect to the exercise of any Limited Right by reason of a change in the composition of the Board described in clause (ii) of the definition of Change in Control or stockholder approval of a plan or agreement described in clause (ii) of the definition of Corporate Transaction, an amount equal to the product computed by multiplying (i) the excess of (A) the greater of (1) the highest price paid in any tender or exchange offer which is in effect at any time during the ninety-day period ending on the date of exercise of the Limited Right or (2) the highest Fair Market Value per share of common stock during the ninety day period ending on the date the Limited Right is exercised over (B) the exercise or other base price of the Limited Right or, if applicable, the Option Price per share of common stock at which the related Option is exercisable, by (ii) the number of shares of common stock with respect to which the Limited Right is being exercised.

(e)TREATMENT OF RELATED OPTIONS AND LIMITED RIGHTS UPON EXERCISE.  Upon the exercise of a Limited Right, the related Option, if any, shall cease to be exercisable to the extent of the shares of Class A Common Stock or Class B Common Stock, as applicable, with respect to which such Limited Right is exercised but shall be considered to have been exercised to that extent for purposes of determining the number of shares of Class A Common Stock or Class B Common Stock, as applicable, available for the grant of future awards pursuant to this Plan. Upon the exercise or termination of a related Option, if any, the Limited Right with respect to such related Option shall terminate to the extent of the shares of Class A Common Stock or Class B Common Stock, as applicable, with respect to which the related Option was exercised or terminated.

(f)METHOD OF EXERCISE.  To exercise a Limited Right, the Grantee shall (i) deliver written notice to the Company specifying the number of shares of Class A Common Stock or Class B Common Stock, as applicable,  with respect to which the Limited Right is being exercised, and (ii) if requested by the Committee, deliver to the Company the Agreement evidencing the Limited Rights being exercised and, if applicable, the Option Agreement evidencing the related Option; the Company shall endorse thereon a notation of such exercise and return such Agreements to the Grantee. The date of exercise of a Limited Right that is validly exercised shall be deemed to be the date on which there shall have been delivered the instruments referred to in the first sentence of this paragraph (f).

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11.Restricted Stock.

The Committee may award shares of Restricted Stock to any eligible employee, director or consultant of the Company or of any Subsidiary. Each award of Restricted Stock under the Plan shall be evidenced by a written Agreement between the Company and the Grantee, in such form as the Committee shall from time to time approve, which Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Agreement:

(a)NUMBER OF SHARES.  Each Agreement shall state the number of shares of Restricted Stock to be subject to an award.

(b)RESTRICTIONS.  Shares of Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, for such period as the Committee shall determine from the date on which the award is granted (the “Restricted Period”). The Committee may also impose such additional or alternative restrictions and conditions on the shares as it deems appropriate including, but not limited to, the satisfaction of performance criteria. Such performance criteria may include sales, earnings before interest and taxes, return on investment, earnings per share, any combination of the foregoing or rate of growth of any of the foregoing, as determined by the Committee. The Company may, at its option, maintain issued shares in book entry form.  Certificates, if any, for shares of stock issued pursuant to Restricted Stock awards shall bear an appropriate legend referring to such restrictions, and any attempt to dispose of any such shares of stock in contravention of such restrictions shall be null and void and without effect. During the Restricted Period, any such certificates shall be held in escrow by an escrow agent appointed by the Committee. In determining the Restricted Period of an award, the Committee may provide that the foregoing restrictions shall lapse with respect to specified percentages of the awarded shares on successive anniversaries of the date of such award.

(c)FORFEITURE.  Subject to such exceptions as may be determined by the Committee, if the Grantee’s Continuous Service with the Company or any Subsidiary shall terminate for any reason prior to the expiration of the Restricted Period of an award, any shares remaining subject to restrictions (after taking into account the provisions of Subsection (e) of this Section 11) shall thereupon be forfeited by the Grantee and transferred to, and retired by, the Company without cost to the Company or such Subsidiary, and such shares shall become available for subsequent grants of awards under the Plan, unless otherwise determined by the Committee.

(d)OWNERSHIP.  During the Restricted Period, the Grantee shall possess all incidents of ownership of such shares, subject to Subsection (b) of this Section 11, including the right to receive dividends with respect to such shares and to vote such shares.

(e)ACCELERATED LAPSE OF RESTRICTIONS.  Upon the occurrence of any of the events specified in Section 14 of the Plan (and subject to the conditions set forth therein), all restrictions then outstanding on any shares of Restricted Stock awarded under the Plan shall lapse as of the applicable date set forth in Section 14. The Committee shall have the authority (and the Agreement may so provide) to cancel all or any portion of any outstanding restrictions prior to the expiration of the Restricted Period with respect to any or all of the shares of Restricted Stock awarded on such terms and conditions as the Committee shall deem appropriate.

12.Deferred Stock Units.

The Committee may award Deferred Stock Units to any outside director, eligible employee or consultant of the Company or of any Subsidiary. Each award of Deferred Stock Units under the Plan shall be evidenced by a written Agreement between the Company and the Grantee, in such form as the Committee shall from time to time approve, which Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Agreement:

(a)NUMBER OF SHARES.  Each Agreement for Deferred Stock Units shall state the number of shares of Class A Common Stock or Class B Common Stock, as applicable, to be subject to an award.

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(b)RESTRICTIONS.  Deferred Stock Units may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, until shares of Class A Common Stock or Class B Common Stock, as applicable, are payable with respect to an award. The Committee may impose such vesting restrictions and conditions on the payment of shares as it deems appropriate including the satisfaction of performance criteria. Such performance criteria may include sales, earnings before interest and taxes, return on investment, earnings per share, any combination of the foregoing or rate of growth of any of the foregoing, as determined by the Committee.

(c)FORFEITURE.  Subject to such exceptions as may be determined by the Committee, if the Grantee’s Continuous Service with the Company or any Subsidiary shall terminate for any reason prior to the Grantee becoming fully vested in the award, then the Grantee’s rights under any unvested Deferred Stock Units shall be forfeited without cost to the Company or such Subsidiary.

(d)OWNERSHIP.  Until shares are delivered with respect to Deferred Stock Units, the Grantee shall not possess any incidents of ownership of such shares, including the right to receive dividends with respect to such shares and to vote such shares.

(e)ACCELERATED LAPSE OF RESTRICTIONS.  Upon the occurrence of any of the events specified in Section 14 of the Plan (and subject to the conditions set forth therein), all restrictions then outstanding on any Deferred Stock Units awarded under the Plan shall lapse as of the applicable date set forth in Section 14. The Committee shall have the authority (and the Agreement may so provide) to cancel all or any portion of any outstanding restrictions prior to the expiration of any restricted period with respect to any or all of the shares of Deferred Stock Units awarded on such terms and conditions as the Committee shall deem appropriate.

13.Effect of Certain Changes.

(a)ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.  In the event of any extraordinary dividend, stock dividend, recapitalization, merger, consolidation, stock split, warrant or rights issuance, or combination or exchange of such shares, or other similar transactions, the Committee shall equitably adjust (i) the maximum number of Options or shares of Restricted Stock that may be awarded to a Grantee in any calendar year (as provided in Section 5 hereof), (ii) the number of shares of Class A Common Stock or Class B Common Stock, as applicable, available for awards under the Plan, (iii) the number and/or kind of shares covered by outstanding awards and (iv) the price per share of Options or the applicable market value of Stock Appreciation Rights or Limited Rights, in each such case so as to reflect such event and preserve the value of such awards; provided, however, that any fractional shares resulting from such adjustment shall be eliminated.

(b)CHANGE IN CLASS A COMMON STOCK OR CLASS B COMMON STOCK STOCK.  In the event of a change in the Class A Common Stock or Class B Common Stock, as applicable, as presently constituted that is limited to a change of all of its authorized shares of Class A Common Stock or Class B Common Stock, as applicable,, into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be the Class A Common Stock or Class B Common Stock, as applicable, within the meaning of the Plan.

14.Corporate Transaction; Change in Control; Related Entity Disposition.

(a)CORPORATE TRANSACTION.  In the event of a Corporate Transaction, each award which is at the time outstanding under the Plan shall automatically become fully vested and exercisable and, in the case of an award of Restricted Stock or an award of Deferred Stock Units, shall be released from any restrictions on transfer (except with regard to the Insider Trading Policy and such other agreements between the Grantee and the Company) and repurchase or forfeiture rights, immediately prior to the specified effective date of such Corporate Transaction. Effective upon the consummation of the Corporate Transaction, all outstanding awards of Options, Stock Appreciation Rights and Limited Rights under the Plan shall terminate, unless otherwise determined by the Committee. However, all such awards shall not terminate if the awards are, in connection with the Corporate Transaction, assumed by the successor corporation or Parent thereof.

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(b)CHANGE IN CONTROL.  In the event of a Change in Control (other than a Change in Control which is also a Corporate Transaction), each award which is at the time outstanding under the Plan automatically shall become fully vested and exercisable and, in the case of an award of Restricted Stock or an award of Deferred Stock Units, shall be released from any restrictions on transfer and repurchase or forfeiture rights, immediately prior to the specified effective date of such Change in Control.

(c)RELATED ENTITY DISPOSITION.  The Continuous Service of each Grantee (who is primarily engaged in service to a Related Entity at the time it is involved in a Related Entity Disposition) shall terminate effective upon the consummation of such Related Entity Disposition, and each outstanding award of such Grantee under the Plan shall become fully vested and exercisable and, in the case of an award of Restricted Stock or an award of Deferred Stock Units, shall be released from any restrictions on transfer (except with regard to the Insider Trading Policy and such other agreements between the Grantee and the Company). Unless otherwise determined by the Committee, the Continuous Service of a Grantee shall not be deemed to terminate (and each outstanding award of such Grantee under the Plan shall not become fully vested and exercisable and, in the case of an award of Restricted Stock or an award of Deferred Stock Units, shall not be released from any restrictions on transfer) if (i) a Related Entity Disposition involves the spin-off of a Related Entity, for so long as such Grantee continues to remain in the service of such entity that constituted the Related Entity immediately prior to the consummation of such Related Entity Disposition (“SpinCo”) in any capacity of officer, employee, director or consultant or (ii) an outstanding award is assumed by the surviving corporation (whether SpinCo or otherwise) or its parent entity in connection with a Related Entity Disposition.

(d)SUBSTITUTE AWARDS.  The Committee may grant awards under the Plan in substitution of stock-based incentive awards held by employees, consultants or directors of another entity who become employees, consultants or directors of the Company or any Subsidiary by reason of a merger or consolidation of such entity with the Company or any Subsidiary, or the acquisition by the Company or a Subsidiary of property or equity of such entity, upon such terms and conditions as the Committee may determine, and such awards shall not count against the share limitation set forth in Section 5 of the Plan.

15.Period During which Awards May Be Granted.

Awards may be granted pursuant to the Plan from time to time within a period of ten (10) years from _________ __, 2009, the date the Board initially adopted the Plan.  No awards shall be effective prior to the approval of the Plan by a majority of the Company’s stockholders.

16.Transferability of Awards.

(a)Incentive Stock Options and Stock Appreciation Rights may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by the laws of descent and distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee or his or her guardian or legal representative.

(b)Nonqualified Stock Options shall be transferable in the manner and to the extent acceptable to the Committee, as evidenced by a writing signed by the Company and the Grantee. Nonqualified Stock Options (together with any Stock Appreciation Rights or Limited Rights related thereto) shall be transferable by a Grantee as a gift to the Grantee’s “family members” (as defined in Form S-8) under such terms and conditions as may be established by the Committee; provided that the Grantee receives no consideration for the transfer. Notwithstanding the transfer by a Grantee of a Nonqualified Stock Option, the transferred Nonqualified Stock Option shall continue to be subject to the same terms and conditions as were applicable to the Nonqualified Stock Option immediately before the transfer (including, without limitation, the Insider Trading Policy) and the Grantee will continue to remain subject to the withholding tax requirements set forth in Section 17 hereof.

(c)The terms of any award granted under the Plan, including the transferability of any such award, shall be binding upon the executors, administrators, heirs and successors of the Grantee.

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(d)Restricted Stock shall remain subject to the Insider Trading Policy after the expiration of the Restricted Period.  Deferred Stock Units shall remain subject to the Insider Trading Policy after payment thereof.

17.Agreement by Grantee regarding Withholding Taxes.

If the Committee shall so require, as a condition of exercise of an Option, Stock Appreciation Right or Limited Right, the expiration of a Restricted Period or payment of a Deferred Stock Unit (each, a “Tax Event”), each Grantee shall agree that no later than the date of the Tax Event, the Grantee will pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the Tax Event. Unless determined otherwise by the Committee, a Grantee shall permit, to the extent permitted or required by law, the Company to withhold federal, state and local taxes of any kind required by law to be withheld upon the Tax Event from any payment of any kind due to the Grantee. Unless otherwise determined by the Committee, any such above-described withholding obligation may, in the discretion of the Company, be satisfied by the withholding by the Company or delivery to the Company of Class A Common Stock or Class B Common Stock,  as applicable.

18.Rights as a Stockholder.

Except as provided in Section 11(d) of the Plan, a Grantee or a transferee of an award shall have no rights as a stockholder with respect to any shares covered by the award until the date of the issuance of such shares to him or her. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights for which the record date is prior to the date such shares are issued, except as provided in Section 12(a) of the Plan.

19.No Rights to Employment; Forfeiture of Gains.

Nothing in the Plan or in any award granted or Agreement entered into pursuant hereto shall confer upon any Grantee the right to continue as a director of, in the employ of, or in a consultant relationship with, the Company or any Subsidiary or to be entitled to any remuneration or benefits not set forth in the Plan or such Agreement or to interfere with or limit in any way the right of the Company or any such Subsidiary to terminate such Grantee’s employment or consulting relationship. Awards granted under the Plan shall not be affected by any change in duties or position of a Grantee as long as such Grantee continues to be employed by, or in a consultant relationship with, or a director of the Company or any Subsidiary. The Agreement for any award under the Plan may require the Grantee to pay to the Company any financial gain realized from the prior exercise, vesting or payment of the award in the event that the Grantee engages in conduct that violates any non-compete, non-solicitation or non-disclosure obligation of the Grantee under any agreement with the Company or any Subsidiary, including, without limitation, any such obligations provided in the Agreement.

20.Beneficiary.

A Grantee may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Grantee, the executor or administrator of the Grantee’s estate shall be deemed to be the Grantee’s beneficiary.

21.Approval; Amendment and Termination of the Plan.

(a)APPROVAL.  The Plan initially became effective when adopted by the Board on _________ __, 2009 and shall terminate on the tenth anniversary of such date. The Plan was ratified by the Company’s sole stockholder on _______ __, 2009.

(b)AMENDMENT AND TERMINATION OF THE PLAN.  The Board, or the Committee if so delegated by the Board, at any time and from time to time may suspend, terminate, modify or amend the Plan; however, unless otherwise determined by the Board, or the Committee if applicable, an amendment that requires stockholder approval in order for the Plan to continue to comply with any law, regulation or stock exchange requirement shall not be effective unless approved by the requisite vote of stockholders. Except as provided in Section 14(a) of the Plan, no suspension, termination, modification or amendment of the Plan may adversely affect any award previously granted, unless the written consent of the Grantee is obtained.

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22.Governing Law.

The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Delaware.

23.Section 409A of the Code.

It is the intention of the Company that no award shall be “deferred compensation” subject to Section 409A of the Code, unless and to the extent that the Committee specifically determines otherwise as provided in this Section 23, and the Plan and the terms and conditions of all awards shall be interpreted accordingly. The terms and conditions governing any awards that the Committee determines will be subject to Section 409A of the Code shall be set forth in the applicable award Agreement and shall comply in all respects with Section 409A of the Code. Notwithstanding any provision of this Plan to the contrary, if one or more of the payments or benefits received or to be received by a Grantee pursuant to an award would cause the Grantee to incur any additional tax or interest under Section 409A of the Code, the Committee may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code. Although the Company intends to administer the Plan so that Awards will be exempt from, or will comply with, the requirements of Section 409A of the Code, the Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under Section 409A of the Code or any other provision of federal, state, local or foreign law. The Company shall not be liable to any Grantee for any tax, interest, or penalties that Grantee might owe as a result of the grant, holding, vesting, exercise, or payment of any award under the Plan.

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EX-10.2

Exhibit 10.2

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

MASTER SERVICES AGREEMENT

THIS MASTER SERVICES AGREEMENT, dated as of [INSERT DATE], 2009 (this “Agreement”), is entered into by and between CTM Media Holdings, Inc., a Delaware corporation (“CTM”), and IDT Corporation, a Delaware corporation (“IDT”). For purposes of this Agreement, “Party” or “Parties” shall mean either CTM or IDT, individually or collectively.

BACKGROUND

WHEREAS, IDT is executing a spin-off of CTM, a wholly-owned subsidiary, to its stockholders, and has agreed to provide certain corporate, tax and accounting support, administrative and other services to CTM on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the foregoing, the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

AGREEMENT

1. Representations and Warranties.

As an inducement to enter into this Agreement, CTM and IDT each hereby represents and warrants to the other as follows:

(a) It is an entity duly organized, validly existing and in good standing under the laws of the state of Delaware.  Such Party has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery by such Party of this Agreement, the performance by such Party of its obligations hereunder and the consummation by such Party of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of such Party.

(b) The execution and delivery by such Party of this Agreement, the performance by such Party of its obligations hereunder and the consummation by such Party of the transactions contemplated hereby do not and will not (i) violate, conflict with or result in the breach of any provision of the certificate of incorporation or bylaws of such Party, (ii) conflict with or violate any law or governmental order applicable to such Party, or (iii) conflict with, or result in any breach of, constitute a default (or event which, with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which such Party is a party, which would adversely affect the ability of such Party to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement.

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

2. Provision and Term of Services; Termination.

(a) IDT agrees to provide to CTM the services (collectively, the “Services”) as set forth on each Schedule A that is appended hereto from time to time.  The Services shall be provided in accordance with the terms and provisions of this Agreement and the applicable Schedule A.  As used herein, the term “Provider” shall refer to IDT or any affiliate designated by IDT that is providing Services, and the term “Recipient” shall refer to CTM.

(b) Provider shall, and where appropriate shall ensure that any officer, employee, agent or sub-contractor providing Services on behalf of Provider shall, use reasonable care, skill and diligence in providing the Services.

(c) Provider shall maintain accurate records and accounts of all transactions relating to the Services performed by it pursuant to this Agreement.  Such records and accounts shall be maintained separately from such Provider’s own records and accounts and shall reflect such information as would normally be examined by an independent accountant in performing a complete audit pursuant to U.S. generally accepted auditing standards for the purpose of certifying financial statements, and to permit verification thereof by governmental agencies.  Recipient shall have the right to inspect and copy, upon reasonable notice and at reasonable intervals during the Provider’s regular office hours, the separate records and accounts maintained by Provider relating to the Services.

(d) All of the Services shall be provided during the term of this Agreement.  The term of this Agreement shall commence on the date hereof and continue until [INSERT FIRST ANNIVERSARY OF THE EFFECTIVE DATE OF THE SPIN-OFF], and shall automatically renew for additional six-month terms unless, no later than ninety (90) days prior to the end of the then-current term of this Agreement, IDT notifies CTM of its intent to terminate this Agreement, in which case this Agreement shall terminate effective as of the end of the then-current term, provided that certain Services shall terminate earlier as set forth on the applicable Schedule A.  This Agreement or any Service being provided for Recipient may be terminated by Recipient upon not less than thirty (30) days’ prior written notice provided that there are no break-up costs (including commitments made to or in respect of personnel or third parties due to the requirement to provide the Services and prepaid expenses related to the Services, or costs related to terminating such commitments) incurred by the Provider as a result of such termination unless Recipient agrees to be solely responsible for such costs.

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

(e) In the event of a termination of this Agreement, all outstanding sums due hereunder shall be paid immediately following the date of termination and any rights or obligations to which any of the Parties may be entitled or be subject prior to its termination shall remain in full force and effect. Provider shall cooperate fully in the transition back to Recipient of any and all matters related to the terminated Services such that Recipient shall not be prejudiced by such termination (but Provider shall not be required to bear any out-of-pocket costs for such transition).

3. Compensation for Services.

(a) Recipient shall pay Provider for the Services in accordance with the fee schedule set forth on an applicable Schedule A.

(b) Unless otherwise specified on a Schedule A, such fees shall be paid by Recipient within thirty (30) days of the delivery of an appropriate invoice related thereto (which, unless otherwise provided for in a Schedule A, shall be issued no more frequently than monthly).  Such invoice must comply with all applicable tax requirements and separately describe the amount for fees, expenses and value added tax, if any.  Failure to provide an invoice for fees for any given month shall not be deemed a waiver of such fees, and such fees may be included, without prejudice, in a later invoice delivered to Recipient.

(c) If not specified on the applicable Schedule A, the fees payable for a specific Service shall be equal to the actual costs of Provider in providing such Service, including a reasonable and good faith allocation of overhead expenses of Provider.  Upon request of Recipient, Provider shall deliver to Recipient such reasonable information and supporting documentation with respect to such overhead allocation.

(d) Unless otherwise specified on a Schedule A, Recipient shall reimburse the Provider for third-party, out-of-pocket, incidental travel, lodging and food expenses incurred by Provider in providing the Services in accordance with Provider’s customary travel policy.  Such reimbursement shall be within thirty (30) days of receipt of an invoice from Provider for such incidental expenses accompanied by such additional documentation reasonably required by Recipient to verify the amount of the expense and that such expense was incurred in connection with providing the Services.

(e) All amounts payable by Recipient to Provider shall be paid by wire transfer in accordance with the wire transfer instructions provided by Provider to Recipient from time to time.

4. Force Majeure.

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

The obligation of Provider to provide Services shall be suspended during the period and to the extent that Provider is prevented or hindered from complying therewith by any law or governmental order, rule, regulation or direction, whether domestic or foreign, or by any cause beyond the reasonable control of Provider, including, but not limited to, acts of nature, strikes, lock outs and other labor and industrial disputes and disturbances, civil disturbances, accidents, acts of terrorism, acts of war or conditions arising out of or attributable to war (whether declared or undeclared), shortage of necessary equipment, materials or labor, or restrictions thereon or limitations upon the use thereof, and delays in transportation.  In such event, Provider shall give notice of suspension as soon as reasonably practicable to Recipient stating the date and extent of such suspension and the cause thereof and Provider’s best estimate of the date on which it will be able to resume the performance of its obligations.  In addition, Provider will use commercially reasonable efforts during any such suspension to keep Recipient informed as to the progress of removal of the cause of such suspension.  Provider shall resume the performance of such obligations as soon as reasonably practicable after the removal of the cause and Provider shall so notify Recipient.  Recipient shall not be liable for payment of fees for any Service for the period in which such Service could not be provided pursuant to this Section 4.

5. Compliance With Law.

Provider shall undertake to provide Services in accordance with and adhere to all laws and governmental rules, regulations and orders applicable at the place where Services are rendered, including without limitation, data protection regulations.

6. Confidentiality.

(a) Each Party agrees to hold in confidence, and to use reasonable efforts to cause its employees, representatives and affiliates performing Services to hold in confidence (at least to the extent that such Party keeps its own confidential information in confidence, but in no event less than commercially reasonable given the nature of the confidential information), all confidential information concerning the other Party and its affiliates furnished to or obtained by such Party in the course of providing the Services (except to the extent that such information has been (i) in the public domain through no fault of such Party or (ii) lawfully acquired on a non-confidential basis by such Party from sources other than Recipient); and shall not disclose or release any such confidential information to any person, except its employees, representatives and agents who have a need to know such information in connection with such Party’s performance under this Agreement, unless (A) such disclosure or release is compelled by the judicial or administrative process or (B) in the opinion of counsel to Provider, such disclosure or release is necessary pursuant to requirements of law or the requirements of any governmental entity including, without limitation, disclosure requirements under the Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as amended.

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

(b) Each Party shall supervise its personnel and establish systems to assure that Recipient’s information is made available to such Party’s employees on an “as needed” basis only.  Each Party shall use such information only for purposes of providing the Services and for no other purpose.  In particular, the department of a Party providing the Services shall in no way make any information concerning Recipient available to any other management or operational department or division of such Party or to personnel associated with such divisions or departments except to the extent approved in writing by the other Party.

7. Indemnification.

(a) CTM and its affiliates, officers, directors, employees, agents, successors and assigns shall be indemnified and held harmless by IDT for and against any and all liabilities, losses, diminution in value, damages (excluding special, incidental, punitive, indirect and consequential damages), claims, costs and expenses, interest, awards, judgments and penalties (including attorneys’ and consultants’ fees and expenses) actually suffered or incurred by them (including any action brought or otherwise initiated by any of them), arising out of or resulting from:

(i) the breach of any representation or warranty made by IDT contained in this Agreement;

(ii) the breach of any covenant or agreement by IDT contained in this Agreement;

(iii) the gross negligence, fraud, willful defaults or willful misconduct of IDT or any other Provider; and

(iv) the enforcement of the indemnification rights of CTM and its affiliates provided for in this Agreement.

(b) IDT and its affiliates, officers, directors, employees, agents, successors and assigns shall be indemnified and held harmless by CTM for and against any and all liabilities, losses, diminution in value, damages (excluding special, incidental, punitive, indirect and consequential damages), claims, costs and expenses, interest, awards, judgments and penalties (including attorneys’ and consultants’ fees and expenses) actually suffered or incurred by them (including any action brought or otherwise initiated by any of them), arising out of or resulting from:

(i) the breach of any representation or warranty made by CTM contained in this Agreement;

(ii) the breach of any covenant or agreement by CTM contained in this Agreement;

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

(iii) the gross negligence, fraud, willful defaults or willful misconduct of CTM; and

(iv) the enforcement of the indemnification rights of IDT and its affiliates provided for in this Agreement.

8. Liability.

Provider (or affiliate thereof) shall not have any liability whatsoever to Recipient or any other Party for any error, act or omission in connection with the Services to be rendered by Provider to Recipient hereunder unless any such error, act or omission derives from the willful misconduct or gross negligence of Provider (or its affiliates).  IN NO EVENT SHALL PROVIDER (OR AFFILIATE THEREOF) BE LIABLE TO RECIPIENT OR ANY OTHER PARTY FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, REVENUES OR DATA), WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT PROVIDER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.  THE LIABILITY OF A PROVIDER (AND ITS AFFILIATES) FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, RECIPIENT’S DIRECT DAMAGES AND IN ALL EVENTS WILL NOT EXCEED THE AGGREGATE FEES PAID BY RECIPIENT TO ALL PROVIDERS HEREUNDER.

9. Notices.

Any legal notice, demand or other communication required or permitted to be given by any provision of this Agreement (each a “Notice”) shall be in writing and shall be deemed to have been properly given or served only if addressed to a Party at its address set forth on Schedule A attached hereto, and if delivered (i) by hand, (ii) by certified mail, return receipt requested, (iii) by overnight commercial carrier or (iv) by telefax transmission with confirmation of receipt.  All such communications shall be deemed to have been properly given or served (i) if by hand, when received, (ii) if by mail, on the date of receipt or of refusal to accept shown on the return receipt, (iii) if by overnight commercial carrier, on the date that is one (1) business day after the date upon which the same shall have been delivered to such overnight commercial carrier, addressed to the recipient, with all shipping charges prepaid, provided that the same is actually received (or refused) by the recipient in the ordinary course and (iv) if by telefax, on the date sent with transmission confirmed.

10. No Third Party Beneficiaries.

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

This Agreement shall be binding upon and inure solely to the benefit of the Parties and their permitted successors and assigns, and Provider and Recipient shall be entitled to enforce its respective rights under this Agreement against the other Party.  Recipient may not assign this Agreement without the prior written consent of Provider.

11. Governing Law.

This Agreement shall be governed by, and construed in accordance with the laws of the state of New Jersey.  The Parties submit to the jurisdiction of any state or federal court sitting in New Jersey for the purpose of any suit, action or proceeding arising out of this Agreement.

12. Dispute Resolution.

It is the intention of the Parties that Provider shall act in the best interests of Recipient.  If, in the course of providing or arranging for Services hereunder, Provider identifies a conflict of interest that would lead a reasonable person to conclude that Provider cannot act in the best interests of Recipient while also acting in the best interests of Provider, such conflict shall immediately be reported to Recipient so that it may be addressed without prejudice to either Party.

CTM and IDT shall each use good faith efforts to resolve any disputes arising out of this Agreement within fifteen (15) days of receipt of a Party’s written notice of a dispute.  All disputes under this Agreement shall be referred to the Chief Financial Officer or his/her designee of each of IDT and CTM.  The executives shall meet as required for the purpose of resolving any pending dispute referred to them under this Agreement and shall consider the disputes in the order such disputes are brought before them.  In the event that such executives are unable to resolve a dispute within thirty (30) business days (or such longer period as the executives may mutually determine), they shall submit the matter to binding arbitration according to the rules of the American Arbitration Association for commercial disputes.  The arbitration shall be conducted by one arbitrator, expert in matters relating to commercial law, mutually selected by the Parties . If the Parties fail to mutually agree upon one arbitrator within ten (10) days of submission of the dispute to arbitration, one will be appointed in accordance with the commercial rules and practices of the American Arbitration Association.  Any award, order or judgment pursuant to such arbitration shall be deemed final and binding and may be enforced in any court of competent jurisdiction.  The Parties agree that the arbitrator shall only have the power and authority to make awards and issue orders as expressly permitted herein and shall not, in any event, make any award that provides for punitive damages.  The schedule and rules for the arbitration proceedings shall be as set by the arbitrator and the arbitration proceedings shall be held in Newark, New Jersey. Each Party shall bear its own costs of participating in the arbitration proceedings.

13. Entire Agreement.

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

This Agreement and the Schedules hereto sets forth all of the promises, covenants, agreements, conditions, and undertakings between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written.  The Schedules to this Agreement constitute an integral part of this Agreement.

14. Binding.

This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

15. Waiver.

No provision of this Agreement may be waived except by an instrument in writing signed by the Party sought to be charged with the effect of such waiver.  The failure of a Party to this Agreement to assert a right or exercise a remedy hereunder shall not waive such right or remedy or any future rights or remedies.

16. Status; Other Activities.

(a) For purposes of this Agreement, Provider is, and will be deemed to be, an independent contractor only and not an agent, joint venturer, partner, or representative of Recipient.  Neither a Provider nor a Recipient may create any obligations or responsibilities on behalf of or in the name of the other Party.

(b) Notwithstanding the amount of time, or percentage of business hours, spent by any employee of Provider in the provision of Services hereunder, no such employee shall, by reason of such provision, become an employee of, or have any direct rights against, Recipient, or be deemed to have any relationship with Recipient other than as a provider of Services hereunder.

(c) Nothing in this Agreement shall limit or restrict the right of any Party, or its affiliates, directors, officers or employees to engage in any other business or devote their time and attention in part to the management or other aspects of any other business, whether of a similar nature, or to limit or restrict the right of such parties to engage in any other business or to render services of any kind to any corporation, firm, individual, trust or association.

17. Amendment.

This Agreement may not be amended or modified except by an instrument in writing signed by the Parties.

18. Severability.

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or unenforceable term or provision, the Parties intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be valid and enforceable, so as to effect the original intent of the Parties to the greatest extent possible.

19. Counterparts.

This Agreement may be executed in one or more counterparts, and by the Parties  in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above.

CTM MEDIA HOLDINGS, INC.
By:
	Name:
	Title:
IDT CORPORATION
By:
	Name:
	Title:

THIS IS THE FORM OF MASTER SERVICES AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION, EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

SCHEDULE A

Recipient: CTM Media Holdings, Inc.

Provider: IDT Corporation

Start Date: [INSERT DATE]

Term: Annual

Description of Service: [INSERT DESCRIPTION]. This includes, but is not limited to, the following service elements:

• [INSERT ELEMENTS]

Fee (other than allocated cost basis): IDT’s costs to the extent incurred in providing this Service to CTM. CTM will be accorded reasonable and appropriate audit rights with respect to any IDT costs charged to CTM in accordance with the foregoing.

Recipient Contacts:

[INSERT CONTACTS]

Acknowledgement:

Recipient:		Provider:
By:	CTM MEDIA HOLDINGS, INC.	By:	IDT Corporation
Name:		Name:
Title:		Title:

EX-10.3

Exhibit 10.3

THIS IS THE FORM OF TAX SEPARATION AGREEMENT THAT IS INTENDED TO BE ENTERED INTO BETWEEN CTM MEDIA HOLDINGS, INC. AND IDT CORPORATION,

EFFECTIVE AS OF THE CONSUMMATION OF THE SPIN-OFF

TAX SEPARATION AGREEMENT

This TAX SEPARATION AGREEMENT (this “Agreement”) is dated as of [____], 2009, by and between IDT Corporation, a Delaware corporation (“IDT”), and CTM Media Holdings, Inc., a Delaware corporation (“CTM”).

WHEREAS, as of the date hereof, IDT is the common parent of an affiliated group of domestic corporations within the meaning of Section 1504(a) of the Code, and the members of the affiliated group have heretofore joined in filing consolidated federal income Tax returns (the “Affiliated Group”);

WHEREAS, on or prior to the Distribution Date and effective as of the Effective Time, IDT will contribute to CTM (the “Contribution”) all of the outstanding stock of (i) CTM Media Group, Inc., a New York corporation, (ii) Beltway Acquisition Corporation d/b/a WMET, a Delaware corporation, (iii) IDT Local Media, Inc., a Delaware corporation and (iv) IDT Internet Mobile Group, Inc., a Delaware corporation, which holds all of IDT’s interests in Idea and Design Works LLC.

WHEREAS, following the Contribution, IDT intends to effect a spinoff of CTM (and the business units held thereby) whereby IDT will distribute to the holders of IDT Common Stock all of the outstanding shares of CTM Common Stock at the rate of (i) one (1) share of CTM Class A common stock for every three (3) shares of IDT common stock, (ii) one (1) share of CTM Class C common stock for every three (3) shares of IDT Class A common stock, and (iii) one (1) share of CTM Class B common stock for every three (3) shares of IDT Class B common stock, each outstanding as of the Record Date (the “Distribution”, and together with the Contribution, the “Spinoff”).

WHEREAS, for United States federal income tax purposes, it is intended that the Contribution will qualify as tax-free under Section 351 of the Code and that the Spinoff will qualify as tax-free under Section 355 of the Code;

WHEREAS, as a result of the Spinoff, the Parties desire to enter into this Tax Separation Agreement to provide for certain Tax matters, including the assignment of responsibility for the preparation and filing of Tax Returns, the payment of and indemnification for Taxes, entitlement to refunds of Taxes, and the prosecution and defense of any Tax controversies;

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the Parties hereby agree as follows:

ARTICLE I. DEFINITIONS

SECTION 1.1. General. Capitalized terms used in this Agreement and not defined herein shall have the meanings that such terms have in the Separation Agreement. As used in this Agreement, the following terms shall have the following meanings:

“Affiliated Group” shall have the meaning specified in the preamble.

“Agreement” shall have the meaning specified in the preamble.

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“Business Day” shall mean a day which is not a Saturday, Sunday or a day on which banks in New York City are authorized or required by law to close.

“Closing of the Books Method” shall mean the apportionment of items between portions of a taxable period based on a closing of the books and records on the Distribution Date (as if the Distribution Date was the end of the taxable period), provided that any items not susceptible to such apportionment (such as real or personal property taxes imposed on a periodic basis) shall be apportioned on the basis of elapsed days during the relevant portion of the taxable period.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Confidentiality Agreement” shall mean any agreement pursuant to which the parties named therein have agreed to terms under which they were permitted to review certain financial information relating to CTM or the CTM Business.

“Combined Group” shall mean a combined, unitary, or consolidated tax group that includes IDT or any of its subsidiaries, not including CTM or any of its subsidiaries, on the one hand, and CTM or any of its subsidiaries.

“Consolidated Return” shall mean any Tax Return relating to Income Taxes filed pursuant to Section 1502 of the Code, or any comparable combined, consolidated, or unitary group Tax Return relating to Income Taxes filed under state or local tax law which, in each case, includes IDT and at least one subsidiary.

“Contribution” shall have the meaning set forth in the preamble.

“CTM” shall have the meaning set forth in the preamble.

“CTM Common Stock” shall mean CTM’s (i) Class A common stock, (ii)  Class B common stock, and (iii) Class C common stock, each par value $0.01 per share.

“Distribution” shall have the meaning set forth in the preamble.

“Final Determination” shall mean the final resolution of liability for any Tax for any taxable period, including any related interest or penalties, by or as a result of: (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction; (ii) a closing agreement or accepted offer in compromise under Section 7121 or 7122 of the Code, or comparable agreement under the laws of other jurisdictions which resolves the entire Tax liability for any taxable period; or (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered by the jurisdiction imposing the Tax.

“IDT” shall have the meaning specified in the preamble.

“IDT Common Stock” shall mean IDT’s (i) common stock, (ii) Class A common stock, and (iii) Class B common stock, each par value $0.01 per share.

“Income Tax” shall mean any income, franchise or similar Taxes imposed on (or measured by) net income or net profits.

“Income Tax Returns” shall mean all Tax Returns relating to Income Taxes.

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“Indemnification Tax Benefit” shall have the meaning specified in Section 2.4(b).

“Indemnified Tax” shall have the meaning specified in Section 2.4(b).

                 “IRS” shall mean the Internal Revenue Service.

“Other Tax” shall mean any Tax other than an Income Tax.

“Party” shall mean either IDT or CTM, as the case maybe.

“Payment Period” shall have the meaning specified in Section 2.4(c).

“Proceeding” shall mean any audit, examination or other proceeding brought by a Taxing Authority with respect to Taxes.

“Refund” shall have the meaning specified in Section 2.2.

“Retained Liabilities” shall have the meaning specified in the Separation Agreement.

“Retained Liability Payment” shall have the meaning specified in Section 2.5.

“Retained Liability Tax Benefit” shall have the meaning specified in Section 2.5.

“Separation Agreement” shall have the meaning specified in the preamble.

           “Straddle Period” shall mean any taxable period commencing prior to, and ending after, the Distribution Date.

“Tax” or “Taxes” shall mean any federal, state, local or foreign income, gross receipts, property, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or add on minimum, ad valorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any Taxing Authority.

“Taxing Authority” shall mean any governmental authority (whether United States or non-United States, and including, any state, municipality, political subdivision or governmental agency) responsible for the imposition of any Tax.

“Tax Returns” shall mean all reports or returns (including information returns and amended returns) required to be filed or that may be filed for any period with any Taxing Authority in connection with any Tax or Taxes (whether domestic or foreign).

SECTION 1.2. References; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. The words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, references in this Agreement to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, such Agreement. Unless the context otherwise requires, the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement.

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ARTICLE II. ALLOCATION OF TAX LIABILITIES

SECTION 2.1. Indemnity.

(a)           Without duplication, IDT shall indemnify CTM from all liability for (i) Taxes of CTM or any of its subsidiaries or relating to the CTM Business with respect to taxable periods ending on or before the Distribution Date, (ii) Taxes of CTM or any of its subsidiaries or relating to the CTM Business for any Straddle Period, but only to the extent attributable to the portion of the Straddle Period ending on or before the Distribution Date, and (iii) Taxes of any member of the Affiliated Group or any Combined Group, other than CTM or any of its subsidiaries, for any taxable period. Taxes for a Straddle Period shall be apportioned in accordance with the Closing of the Books Method.

(b)           CTM shall indemnify IDT from all liability for Taxes of CTM or its subsidiaries or relating to the CTM Business accruing after the Distribution Date under the Closing of the Books Method, including the portion of any Straddle Period beginning on the Distribution Date.

SECTION 2.2. Refunds.

(a)           Subject to Section 3.5, if a Party receives a refund, offset, credit, or other benefit (including interest received thereon) (a “Refund”) of Tax which the other Party would have been obligated to indemnify had the Refund been a payment, then the Party receiving the Refund shall promptly pay the amount of the Refund to the other Party, less reasonable costs and expenses incurred in connection with such Refund, including any Taxes on such Refund or interest thereon (net of any tax benefit actually realized for paying over such Refund).

(b)           Each Party shall, if reasonably requested by the other Party, cause the relevant entity to file for and use its reasonable best efforts to obtain and expedite the receipt of any Refund to which such requesting Party is entitled under this Section 2.2.

SECTION 2.3. Contests.

(a)           In the case of any Proceeding that relates to Taxes for which IDT is responsible under Section 2.1, IDT shall have the right to control, in its sole discretion, the conduct of such Proceeding. Subject to the foregoing, CTM shall have the right to participate jointly in any Proceeding if the consequences of the resolution of such Proceeding could reasonably be expected to affect the tax liability of CTM for any tax period to the extent such tax liability of CTM is not subject to an indemnification by IDT hereunder.

(b)           In the case of any Proceeding that relates to Taxes for which CTM is responsible under Section 2.1, CTM shall have the sole right to control the conduct of such Proceeding. Subject to the foregoing, IDT shall have the right to participate jointly in any Proceeding if the consequences of the resolution of such Proceeding could reasonably be expected to affect the tax liability of IDT for any tax period to the extent such tax liability of IDT is not subject to an indemnification by CTM hereunder.

(c)           In the case of any Proceeding that relates to a Straddle Period of CTM or the CTM Business, the parties shall use reasonable efforts to cause such Proceeding to be bifurcated between the period ending on the Distribution Date and the period beginning after the Distribution Date. If the parties are able to cause the audit to be so bifurcated, then Sections 2.3(a) and (b) shall govern the control of such Proceedings. To the extent that the parties are unable to cause such bifurcation, IDT and CTM shall jointly control such Proceeding.

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(d)           After the Distribution Date, each Party shall promptly notify the other Party in writing upon receipt of written notice of the commencement of any Proceeding or of any demand or claim upon it, which, if determined adversely, would be grounds for indemnification from such other Party pursuant to Section 2.1 or could reasonably be expected to have an adverse Tax effect on the other Party. The failure of one Party to promptly forward such notification in accordance with the immediately preceding sentence shall not relieve the other Party of any obligation under this Agreement, except to the extent that the failure to promptly forward such notification actually prejudices the ability of the other Party to contest such Proceeding. Each Party shall, on a timely basis, keep the other Party informed of all developments in the Proceeding and provide such other Party with copies of all pleadings, briefs, orders, and other correspondence pertaining thereto.

SECTION 2.4. Treatment of Payments; After Tax Basis.

(a)           IDT and CTM agree to treat any indemnification payments (other than payments of interest pursuant to Section 2.4(c)) pursuant to this Agreement, including any payments made pursuant to Section 2.5, as either a capital contribution or a distribution, as the case may be, between IDT and CTM occurring immediately prior to the Distribution, and to challenge in good faith any other characterization of such payments by any Taxing Authority. If, notwithstanding such good faith efforts, the receipt or accrual of any such payment (other than payments of interest pursuant to Section 2.4(c)) results in taxable income to the indemnified Party, such payment shall be increased so that, after the payment of any Taxes with respect to the payment, the indemnified Party shall have realized the same net amount it would have realized had the payment not resulted in taxable income.

(b)           To the extent that any liability for Taxes that is subject to indemnification under Section 2.1 (an “Indemnified Tax”) gives rise to an Indemnification Tax Benefit to the indemnified Party in any taxable period, the indemnified Party will promptly remit to the indemnifying Party the amount of any such Indemnification Tax Benefit actually realized. For purposes of this Agreement, “Indemnification Tax Benefit” means a reduction in the amount of Taxes that are required to be paid or increase in refund due, whether resulting from a deduction, from reduced gain or increased loss from disposition of an asset, or otherwise. For purposes of this Agreement, an indemnified Party will be deemed to have actually realized an Indemnification Tax Benefit at the time the amount of Taxes such indemnified Party is required to pay is reduced or the amount of any refund due is increased. The amount of any Indemnification Tax Benefit in this Section 2.4(b) shall be calculated by comparing (i) the indemnified Party’s actual Tax liability taking into account any Indemnified Tax with (ii) what the indemnified Party’s Tax liability would have been without taking into account any Indemnified Tax. If, pursuant to this Agreement, the indemnified Party makes a remittance to the indemnifying Party of any Indemnification Tax Benefit and all or part of such

Indemnification Tax Benefit is subsequently disallowed, the indemnifying Party will promptly pay to the indemnified Party that portion of such remittance equal to the portion of the Indemnification Tax Benefit that is disallowed.

(c)           Payments made pursuant to this Agreement that are not made within the period prescribed in this Agreement or, if no period is prescribed, within thirty (30) days after demand for payment is made (the “Payment Period”) shall bear interest for the period from and including the date immediately following the last date of the Payment Period through and including the date of payment at a rate equal to the monthly average of the “prime rate” as published in the Wall Street Journal, compounded semi-annually. Such interest will be payable at the same time as the payment to which it relates and shall be calculated on the basis of a year of 365 days and the actual number of days for which due; provided, however, that this provision for interest shall not be construed to give the Party responsible for such payment the right to defer payment beyond the due date hereunder.

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SECTION 2.5. Retained Liabilities. To the extent that any payments made by IDT in respect of the Retained Liabilities (a “Retained Liability Payment”) gives rise to a Retained Liability Tax Benefit to CTM in any taxable period, CTM will promptly remit to IDT the amount of any such Retained Liability Tax Benefit actually realized. For purposes of this Agreement, “Retained Liability Tax Benefit” means a reduction in the amount of Taxes that are required to be paid or increase in refund due, whether resulting from a deduction, credit, increased basis, or otherwise. For purposes of this Agreement, CTM will be deemed to have actually realized a Retained Liability Tax Benefit at the time the amount of Taxes CTM is required to pay is reduced or the amount of any refund due is increased. The amount of any Retained Liability Tax Benefit in this Section 2.5 shall be calculated by comparing (i) CTM’s actual Tax liability taking into account any Retained Liability Payment with (ii) what CTM’s Tax liability would have been without taking into account any Retained Liability Payment. If, pursuant to this Agreement, CTM makes a remittance to IDT of any Retained Liability Tax Benefit and all or part of such Retained Liability Tax Benefit is subsequently disallowed, IDT will promptly pay to CTM that portion of such remittance equal to the portion of the Retained Liability Tax Benefit that is disallowed.

SECTION 2.6. Transfer Taxes. Notwithstanding anything to the contrary herein, IDT shall bear any and all stamp, duty, transfer, sales and use or similar Taxes incurred in connection with the Spinoff.

ARTICLE III. RETURNS AND TAXES ATTRIBUTABLE TO CTM

SECTION 3.1. IDT’s Responsibility for the Preparation of Tax Returns and for the Payment of Taxes.

(a)           IDT shall prepare and file or cause to be prepared and filed all Tax Returns of CTM or any of its subsidiaries or relating to the CTM Business that are due on or before the Distribution Date (taking into account any valid extensions thereof), all Income Tax Returns relating to taxable periods ending on or before the Distribution Date and all Income Tax Returns of the Affiliated Group or any Combined Group.

(b)           To the extent that CTM or any of its subsidiaries or the CTM Business is included in any Consolidated Return for a taxable period that includes the Distribution Date, IDT shall include in such Consolidated Return the results of CTM and the CTM Business on the basis of the Closing of the Books Method. To the extent permitted by law or administrative practice with respect to other Income Tax Returns, the taxable period relating to CTM or the CTM Business shall be treated as ending on the Distribution Date, and if the taxable period does not, in fact, end on the Distribution Date, the Parties shall apportion all tax items between the portions of the taxable period before and after the Distribution Date on the Closing of the Books Method.

SECTION 3.2. CTM’s Responsibility for the Preparation of Tax Returns and for the Payment of Taxes. CTM shall prepare and file or cause to be prepared and filed all Tax Returns relating to Other Taxes of CTM or any of its subsidiaries or the CTM Business that have not been filed before the Distribution Date. CTM shall prepare and file or cause to be prepared and filed all Income Tax Returns relating to taxable periods of CTM and its subsidiaries after the Distribution Date, except for Income Tax Returns of the Affiliated Group or any Combined Group and Income Tax Returns of CTM for any Straddle Period as described in Sections 3.1 and 3.3.

SECTION 3.3. Responsibility for the Preparation of Straddle Period Income Tax Returns and for the Payment of Straddle Period Income Taxes. IDT shall prepare and file or cause to be prepared and filed all Income Tax Returns of CTM for any Straddle Period. All such Income Tax Returns that are to be prepared and filed by IDT pursuant to this paragraph shall be submitted to CTM not later than thirty (30) days prior to the due date for filing of such Tax Returns (or if such due date is within forty-five (45) days following the Distribution Date, as promptly as practicable following the Distribution Date). CTM shall have the right to review such Tax Returns and to review all work papers and procedures used to prepare any such Tax Return. If CTM, within ten (10) Business Days after delivery of any such Tax Return, notifies IDT in writing that it objects to any of the items in such Tax Return, IDT and CTM shall attempt in good faith to resolve the dispute and, if they are unable to do so, the disputed items shall be resolved (within a reasonable time, taking into account the deadline for filing such Tax Return) by an internationally recognized independent accounting firm chosen by both IDT and CTM. Upon resolution of all such items, the relevant Straddle Period Tax Return shall be filed on that basis. The costs, fees and expenses of such accounting firm shall be borne equally by IDT and CTM.

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SECTION 3.4. Manner of Preparation. All Income Tax Returns filed on or after the Distribution Date shall be prepared and filed on a timely basis (including pursuant to extensions) by the Party responsible for such filing under this Agreement. In the absence of a Final Determination to the contrary, a controlling change in law or circumstances, or accounting method changes pursuant to applications that are approved by the Internal Revenue Service, all Income Tax Returns of CTM for tax periods commencing prior to the Distribution Date shall be prepared on a basis consistent with the elections, accounting methods, conventions, assumptions and principles of taxation used with respect to the CTM Business for the most recent taxable periods for which Tax Returns of the Affiliated Group have been filed.

SECTION 3.5. Carrybacks. CTM agrees and will cause its subsidiaries not to carry back any net operating losses, capital losses or credits for any taxable period ending after the Distribution Date to a taxable period, or portion thereof, ending on or before the Distribution Date. To the extent that CTM or any of its subsidiaries is required by applicable law to carry back any such net operating losses, capital losses or credits, any refund of Taxes attributable to such carryback shall be for IDT’s account.

SECTION 3.6. Retention of Records; Cooperation; Access.

(a)           IDT and CTM shall, and shall cause each of their subsidiaries to retain adequate records, documents, accounting data and other information (including computer data) necessary for the preparation and filing of all Tax Returns required to be filed by IDT or CTM and for any Tax matter covered by this Agreement, including any Proceeding relating to such Tax Returns or to any Taxes payable by IDT or CTM or any of their subsidiaries.

(b)           Subject to the provisions of Section 3.8, IDT and CTM shall reasonably cooperate with one another in a timely manner with respect to any Tax matter covered by this Agreement, including any Proceeding described in Section 2.3. IDT and CTM shall, and shall cause each of their subsidiaries to, cooperate and provide reasonable access to (i) all records, documents, accounting data and other information (including computer data) necessary for the preparation and filing of all Tax Returns required to be filed by IDT or CTM and for any Proceeding relating to such Tax Returns or to any Taxes payable by IDT or CTM and (ii) its personnel and premises, for the purpose of the preparation, review or audit of such Tax Returns, or in connection with any Tax matter covered by this Agreement, including any Proceeding described in Section 2.3 as reasonably requested by either IDT or CTM. The Party requesting or otherwise entitled to any books, records, information, officers or employees pursuant to this Section 3.6(b) shall bear all reasonable out-of-pocket costs and expenses (except reimbursement of salaries, employee benefits and general overhead) incurred in connection with providing such books, records, information, officers or employees; provided, however, that any costs (including but not limited to attorneys’ fees and expenses) arising from the requested Party’s failure to cooperate under this Section 3.6(b) shall be payable by such Party.

(c)           The obligations set forth above in Sections 3.6(a) and 3.6(b) shall continue until the longer of (i) the time of a Final Determination or (ii) expiration of all applicable statutes of limitations, to which the records and information relate. For purposes of the preceding sentence, each Party shall assume that no applicable statute of limitations has expired unless such Party has received notification or otherwise has actual knowledge that such statute of limitations has expired.

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SECTION 3.7. Tax Treatment. The Parties intend that:

(A)           the Contribution will be qualified as a transaction in which IDT and CTM recognize no income or gain for U.S. Federal income tax purposes pursuant to Sections 351 and 1032 of the Code; and

(B)           the Distribution, and the Spinoff as a whole, will be qualified as a (i) reorganization described in Sections 355(a) and 368(a)(1)(D) of the Code and (ii) transaction in which the stock distributed thereby is “qualified property” for purposes of Sections 355(d), 355(e) and 361(c) of the Code as a transaction in which IDT, CTM and the stockholders of IDT recognize no income or gain for U.S. Federal income tax purposes pursuant to Sections 355, 361 and 1032 of the Code. For the avoidance of doubt, recognition of income or gain by IDT or CTM as a result of taking into account intercompany items or excess loss accounts pursuant to the Treasury Regulations promulgated pursuant to Section 1502 of the Code shall not mean that the Spinoff does not have tax-free status.

SECTION 3.8. Confidentiality; Ownership of Information; Privileged Information. The provisions of Article X of the Separation Agreement relating to confidentiality of information, ownership of information, privileged information and related matters shall apply with equal force to any records and information prepared and/or shared by and among the Parties in carrying out the intent of this Agreement.

ARTICLE IV. MISCELLANEOUS

SECTION 4.1. Complete Agreement; Construction. This Agreement shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter, including, without limitation, any tax sharing agreement previously entered into by the Parties.

SECTION 4.2. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by both Parties.

SECTION 4.3. Survival of Agreements. Except as otherwise contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Distribution Date.

SECTION 4.4. Notices. All notices and other communications hereunder shall be in writing and hand delivered or mailed by registered or certified mail (return receipt requested) or sent by any means of electronic message transmission with delivery confirmed (by voice or otherwise) to the Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:

To IDT:

IDT Corporation

550 Broad Street

Newark New Jersey 07102

Fax: 973-438-1010

Attention: Bill Pereira

               With copies to:

IDT Corporation

550 Broad Street

Newark New Jersey 07102

Fax: 973-438-1456

Attention: Legal Department

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               To CTM:

CTM Media Group, Inc.

11 Largo Drive

South Stamford, CT 06907

Fax: 203-724-2397

Attention: Marc E. Knoller

SECTION 4.5. Waivers. The failure of any Party to require strict performance by the other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof.

SECTION 4.6. Amendments. This Agreement may not be modified or amended except by an agreement in writing signed by the Parties hereto.

SECTION 4.7. Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party hereto without the prior written consent of the other Party hereto, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void.

SECTION 4.8. Successors and Assigns. The provisions to this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.

SECTION 4.9. Additional Members. Any new members of the Affiliated Group shall automatically become a Party to this Agreement upon becoming members.

SECTION 4.10. Third Party Beneficiaries. This Agreement is solely for the benefit of the Parties hereto and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement.

SECTION 4.11. Title and Headings. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

SECTION 4.12. Exhibits. The Exhibits to this Agreement shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

SECTION 4.13. Governing Law; Jurisdiction. This Agreement shall be construed in accordance with, and governed by, the laws of the State of New Jersey, without regard to the conflicts of law rules of such state. Each of the Parties (a) consents to submit itself to the personal jurisdiction of the courts of the State of New Jersey or any federal court with subject matter jurisdiction located in the District of New Jersey (and any appeals court therefrom) in the event any dispute arises out of this Agreement or any Ancillary Agreement or any transaction contemplated hereby or thereby, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (c) agrees that it will not bring any action relating to this Agreement or any Ancillary Agreement or any transaction contemplated hereby or thereby in any court other than such courts.

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SECTION 4.14. Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written.

CTM MEDIA HOLDINGS, INC.
By:
	Name:	Marc E. Knoller
	Title:	CEO
IDT CORPORATION
By:
	Name:	Bill Pereira
	Title:	CFO

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EX-99.1

Exhibit 99.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14C INFORMATION

Information Statement Pursuant to Section 14(c) of the

Securities Exchange Act of 1934

Check the appropriate box:

x Preliminary Information Statement

¨  Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))

¨ Definitive Information Statement

¨  Definitive Additional Materials

CTM MEDIA HOLDINGS, INC.

(Name of Registrant as Specified In Charter)

Payment of Filing Fee (Check the appropriate box):

ý  No fee required.

¨  Fee computed on table below per Exchange Act Rule 14c-5(g), and 0-11.

(1)  Title of each class of securities to which transaction applies:

(2)  Aggregate number of securities to which transaction applies:

(3)  Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

(4)  Proposed maximum aggregate value of transaction:

(5)  Total fee paid:

¨  Fee paid previously with preliminary materials.

¨  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1)  Amount Previously Paid:

(2)  Form, Schedule or Registration Statement No.:

(3)  Filing Party:

(4)  Date Filed:

Howard S. Jonas

Chairman of the Board of Directors

IDT Corporation

520 Broad Street

Newark, NJ 07102

[ __, 2009]

Dear IDT Corporation Stockholder:

We are pleased to inform you that the Board of Directors of IDT Corporation (“IDT”) has approved the spin-off of CTM Media Holdings, Inc. (“Holdings”), a wholly-owned subsidiary of IDT, to IDT’s stockholders. Following the spin-off, IDT’s business will consist of IDT Telecom, IDT Energy and IDT’s alternative energy initiatives, as well as other interests. Holdings will consist of the CTM Media Group, IDT’s majority interest in Idea and Design Works and the WMET-AM radio station.

The spin-off of Holdings will occur by way of a pro rata distribution of Holdings Class A common stock, Class B common stock and Class C common stock to IDT’s stockholders. In the distribution, each IDT stockholder will receive one share of Holdings Class A common stock for every three shares of IDT common stock, one share of Holdings Class B common stock for every three shares of IDT Class B common stock, and one share of Holdings Class C common stock for every three shares of IDT Class A common stock, held at 5:00 p.m., New York City time, on [___ __,] 2009, which is the record date of the spin-off. The distribution of unrestricted shares of our Class A common stock and Class B common stock will be paid in book-entry form and physical stock certificates will be issued only to holders of Class C common stock and, upon request, to holders of restricted Class A common stock and holders of restricted Class B common stock . Stockholder approval of the spin-off is not being sought, and you are not required to take any action to receive your Holdings common stock.

We believe that the spin-off will separate certain of our business units whose performance and financial results are more predictable and have different growth characteristics than the remaining operations.  Management believes that separating the two groups of operating units will allow management of each of IDT and Holdings to design and implement corporate strategies and policies that are based primarily on the business characteristics of that company and its business units, maintain a sharper focus on core business and growth opportunities, and concentrate their financial resources wholly on their own operations.  Moreover, the separation of Holdings will provide investors with greater transparency regarding the value of Holdings’ business units. In addition, the spin-off will separate business units with different risk profiles and performance characteristics from one another. Accordingly, we believe the spin-off will build long-term stockholder value.

     Following the spin-off, you will own shares in both IDT and Holdings. We do not anticipate that the Holdings Class A common stock or the Class B common stock will, immediately following the spin-off, be listed on any exchange.  We do intend to apply to have the Holdings Class A common stock and Holdings Class B common stock quoted on the Over the Counter Bulletin Board and it is possible that, after establishing a market value in that forum, Holdings’ management will seek to have the Holdings Class A common stock and Holdings Class B common stock listed on an exchange.  We do not anticipate listing the Holdings Class C common stock on any exchange or trading forum.   IDT common stock and IDT Class B common stock will continue to trade on the New York Stock Exchange under the symbol “IDT.C” and “IDT”, respectively.

We intend for the spin-off to be tax-free for stockholders. To that end, we expect to receive a favorable opinion from Stern & Kilcullen, LLC confirming the spin-off’s tax-free status. You should, of course, consult your own tax advisor as to the particular consequences of the spin-off to you.

The enclosed information statement, which is being mailed to all IDT stockholders, describes the spin-off in detail and contains important information about Holdings, including its financial statements.

We look forward to your continued support as a stockholder of IDT. We remain committed to working on your behalf to build long-term stockholder value.

Sincerely,

Howard S. Jonas

Chairman of the Board of Directors

[HOLDINGS LOGO]

[____ __,] 2009

Dear CTM Media Holdings Stockholder:

It is my pleasure to welcome you as a stockholder of our newly independent company, CTM Media Holdings, Inc. All of us at CTM Media Holdings look forward to becoming an independent company. Our management team and our employees have worked hard over the years to make the businesses that comprise CTM Media Holdings what they are today.

As an independent public company, we will have the ability to focus exclusively on the growth and development of our businesses and to create value for our new stockholders, as well as to concentrate our financial resources solely on our own operations. We also hope to achieve greater visibility – in the financial community, and for our products and services as well.

Following the spin-off, we will have holdings in media and travel-related businesses. We will focus on developing our brochure distribution and comic book and graphic novel publishing businesses, which have strong presences in their respective industries and niches, as well as our radio station. We believe our experienced management team and consistent performance are representative of the strengths that will position us to excel as a stand-alone entity and to continue our growth in the several markets in which we are engaged.

We do not anticipate that our Class A common stock or our Class B common stock will, immediately following the spin-off, be listed on any exchange.  We do intend to apply to have our Class A common stock and our Class B common stock quoted on the Over the Counter Bulletin Board and it is possible that, after establishing a market value in that forum, we will seek to have our Class A common stock and Class B common stock listed on an exchange.  We do not anticipate listing our Class C common stock on any exchange or trading forum.   We invite you to learn more about us by reviewing the enclosed information statement. We look forward to our future as a separate publicly-traded company and to your support as a stockholder.

I am excited about the opportunities that the spin-off will create for our company, our customers and for you, our stockholders.

Sincerely,

[Signature]                                                              

Marc E. Knoller

Chief Executive Officer

Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the United States Securities and Exchange Commission under the Securities and Exchange Act of 1934, as amended.

SUBJECT TO COMPLETION, DATED [___________ ], 2009

PRELIMINARY INFORMATION STATEMENT

CTM MEDIA HOLDINGS, INC.

Class A Common Stock

Class B Common Stock

and

Class  C Common Stock

(each, par value $0.01 per share)

This information statement is being furnished in connection with the distribution to holders of common stock, Class A common stock and Class B common stock, each par value $0.01 per share, of IDT Corporation (“IDT”) of all the outstanding shares of Class A common stock, Class B common stock and Class C common stock, each par value $0.01 per share, of CTM Media Holdings, Inc. (“Holdings”).

We are currently a subsidiary of IDT. Following the spin-off, our principal businesses, which are currently part of IDT, will consist of:

·   CTM Media Group (“CTM”), our brochure distribution company and other advertising-based new product initiatives focused on small to medium sized businesses;

·   Our majority interest in Idea and Design Works, LLC (“IDW”), which is a comic book and graphic novel publisher that creates and licenses original intellectual property; and

·   The WMET-AM radio station in the Washington, D.C. metropolitan area (“WMET”).

The spin-off will separate our businesses from the remainder of IDT’s operations and holdings, including IDT Telecom, IDT Energy and IDT’s alternative energy initiatives, as well as other interests. We, along with IDT’s management, believe that the operational and growth prospects of our businesses may best be realized by a separation from those non-spun-off businesses based on several factors including synergies and growth prospects. Each of our businesses is described in more detail below.

Our business will consist of the following segments: CTM and IDW. The results of operations of WMET do not comprise a separate segment and are reported under the heading “Other.”

The spin-off of Holdings will occur by way of a pro rata distribution of Holdings common stock to IDT’s stockholders. In the distribution, each IDT stockholder will receive one share of Holdings Class A common stock for every three shares of IDT common stock, one share of Holdings Class B common stock for every three shares of IDT Class B common stock, and one share of Holdings Class C common stock for every three shares of IDT Class A common stock, held at 5:00 p.m., New York City time, on [___ __,] 2009, which is the record date of the spin-off. The distribution of unrestricted shares of our Class A common stock and Class B common stock will be paid in book-entry form and physical stock certificates will be issued only to holders of Class C common stock and, upon request, to holders of restricted Class A common stock and holders of restricted Class B common stock .  Stockholder approval of the spin-off is not required, and you are not required to take any action to receive your Holdings common stock.

No stockholder approval of the spin-off is required or sought. We are not asking you for a proxy and you are requested not to send us a proxy.  IDT stockholders will not be required to pay for the shares of our Class A common stock, Class B common stock or Class C common stock to be received by them in the spin-off or to surrender or exchange shares of IDT common stock, Class B common stock or Class A common stock in order to receive our Class A common stock, Class B common stock and Class C common stock or to take any other action in connection with the spin-off.

Currently, there is no trading market for our Class A common stock, Class B common stock or Class C common stock. However, we intend to apply to have our Class A common stock and Class B common stock be quoted on the Over the Counter Bulletin Board.  We cannot predict what the trading prices for our Class A common stock and Class B common stock will be before or after the distribution.  We do not intend to list our Class C common stock for trading on any exchange or trading forum .

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In reviewing this information statement, you should carefully consider the matters described under “Risk Factors” beginning on page 6 for a discussion of certain factors that should be considered by recipients of our common stock.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

This information statement is first being mailed to IDT stockholders on or about [____ __,] 2009.

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TABLE OF CONTENTS

	Page
Questions and Answers About the Spin-Off	1
Executive Summary	5
Risk Factors	6
Special Note About Forward-Looking Statements	12
The Spin-Off	12
Dividend Policy	17
Unaudited Pro Forma Consolidated Financial Data	17
Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Business	34
Management	38
Corporate Governance	38
Director Compensation	41
Executive Compensation	41
Security Ownership by Certain Beneficial Owners and Management	43
Our Relationship with IDT After the Spin-Off and Related Person Transactions	45
Legal Proceedings	47
Description of Our Capital Stock	47
Where You Can Find More Information	49
Index to Consolidated Financial Statements	F-1

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This information statement is being furnished solely to provide information to IDT stockholders who will receive shares of our Class A common stock, Class B common stock and Class C common stock in the distribution. This information statement is not, and is not to be construed as, an inducement or encouragement to buy or sell any of our securities or any securities of IDT. This information statement describes our business, the relationship between IDT and us, and how the spin-off affects IDT and its stockholders, and provides other information to assist you in evaluating the benefits and risks of holding or disposing of our common stock that you will receive in the distribution. Except as expressly noted, any information contained herein regarding Holdings assumes the consummation of the steps necessary to transfer CTM, IDT's interest in IDW and WMET to Holdings prior to the distribution. You should be aware of certain risks relating to the spin-off, our business and ownership of our common stock, which are described under the heading “Risk Factors.”

You should not assume that the information contained in this information statement is accurate as of any date other than the date set forth on the cover. Changes to the information contained in this information statement may occur after that date, and we undertake no obligation to update the information, except in the normal course of our public disclosure obligations and practices.

Unless the context indicates otherwise, all references in this information statement:

·   to “Holdings,” “us,” “we,” or “our” are to CTM Media Holdings, Inc. and its subsidiaries; and

·   to “IDT” are to IDT Corporation and its subsidiaries, and, with respect to periods following the spin-off, IDT Corporation and its subsidiaries other than Holdings and its subsidiaries.

The transaction in which we will be separated from IDT and become a separately-traded public company is referred to in this information statement as the “separation,” the “distribution” or the “spin-off.”

We obtained the market and industry data and other statistical information used throughout this information statement from our own research, surveys or studies conducted by third parties, independent industry or general publications and other published independent sources. While we believe that each of these sources is reliable, we have not independently verified such data. Similarly, we believe our internal research is reliable, but it has not been verified by any independent sources.

QUESTIONS AND ANSWERS ABOUT THE SPIN-OFF

Q:	Why am I receiving this document?
A:	IDT is delivering this document to you because you were a holder of IDT’s common stock, Class A common stock or Class B common stock on the record date for the distribution of our shares of Class A common stock, Class B common stock and Class C common stock. Accordingly, you are entitled to receive one share of our Class A common stock for every three shares of IDT common stock, one share of our Class B common stock for every three shares of IDT Class B common stock, and one share of our Class C common stock for every three shares of IDT Class A common stock that you held on the record date. No action is required for you to participate in the distribution.
Q:	What is the spin-off?
A:	The spin-off is the overall transaction of separating our company from IDT, which will be accomplished through a series of transactions resulting in us owning what are currently the CTM, IDW and WMET business units of IDT. The final step of the transactions will be the pro rata distribution of our Class A common stock, Class B common stock and Class C common stock by IDT to holders of IDT’s common stock, Class A common stock and Class B common stock as set forth in the answer above. We refer to this last step as the “distribution.” For additional information regarding these transactions, see “The Spin-Off--Manner of Effecting the Spin-Off” on page 14.
Q:	Who is Holdings?
A:	Up to the time of the spin-off, we will be a wholly-owned subsidiary of IDT. Following the spin-off, we will be a separate publicly-traded company. We will have holdings in media and travel-related businesses, concentrating on our brochure distribution and comic book and graphic novel publishing businesses, as well as the WMET-AM radio station.

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Q:	Why is IDT separating our businesses and distributing our stock?
A:	IDT’s Board of Directors and management believe the separation will provide the benefits set forth below under the caption “The Spin-Off--Reasons for the Spin-Off” on page 14 , including allowing management of each of IDT and Holdings to design and implement corporate strategies and policies that are based primarily on the business characteristics of that company and its business units, maintain a sharper focus on core business and growth opportunities, concentrate their financial resources wholly on their own operations and allowing investors to appreciate the value of Holdings’ business units. Management also considered the other factors set forth below under the caption “The Spin-Off – Other Benefits of the Spin-Off” on page 13.
Q:	Why is the separation of the two companies structured as a spin-off?
A:	IDT’s Board of Directors believes that a tax-free spin-off of our shares is a cost-effective and tax efficient way to separate the companies.  For additional information, see “Material U.S. Federal Income Tax Consequences of the Spin-Off” beginning on page 14.
Q:	What is the record date for the distribution?
A:	The record date is [____ __,] 2009 and ownership will be determined as of 5:00 p.m., New York City time, on that date. When we refer to the “record date,” we are referring to that time and date.
Q:	What will be our relationship with IDT after the spin-off?
A:	IDT and Holdings each will be independent, publicly-traded companies. Howard Jonas will be chairman of both companies. Further, we intend to enter into agreements with IDT that will ease our transition from consolidated operating segments to an independent company following the spin-off and we will continue to cooperate with IDT when there is an opportunity for cost savings that does not impact the independence of the two companies. For example, it is intended that IDT will continue to provide certain administrative services for an agreed period following the spin-off. For additional information regarding our relationship with IDT after the spin-off, see “Our Relationship with IDT After the Spin-Off and Related Person Transactions” beginning on page 45.
Q:	When will the spin-off be completed?
A:	Shares of our Class A common stock, Class B common stock and Class C common stock will be distributed on or about [____ __,] 2009. We refer to this date as the “distribution date.”
Q:	Can IDT decide to cancel the distribution of our Class A common stock, Class B common stock and Class C common stock even if all the conditions have been met?
A:	Yes. The distribution is conditioned upon satisfaction or waiver of certain conditions. See “The Spin-Off--Spin-Off Conditions and Termination” on page 16. IDT has the right to terminate the stock distribution, even if all of these conditions are met, if at any time IDT’s Board of Directors determines, in its sole discretion, that IDT and Holdings are better served by remaining a combined company or that business conditions are such that it is not advisable to complete the spin-off.
Q:	What will happen to the listing of IDT’s common stock and Class B common stock?
A:	Nothing. We expect that IDT common stock and Class B common stock will continue to be traded on the New York Stock Exchange (“NYSE”) under the symbols “IDT.C” and “IDT”, respectively.
Q:	Will the spin-off affect the market price of my IDT shares?
A:	Probably. As a result of the spin-off, the trading price of IDT shares immediately following the distribution may be lower than immediately prior to the distribution because the trading price will no longer reflect the value of our businesses. In addition, until the market has fully analyzed the operations of IDT without these business segments, the price of IDT shares may fluctuate significantly. Furthermore, the combined trading prices of IDT’s common stock and Class B common stock and our common stock after the distribution may be higher or lower than the trading price of IDT common stock or Class B common stock prior to the distribution. See the Risk Factor entitled “There may not be an active trading market for shares of our common stock and stockholders may find it difficult to transfer our securities” on page 11. Probably. As a result of the spin-off, the trading price of IDT shares immediately following the distribution may be lower than immediately prior to the distribution because the trading price will no longer reflect the value of our businesses. In addition, until the market has fully analyzed the operations of IDT without these business segments, the price of IDT shares may fluctuate significantly. Furthermore, the combined trading prices of IDT’s common stock and Class B common stock and our common stock after the distribution may be higher or lower than the trading price of IDT common stock or Class B common stock prior to the distribution. See the Risk Factor entitled “ There may be a limited trading market for shares of our common stock and stockholders may find it difficult to transfer our securities .” on page 11.

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Q:	What will IDT stockholders receive in the spin-off?
A:	In the spin-off, IDT stockholders will receive one share of our Class A common stock for every three shares of IDT common stock, one share of our Class B common stock for every three shares of IDT Class B common stock, and one share of our Class C common stock for every three shares of IDT Class A common stock, that they own as of the record date and cash in lieu of a fractional share of our common stock. Immediately after the spin-off, IDT stockholders will still own all of IDT’s current business segments, but they will own them as two separate investments rather than as a single investment. Holders of our Class A common stock will be entitled to one vote per share, holders of our Class B common stock will be entitled to one-tenth of one vote per share and holders of our Class C common stock will be entitled to three votes per share. After the spin-off, the certificates and book-entry interests representing the “old” IDT common stock, Class A common stock and Class B common stock will represent such stockholders’ interests in the IDT businesses (other than our business) following the spin-off, and the certificates and book-entry interests representing our Class A common stock, Class B common stock and Class C common stock that stockholders receive in the spin-off will represent their interest in our businesses only.
Q:	If a stockholder owns restricted stock of IDT, what will that stockholder receive in the spin-off?
A:	Holders of restricted stock of IDT will receive, in respect of those restricted shares, one share of our Class B common stock for every three restricted shares of IDT Class B common stock that they own as of the record date of the spin-off and cash in lieu of a fractional share of our common stock . Those particular shares of our stock that you will receive will be restricted under the same terms as the IDT restricted shares in respect of which they were issued. This means that restricted shares of our stock received in the spin-off are subject to forfeiture on the same terms, and their restrictions lapse at the same time, as the corresponding IDT shares.
Q:	If a stockholder owns options to purchase shares of IDT stock, what will that option holder receive in the spin-off?
A:	IDT is studying the impact of the spin-off on holders of options to purchase shares of IDT stock and, if the Board of Directors of IDT deems it appropriate, IDT will adjust the exercise prices of those options to reflect the change in value of the underlying securities as a result of the spin-off. As of June 1, 2009, there were outstanding options to purchase 2.0 million shares of IDT Class B common stock with exercise prices ranging from $6.56 to $59.73 per share. The closing price of the IDT Class B common stock on June 1, 2009 was $ 1.68
Q:	What does an IDT stockholder need to do now?
A:	IDT stockholders do not need to take any action, although we urge you to read this entire document carefully. The approval of the IDT stockholders is not required or sought to effect the spin-off, and IDT stockholders have no appraisal rights in connection with the spin-off. IDT is not seeking a proxy from any stockholders, and you are requested not to send us a proxy. IDT stockholders will not be required to pay anything for our shares distributed in the spin-off or to surrender any shares of IDT common stock, Class A common stock or Class B common stock. IDT stockholders should not send in their IDT share certificates. IDT stockholders will automatically receive their shares of our Class A common stock, Class B common stock and Class C common stock when the spin-off is effected.  If you want to receive a physical certificate, your broker and/or clearing broker and our distribution agent will need to act together to facilitate this request. There is a nominal cost associated with this process.
Q:	Are there risks associated with owning our common stock?
A:	Yes. Our business is subject to both general and specific risks relating to our operations. In addition, our spin-off from IDT presents risks relating to our becoming a separately-traded public company as well as risks relating to the nature of the spin-off transaction itself. See “Risk Factors” beginning on page 6.
Q:	What are the U.S. federal income tax consequences of the spin-off to IDT stockholders?
A:	IDT stockholders will not recognize a gain or loss on the receipt of shares of our common stock in the spin-off other than with respect to fractional shares of our common stock for which cash is received . IDT stockholders will apportion their tax basis in IDT common stock between such IDT common stock and our common stock received in the spin-off in proportion to the relative fair market values of such stock at the time of the spin-off. An IDT stockholder’s holding period for our common stock received in the spin-off will include the period for which that stockholder’s IDT common stock was held. See “The Spin-Off--Material U.S. Federal Income Tax Consequences of the Spin-Off” beginning on page 14 . You should consult your own tax advisor as to the particular consequences of the spin-off to you.

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Q:	What if I want to sell my IDT common stock or my Holdings common stock?
A:	You should consult with your own financial advisors, such as your stockbroker, bank or tax advisor. We do not make any recommendations on the purchase, retention or sale of shares of IDT common stock or our common stock to be distributed. If you decide to sell any shares after the record date, but before the spin-off , you should make sure your stockbroker, bank or other nominee understands whether you want to sell your IDT common stock, the Holdings common stock you will receive in the spin-off, or both. If you sell your IDT stock before the record date, you will not receive shares of Holdings in the spin-off.
Q:	Where will I be able to trade shares of Holdings common stock?
A:	There is no current public market for our common stock. We do not anticipate that the Holdings Class A common stock  or Holdings Class B common stock will, immediately following the spin-off, be listed on an exchange.  We do intend to apply to have our common stock and our Class B common stock be quoted on the Over the Counter Bulletin Board and it is possible that, after establishing a market value in that forum, our management will seek to have our Class A common stock and our Class B common stock listed on an exchange . We cannot predict the trading prices for our Class A common stock before or after the distribution date. We do not anticipate listing the Holdings Class C common stock on any exchange or trading forum .
Q:	Do you intend to pay dividends on your common stock?
A:	We do not anticipate paying dividends on our common stock in the foreseeable future. Our current intent is to retain earnings, if any, to finance the expansion of our business. The payment of dividends in the future will depend on our results of operations, financial condition, capital expenditure plans and other cash obligations and will be at the sole discretion of our Board of Directors. Because IDT does not currently pay a dividend and because we and IDT will be separate entities after the spin-off, our decision to pay (or not pay) dividends in the future will not impact IDT’s decision of whether to pay (or not pay) dividends in the future. See “Dividend Policy” on page 17 for additional information on our dividend policy following the spin-off.
Q:	Where can IDT stockholders get more information?
A:	Before the distribution, if you have any questions relating to the distribution, you should contact: IDT Corporation 520 Broad Street Newark, New Jersey 07102 Attention: Bill Ulrey (973) 438-3838 After the distribution, if you have any questions relating to our common stock, you should contact: CTM Media Holdings, Inc. 11 Largo Drive South Stamford, Connecticut 06907 Attention: Les Rozner (203) 323-5161
Q:	Who will be the distribution agent for the spin-off?
A:	American Stock Transfer & Trust Company will be the distribution agent for the spin-off. The distribution agent can be contacted at: 59 Maiden Lane Plaza Level New York, New York 10038 Telephone (800) 937-5449

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EXECUTIVE SUMMARY

CTM Media Holdings, Inc., a Delaware corporation, is currently a subsidiary of IDT Corporation. Following the spin-off, our principal businesses, which are currently part of IDT, will consist of:

·   CTM Media Group, our brochure distribution company and other advertising-based new product initiatives focused on small to medium sized businesses;

·   Our interest in Idea and Design Works, LLC, which is a comic book and graphic novel publisher that creates and licenses original intellectual property; and

·   The WMET-AM radio station in the Washington, D.C. metropolitan area.

The spin-off will separate our businesses from the remainder of IDT’s operations and holdings, including IDT Telecom, IDT Energy and IDT’s alternative energy initiatives, as well as other interests.  We, along with IDT’s management, believe that the operational and growth prospects of our businesses may best be realized by a separation from those non-spun-off businesses based on several factors including synergies and growth prospects. Each of our businesses is described in more detail below.

Our business will consist of the following segments: CTM and IDW. The results of operations of WMET do not comprise a separate segment and are reported under the heading “Other.”

Summary of the Spin-Off

The following is a summary of the terms of the spin-off. Please see “The Spin-Off” beginning on page 12 for a more detailed description of the matters described below.

Distributing company	IDT Corporation, a Delaware corporation.
Distributed company	CTM Media Holdings, Inc., a Delaware corporation, which, following the spin-off, will be comprised of the current CTM, IDW and WMET business units of IDT. Holdings’ principal executive offices are located at 11 Largo Drive South, Stamford, CT 06907.
Distribution ratio	Each holder of IDT common stock will receive a distribution of one share of Holdings Class A common stock for every three shares of IDT common stock held on the record date, each holder of IDT Class B common stock will receive a distribution of one share of Holdings Class B common stock for every three shares of Class B common stock held on the record date, and each holder of IDT Class A common stock will receive a distribution of one share of Holdings Class C common stock for every three shares of IDT Class A common stock held on the record date, and each holder of any class of IDT stock will receive cash in lieu of a fractional share of our common stock .
Securities to be distributed	Approximately 1.4 million shares of Holdings Class A common stock, which will constitute all of the outstanding shares of Holdings Class A common stock immediately after the spin-off (based on approximately 4.3 million shares of IDT common stock that we expect to be outstanding on the record date ). Approximately 5.4 million shares of Holdings Class B common stock, which will constitute all of the outstanding shares of Holdings Class B common stock immediately after the spin-off (based on approximately 16.3 million shares of IDT Class B common stock that we expect to be outstanding on the record date). Approximately 1.1 million shares of Holdings Class  C common stock, which will constitute all of the outstanding shares of Holdings Class  C common stock immediately after the spin-off (based on approximately 3.3 million shares of IDT Class A common stock that we expect to be outstanding on the record date).
Record date	The record date is 5:00 p.m., New York City time, on [___ __], 2009. In order to be entitled to receive shares of Holdings Class A common stock, Holdings Class B common stock and/or Class C common stock in the spin-off, holders of shares of IDT common stock, Class B common stock and Class A common stock must be stockholders as of 5:00 p.m., New York City time, on the record date.
Distribution date	The distribution date will be on or about [___ __], 2009.

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Relationship between Holdings and IDT after the spin-off	Following the spin-off, IDT and Holdings each will be independent, publicly-traded companies. Howard Jonas will be chairman of both companies. Further, we intend to enter into agreements with IDT that will ease our transition from consolidated operating segments to an independent company following the spin-off and we will continue to cooperate with IDT when there is an opportunity for cost savings that does not impact the independence of the two companies. For example, it is intended that IDT will continue to provide certain administrative services for an agreed period following the spin-off. For additional information regarding our relationship with IDT after the spin-off, see “Our Relationship with IDT After the Spin-Off and Related Person Transactions” beginning on page 45.
Dividend policy	We do not anticipate paying dividends on our common stock in the foreseeable future. Our current intent is to retain earnings, if any, to finance the expansion of our business. The payment of dividends in the future will depend on our results of operations, financial condition, capital expenditure plans and other cash obligations and will be at the sole discretion of our Board of Directors.
Payment of intercompany indebtedness	All intercompany debt between IDT and the businesses included in Holdings will be capitalized prior to the completion of the spin-off and there will be no-indebtedness owning from Holdings to IDT immediately following the spin-off.  The only contemplated obligations to IDT arising after the spin-off would be obligations that arise under the Separation and Distribution Agreement and Services Agreement, or that arise in the ordinary course of business pursuant to arms’ length arrangements between the Company and IDT .

Corporate Information and Structure

Pursuant to the spin-off, we will be separated from IDT and become a separate publicly-traded company. The spin-off and our resulting separation from IDT involve the following steps:

·   Before our separation from IDT, we will enter into a Separation and Distribution Agreement and Tax Separation Agreement with IDT to effect the separation and provide a framework for our relationship with IDT after the spin-off. We also will enter into a services agreement with IDT which will provide for certain services to be performed by each of IDT and us to facilitate our transition into a separate company. These agreements will provide, among other things, for the allocation between us and IDT of the assets, liabilities and obligations currently owned by IDT and attributable to periods prior to, at and after our separation from IDT, services relating to employee benefits and payroll and/or the allocation of liabilities and responsibilities relating to employee compensation and benefit plans and programs and other related matters, and the administration of insurance claims. For more information on these agreements, see “Our Relationship with IDT After the Spin-Off and Related Person Transactions” beginning on page 45.

·   The Securities and Exchange Commission (the “SEC”) will declare effective under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the registration statement on Form 10 of which this information statement is a part, and IDT will mail this information statement to its stockholders.

·   On or prior to the distribution date, IDT will receive an opinion by Stern & Kilcullen, LLC as to the satisfaction of certain required qualifying conditions for the application of Section 355 of the Internal Revenue Code of 1986 (the “Code”) to the spin- off and the receipt of this tax opinion can not be waived by the IDT board as a condition to the spin-off.

·   Following the separation, we will operate as a separate publicly-traded company, and we expect that our Class A common stock and Class B common stock will be eligible to be quoted on the Over the Counter Bulletin Board following consummation of the spin-off.

For a further explanation of the spin-off, see “The Spin-Off” beginning on page 12.

RISK FACTORS

Our business, operating results or financial condition could be materially adversely affected by any of the following risks associated with any one of our businesses, as well as the other risks highlighted elsewhere in this document, particularly the discussions about competition. The trading price of our common stock could decline due to any of these risks. Note that references to “our”, “us”, “we”, etc. used in each risk factor below refers to the business about which such risk factor is provided.

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Risks Related to CTM

General economic downturns and other factors could negatively impact the tourism industry and reduce CTM’s revenues.

CTM’s brochure distribution business is closely linked to the travel and tourism industry. Travel is highly sensitive to business and personal discretionary spending levels, and thus tends to decline during general economic downturns. CTM’s sales and revenues would be significantly reduced as a result of a decline in travel as its business targets the tourist and travelers in the locations its brochures are displayed.  In the current recession of the global economy, discretionary spending levels have already dropped significantly.

Without limitation, some events that tend to reduce travel and, therefore, could reduce CTM’s sales and revenues include:

·   price escalation in the airline industry or other travel-related industries;

·   airline or other travel related strikes;

·   pandemics or other widespread health risks;

·   regional hostilities and terrorism;

·   unusual extended periods of bad weather;

·   fuel price escalation;

·   reduction of capacity by travel suppliers;

·   labor force stoppages that impact the Broadway theater industry;

·   increased occurrence of travel-related accidents; and

·   economic downturns and recessions.

If any of the foregoing factors results in a downturn in the tourism and travel industry, there could be a material adverse effect on CTM’s business, prospects and financial condition.

Declines or disruptions in the travel and tourism industry, such as those caused by terrorist attacks or general economic slowdowns such as the current recession, could negatively affect CTM’s business.

CTM’s brochure distribution business relies on the health and growth of the travel and tourism industry. Travel is highly sensitive to traveler safety concerns, and thus has historically declined after acts of terrorism such as those on September 11, 2001.  A terrorist attack or the perceived threat of one in New York City in particular (as a significant portion of CTM’s revenue is derived from the distribution of brochures related to Broadway shows – see “Trends and changes in the theater industry could adversely affect CTM’s revenues”) could significantly reduce tourism and theater attendance. These effects, depending on their scope and duration, could significantly reduce travel and tourism, which in turn could negatively impact the demand for CTM’s services.   Reductions in tourism could also result in reduced tourism revenues for attractions, reducing the resources available to attractions to purchase CTM’s services.  Such declines could negatively impact CTM’s business, and if continuing, could have a material adverse affect on its business, prospects, and financial condition.

If CTM’s access to hotels and other locations for its brochure racks on the current terms were to be limited, it could negatively impact its results of operations.

CTM’s brochure distribution business relies on access to hotels and other locations for the placement of its brochure racks as a service or convenience for the customers of those businesses and other users of those facilities. If the owners or operators of those facilities were to restrict or substantially reduce such access, CTM’s brochure distribution business, revenues and results of operations could be materially and adversely affected.

Trends and changes in the theater industry could adversely affect CTM’s revenues.

A significant portion of CTM’s revenue (approximately 10% to 15%) is derived from its distribution of brochures related to Broadway shows. If theater attendance on Broadway declines, the demand for CTM’s services to the theater industry could soften, adversely affecting its revenues.  Further, economic downturns negatively affect the entertainment industry generally and attendance at Broadway shows in particular. Moreover, new shows may not open. Accordingly, the current recession could adversely impact CTM’s business from the theater industry which could have an adverse effect on its business, prospects and financial condition.

Any labor disputes that cause Broadway shows to close could adversely affect CTM’s revenues.

As a significant portion of CTM’s revenue is derived from its distribution of brochures related to Broadway shows, any strikes that cause the “lights to go off” on Broadway could adversely affect CTM’s revenues.

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Rapid technological changes and reliance on the Internet may decrease the attractiveness of CTM’s services to customers.

In order to remain competitive in the brochure industry, CTM must continue to enhance its services. If CTM fails to continually improve its services, it could lag behind competitors or it could become obsolete due to its customers’ and the public’s reliance on technology and the Internet.  In particular, the increasing popularity and availability of access content and the Internet through wireless devices may reduce the appeal of advertising through brochure displays.

CTM may need to develop technology or modify its services accordingly to retain its customers and grow its customer base. Such development and modifications may require CTM to incur substantial costs and expenses to respond. Such costs and expenses may have a material adverse effect on CTM’s business, financial condition and results of operations. It is possible that CTM may not be able to adapt as Internet technologies and customer demands continue to evolve. To be successful, CTM must adapt to its rapidly changing market by continually enhancing the technologies used in its Internet products and services, and introducing new technology to address the changing needs of its business and consumers. If CTM is unable, for technical, legal, financial or other reasons, to adapt in a timely manner in response to changing market conditions or business and consumer customer requirements, its business, prospects and financial condition and results of operations could be materially adversely affected.

Seasonal factors may affect CTM’s operating results.

Seasonality of revenues will cause CTM’s revenues to fluctuate. Travel is usually slow during non-summer months and during the non-holiday season, and customers are less likely to pay for distribution of brochures during such periods.  Accordingly, CTM needs adequate liquidity to finance its operations during off-seasons. Although in the past CTM has consistently had sufficient cash reserves to fund its operations year-round, there can be no assurance that it will have sufficient funds from operations or external sources to fund its operations during slower periods.

Risks Related to IDW

IDW depends on a single distributor for its publications and such dependence subjects IDW to the risk that such distributor may be unable to perform its obligations to IDW.

Diamond Comic Distributors, Inc., which handles the vast majority of all comic publishers’ direct market distribution, distributes all of IDW’s products for both the direct and non-direct markets. Should Diamond fail to perform under its distribution agreement or if it were to experience financial difficulties that would hinder its performance, although the non-direct market may have other distributors that could fill Diamond’s role, distribution to the direct market would be significantly impaired in the short term and IDW’s ability to distribute and receive proceeds from its publications would be impaired.

IDW depends on its distributors for the implementation of internal controls related to the accounting of publication activities.

Because of Diamond’s role as distributor of IDW’s publications, IDW depends on Diamond to implement internal controls over financial reporting related to the publications they distribute for IDW and to provide IDW with information related to those internal controls.  Diamond’s internal controls might not be sufficient to allow IDW to meet its internal control obligations, to allow IDW’s management to properly assess those controls or to allow IDW’s independent registered public accounting firm to attest to IDW’s management’s assessment.  Diamond might fail to cure any internal control deficiencies related to the publications that it distributes for IDW. IDW may be unable to effectively create compensating controls to detect and prevent errors or irregularities in Diamond’s accounting to IDW and others.  Errors in properly tracking publication sales could negatively impact IDW’s revenues.

IDW’s publications might be more expensive to make than anticipated

Expenses associated with publishing IDW’s publications could increase beyond its budgetary limit because of a range of things such as an escalation in compensation rates of talent working on the publications or in the number of personnel required to work on publications, or because of creative problems or an increase in printing costs.  In addition, unexpected circumstances sometimes cause publication to exceed budget.

Any loss of key personnel and the inability to attract and retain qualified employees could have a material adverse impact on IDW’s operations.

IDW is dependent on the continued services of key executives such as its CEO, Theodore Adams; its Executive Vice-President, Robbie Robbins; and certain creative employees. IDW currently has employment contracts with its CEO and Executive Vice-President, but does not have employment agreements with any other officers or employees. The departure of key personnel without adequate replacement could severely disrupt IDW’s business operations. Additionally, IDW needs qualified managers and skilled employees with industry experience to operate its businesses successfully. From time to time there may be shortages of skilled labor which may make it more difficult and expensive for IDW to attract and retain qualified employees. If IDW is unable to attract and retain qualified individuals or its costs to do so increase significantly, its operations would be materially adversely affected.

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IDW may not be able to respond to changing consumer preferences and its sales may decline.

IDW operates in highly competitive markets that are subject to rapid change, including changes in customer preferences. There are substantial uncertainties associated with IDW’s efforts to develop successful publications and products for its customers.  New fads, trends, and shifts in popular culture could affect the type of creative media consumers will purchase. IDW has no professionally gathered demographic data, but anecdotal evidence and management experience indicate that the majority of IDW’s readers are males between the ages of 18 and 35. Content in which IDW has invested significant resources may fail to respond to consumer demand at the time it is published. IDW regularly makes significant investments in new products that may not be profitable, or whose profitability may be significantly lower than IDW has experienced historically.  A loss in sales due to the foregoing could have a material adverse effect on IDW’s business, prospects, and financial condition.

IDW’s publications might be less successful economically than anticipated.

IDW cannot predict the economic success of any of its publications because the revenue derived from the distribution of a publication depends primarily upon its acceptance by the public, which cannot be accurately predicted. The economic success of a publication also depends upon the public’s acceptance of competing publications, critical reviews, the availability of alternative forms of entertainment and leisure time activities, piracy and unauthorized recording, transmission and distribution of publications, general economic conditions, and other tangible and intangible factors, none of which can be predicted with certainty.  The commercial failure of just one of IDW’s publications could have a material adverse effect on IDW’s results of operations in both the year of release and in the future.

If IDW fails to maintain strong relationships with its licensors, authors, illustrators and other creative talent, as well as to develop relationships with new licensors and creative talent, its business could be adversely affected.

IDW’s business is highly dependent on maintaining strong relationships with the entertainment companies that license IDW their entertainment properties, and with authors, illustrators and other creative talent who produce the products that are sold to IDW’s customers. Any overall weakening of these relationships, or the failure to develop successful new relationships, could have an adverse impact on IDW’s business and financial performance. IDW has an exclusive relationship with one artist – Ashley Wood. IDW also depends on freelance artists who work for a variety of companies. It is important for IDW to maintain strong relationships with those freelance artists in order for them to choose to devote their time and talent towards IDW’s projects as opposed to another company’s.

A decrease in the level of media exposure or popularity of IDW’s characters could adversely affect its financial results.

If the movies or television programs that IDW licenses are not successful, or if the characters that IDW licenses lose some of their popularity, IDW’s ability to sell publications based on such characters will decline.

IDW cannot control certain publication delays and cancellations which could adversely affect IDW’s sales and its ability to meet delivery obligations.

IDW does not control the decision to proceed with the production of publications based on characters that it licenses from studios, and does not control the timing of the releases of those publications which are subject to long and inflexible schedules.  Disruptions, delays or cancellations to those schedules could cause IDW to incur additional costs, miss an anticipated publication date, endure for long periods without publishing a publication or all of the above, and could hurt IDW’s associated licensing programs and business, generally.

IDW might be disadvantaged by changes or disruptions in the way publications are distributed.

The manner in which consumers access publication content has undergone rapid and dramatic changes.  IDW cannot assure that new distribution channels, such as digital distribution, will be as profitable for its industry as are today’s channels or that it will successfully exploit any new channels. IDW can also not assure that current distribution channels will maintain their profitability. In addition, publications are distributed internationally and are subject to risks inherent in international trade including war and acts of terrorism, instability of foreign governments or economies, fluctuating foreign exchange rates and changes in laws and policies affecting the trade of publications.

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IDW might lose potential sales because of piracy of publications.

With technological advances, the piracy of publications has increased. Unauthorized and pirated copies of IDW’s publications will reduce the revenue generated by those publications. If consumers can obtain illegal copies of IDW’s publications and media, IDW’s revenues will decline. IDW may not be able to identify or enforce violations of its intellectual property rights and even if legal remedies are available, they could be costly and drain its financial resources.  Accordingly, illegal copying of IDW’s content could negatively affect its revenues.

IDW’s dependence on printers outside the United States subjects it to the risks of international business.

IDW’s publications are printed in South Korea and occasionally in Canada on an as needed basis. International manufacturing is subject to a number of risks, including extreme fluctuations and volatility in currency exchange rates, transportation delays and interruptions, political and economic disruptions, the impositions of tariffs, import and export controls and changes in governmental policies. The impact of changes in currency rates has been especially heightened by current global economic conditions and significant devaluations of local currencies in comparison to the U.S. dollar.  Although to date, currency fluctuations have not adversely affected IDW’s revenues, such fluctuations could adversely affect IDW in the future.  Possible increases in costs and delays of, or interferences with, product deliveries could result in losses of revenues and the goodwill of IDW’s customers. Additional factors that may adversely affect IDW’s printing activities outside of the United States include international political situations, uncertain legal systems and applications of law, prejudice against foreigners, corrupt practices, uncertain economic policies and potential political and economic instability that may be exacerbated in foreign countries.

The competitive pressures IDW faces in its business could adversely affect its financial performance and growth prospects.

IDW is subject to significant competition, including from other publishers, many of which are substantially larger than IDW and have much greater resources than it, such as Marvel Comics and DC Comics. To the extent IDW cannot meet these challenges from existing or new competitors and develop new product offerings to meet customer preferences or needs, its revenues and profitability could be adversely affected.

Risks Relating to the Spin-Off

We may be unable to achieve some or all of the benefits that we expect to achieve from our separation from IDT.

As a stand-alone, independent public company, we believe that our business will benefit from, among other things, allowing our management to design and implement corporate policies and strategies that are based primarily on the characteristics of our business, to focus our financial resources wholly on our own operations and to implement and maintain a capital structure designed to meet our own specific needs. However, we may not be able to achieve some or all of the benefits expected as a result of the spin-off.

Additionally, by separating from IDT, there is a risk that our company may be more susceptible to stock market fluctuations and other adverse events than we would have been were we still a part of IDT due to a reduction in market diversification. Prior to the spin-off, we have been able to take advantage of IDT’s size and purchasing power in procuring goods, technology and services, including insurance, employee benefit support and audit services. As a separate, stand-alone entity, we may be unable to obtain access to financial and other resources on terms as favorable as those available to us prior to the separation. Furthermore, as a stand-alone company, we will not be able to enjoy certain benefits from IDT’s operating diversity, borrowing leverage and available capital for investments.

If the spin-off were to fail to qualify as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code, our stockholders, we and/or IDT might be subject to significant tax liability.

If the spin-off fails to qualify for tax-free treatment, IDT would be treated as if it had sold the common stock of our company for its fair market value, resulting in a taxable gain to the extent of the excess of such fair market value over its tax basis in our stock. In general, our initial public stockholders would be treated as if they had received a taxable distribution equal to the fair market value of our common stock that was distributed to them. For additional information, see “Material U.S. Federal Income Tax Consequences of the Spin-Off” beginning on page 14 .

Our operations may depend on the availability of additional financing and, after the spin-off, we will not be able to obtain financing from IDT.

Following the spin-off, we expect to have sufficient liquidity to support the development of our business. In the future, however, we may require additional financing for capital requirements and growth initiatives. After the spin-off, IDT will not provide funds to us. Accordingly, we will depend on our ability to generate cash flows from operations and to borrow funds and issue securities in the capital markets to maintain and expand our business. We may need to incur debt on terms and at interest rates that may not be as favorable as those historically enjoyed by IDT. If additional financing is not available when required or is not available on acceptable terms, we may be unable to fund our expansion, successfully promote our business, develop or enhance our products and services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our products and business, financial condition and results of operations.

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Our historical and pro forma financial information may not be indicative of our future results as an independent company.

The historical and pro forma financial information we have included in this information statement may not reflect what our results of operations, financial position and cash flows would have been had we been an independent company during the periods presented or be indicative of what our results of operations, financial position and cash flows may be in the future when we are an independent company. We have made pro forma adjustments based upon available information and assumptions that we believe are reasonable to reflect these factors, among others, in our pro forma financial information included in this information statement. However, our assumptions may not prove to be accurate and, accordingly, our pro forma information should not be assumed to be indicative of what our results of operations, cash flows or financial condition actually would have been as a stand-alone public company nor to be a reliable indicator of what our results of operations, cash flows and financial condition actually may be in the future.

Risk Factors Generally Relating to Us and Our Common Stock

We have limited resources and could find it difficult to raise additional capital.

As a result of the spin-off, CTM, IDW and WMET will be newly independent from IDT.  We have limited operating history as an independent company, and no current sources of financing. Any financing formerly provided to any of our businesses by IDT will no longer be available. We may need to raise additional capital in order for stockholders to realize increased value on our securities. Given the current global economy, there can be no assurance that we will be able to obtain the necessary funding on commercially reasonable terms in a timely fashion. Failure to receive the funding could have a material adverse effect on our business, prospects, and financial condition.

There may a limited trading market for shares of our common stock and stockholders may find it difficult to transfer our securities.

Prior to the spin-off, there was no public trading market for shares of our common stock. We intend to apply to have our Class A common stock and Class B common stock quoted on the Over the Counter Bulletin Board.  As a result, an investor may find it difficult to sell, or to obtain accurate quotations as to the price of, our securities.  In addition, our common stock may be subject to the penny stock rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors.  The SEC regulations generally define a penny stock to be an equity that has a market price of less than $5.00 per share, subject to certain exceptions.  Unless an exception is available, those regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally institutions and high net worth individuals).  In addition, the broker-dealer must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account.  Moreover, broker-dealers who recommend such securities to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser's written agreement to transactions prior to sale.  Regulations on penny stocks could limit the ability of broker-dealers to sell our common stock and thus the ability of purchasers of our common stock to sell their shares in the secondary market.

In addition, because of the significant changes that will take place as a result of the spin-off, the trading market for both our common stock and IDT’s common stock after the spin-off may be significantly different from that for IDT’s common stock prior to the spin-off.

We cannot predict the price range or volatility of our common stock after the spin-off, and sales of a substantial number of shares of our common stock may adversely affect the market price of our common stock.

Investors may suffer dilution.

We may engage in equity financing to fund our future operations and growth.  If we raise additional funds by issuing equity securities, stockholders may experience significant dilution of their ownership interest (both with respect to the percentage of total securities held, and with respect to the book value of their securities) and such securities may have rights senior to those of the holders of our common stock.

General economic conditions may negatively impact our results.

Economic downturns may negatively affect our operations. These conditions may be widespread or isolated to one or more geographic regions in which we operate. Higher wages, related labor costs, printing costs, leasing costs, energy, insurance and fuel costs and the increasing cost trends in those markets may decrease our margins.   Moreover, such economic downturns presents a challenge to our IDW business as attracting customers becomes increasingly more difficult.  Specifically, the distribution of books published by IDW by retail customers would become increasingly more difficult as retail stores, that are an important channel in such distribution, are more likely to close during such economic downturns.  In addition, decreases in travel and entertainment spending during economic downturns could impact our businesses , and thereby negatively impact our operations.

We are controlled by our principal stockholder, which limits the ability of other stockholders to affect the management of the Company.

Howard S. Jonas, our Chairman of the Board and founder, will, following the spinoff have voting power over 2,197,253 shares of our common stock (which includes 497,237 shares of our Class A common stock, 609,239 shares of our Class B common stock and 1,090,776 shares of our Class C common stock which are convertible into shares of our Class A common stock on a 1-for-1 basis), representing approximately 73% of the combined voting power of our outstanding capital stock, as of June 3, 2009. Mr. Jonas is able to control matters requiring approval by our stockholders, including the approval of significant corporate matters, such as any merger, consolidation or sale of all or substantially all of our assets.  As a result, the ability of any of our other stockholders to influence the management of our Company is limited .

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SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

This information statement and other materials filed or to be filed by us and IDT, as well as information in oral statements or other written statements made or to be made by us and IDT, contain statements, including in this document under the captions “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are forward-looking statements. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “foresees” or the negative version of those words or other comparable words and phrases. Any forward-looking statements contained in this information statement are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved.

We believe that the factors that could cause our actual results to differ materially include but are not limited to the factors we describe in this information statement, including under “Risk Factors,” “The Spin-off” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:

·   Fluctuations in our financial results;

·   Unanticipated delays or acceleration in our sales cycles;

·   Changes in demand for our products and services;

·   Weather conditions and natural disasters;

·   Acts of terrorism or war;

·   Termination or loss of major customer contracts;

·   Competition and innovation in our industries;

·   Our ability to develop and introduce new or enhanced products and services;

·   Difficulty in developing, preserving and protecting our intellectual property;

·   Our ability to protect our information systems;

·   Adequacy of our internal controls;

·   Loss of key management and other personnel;

·   Our ability to comply with laws governing our operations and industries;

·   Increases in tax liabilities;

·   Difficulty in implementing our business strategies;

·   Availability and access to financial and other resources;

·   Failure to qualify as a tax-free reorganization;

·   Our ability to obtain financing; and

·   Labor force stoppages.

These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this information statement. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Consequently, actual events and results may vary significantly from those included in or contemplated or implied by our forward-looking statements. The forward-looking statements included in this information statement are made only as of the date of this information statement, and we undertake no obligation to publicly update or review any forward-looking statement made by us or on our behalf, whether as a result of new information, future developments, subsequent events or circumstances or otherwise.

THE SPIN-OFF

After a thorough strategic review of IDT’s portfolio, IDT determined that separating the CTM, IDW and WMET businesses from its other operations would allow us to be in a better position to thrive under our own management focus and long-term growth plans and allow us to create more long-term value individually than through the combined entity. In addition, by separating from the remaining IDT businesses, we would avoid the risks associated with those businesses.

The transaction is intended to be in the form of a tax-free distribution to IDT’s stockholders. To that end, we expect to receive an opinion from Stern & Kilcullen, LLC as to the nature of the transaction, as well as the tax implications for IDT stockholders and IDT arising therefrom. IDT’s Board of Directors will establish record and payment dates for the spin-off shortly before the completion of the distribution.  You should consult your own tax advisor concerning the tax impact of the spin-off on you.

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Reasons for the Spin-Off

IDT’s Board of Directors believes that the spin-off will separate certain business units whose performance and financial results of the business units to be separated are more predictable and have different growth characteristics than the remaining operations.  Management believes that separating the two groups of operating units will allow management of each of IDT and Holdings to design and implement corporate strategies and policies that are based primarily on the business characteristics of that company and its business units, maintain a sharper focus on core business and growth opportunities, and concentrate their financial resources wholly on their own operations. Moreover, the separation of Holdings will provide investors with greater transparency regarding the value of Holdings’ business units. In addition, the spin-off will separate business units with different risk profiles and performance characteristics from one another. Accordingly, we believe the spin-off will build long-term stockholder value.

IDT’s Board of Directors weighed the reasons for the spin-off and the other benefits it is expected to bring against the negative impacts thereof, including the one time costs of effecting the spin-off, the increased costs of maintaining IDT and Holdings as separate public companies, the possibility of reduced liquidity in the market for Holdings’ common stock as a smaller company or because of  the absence of a listing for Holdings’ equity on an established market and the disruption on operations caused by the separation.  The Board concluded that the reasons and benefits outweighed the negative impacts and elected to proceed with the spin-off.

Other Benefits of the Spin-Off

The Board of Directors of IDT considered the following potential benefits in making the determination to effect the spin-off:

·   Allow each separated company to recruit and retain employees pursuant to compensation policies which are appropriate for their respective lines of business. As a separate, publicly-traded company with our own executive management team, we may be able to attract greater media attention and press coverage, which could strengthen our ability to promote the CTM and IDW brands, and WMET-AM.

·   Reduce internal competition for capital. Instead of having limited access to resources, we will now be able to invest any excess cash flow exclusively into the growth initiatives of our businesses. In addition, we will have direct access to the public capital markets to allow us to seek to finance our operations and growth without having to compete with IDT’s other businesses with respect to financing. As an independent entity, we will be in a position to pursue strategies our Board of Directors and management believe will create long-term stockholder value, including organic and acquisition growth opportunities, provided we continue to have access to capital.

·   Provide both companies heightened strategic flexibility to form strategic business alliances in their target markets, unencumbered by considerations of the potential impact on the other business.

·   Create our common equity shares, including options and restricted share units, in order to provide the appropriate incentive mechanisms to motivate and reward our management and employees. The common stock of the independent, publicly-traded Holdings will have a value that reflects the efforts and performance of our management and employees. As a result, we will be able to develop better incentive programs to attract and retain key employees through the use of stock-based and performance-based incentive plans that more directly link their compensation with our financial performance. These programs will be designed to more directly reward employees based on our performance.

·   Allow us to effect future acquisitions utilizing our common stock for all or part of the consideration and to issue a security more directly tied to the performance of our business.

·   Increase transparency and clarity into the different businesses of IDT and us. The investment community, including the respective analysts, stockholders and investors of IDT and us, will be better able to evaluate the merits and future prospects of each company. This will enhance the likelihood that each company will receive an appropriate market valuation.

Neither we nor IDT can assure you that, following the spin-off, any of these benefits will be realized to the extent anticipated or at all. For a description of the factors that might impact our ability to achieve these benefits, see “Risk Factors.”

IDT’s Board of Directors also considered a number of other factors in evaluating the spin-off, including:

·   The one-time and on-going costs of the spin-off, and having us operate as an independent public company;

·   Our capital structure;

·   The possibility that disruptions in normal business may result, including as we perform functions that previously were provided by IDT ; and

·   The risk that the combined trading prices of our common stock and IDT common stock after the distribution may be lower than the trading price of IDT common stock before the distribution, and the possible reduced liquidity in the market for our Class A common stock and Class B common stock, given the size of our operations and the absence of a listing of Holdings’ equity on an established market .

IDT’s Board of Directors concluded, however, that the potential long-term benefits of the spin-off outweigh these factors, and that separating us from IDT in the form of a tax-free distribution is appropriate and advisable.

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Manner of Effecting the Spin-Off

The general terms and conditions relating to the spin-off will be set forth in the Separation Agreement between us and IDT. The spin-off will be effective at 11:59 p.m., New York City time on the distribution date, which is [_____ __,] 2009. As a result of the spin-off, each IDT stockholder will receive one share of our Class A common stock for every three shares of IDT common stock, one share of our Class B common stock for every three shares of IDT Class B common stock they own, one share of our Class C common stock for every three shares of IDT Class A common stock they own and each holder of any class of IDT stock will receive cash in lieu of a fractional share of our common stock . In order to be entitled to receive shares of our common stock in the spin-off, IDT stockholders must be stockholders at 5:00 p.m., New York City time, on the record date, [_____ __,] 2009. The distribution of restricted shares of our Class A common stock and Class B common stock will be paid in book-entry form and physical stock certificates will be issued only to holders of Class C common stock and, upon request, to holders of restricted Class A common stock and holders of restricted Class B common stock .  Each share of our Class A common stock, Class B common stock and Class C common stock that is distributed will be validly issued, fully paid and non-assessable and free of preemptive rights. See “Description of Our Capital Stock” beginning on page 47.

IDT stockholders will not be required to pay for shares of our Class A common stock, Class B common stock and Class C common stock received in the spin-off or to surrender or exchange shares of IDT common stock, Class B common stock and/or Class A common stock in order to receive our common stock or to take any other action in connection with the spin-off. No vote of IDT stockholders is required or sought in connection with the spin-off, and IDT stockholders have no appraisal rights in connection with the spin-off.

If any stockholder of IDT on the record date sells shares of IDT common stock on the “regular way” market after the record date but on or before the spin-off date, the buyer of those shares, and not the seller, will become entitled to receive the shares of our common stock issuable in respect of the shares sold. See “— Trading Between the Record Date and Spin-Off Date” below for more information.

Trading Between the Record Date and Spin-Off Date

Beginning on or shortly before the record date and continuing up to and including through the spin-off date, we expect that there will be two markets in IDT common stock: a “regular-way” market and an “ex-distribution” market. Shares of IDT common stock that trade on the regular way market will trade with an entitlement to shares of common stock distributed pursuant to the spin-off. Shares that trade on the ex-distribution market will trade without an entitlement to shares of our common stock distributed pursuant to the spin-off. Therefore, if you sell shares of IDT common stock in the “regular-way” market up to and including through the spin-off date, you will be selling your right to receive shares of our common stock in the spin-off. If you own shares of IDT common stock at the close of business on the record date and sell those shares on the “ex-distribution” market, up to and including the spin-off date, you will still receive the shares of our common stock that you would be entitled to receive pursuant to your ownership of the shares of IDT common stock.  

IN ORDER TO BE ENTITLED TO RECEIVE SHARES OF OUR CLASS A COMMON STOCK AND CLASS B COMMON STOCK IN THE SPIN-OFF, YOU MUST BE A HOLDER OF IDT COMMON STOCK, CLASS B COMMON STOCK AND/OR CLASS A COMMON STOCK AT 5:00 P.M., NEW YORK CITY TIME, ON THE RECORD DATE.

Results of the Spin-Off

After the spin-off, we will be a separately traded, public company. Immediately following the spin-off, we expect to have approximately [______] beneficial holders and approximately [____] record holders of shares of our common stock (assuming conversion of all outstanding shares of our Class C common stock to our Class A common stock) based on the number of beneficial and record holders, respectively, of shares of IDT common stock, Class B common stock and Class A common stock (assuming conversion of all outstanding shares of IDT Class A common stock to common stock) on [______], 2009. The actual number of shares to be distributed will be determined on the record date and will reflect any exercise of IDT options between the date the Board of Directors of IDT declares the dividend for the spin-off and the record date for the spin-off.

We and IDT will be parties to a number of agreements that govern the spin-off and the future relationship between the two companies. For a more detailed description of these agreements, please see “Our Relationship with IDT After the Spin-Off and Related Person Transactions” beginning on page 45.

Interest of Holdings’ Officers and Directors

The interest of our officers and board of directors in the spin-off is reflected in their stock ownership as set forth in the Security Ownership and Certain Beneficial Owners and Management as certain of them will be receiving shares of our common stock as a result of the distribution .  

Material U.S. Federal Income Tax Consequences of the Spin-Off

The following is a summary of  the U.S. federal income tax consequences to IDT, the holders of IDT common stock, Class B common stock and Class A common stock, us and the holders of our common stock after the spin-off as of the date hereof. This summary does not discuss all tax considerations that may be relevant to stockholders in light of their particular circumstances, nor does it address the consequences to stockholders subject to special treatment under the U.S. federal income tax laws, such as stockholders subject to the alternative minimum tax, tax-exempt entities, non-resident alien individuals, foreign entities, foreign trusts and estates and beneficiaries thereof, stockholders who acquire shares as compensation for services (including holders of IDT restricted stock who did not make a Section 83(b) election), banks, insurance companies, other financial institutions, traders in securities that use mark-to-market accounting, and dealers in securities or commodities. In addition, this summary does not address any state, local or foreign tax consequences. This summary is based upon provisions of the Code, Treasury Regulations promulgated thereunder, pertinent judicial authorities, rulings of the Internal Revenue Service and such other relevant authorities, in effect on the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those summarized below.

If a partnership holds IDT or our common stock, the tax treatment of a partner will depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding IDT or our common stock, you should consult your tax advisors.

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All stockholders should consult their own tax advisors concerning the specific tax consequences of the spin-off of our Class A common stock, Class B common stock and Class C common stock to holders of IDT common stock, Class B common stock and Class A common stock in light of their particular circumstances. This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular investor.

IDT expects to obtain an opinion from Stern & Kilcullen, LLC as to the qualification of the spin-off as tax-free under Section 355 of the Code and a tax-free reorganization under Section 368(a)(1)(D) of the Code. An opinion of independent tax attorneys is not binding on the IRS or the courts. The opinion of Stern & Kilcullen, LLC will be based on, among other things, current tax law and assumptions and representations as to factual matters made by IDT, which if incorrect in certain material respects, would jeopardize the conclusions reached by Stern & Kilcullen, LLC in its opinion. Neither we nor IDT are currently aware of any facts or circumstances that would cause these assumptions and representations to be untrue or incorrect in any material respect or that would jeopardize the conclusions reached by Stern & Kilcullen, LLC in its opinion.

On the basis of the opinion IDT expects to receive in connection therewith, and assuming that IDT common stock, Class B common stock and Class A common stock is a capital asset in the hands of an IDT stockholder on the distribution date:

·   holders of IDT common stock, Class B common stock and Class A common stock, will not recognize any income, gain or loss as a result of the receipt of shares of our Class A common stock, Class B common stock and Class C common stock in the spin-off;

·   holders of IDT stock will apportion their adjusted tax basis of their IDT stock between such Holdings stock received in the spin-off in proportion to the relative fair market values of such stock at the time of the spin-off;

·   the holding period for our Class A common stock , Class B common stock and Class C common stock received in the spin-off by holders of IDT common stock, Class B common stock and Class A common stock will include the period during which such holders held the IDT common stock, Class B common stock and Class A common stock with respect to which the spin-off was made; and

·   neither we nor IDT will recognize gain or loss as a result of the spin-off.

Current federal tax regulations also provide that if an IDT stockholder holds different blocks of either IDT common stock , Class B common stock and/or Class A common stock ( such as shares of IDT common stock purchased on different dates or at different prices), the aggregate basis for each block of such IDT common stock, Class B common stock and/or Class A common stock purchased or acquired on the same date and at the same price will be allocated, to the greatest extent possible, between the shares of our common stock (including any fractional share) received in the spin -off in respect of such block of such IDT common stock, Class B common stock and/or Class A common stock and such block of IDT common stock, Class B common stock and/or Class A common stock, in proportion to their respective fair market values. The holding period of the shares of our Class A common stock, Class B common stock and/or Class C common stock (including any fractional share) received in the spin-off in respect of such block of IDT common stock, Class B common stock and/or Class A common stock will include the holding period of such block of such IDT common stock, Class B common stock and/or Class A common stock provided that such block of such IDT common stock, Class B common stock and/or Class A common stock was held as a capital asset on the distribution date. If an IDT stockholder is not able to identify which particular shares of our Class A common stock, Class B common stock and/or Class C common stock (including any fractional share) are received in the spin-off with respect to a particular block of such IDT common stock, Class B common stock and/or Class A common stock, for purposes of applying the rules described above, the stockholder may designate which shares of our Class A common stock, Class B common stock and/or Class C common stock (including any fractional share) are received in the spin -off in respect of a particular block of such IDT common stock, Class B common stock and/or Class A common stock, provided that the number of shares so designated is consistent with the ratio of the total number of shares of our Class A common stock, Class B common stock and/or Class C common stock distributed to the IDT stockholder in the spin-off to the total number of shares of IDT common stock, Class B common stock and/or Class A common stock on which the IDT stockholder received that distribution.

If you receive cash in lieu of a fractional share of our common stock, you will be treated as though you first received a distribution of the fractional share in the spin-off and then sold it for the amount of such cash. You will recognize capital gain or loss, provided that the fractional share is considered to be held as a capital asset, measured by the difference between the cash you receive for such fractional share and your tax basis in that fractional share, as determined above. Such capital gain or loss will be long-term capital gain or loss if your holding period (as determined above) for such fractional share is more than one year on the distribution date.

If the distribution were not to qualify as a tax-free spin-off under Section 355 of the Code, each IDT stockholder receiving shares of our common stock in the spin-off would be treated as if such stockholder had received a distribution in an amount equal to the fair market value of our Class A common stock received, which would result in (1) a taxable distribution to the extent of such stockholder’s pro rata share of IDT’s current and accumulated earnings and profits, (2) a reduction in such stockholder’s basis in such IDT common stock, Class B common stock and/or Class A common stock to the extent the amount received exceeds such stockholder’s share of earnings and profits and (3) a taxable gain to the extent the amount received exceeds the sum of the amount treated as a distribution and the stockholder’s basis in the IDT common stock, Class B common stock and/or Class A common stock. Any such gain would be a capital gain if the IDT stock is held as a capital asset on the distribution date. In addition, IDT would recognize a taxable gain to the extent the fair market value of our common stock exceeded its tax basis in such common stock.

Even if the spin-off otherwise qualifies for tax-free treatment under Section 355 of the Code, IDT could recognize taxable gain if the spin-off is determined to be part of a plan or series of related transactions pursuant to which one or more persons acquire, directly or indirectly, stock representing a 50% or greater interest in either IDT or us. Under the Code, any acquisitions of IDT or us within the four-year period beginning two years before the date of the spin-off are presumed to be part of such a plan. Regulations issued by the IRS, however, provide mitigating rules in many circumstances. Nonetheless, a merger, recapitalization or acquisition, or issuance or redemption of our common stock after the spin-off, in some circumstances, could be counted toward the 50% change of ownership threshold. As a result, we may be unable to engage in strategic or capital raising transactions that stockholders might consider favorable, or to structure potential transactions in the manner most favorable to us.

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If you are a “significant distributee” with respect to the spin-off, you are required to attach a statement to your federal income tax return for the year in which the spin-off occurs setting forth our name and IRS employer identification number, IDT’s name and IRS employer identification number, the date of the spin-off, and the fair market value of the shares of our common stock that you receive in the spin-off. Upon request, IDT will provide the information necessary to comply with this reporting requirement to each stockholder of record as of 5:00 p.m., New York City time, on the record date. You are a “significant distributee” with respect to the spin-off if you own at least 5% of the outstanding shares of IDT common stock immediately before the spin-off. You should consult your own tax advisor concerning the application of this reporting requirement in light of your particular circumstances.

Certain State Income Tax Matters

The above discussion does not address any tax consequences of the spin-off other than the material U.S. federal income tax consequences set forth above.  IDT stockholders are encouraged to consult their tax advisor concerning all possible state income tax consequences of the spin-off.

Listing and Trading of Our Class A Common Stock and Class B common Stock

There is currently no public market for our common stock. We do not anticipate that the Holdings Class A common stock or Class B common stock will, immediately following the spin-off, be listed on any exchange.  We do intend to apply to have our Class A common stock and Class B common stock be quoted on the Over the Counter Bulletin Board and it is possible that, after establishing a market value in that forum, we will seek to have the our Class A common stock and Holdings Class B common stock listed on an exchange.  We do not anticipate listing the Holdings Class C common stock on any exchange or trading forum.

We cannot predict what the trading prices for our Class A common stock or Class B common stock will be before or after the distribution date. We also cannot predict any change that may occur in the trading price of IDT common stock and Class B common stock as a result of the spin-off. Until our Class A common stock and Class B common stock is fully distributed and an orderly market develops in our Class A common stock and Class B common stock, the price at which it trades may fluctuate significantly and may be lower or higher than the price that would be expected for a fully distributed issue. See “Risk Factors--Risk Factors Generally Relating to Us and Our Common Stock.”

The shares of our Class A common stock and Class B common stock distributed to IDT stockholders will be freely transferable except for shares received by persons who may be deemed to be our “affiliates” under the Securities Act of 1933, as amended. Persons that may be considered affiliates of us after the spin-off generally include individuals or entities that control, are controlled by or are under common control with us. This may include some or all of our officers and directors as well as our principal stockholders. Persons that are our affiliates will be permitted to sell their shares only pursuant to an effective registration statement under the Securities Act of 1933, as amended, or an exemption from the registration requirements of the Securities Act, such as the exemptions afforded by Section 4(1) of the Securities Act or Rule 144 thereunder.

Spin-off Conditions and Termination

We expect that the spin-off will be effective on the distribution date, [____ __], 2009 (the “distribution date”), provided that,

·   the SEC has declared effective our registration statement on Form 10, of which this information statement is a part, under the Exchange Act and no stop order relating to the registration statement is in effect;

·   no action, proceeding or investigation shall have been instituted or threatened before any court or administrative body to restrain, enjoin or otherwise prevent the consummation of the spin-off, and no restraining order or injunction issued by any court of competent jurisdiction shall be in effect restraining the consummation of the spin-off, and

·   the receipt of the opinion by Stern & Kilcullen, LLC as to the satisfaction of certain required qualifying conditions for the application of Section 355 of the Code to the spin-off.

The fulfillment of the foregoing conditions will not create any obligation on IDT’s part to effect the spin-off, and the Board of Directors of IDT has reserved the right to amend, modify or abandon the spin-off and the related transactions at any time prior to the distribution date. The Board of Directors of IDT may also waive any of these conditions.

In addition, IDT has the right not to complete the spin-off and related transactions if, at any time, IDT’s Board of Directors determines, in its sole discretion, that the distribution is not in the best interests of IDT and its stockholders or that business conditions are such that it is not advisable to spin-off our business.

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Reason for Furnishing this Information Statement

This information statement is being furnished solely to provide information to IDT stockholders who will receive shares of our common stock in the spin-off. It is not and is not to be construed as an inducement or encouragement to buy or sell any securities. We believe that the information contained in this information statement is accurate as of the date set forth on the cover. Changes may occur after that date and neither we nor IDT undertakes any obligation to update the information except in the normal course of our respective public disclosure obligations.

DIVIDEND POLICY

We were formed in May 2009 and have never paid cash dividends. Following the spin-off we do not expect to pay any cash dividends for the foreseeable future. Our current policy is to retain all of our earnings to finance future growth. Any future declaration of dividends will be subject to the discretion of our Board of Directors.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

The unaudited pro forma consolidated financial statements reported below consist of an unaudited pro forma consolidated balance sheet as of April 30 , 2009 and unaudited pro forma consolidated statements of operations for the nine months ended April 30 , 2009 and for the fiscal year ended July 31, 2008. The unaudited pro forma consolidated financial statements reported below should be read in conjunction with our “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our audited consolidated financial statements for each of the fiscal years in the twoyear period ended July 31, 2008 and the notes thereto, and the unaudited interim consolidated financial statements for the nine months ended April 30 , 2009 and the notes thereto, all of which are included elsewhere in this information statement. Our unaudited pro forma financial information was prepared on the same basis as with our audited consolidated financial statements and, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position and results of operations for these periods.

The pro forma balance sheet adjustments assume that our spin-off from IDT occurred as of April 30 , 2009. The pro forma adjustments to the consolidated statements of operations for the nine months ended April 30 , 2009 and for the year ended July 31, 2008 assume that the spin-off occurred as of August 1, 2007.

The following unaudited pro forma consolidated financial statements reflect IDT’s transfer to us of all of its assets and liabilities related to Holdings, the contribution of $2 million in cash by IDT prior to the spin-off, the conversion of our debt to IDT into a capital contribution, and the distribution by IDT to its stockholders of approximately 1.4 million shares of our Class A common stock, approximately 5.4 million shares of our Class B common stock and approximately 1.1 million shares of our Class C common stock.  The number of our Class A common stock is based on the number of shares of IDT common stock outstanding at June 1, 2009, the number of our Class B common stock is based on the number of shares of IDT Class B common stock outstanding at June 1, 2009, and the number of our Class C common stock is based on the number of shares of IDT Class A common stock outstanding at June 1, 2009.

The unaudited pro forma consolidated balance sheet and statements of operations included in this information statement have been derived from our audited consolidated financial statements and our unaudited interim consolidated financial statements included elsewhere in this information statement and do not purport to represent what our financial position, results of operations or cash flows actually would have been had the spin-off occurred on the date indicated, or to project our financial performance for any future period.

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CTM MEDIA HOLDINGS, INC.

PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET

AS OF APRIL 30, 2009

(in thousands)

(unaudited)

	Historical			Pro Forma adjustments				Pro Forma
Assets
Current assets:
Cash and cash equivalents	$	4,009		$	2,000		(A)	$	6,009
Short-term investment		1,019							1,019
Trade accounts receivable, net		3,500							3,500
Inventory		1,306							1,306
Prepaid expenses		1,017							1,017
Total current assets		10,851							12,851
Property, plant and equipment, net		4,133							4,133
Licenses and other intangibles, net		636							636
Other assets		158							158
Total assets	$	15,778						$	17,778
Liabilities and stockholders’ (deficit) equity
Current liabilities:
Trade accounts payable	$	1,032						$	1,032
Accrued expenses		1,998							1,998
Deferred revenue		1,541							1,541
Due to IDT Corporation		24,047			(24,047	)	(B)		—
Capital lease obligations—current portion		177							177
Other current liabilities		429							429
Total current liabilities		29,224							5,177
Capital lease obligations—long-term portion		408							408
Total liabilities		29,632							5,585
Stockholders’ (deficit) equity:
Preferred stock, $.01 par value; authorized shares— 10,000; no shares issued		—							—
Class A common stock, $.01 par value; authorized shares— 35,000; pro forma 1,431 shares issued and outstanding		—			14		(C)		14
Class B common stock, $.01 par value; authorized shares— 65,000; pro forma 5,436 shares issued and outstanding		—			54		(C)		54
Class C common stock, $.01 par value; authorized shares— 15,000; pro forma 1,091 shares issued and outstanding		—			11		(C)		11
Additional paid-in capital		33,140			25,968		(A, B, C)		59,108
Accumulated other comprehensive income		89							89
Accumulated  deficit		(47,083	)						(47,083	)
Total stockholders’ (deficit) equity		(13,854	)						12,193
Total liabilities and stockholders’ (deficit) equity	$	15,778						$	17,778

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CTM MEDIA HOLDINGS, INC.

PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED APRIL 30, 2009

(in thousands, except per share data)

(unaudited)

	Historical			Pro Forma Adjustments		Pro Forma
Revenues	$	23,392				$	23,392
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)		10,553					10,553
Selling, general and administrative		11,796					11,796
Depreciation and amortization		1,148					1,148
Bad debt		708					708
Impairment and severance charges		33,335					33,335
Total costs and expenses		57,540					57,540
Loss from operations		(34,148	)				(34,118	)
Interest expense, net		(38	)				(38	)
Other income, net		7					7
Loss before minority interests and income taxes		(34,179	)				(34,179	)
Minority interests		737					737
Provision for income taxes		(19	)		(E)		(19	)
Net loss	$	(33,461	)			$	(33,461	)
Loss per share:
Basic and diluted					(D)		(4.20	)
Weighted average number of shares used in calculating basic and diluted loss per share							7,959

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CTM MEDIA HOLDINGS, INC.

PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JULY 31, 2008

(in thousands, except per share data)

(unaudited)

	Historical			Pro Forma adjustments		Pro Forma
Revenues	$	32,626				$	32,626
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)		12,566					12,566
Selling, general and administrative		18,277					18,277
Depreciation and amortization		2,078					2,078
Bad debt		472					472
Impairment and severance charges		3,683					3,683
Total costs and expenses		37,076					37,076
Loss from operations		(4,450	)				(4,450	)
Interest income, net		57					57
Other expense, net		(99	)				(99	)
Loss before minority interests and income taxes		(4,492	)				(4,492	)
Minority interests		(378	)				(378	)
Provision for income taxes		(457	)		(E)		(457	)
Net loss	$	(5,327	)			$	(5,327	)
Loss per share:					(D)
Basic and diluted							(0.67	)
Weighted average number of shares used in calculating loss per share							7,959

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CTM MEDIA HOLDINGS, INC.

NOTES AND MANAGEMENT’S ASSUMPTIONS

TO THE PROFORMA CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following is a description of the pro forma adjustments to the consolidated financial statements:

( A) Reflected as if IDT has made a $2 million contribution of cash on April 30, 2009.

( B ) Reflected as if the amounts due from Holdings to IDT were converted into a capital contribution on April 30 , 2009.

( C ) Reflected as if the 1.4 million shares of Class A common stock, 5.4 million shares of Class B common stock and 1.1 million shares of Class C common stock shares were issued at April 30 , 2009.

( D )	Earnings per share is calculated as if 1.4 million shares of Class A common stock, 5.4 million shares of Class B common stock and 1.1 million shares of Class C common stock were issued and outstanding in all periods presented.
( E )	The Company’s financial statements include provisions for federal, state and foreign income taxes as on a separate tax return basis for all periods presented. Accordingly, no provision for income taxes is provided as a pro forma adjustment.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are currently a subsidiary of IDT. Following the spin-off, our principal businesses, which are currently part of IDT, will consist of:

·   CTM Media Group, our brochure distribution company, other advertising-based new product initiatives focused on small to medium sized businesses;

·   Our majority interest in Idea and Design Works, LLC, which is a comic book and graphic novel publisher that creates and licenses original intellectual property; and

·   WMET-AM radio station in the Washington, D.C. metropolitan area.

The spin-off will separate our businesses from IDT Telecom, IDT Energy and IDT’s alternative energy initiatives, as well as other IDT interests.  We, along with IDT’s management, believe that the operational and growth prospects of our businesses may best be realized by a separation from those non-spun-off businesses based on several factors including synergies and growth prospects. Each of our businesses is described in more detail below.

The Company’s operations face challenges, including those outlined in the Risk Factors section of this Information Statement.  In particular, the Company faces challenges:

·    related to the current state of the United States and global economies and its impact on travel and other discretionary spending;

·    challenges from technological changes; and

·    movement to alternatives to the Company’s products and services.  

The Company is developing plans and changes to its businesses to address each of these identified challenges.

The current economic situation, including reductions in compensation, increases in unemployment and the relatively low level of consumer confidence, has led to a decrease in travel and spending on entertainment, which has a negative impact on CTM’s operations.  While the segment of the travel industry that CTM targets is less impacted by the downturn, and certain consumers may look to more modest travel options, including car travel as opposed to air travel, which could increase the demand for the offerings of CTM’s customers, any negative impact on travel and entertainment spending could negatively impact CTM’s business.

In addition, several important customers of CTM have experienced financial challenges, including bankruptcy, which could impact CTM’s collections and future revenues.

CTM is increasing its monitoring of customers’ financial condition and seeking to target those sectors of the market that it believes to be less impacted by the current economic situation.

IDW’s products are directly impacted to a lesser degree by the economic crisis, but IDW is experiencing challenges to its distribution efforts as certain retail stores, that are an important outlet through which its products are sold, are experiencing pressure and some may close.  

IDW is increasing its direct to consumer sales channels and on-line sales to counter the pressure on retail outlets.

CTM and IDW both anticipate challenges to their businesses from new entrants, technological developments and developments of alternative products and are addressing these challenges by developing their own competitive offerings.

CTM is seeking to maintain its market share by developing internet-based services to existing and other customers and to upgrade its offerings to compete with alternative providers.  CTM sees a continuation of the trend away from print advertising.

In response, CTM has developed offerings to work with newer applications, including by use of text messaging to mobile phones.

IDW is also impacted by declines in the publishing industry.  To counteract that decline, IDW is increasing its presence in the digital book area.

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IDW's performance in recent quarters has been helped by sales of comic book and graphic novel products linked to successful movie properties.  To replicate this performance, IDW would need to obtain the access to such big name properties.   Blockbuster movies are hard to predict and those from major developers often have their own outlets for comic book and graphic novel development.  IDW will seek out opportunities it believes are attractive for it and to increase sales of other properties to maintain its overall revenue figures.

In addition, Holdings will be operating as an independent public company following the Spin-off.  While many of the costs of being a public company were already borne by the business units that are part of the Company – either directly or by allocation of corporate overhead from IDT, the Company will need to have the proper infrastructure in place to perform the necessary, accounting, internal controls and reporting functions.  Management predicts incremental costs of $300,000-$500,000 in additional costs following the spin-off .

CTM

CTM is a distributor of travel and entertainment information to visitors who desire to maximize their experience in a particular region. CTM has five divisions: Brochure Distribution, Design & Print, Publishing, RightCardTM, and Digital Distribution.  Through these divisions, CTM offers clients a comprehensive media marketing approach.  In fiscal 2008, CTM serviced over 3,000 clients and maintained more than 11,000 display stations, in over 30 states and provinces. CTM’s display stations are located in travel and entertainment venues, including hotels, resorts, interstate highway rest areas, airports and local attractions. CTM generated revenues which represented 60.8 % of consolidated revenues in the nine months ended April 30 , 2009, 66.2% in fiscal 2008 and 88.4% in fiscal 2007.

IDW

     IDW is a comic book and graphic novel publisher that creates and licenses original intellectual property. IDW generated revenues which represented 35.3 % of consolidated revenues in the nine months ended April 30 , 2009, 30.2% in fiscal 2008 and 5.9% in fiscal 2007.

WMET

WMET 1160 AM is a radio station serving the Washington, D.C. metropolitan area. WMET generated revenues which represented 3.7% of consolidated revenues in the six months ended January 31, 2009, 3.6% in fiscal 2008 and 5.7% in fiscal 2007.

Reportable Segments

We have the following two reportable business segments: CTM and IDW. The results of operations of WMET do not comprise a separate segment and are reported under the heading “Other.”

Presentation of financial information

Basis of presentation

The consolidated financial statements for the periods reflect our financial position, results of operations, changes in stockholders’ equity and cash flows as if the current structure existed for all periods presented.  The financial statements have been prepared using the historical basis for the assets and liabilities and results of operations.

23

Critical Accounting Policies

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).  The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses as well as the disclosure of contingent assets and liabilities.  Management continually evaluates its estimates and judgments including those related to allowance for doubtful accounts, goodwill and intangible assets with indefinite useful lives and valuation of long-lived assets including intangible assets with finite useful lives.  Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances.  Actual results may differ from these estimates under different assumptions or conditions.  We believe that of our significant accounting policies, the following may involve a higher degree of judgment (see Note 2 to the consolidated financial statements for a complete discussion of our significant accounting policies).

Allowance for Doubtful Accounts

We maintain allowances for doubtful accounts receivable for estimated losses, which result from the inability or unwillingness of our customers to make required payments.  We base our allowances on our determination of the likelihood of recoverability of trade accounts receivable based on past experience and current collection trends that are expected to continue.  In addition, we perform ongoing credit evaluations of our significant customers, but historically we have not required collateral to support trade accounts receivable from our customers.

Goodwill and Intangible Assets with Indefinite Useful Lives

In accordance with Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to impairment tests, performed at least annually. Other intangible assets with definite lives are amortized over their estimated useful lives.

The goodwill impairment assessment involves estimating the fair value of the reporting unit and comparing it to its carrying amount (which is known as Step 1). If the carrying value of the reporting unit exceeds its estimated fair value, additional steps are followed to determine if an impairment of goodwill is required. We estimate the fair value of our reporting units by applying discounted cash flow methodologies, as well as considering third party market value indicators. Calculating the fair value of the reporting units, and allocating the estimated fair value to all of the tangible assets, intangible assets and liabilities requires significant estimates and assumptions by management. Should our estimates and assumptions regarding the fair value of our reporting units prove to be incorrect, we may adjust our preliminary impairment in future periods.

Valuation of Long-Lived Assets including Intangible Assets with Finite Useful Lives

We assess the recoverability of our long-lived assets including identifiable intangible assets with finite useful lives whenever events or changes in circumstances indicate that the carrying value of any such asset may not be recoverable. Such events or changes in circumstances include:

·   significant actual underperformance relative to expected performance or projected future operating results;

·   significant changes in the manner or use of the asset or the strategy of our overall business; and

·   significant adverse changes in the business climate in which we operate.

If we determine that the carrying value of certain long-lived assets may not be recoverable and may exceed its fair value based upon the existence of one or more of the above indicators, we will test for impairment based on the projected undiscounted cash flows to be derived from such asset. If the projected undiscounted future cash flows are less than the carrying value of the asset, we will record an impairment loss based on the difference between the estimated fair value and the carrying value of the asset. We generally measure fair value by considering sale prices for similar assets or by discounting estimated future cash flows from the asset using an appropriate discount rate. Cash flow projections and fair value estimates require significant estimates and assumptions by management. Should our estimates and assumptions prove to be incorrect, we may be required to record impairments in future periods and such impairments could be material.

Results of Operations

We evaluate the performance of our operating business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.

24

In June 2007, we acquired a controlling interest in IDW for $2.4 million, which is net of cash acquired of $1.6 million. IDW’s results of operations were included in our consolidated results of operations from the date of acquisition.

We recorded aggregate preliminary goodwill impairment charges of $32.6 million in the nine months ended April 30, 2009, which are subject to adjustment as our goodwill impairment analysis is completed. At April 30, 2009, the carrying amount of our goodwill was reduced to zero as a result of these impairment charges. Our operating results for the nine months ended April 30, 2009, which included these significant goodwill impairment charges, are not necessarily indicative of the results that may be expected in the future. Goodwill impairment is not a cash expenditure therefore it did not impact our liquidity at April 30, 2009, nor will these charges impact our future liquidity.   

NINE MONTHS ENDED APRIL 30 , 2009 COMPARED TO NINE MONTHS ENDED APRIL 30 , 2008

Consolidated

(in millions)					Change
Nine months ended April 30,	2009		2008		$			%
Revenues
CTM Media Group	$	14.2	$	14.8	$	(0.6	)	(3.8	%)
IDW Publishing		8.3		6.6		1.7		24.6
Other		0.9		0.9		0.0		5.9
Total revenues	$	23.4	$	22.3	$	1.1		5.0	%

Revenues.   The increase in consolidated revenues in the nine months ended April 30, 2009 compared to the similar period in fiscal 2008 was primarily due to the increase in IDW revenues, partially offset by a decrease in CTM revenues. The increase in IDW revenues in the nine months ended April 30, 2009 compared to the similar period in fiscal 2008 was as a result of an increase in titles sold. The decrease in CTM revenues was primarily due to the global economic slowdown and a decrease in advertising and customer spending and in some cases certain of our customers going out of business. Offsetting this decrease in distribution revenues was an increase in printing revenues during the fiscal 2009 period.

(in millions)					Change
Nine months ended April 30,	2009		2008		$				%
Costs and expenses
Direct cost of revenues	$	10.6	$	9.0	$	1.6			17.4	%
Selling, general and administrative		11.8		13.3		(1.6	)		(11.7	)
Depreciation and amortization		1.1		1.1		0.0			7.7
Bad debt expense		0.7		0.3		0.4			117.4
Impairment and severance charges		33.3		0.2		31.9		Nm
Total costs and expenses	$	57.5	$	23.9	$	33.6			140.5	%

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Direct Cost of Revenues.  The increase in direct cost of revenues in the nine months ended April 30 , 2009 compared to the similar period in fiscal 2008 was due primarily to the increases in IDW’s and CTM’s direct cost of revenues. The increase in IDW’s direct cost of revenues in the nine months ended April 30 , 2009 compared to the similar period in fiscal 2008 was a result of the increase in revenues. The increase in CTM’s direct cost of revenues was the result of a shift in costs as a result of the decrease in distribution revenues and an increase in printing revenues.  Printing revenues are a lower margin business compared to the higher margin distribution business. However, we maintain the printing business as a method to solidify our relationship with our customers by providing this requested service . In addition, overall gross margin decreased from 59.6 % in the nine months ended April 30 , 2008 to 54.9 % in the nine months ended April 30 , 2009 due to decrease in gross margins in CTM, which was primarily due to the mix of products as a result of an increase in lower margin printing revenues.

Selling, General and Administrative.  The decrease in selling, general and administrative expenses in the nine months ended April 30 , 2009 compared to the similar period in fiscal 2008 was due to decrease in the selling, general and administrative expenses of CTM. CTM’s selling, general and administrative expenses decreased in the nine months ended April 30, 2009 compared to the similar period in fiscal 2008 due primarily to the exit from certain unprofitable lines of businesses, consisting of Traffic Pull and Local Pull, our Internet search position enhancement ventures, and Click2Talk, our Web-based communications product. The exit from these lines of business was a process that commenced in the fourth quarter of fiscal 2008 and is mostly completed. The Local Pull product is still being offered by CTM, however the business model has been reworked and Local Pull is being marketed through outsourced channels, which is more cost effective for us. Total selling, general and administrative expenses for these exited businesses was $0.9 million and $3.5 million for the nine months ended April 30 , 2009 and 2008, respectively. As a percentage of total revenues, selling, general and administrative expenses decreased from 59.8 % in the nine months ended April 30 , 2008 to 50.3% in the nine months ended April 30, 2009 as selling, general and administrative expenses decreased while revenues increased.

Bad Debt Expense.  The increase in bad debt expense in the nine months ended April 30 , 2009 compared to the similar period in fiscal 2008 was due primarily to increase in bad debt expense of CTM as a result of several of its customers going out of business.

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Impairment and severance charges.   We recorded aggregate preliminary goodwill impairment charges of $32.6 million in the nine months ended April 30, 2009. In the second quarter of fiscal 2009, the following events and circumstances indicated that the fair value of certain of our reporting units may be below their carrying value: (1) a significant adverse change in the business climate, (2) operating losses of reporting units, and (3) significant revisions to internal forecasts. We measured the fair value of our reporting units by discounting their estimated future cash flows using an appropriate discount rate. The carrying value including goodwill of CTM, IDW and WMET exceeded their estimated fair value, therefore we performed additional steps for these reporting units to determine whether an impairment of goodwill was required. As a result of this analysis, in the nine months ended April 30, 2009, we recorded preliminary goodwill impairment, which is subject to adjustment, of $29.7 million in CTM, $1.8 million in IDW, and $1.1 million in WMET, which reduced the carrying amount of the goodwill in each of these reporting units to zero. We recorded the preliminary amounts because it was probable that goodwill was impaired, and the amount of impairment could be reasonably estimated. We expect to complete the goodwill impairment analysis in the fourth quarter of fiscal 2009. Calculating the fair value of the reporting units, and allocating the estimated fair value to all of the tangible assets, intangible assets and liabilities, requires significant estimates and assumptions. The primary drivers in our assumptions that resulted in the preliminary goodwill impairment were (1) lower than expected revenues since our prior annual goodwill impairment test conducted as of May 1, 2008 that caused us to reduce our revenue and cash flow projections at December 31, 2008, (2) an increase in the discount rates used at December 31, 2008 compared to May 1, 2008, (3) reductions in the terminal value growth rates used at December 31, 2008 compared to May 1, 2008, and (4) no expectation of an economic recovery in our cash flow projections. Should these estimates or assumptions prove to be incorrect, we may adjust our preliminary impairment in future periods.

( in millions)							Change
Nine months ended April 30,	2009			2008			$				%
Loss from operations	$	(34.1	)	$	(1.6	)	$	(32.5	)	nm
Interest income, net		—			0.1			(0.1	)		(163.8	)%
Other expense, net		—			(0.1	)		0.1			108.2
Minority interests		0.7			(0.2	)		0.9		nm
Benefit from income taxes		—			0.2			—			—
Net loss	$	(33.5	)	$	(1.6	)	$	(31.6	)	nm

nm—not meaningful

Minority Interests.  Minority interests arise from the 47% interest held by the minority owners of IDW.

Income Taxes.   Benefit from income taxes in the nine months ended April 30, 2009 compared to the similar period in fiscal 2008 remained unchanged primarily because the benefit from federal and foreign income tax expense decreased.  Our foreign income tax expense results from income generated by our foreign subsidiaries that cannot be offset against losses generated in the United States.

CTM

(in millions)							Change
Nine months ended April 30,	2009			2008			$				%
Revenues	$	14.2		$	14.8		$	(0.6	)		(3.8	%)
Direct cost of revenues		5.5			4.9			0.6			12.5
Selling, general and administrative		8.4			10.0			(1.6	)		(15.7	)
Depreciation and amortization		0.6			0.6			0.0			7.0
Bad debt expense		0.5			0.2			0.3			156.3
Impairment and severance charges		30.3			0.2			30.1		nm
Loss from operations	$	(31.1	)	$	(1.0	)	$	(30.1	)	nm

nm—not meaningful

Revenues.  The decrease in CTM’s revenues in the nine months ended April 30, 2009 compared to the similar period in fiscal 2008 was primarily due to a decrease in distribution revenues attributable to the global economic slowdown and a decrease in advertising and customer spending and in some cases certain customers going out of business.  Offsetting this decrease in distribution revenues was an increase in printing revenues during the fiscal 2009 period.

26

Direct Cost of Revenues.  Direct costs of revenues consist of warehouse and delivery expense as well as salaries related to those costs and printing costs. The increase in direct cost of revenues in the nine months ended April 30, 2009 compared to the similar period in fiscal 2008 reflects a shift in costs as a result of the decrease in distribution revenues with an increase in printing revenues.  Printing revenues are a lower margin business compared to the higher margin distribution business. However, we maintain the printing business as a method to solidify our relationship with our customers by providing this requested service.

CTM’s aggregate gross margin decreased in the nine months ended April 30 , 2009 to 61.2 % from 66.9 % in the nine months ended April 30 , 2008. The decrease was primarily due to the mix of products as a result of an increase in lower margin printing revenues.

Selling, General and Administrative.  Selling, general and administrative expenses consist primarily of payroll and related benefits, facilities costs and insurance.  Selling, general and administrative expenses decreased in the nine months ended April 30 , 2009 compared to similar period in fiscal 2008 primarily due to the exit from certain unprofitable lines of businesses, consisting of Traffic Pull and Local Pull, our Internet search position enhancement, and Click2Talk, our Web-based communications product. The exit from these lines of business was a process that commenced in the fourth quarter of fiscal 2008 and is mostly completed. The Local Pull product is still being offered by CTM, however the business model has been reworked and Local Pull is being marketed through outsourcing which is more cost effective for us. Total selling, general and administrative expenses for these exited businesses was $0.9 million and $3.5 million for the nine months ended April 30 , 2009 and 2008, respectively. As a percentage of CTM’s aggregate revenues, selling, general and administrative expenses decreased in the nine months ended April 30 , 2009 to 59.1 % from 67.5 % in the nine months ended April 30 , 2008, as selling, general and administrative expenses decreased at a faster rate than revenues .

Impairment and severance charges.   CTM recorded goodwill impairment charges of $29.7 million in the nine months ended April 30 , 2009, which reduced the carrying value of its goodwill to zero.  In the second quarter of fiscal 2009, the following events and circumstances indicated that the fair value of certain of our reporting units may be below their carrying value: (1) a significant adverse change in the business climate, (2) operating losses of reporting units, and (3) significant revisions to internal forecasts. We measured the fair value of CTM by discounting its estimated future cash flows using an appropriate discount rate. CTM’s carrying value including goodwill exceeded its estimated fair value, therefore additional steps were performed to determine whether an impairment of goodwill was required.   As a result of this analysis, in the nine months ended April 30, 2009, we recorded preliminary goodwill impairment of $29.7 million, which is subject to adjustment.  We recorded the preliminary amount because it was probable that goodwill was impaired, and the amount of impairment could be reasonably estimated.  We expect that we will complete the goodwill impairment analysis in the fourth quarter of fiscal 2009.  Calculating the fair value of the reporting units, and allocating the estimated fair value to all of the tangible assets, intangible assets and liabilities, requires significant estimates and assumptions.   Should these estimates or assumptions prove to be incorrect, we may adjust our preliminary impairment in future periods.

IDW

(in millions)						Change
Nine months ended April 30,	2009			2008		$				%
Revenues	$	8.3		$	6.6	$	1.7			24.6	%
Direct cost of revenues		5.1			4.1		1.0			23.2
Selling, general and administrative		2.5			2.3		0.2			8.3
Depreciation and amortization		0.2			—		0.2		nm
Impairment and severance charges		1.8			—		1.8		nm
Loss (income) from operations	$	(1.3	)	$	0.2	$	(1.5	)	nm

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Revenues.  The increase in IDW’s revenues in the nine months ended April 30 , 2009 compared to the similar period in fiscal 2008 was due to new editorial hires, which have resulted in more and better products and an increase in the number of titles we are releasing on a weekly and monthly basis, and the success of our Presidential Material comic books, particularly a volume featuring Barack Obama, and our licensed comics, particularly books based on Angel, Star Trek, and Transformers.

Direct Cost of Revenues.   Direct costs of revenues consist primarily of printing expenses and costs of artist and writers . The increase in direct cost of revenues in the nine months ended April 30 , 2009 compared to the similar period in fiscal 2008 reflects the increase in revenues.

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IDW’s aggregate gross margin decreased slightly in the nine months ended April 30 , 2009 to 38.9 % from 38.2 % in the nine months ended April 30 , 2008. The decrease in the nine months ended April 30 , 2009 was primarily due to the mix of products.

Selling, General and Administrative.  Selling, general and administrative expenses increased in the nine months ended April 30 , 2009 compared to the similar period in fiscal 2008 primarily due to expense increases relating to the increase in titles sold and the increase in the number of employees, as well as moving to new facilities to accommodate the growth which carries higher costs.  As a percentage of IDW’s aggregate revenues, selling, general and administrative expenses decreased in the nine months ended April 30 , 2009 to 30.1 % from 34.6 % in the nine months ended April 30 , 2008, as the increase in revenues was higher than the increase in selling, general and administrative expenses.

Impairment and severance charges.   IDW recorded goodwill impairment charges of $1.8 million in the nine months ended April 30 , 2009, which reduced the carrying value of its goodwill to zero.  In the second quarter of fiscal 2009, the following events and circumstances indicated that the fair value of certain of our reporting units may be below their carrying value: (1) a significant adverse change in the business climate, (2) operating losses of reporting units, and (3) significant revisions to internal forecasts.  We measured the fair value of IDW by discounting its estimated future cash flows using an appropriate discount rate. IDW’s carrying value including goodwill exceeded its estimated fair value, therefore additional steps were performed to determine whether an impairment of goodwill was required.   As a result of this analysis, in the nine months ended April 30, 2009, we recorded preliminary goodwill impairment of $1.8 million, which is subject to adjustment.  We recorded the preliminary amount because it was probable that goodwill was impaired, and the amount of impairment could be reasonably estimated.  We expect that we will complete the goodwill impairment analysis in the fourth quarte r of fiscal 2009.  Calculating the fair value of the reporting units, and allocating the estimated fair value to all of the tangible assets, intangible assets and liabilities, requires significant estimates and assumptions. Should these estimates or assumptions prove to be incorrect, we may adjust our preliminary impairment in future periods .

YEAR ENDED JULY 31, 2008 COMPARED TO YEAR ENDED JULY 31, 2007

Consolidated

(in millions)					Change
Year ended July 31,	2008		2007		$			%
Revenues
CTM	$	21.6	$	20.3	$	1.3		6.2	%
IDW		9.9		1.4		8.5		627.4
Other		1.1		1.3		(0.2	)	(12.1	)
Total revenues	$	32.6	$	23.0	$	9.6		41.7	%

nm—not meaningful

Revenues.  The increase in consolidated revenues in fiscal 2008 was primarily due to the increase in IDW revenues, which was the result of the acquisition of IDW in the fourth quarter of fiscal 2007.

(in millions)					Change
Year ended July 31,	2008		2007		$		%
Costs and expenses
Direct cost of revenues	$	12.5	$	7.3	$	5.2	72.5	%
Selling, general and administrative		18.3		13.5		4.8	35.2
Depreciation and amortization		2.1		1.4		0.7	49.7
Bad debt expense		0.5		0.1		0.4	214.5
Impairment and severance charges		3.7		0.1		3.6	nm
Total costs and expenses	$	37.1	$	22.4	$	14.7	65.1	%

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Direct Cost of Revenues.  The increase in direct cost of revenues in fiscal 2008 was due primarily to the increase in IDW’s direct cost of revenues, which was the result of the acquisition of IDW in the fourth quarter of fiscal 2007. Overall gross margin decreased from 68.4% in fiscal 2007 to 61.5% in fiscal 2008 primarily due to the increase in IDW revenues which have a relatively lower gross margin.

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Selling, General and Administrative.  The increase in selling, general and administrative expenses in fiscal 2008 was due to increases in the selling, general and administrative expenses of IDW, which was the result of the acquisition of IDW in the fourth quarter of fiscal 2007 as well as increases in the selling, general and administrative expenses of CTM. CTM’s selling, general and administrative expenses increased in fiscal 2008 due primarily to increases in compensation and commission expenses as a result of our sales growth initiative which consisted of our increasing of our sales force and expanding into new territories. This sales growth initiative consisted of the creation of new lines of businesses of CTM, consisting of Traffic Pull and Local Pull, our Internet search position enhancement ventures, and Click2Talk, our Web-based communications product. These new lines of business have been discontinued beginning in the fourth quarter of fiscal 2008. The Local Pull product is still being offered by CTM, however the business model has been reworked and Local Pull is being marketed through outsourced channels, which is more cost effective for us. Total selling, general and administrative expenses for these exited businesses was $4.6 million and $3.0 million for fiscal 2008 and 2007, respectively. As a percentage of total revenues, selling, general and administrative expenses decreased from 58.4 % in fiscal 2007 to 56.0% in fiscal 2008 as total revenues increased at a faster rate than selling, general and administrative expenses

Bad Debt Expense.  The increase in bad debt expense in fiscal 2008 compared to fiscal 2007 was due primarily to the increase in CTM’s bad debt as a result of several of its customers going out of business and an increase in WMET’s bad debt expense which reflected the aging of its accounts receivable on one of its larger customers.

Impairment and Severance Charges.   Impairment and severance charges in fiscal 2008 included mainly impairment charges of $3.5 million in WMET’s fixed assets.

(in millions)							Change
Year ended July 31,	2008			2007			$				%
(Loss) income from operations	$	(4.5	)	$	0.6		$	(5.1	)	nm
Interest income, net		0.1			0.1			—			—
Other expense, net		(0.1	)		(0.4	)		0.3			72.1	%
Minority interests		(0.4	)		(0.1	)		(0.3	)		254.1
Provision for income taxes		(0.4	)		(0.5	)		0.1			(16.6	)
Net loss	$	(5.3	)	$	(0.3	)	$	(5.0	)	nm

Interest Income, net.  The slight decrease in net interest income in fiscal 2008 was due primarily to a decrease in interest income as a result of lower yields on our interest bearing cash.

Other Expense, net.  Other (expense) income in fiscal 2007 consisted primarily on losses of CTM.

Minority Interests.  Minority interests arise from the 47% minority owners of IDW.

Income Taxes.  Income tax expense decreased in fiscal 2008 due primarily to decreases in our federal and foreign income tax expense, partially offset by an increase in state and local income tax expense. Our foreign income tax expense results from income generated by our foreign subsidiaries that cannot be offset against losses generated in the United States.

CTM

(in millions)						Change
Year ended July 31,	2008			2007		$			%
Revenues	$	21.6		$	20.3	$	1.3		6.2	%
Direct cost of revenues		7.0			6.4		0.6		9.7
Selling, general and administrative		13.7			11.0		2.7		23.5
Depreciation and amortization		0.7			0.7		—		—
Bad debt expense		0.3			0.1		0.2		204.9	%
Impairment and severance charges		0.2			0.1		0.1		75.8
(Loss) income from operations	$	(0.3	)	$	2.0	$	(2.3	)	(117.5	)%

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Revenues.  The increase in CTM’s revenues in fiscal 2008 was primarily due to the growth in CTM as a result of our sales growth initiative as well as an increase in lower margin printing revenues. The sales growth initiative consisted of increasing our sales force and expanding into new territory, which we started in late calendar year 2007.  Printing revenues are a lower margin business for us as compared to our higher margin distribution business. However we maintain the printing business as a method to solidify our relationship with our customers by proving this requested service.

Direct Cost of Revenues.  The increase in direct cost of revenues in fiscal 2008 reflects the higher printing cost of revenues as well as expansion of our distribution workforce. CTM’s aggregate gross margin decreased in fiscal 2008 to 67.5% from 68.5% in fiscal 2007. The decrease in gross margins was primarily due to the growth in printing revenues which has lower gross margins than distribution revenues.

Selling, General and Administrative.  Selling, general and administrative expenses increased in fiscal 2008 compared to fiscal 2007 primarily due to increases in compensation and commission expenses as a result of our sales growth initiative which consisted of our increasing of our sales force and expanding into new territory. This sales growth initiative consisted of the creation of new lines of businesses of CTM, consisting of Traffic Pull and Local Pull, our Internet search position enhancement, and Click2Talk, our Web-based communications product. These new lines of business have been discontinued beginning in the fourth quarter of fiscal 2008.   The Local Pull product is still being offered by CTM, however the business model has been reworked and Local Pull is being marketed through outsourcing which is more cost effective for us. Total selling, general and administrative expenses for these exited businesses was $4.6 million and $3.0 million for fiscal 2008 and 2007, respectively. As a percentage of CTM’s aggregate revenues, selling, general and administrative expenses increased in fiscal 2008 to 63.6% from 54.3% in fiscal 2007.

IDW

(in millions)					Change
Year ended July 31,	2008		2007		$		%
Revenues	$	9.9	$	1.4	$	8.5		627.4	%
Direct cost of revenues		5.6		0.9		4.7	nm
Selling, general and administrative		3.1		0.4		2.7	nm
Depreciation and amortization		0.7		—		0.7	nm
Income from operations	$	0.5	$	0.1	$	0.4	nm

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We acquired IDW in the fourth quarter of fiscal 2007. The results of operations for fiscal 2007 therefore represent operations during the fourth quarter of fiscal 2007 while fiscal 2008 includes a full year of operations.

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have satisfied our cash requirements through cash flow from operating activities generated from CTM and funding from IDT.

(in millions)	Nine months ended  Arpil 30 ,			Year ended July 31,
	2009			2008			2007
Cash flows (used in) provided by
Operating activities	$	(0.8	)	$	(0.2	)	$	2.0
Investing activities		(1.5	)		(1.0	)		(3.2	)
Financing activities		0.75			1.1			3.6
(Decrease) increase in cash and cash equivalents	$	(1.6	)	$	(0.1	)	$	2.4

30

Operating Activities

Our cash flow from operations varies from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. In the fourth quarter of fiscal 2008, we commenced the exit of certain unprofitable lines of businesses of CTM, consisting of Traffic Pull and Local Pull, our Internet search position enhancement, and Click2Talk, our Web-based communications product. The exit from these lines of business is mostly completed. The Local Pull product is still being offered by CTM, however the business model has been reworked and Local Pull is being marketed through outsourcing which is more cost effective for us. Cash flow used in operating activities from these exited businesses was approximately $0.9 million, $4.6 million and $ 3.0 million in the nine months ended April 30 , 2009, and in fiscal 2008 and 2007 , respectively.

Investing Activities

Our capital expenditures were $ 0.5 million in the nine months ended April 30 , 2009, $0.9 million in fiscal 2008 and $0.7 million in fiscal 2007. We currently anticipate that total capital expenditures for all of our divisions in fiscal 2009 will be approximately $ 1.0 million. The decrease is the result of CTM upgrading their fleet of trucks and brochure distribution racks and stands as well as CTM moving to a new location in previous periods. We expect to fund our capital expenditures with our cash, cash equivalents and marketable securities on hand and cash that we expect to receive from IDT prior to the consummation of the spin-off.

In the nine months ended April 30 , 2009, IDW invested $1.0 million in a short-term instrument.

In the fourth quarter of fiscal 2007, we acquired a controlling interest in IDW for $2.4 million, net of cash of $1.6 million.

Financing Activities

During all periods presented, IDT, our parent company, provided us with the required liquidity to fund our working capital requirement and investments for some of our businesses. We used any excess cash provided by our operations to repay IDT. In the nine months ended April 30 , 2009 and in fiscal 2008 and in fiscal 2007, IDT provided cash to us of $ 1.0 million, $1.8 million, and $3.7 million, respectively. At April 30 , 2009, the amount due to IDT was $ 23.9 million. Upon consummation of the spin-off, the amount due to IDT is expected to be converted into a capital contribution.

We distributed cash of $0.3 million in the nine months ended April 30 , 2009 and $0.5 million in fiscal 2008 to the minority equity holders of IDW. There were no distributions to minority equity holders in fiscal 2007.

We repaid capital lease obligations of $0.1 million in the nine months ended April 30 , 2009, in fiscal 2008 and in fiscal 2007.

CHANGES IN TRADE ACCOUNTS RECEIVABLE, ALLOWANCE FOR DOUBTFUL ACCOUNTS AND DEFERRED REVENUE

Gross trade accounts receivable decreased to $4.0 million at April 30 , 2009 compared to $4.7 million at July 31, 2008 and increased from $3.4 million at July 31, 2007. The decrease in the nine months ended April 30 , 2009 is due to higher collections in IDW. The increase in gross account receivable at July 31, 2008 compared to July 31, 2007 was primarily due to increase in revenues of IDW. The allowance for doubtful accounts as a percentage of gross trade accounts receivable increased to 12.9 % at April 30 , 2009, compared to 2.9% at July 31, 2008 and 6.5% at July 31, 2007. The main reason for the changes in the allowance for doubtful accounts is due to changes in WMET’s allowance as result of new management revaluating the adequacy of WMET’s allowance.

Deferred revenue as a percentage of total revenues vary from period to period depending on the mix and the timing of revenues. Deferred revenue arises primarily from billings by CTM in advance of brochure distribution. Deferred revenue decreased to $ 1.5 million at April 30 , 2009 and to $ 2.1 million at July 31, 2008 from $2.3 million at July 31, 2007 primarily due to fewer advance billings by CTM.

OTHER SOURCES AND USES OF RESOURCES

We intend to, where appropriate, make strategic investments and acquisitions to complement, expand, and/or enter into new businesses. In considering acquisitions and investments, we search for opportunities to profitably grow our existing businesses, to add qualitatively to the range of businesses in our portfolio and to achieve operational synergies. Historically such acquisitions have not exceeded $0.5 million with the average acquisition being less than $0.1 million. If we were to pursue an acquisition in excess of $0.5 million we would need to secure financing arrangements . At this time, we cannot guarantee that we will be presented with acquisition opportunities that meet our return on investment criteria, or that our efforts to make acquisitions that meet our criteria will be successful.

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Historically, we satisfied our cash requirements primarily through operating cash generated by CTM and from funding from IDT. With the exit of certain lines of businesses within CTM, we expect our operations in the next twelve months and the balance of cash, cash equivalents, marketable securities that we held as of April 30, 2009, as well as the anticipated $2.0 million cash contribution from IDT and  expected conversion of our  $23.9 million debt which is Due to IDT at April 30, 2009 into a capital contribution, upon consummation of the spinoff , will be sufficient to meet our currently anticipated working capital and capital expenditure requirements, capital lease obligations, make limited acquisitions and investments , and to fund any potential operating cash flow deficits within any of our segments for at least the next twelve months. In addition, we anticipate that our expected cash balances as well as cash flows from our operations will be sufficient to meet our long term liquidity needs. The foregoing is based on a number of assumptions, including that we will collect on our receivables, effectively manage our working capital requirements, and maintain our revenue levels and liquidity. Predicting these matters is particularly difficult in the current worldwide economic situation and overall decline in consumer demand . Failure to generate sufficient revenue and operating income could have a material adverse effect on our results of operations, financial condition and cash flows. Failure to generate sufficient revenue and operating income could have a material adverse effect on our results of operations, financial condition and cash flows. The recoverability of assets is highly dependent on the ability of management to execute its businessplan. We do not have any material debt obligations.

FOREIGN CURRENCY RISK

Revenues from our international operations represented 9.3% and 11.9% of our consolidated revenues from operations for the years ended July 31, 2008 and 2007, respectively. A significant portion of these revenues is in currencies other than the U.S. Dollar, primarily Canadian dollars and recently in Euros, although our revenues in Euros are not significant at this time. Our foreign currency exchange risk is somewhat mitigated by our ability to offset the majority of these non U.S. Dollar-denominated revenues with operating expenses that are paid in the same currencies. As such, the net amount of our exposure to foreign currency exchange rate changes is generally not material.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETS RISKS

Smaller reporting companies are not required to provide the information required by this item. 

RECENTLY ISSUED ACCOUNTING STANDARDS AND STANDARDS NOT YET ADOPTED

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations. SFAS 141(R) establishes principles and requirements for how the acquirer: (a) recognizes and measures the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase, and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) requires the acquiring entity in a business combination to recognize the full fair value of the assets acquired and liabilities assumed in the transaction at the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date; the immediate expense recognition of transaction costs; changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense; and restructuring plans will be accounted for separately from the business combination, among other things. In April 2009, the FASB issued FASB Staff Position (FSP) 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, which amends and clarifies SFAS 141(R) with regards to the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. We are required to apply SFAS 141(R) and FSP 141(R)-1 to business combinations with an acquisition date on or after August 1, 2009. SFAS 141(R) fundamentally changes many aspects of existing accounting requirements for business combinations. As such, if we enter into any business combinations after the adoption of SFAS 141(R), a transaction may significantly impact our financial position and results of operations, but not our cash flows, when compared to acquisitions accounted for under current US GAAP.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51. SFAS 160 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Also, SFAS 160 requires consolidated net income (loss) to include the amounts attributable to both the parent and the noncontrolling interest, and it requires disclosure of the amounts of net income (loss) attributable to the parent and to the noncontrolling interest. Finally, SFAS 160 requires increases and decreases in the noncontrolling ownership interest amount to be accounted for as equity transactions, and the gain or loss on the deconsolidation of a subsidiary will be measured using the fair value of any noncontrolling equity investment rather than the carrying amount of the retained investment. We are required to adopt SFAS 160 on August 1, 2009. Upon the adoption of SFAS 160, we will change the classification and presentation of noncontrolling interest in our financial statements, which is currently referred to as minority interests. We are still evaluating the impact that SFAS 160 will have on our consolidated financial statements, but we do not expect SFAS 160 to have a material impact on our financial position, results of operations or cash flows.  

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In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. We are required to adopt FSP 142-3 on August 1, 2009. The guidance in FSP 142-3 for determining the useful life of a recognized intangible asset shall be applied prospectively to intangible assets acquired after adoption, and the disclosure requirements shall be applied prospectively to all intangible assets recognized as of, and subsequent to, adoption. We are currently evaluating the impact of FSP 142-3 on our consolidated financial statements.

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the guidance in US GAAP for assessing whether an impairment of a debt security is other than temporary, and revises the presentation and disclosure in the financial statements of other than temporary impairments of debt and equity securities. We are required to adopt FSP 115-2 on May 1, 2009. In addition, in April 2009, the SEC amended Topic 5.M. in the Staff Accounting Bulletin Series entitled Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities to exclude debt securities from its scope. Topic 5.M., as amended, maintains the staff’s previous views related to equity securities. We are currently evaluating the impact of FSP 115-2 on our consolidated financial statements. We do not expect the amendment to Topic 5.M. to have a material impact on our financial position, results of operations or cash flows.

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, which amends SFAS 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. The FSP also requires entities to disclose the methods and significant assumptions used to estimate fair value of financial instruments in interim financial statements, and to highlight any changes in the methods and assumptions from prior periods. FSP 107-1 became effective for our financial statements beginning on May 1, 2009. We will include the disclosures required by FSP 107-1 in our consolidated financial statements for our first quarter ending October 31, 2009.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events, to establish principles and requirements for subsequent events, in particular: (a) the period after the balance sheet date during which management of a reporting entity shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (b) the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements, and (c) the disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective prospectively for interim or annual financial periods ending after June 15, 2009. SFAS 165 should not result in significant changes in the subsequent events that we report in our financial statements, because it does not change the previous recognition and disclosure guidance in the accounting literature and it does not change the date through which we were expected to evaluate subsequent events. This statement requires management to disclose the date through which subsequent events have been evaluated, which we will begin to disclose in our financial statements for the year ending July 31, 2009.

In June of 2009, the FASB approved its Accounting Standards Codification, or Codification, as the single source of authoritative United States accounting and reporting standards applicable for all non-governmental entities, with the exception of the SEC and its staff. The Codification, which changes the referencing of financial standards, is effective for interim or annual financial periods ending after September 15, 2009. Therefore, in the first quarter of fiscal 2010, all references made to US GAAP will use the new Codification numbering system prescribed by the FASB. As the Codification is not intended to change or alter existing US GAAP, it is not expected to have any impact on our consolidated financial position or results of operations.

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BUSINESS

CTM Media Holdings, Inc., a Delaware corporation, is currently a subsidiary of IDT Corporation. Following the spin-off, our principal businesses, which are currently part of IDT, will consist of:

·   CTM Media Group, our brochure distribution company and other advertising-based new product initiatives focused on small to medium sized businesses;

·   Our majority interest in Idea and Design Works, LLC, which is a comic book and graphic novel publisher that creates and licenses original intellectual property; and

·   The WMET-AM radio station in the Washington, D.C. metropolitan area.

The spin-off will separate our businesses from the remainder of IDT’s operations and holdings, including IDT Telecom, IDT Energy and IDT’s alternative energy initiatives, as well as other interests. We, along with IDT’s management, believe that the operational and growth prospects of our businesses may best be realized by a separation from those non-spun-off businesses based on several factors including synergies and growth prospects. Each of our businesses is described in more detail below.

Our business will consist of the following segments: CTM and IDW. The results of operations of WMET do not comprise a separate segment and are reported under the heading “Other.”

CTM

CTM Media Group, Inc. develops and distributes print and mobile-based advertising and information in targeted tourist markets.  Advertisers include entertainment venues, tourist attractions, and cultural sites as well as their related service providers including dining, lodging, and transport services. CTM leverages its regional network of more than 11,000 proprietary brochure display stations to distribute over 135 million printed brochures and cards per year to tourists, and to drive mobile and Internet traffic to its online tourist information services.

CTM is headquartered at 11 Largo Drive South, Stamford, Connecticut.  CTM has approximately 165 employees, 14 of whom are part-time and 151 of whom are full-time, including management, sales, distribution, graphic designers, and corporate support. CTM has 16 field offices and over 30 distribution facilities within its territory. CTM’s strategically located display stations are managed by a dedicated organization utilizing over 30 warehouses, branded delivery vans, and a uniformed distribution and delivery team.

CTM was an independent brochure distribution company until it was purchased by IDT in June 2000.  At that time, CTM’s primary business centered on the distribution of brochures promoting Broadway shows within the greater New York City metropolitan area. Additional territories included Boston and other locations in New England, Toronto, Ottawa, Philadelphia, Southeast Florida, and Detroit.

Since the acquisition by IDT, CTM has grown both geographically and by developing related lines of business.  Geographic growth has been driven both by organic expansion to new territories and through selective purchases of regional businesses.  CTM currently has over 11,000 brochure display stations from which it distributed 135 million printed brochures in 2008.

CTM’s client base includes over 3,000 advertisers in 36 states and provinces in the United States (including Puerto Rico) and Canada.  Its distribution territory in the United States includes the Northeast, Mid-Atlantic, and Midwestern states. CTM Media is a brochure distribution market leader in each of the following greater metro areas: New York City, Boston, Toronto, Ottawa, Miami, Ft. Lauderdale, Philadelphia, Chicago, St. Louis, Kansas City, Minneapolis/St. Paul, Detroit and Cleveland.

CTM’s client base is diverse. No single advertiser contributes a significant portion of CTM revenues. However, CTM is the leading distributor of Broadway show brochures and derives approximately 10% to 15% of its revenues from Broadway and its affiliated advertising agencies.

Throughout its operating region, CTM operates five integrated and complimentary business lines: Brochure Distribution, Design & Print, Publishing, RightCardTM, and Digital Distribution.

Brochure Distribution:  CTM distributes client brochures through its network of more than 11,000 strategically located display stations.  Brochure distribution is CTM’s largest line of business generating roughly 85% of CTM’s revenues.

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CTM’s extensive distribution and display station network is the key value driver and differentiator in this line of business. The large quantity and diversity of its display station locations allows CTM to segment its visitor audience and tailor targeted marketing programs for its clients. Locations are typically hosted within facilities serving the travel, tourism and entertainment industry, including: hotels and other lodgings, corporate and community venues, transportation terminals and hubs, tourist attractions and entertainment venues. CTM also contracts with public transportation authorities and high volume retail chains to host a small percentage of its brochure display stations.

CTM has developed strong relationships with its display station hosts and its regional client advertisers.  These relationships constitute a significant barrier to entry that CTM believes discourages competition within metropolitan markets.

CTM is the largest traveland tourism brochure display company in the Eastern and Midwestern United States, and the second largest nationally. Privately held Certified Folder Display is the national market leader with over 23,000 display station locations, primarily in the Western United States. Certified’s key metropolitan areas include San Francisco, Seattle, Los Angeles, Phoenix and Las Vegas. An estimated 20 to 30 other distribution companies competing from smaller regional bases comprise the remainder of the brochure distribution and display industry.

Design & Print:  CTM leverages its in-house design team and large print volumes to provide clients with cost-effective custom design and print services.  Design & Print services contribute approximately 7% of CTM’s revenues.

Publishing:  CTM publishes maps with integrated display advertising and identified tourist locations.  Current maps cover key metropolitan areas within CTM’s territory including Boston/New England, Chicago, Kansas City, Minneapolis/St. Paul, New York City, Philadelphia, Southeast Florida, St. Louis, and Toronto.  Publishing accounts for approximately 3-5% of CTM revenues.

RightCardTM: CTM designs and prints RightCardsTM – pocket-sized cards in a consistent format distributed through a network of specialized display stations in high-traffic areas. The RightCardTM content format includes a discount or value offer, map and contact information in both print and online. RightCardsTM are distributed at approximately 600 locations. The RightCardTM program contributes approximately 3-5% of CTM’s revenues.

Digital Distribution:  CTM’s digital distribution business helps CTM clients effectively target and reach tourists who use mobile devices and/or the Internet.  In 2008, CTM launched its “City in the Pocket” series with mobile New York (www.cipny.mobi). CTM plans to introduce comparable mobile sites for Philadelphia, Chicago, and Boston later this year. Beginning in January of this year, a new text alert system developed and provided by CTM offered tourists the ability to subscribe to and receive text alerts of offers and news from local attractions and venues.

CTM’s telephone number at its headquarters is (203) 323-9345 and its website is www.ctmmediagroup.com.

IDW

Idea and Design Works, LLC is an independent comic book publisher pre-eminent in the horror and action genres, boasting such high-profile titles as 30 Days of Night, Angel, Doctor Who, G.I. Joe, Locke and Key, Star Trek and The Transformers.

In 1999, four entertainment executives and artists established IDW as a creative-service company providing artwork and graphic design to entertainment companies. In 2001, IDW formed its publishing division, IDW Publishing, which initially focused on producing a small number of high-quality publications and has since grown into a fully staffed publishing company.  In June 2007, a subsidiary of IDT purchased a 53% interest in IDW.  Founders of IDW, including Theodore Adams, its current CEO, retained the remaining ownership interests in IDW.

IDW has established itself as a significant player in the comic book and graphic novel marketplace. IDW has been named Publisher of the Year in 2003, 2004, 2005, 2007, and 2008 by Diamond Comic Distributors, Inc. In 2007, Hasbro named IDW as their “Transformers Licensee of the Year – Publishing” and the nationally televised Spike Awards named 30 Days of Night as the “Best Comic Book.” In 2008, IDW won an Eisner Award for its series “The Complete Terry and the Pirates.” In 2007 and 2008, IDW was the only comic publisher named by Global License as one on the “Top Global Licensees.”

IDW’s comic book and trade paperback publications are distributed through two channels: (i) to comic book specialty stores on a non-returnable basis (the “direct market”), and (ii) to traditional retail outlets, including bookstores and newsstands, on a returnable basis (the “mass market”). In addition, IDW provides clients with custom comic books and artwork/graphic design services (“creative services”). In fiscal 2006, 2007 and 2008, the direct market accounted for 68%, 56% and 50% of IDW’s revenue, while the mass market accounted for 10%, 30% and 34%, and creative services accounted for 18%, 10% and 11%, respectively.  IDW’s primary customer is Diamond Comic Distributors, Inc. (“Diamond”), an unaffiliated entity that handles the vast majority of all comic publishers’ direct market distribution. Diamond purchases IDW’s publications and subsequently sells them to both the direct and non-direct markets. Retail stores are also indirect IDW customers.

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In an effort to increase availability of versions of its content at retail outlets, IDW has entered into a number of digital distribution agreements this year, and IDW’s publications are currently available for purchase via mobile phones, primarily iPhones/iPod Touch. IDW has also entered into agreements for distribution via handheld video game devices, and direct-to-desktop and titles are expected to be available in both formats later this year.  IDW’s business cycle is driven by its publishing schedule and movie release dates (of movies for which IDW publishes comic books and graphic novels) which are set by third party studios.

IDW faces significant competition from other publishers such as Marvel Comics, DC Comics, Dark Horse Comics, Image Comics, and Dynamic Forces, many of which are substantially larger than IDW and have much greater resources than IDW.

In fiscal 2008, IDW generated revenues of $9.9 million and operating income of $0.5 million compared to the period of June 8, 2007 (date of IDT’s purchase of its interest in IDW) to July 31, 2007 when IDW generated revenues of $1.4 million and operating income of nil. In the nine months ended April 30 ,   2009, IDW has generated revenues of $ 8.3 million and an operating loss of $ 1.3 million. Included in the operating loss was goodwill impairment of $1.8 million related to IDT’s acquisition of IDW.

IDW currently employs 20 full-time employees and 3 part-time employees.

IDW’s telephone number at its headquarters is (858) 270-1315 and its website is www.idwpublishing.com.

WMET

We own and operate WMET 1160 AM, a radio station in the Washington, D.C. metropolitan area. In July, 2002, IDT purchased Beltway Acquisition Corporation, the entity holding WMET’s Federal Communications Commission (“FCC”) broadcast license. The station  broadcasts at  50KW power daytime and 1.5kW after sunset  serving the Washington, D.C. metropolitan area, the nation’s eighth-largest radio market, including the corridor from Baltimore, Maryland to Richmond, Virginia. WMET is a reseller of radio broadcast time to outside parties.

In addition to broadcasting in the Washington, D.C. metropolitan area, WMET’s radio signal is simultaneously broadcast via Web-streaming technology.  WMET’s customers, who buy airtime, provide a balance of entertainment and information programming, including Spanish and Ethiopian programming.

In the format as a primary reseller of radio broadcast to outside parties, WMET earns revenues through the rental of airtime slots as well as the sale of advertising. In the nine months ended April 30 2009, WMET generated revenues of $ 0.9  million and an operating loss of $1.7 million. Included in the operating loss was goodwill impairment of $1.1 million related to IDT’s acquisition of WMET .  In fiscal 2008, WMET generated revenues of $1.2 million and an operating loss of $4.6 million, which included a $3.5 million impairment of fixed assets.   In fiscal 2007,WMET generated revenues of $1.3 millionand an operating loss of $1.4 million. WMET offers studio personnel providing technical support which it feels is a competitive advantage over its competitors.

The types of properties required to support WMET include an office, studios and a tower and antenna site. The tower and antenna site is located in an area that provides maximum market coverage.

WMET has a license from the FCC to operate at 1160 MHz in the AM band and is licensed  in Gaithersburg, Maryland.

The radio broadcasting industry is subject to extensive and changing regulation of, among other things, program content, advertising content, technical operations and business and employment practices. The ownership, operation and sale of radio stations are subject to the jurisdiction of the FCC. Among other things, the FCC:

·   assigns frequency bands for broadcasting;

·   determines the particular frequencies, locations, operating powers and other technical parameters of stations;

·   issues, renews, revokes, conditions and modifies station licenses;

·   determines whether to approve changes in ownership or control of station licenses;

·   regulates equipment used by stations; and

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·   adopts and implements regulations and policies that directly affect the ownership, operation and employment practices of stations.

The FCC has the power to impose penalties for violations of its rules or the Communications Act of 1934 ( the “Communications Act”), including the imposition of monetary forfeitures, the issuance of short-term licenses, the imposition of a condition on the renewal of a license, non-renewal of licenses and the revocation of operating authority. The following is a brief summary of some provisions of the Communications Act and of specific FCC regulations and policies. The summary is not a comprehensive listing of all of the regulations and policies affecting radio stations. For further information concerning the nature and extent of Federal regulation of radio stations, you should refer to the Communications Act, FCC rules and public notices, and the rulings of the FCC and applicable courts.

FCC AM Radio Licenses

Radio stations operate pursuant to renewable broadcasting licenses that are ordinarily granted by the FCC for maximum terms of eight years. A station may continue to operate beyond the expiration date of its license if a timely filed license renewal application is pending. During the periods when renewal applications are pending, petitions to deny license renewals can be filed by interested parties, including members of the public. The FCC is required to hold hearings on a station’s renewal application if a substantial or material question of fact exists as to whether the station has served the public interest, convenience and necessity. If, as a result of an evidentiary hearing, the FCC determines that the licensee has failed to meet certain requirements and that no mitigating factors justify the imposition of a lesser sanction, then the FCC may deny a license renewal application. Historically, FCC licenses have generally been renewed. WMET’s FCC license expires on October 1, 2011. We have no reason to believe that our license for WMET will not be renewed in the ordinary course, although there can be no assurance to that effect. The non-renewal of that license could have a material adverse effect on our radio business.

Pursuant to FCC rules and regulations, many AM radio stations, including WMET, are authorized to operate only at a reduced power during the nighttime broadcasting hours, which results in reducing the radio station’s coverage during the nighttime hours of operation.  

WMET currently is licensed to serve Gaithersburg, Maryland as a Class B AM station on 1160 MHz with 50 kilowatt of effective radiated power during the daytime hours and 1.5 kilowatt during the nighttime hours.

Transfers or Assignment of AM Radio License

The Communications Act prohibits the assignment of broadcast licenses or the transfer of control of a broadcast licensee without the prior approval of the FCC. In determining whether to grant such approval, the FCC considers a number of factors pertaining to the licensee and proposed licensee, including:

·   compliance with the various rules limiting common ownership of media properties in a given market;

·   the character of the licensee and those persons holding attributable interests in the licensee; and

·   compliance with the Communications Act’s limitations on foreign ownership as well as compliance with other FCC regulations and policies.

If we determine that it is in our best interest to sell the WMET license to a third party, we will need to obtain the prior consent of the FCC before consummating the sale of the WMET FCC license.

From time to time we may evaluate the corporate entities and structure that controls WMET and may determine that is in our best interest to reorganize that structure.  If we determine it is in our best interests to modify that ownership structure, we will need to obtain prior FCC approval of a pro forma transfer control of the license if there is a less than 50% change in the ownership interest.

As a result of the spin-off, a pro forma transfer of WMET would occur.  Accordingly, we will file a pro forma application with the FCC seeking approval of the proposed modification of the ownership structure of WMET whereby the stockholders of IDT would be the ultimate owner of Beltway Acquisition Corporation (the licensee of WMET) instead of IDT being the owner.

WMET currently employs six full time employees and three to six part-time employees.

WMET’s telephone number at its headquarters is (202) 969-9884 and its website is www.wmet1160.com.

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MANAGEMENT

Directors and Executive Officers

Set forth below is information concerning those persons that we expect to serve as our executive officers and directors immediately following the distribution date.

Name	Age	Position
Howard S. Jonas	52	Chairman and Director
Marc E. Knoller	48	Chief Executive Officer, President and Director
Leslie B. Rozner	56	Chief Financial Officer, Treasurer and Secretary
Jay Buchsbaum	54	Director
Betty A. Llantin	50	Director

Howard S. Jonas founded IDT in August 1990, and has served as Chairman of the Board of Directors since its inception. Mr. Jonas served as Chief Executive Officer of IDT from December 1991 until July 2001, as President of IDT from December 1991 through September 1996, and as Treasurer of IDT from inception through 2002. Mr. Jonas has also served as the Vice Chairman of the Board of Directors of IDT Telecom from December 1999 to April 2008, as Co-Chairman since April 2008, and as a director of IDT Capital since September 2004. Mr. Jonas served as Co-Chairman of the Board of Directors of IDT Entertainment from November 2004 until August 2006. Since August 2006, Mr. Jonas has been a director of Starz Media Holdings, LLC, Starz Media, LLC and Starz Foreign Holdings, LLC, each of which is a subsidiary of Liberty Media Corporation. In addition, Mr. Jonas has been a director of IDT Energy since June 2007 and a director of American Shale Oil Corporation since January 2008. Mr. Jonas is also the founder and has been President of Jonas Media Group (f/k/a Jonas Publishing) since its inception in 1979. Mr. Jonas was the Chairman of the Board of Directors of Net2Phone from October 2001 to October 2004, the Vice Chairman of the Board of Directors of Net2Phone from October 2004 to June 2006, and has served as the Chairman of Net2Phone since June 2006.  Mr. Jonas has served as our Chairman since our inception.  Mr. Jonas received a B.A. in Economics from Harvard University.

Marc E. Knoller has been an Executive Vice President of IDT since December 1998 and served as a director of IDT from March 1996 to August 2007. Mr. Knoller joined IDT as a Vice President in March 1991 and also served as a director of its predecessor. Mr. Knoller has served as Vice President of Jonas Media Group (f/k/a Jonas Publishing) since 1991. Mr. Knoller has been our Chief Executive Officer since our inception. Mr. Knoller received a B.B.A. from Baruch College.

Leslie B. Rozner has been the Chief Financial Officer of Holdings since inception and CFO of CTM Media Group since August 2008. Mr. Rozner served as CFO of IDT Spectrum from July 2006 until July 2008. Prior to that time, Mr. Rozner worked as a CPA and provided consulting services to IDT.  Mr. Rozner originally joined IDT in 1991 and served as the first CFO of IDT until 1993. Mr. Rozner is a certified public accountant licensed by the State of New York.  Mr. Rozner received a BS in Accounting from Brooklyn College of CUNY. Mr. Rozner filed for Chapter 7 personal bankruptcy in October 2005, which was discharged in December 2007.

Jay Buchsbaum has been Vice President of Marketing for Royal Wine Corp. since 1987, where he also serves as Director of Wine Education and Trading and as Executive Vice President of 3D Marketing and President of Weinstock Cellars.  Mr. Buchsbaum was a fiscal records analyst for the Audit Division of the City of New York from 1973 to1975.  

Betty A. Llantin was an attorney with the law firm of Palmer, Reifler & Associates in Orlando, Florida from February 2002 to February, 2009.  Ms. Llantin was an administrative law judge with the New York State Division of Parole from 1992 to 1998 and was also an assistant district attorney for the Bronx County District Attorney’s Office from 1983 to 1992. Ms. Llantin received a B. A. from the City College of New York and a J.D. from New York Law School.  

Board of Directors

Currently, our Board of Directors is composed of Howard Jonas and Marc Knoller. Prior to the spin-off, we intend to designate, and IDT intends, acting as our sole stockholder, to elect, Jay Buchsbaum, Betty Llantin and one more director as independent directors such that a majority of our directors will be independent in accordance with our to-be-adopted Corporate Governance Guidelines and other applicable laws. Each director has indicated a willingness to serve on our Board of Directors and will hold office, in accordance with our Certificate of Incorporation and By-laws until the next annual meeting of stockholders and until his or her successor is duly elected and qualified.

CORPORATE GOVERNANCE

Director Independence

Following the spin-off, our Corporate Governance Guidelines will provide that a majority of our directors must be independent as defined therein .  Prior to the spin-off, we expect to designate and elect Mr. Buchsbaum, Ms. Llantin and one more independent director in addition to Messrs. Jonas and Knoller such that a majority of our directors will be independent in accordance with our Corporate Governance Guidelines.

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Committees of the Board of Directors

Prior to the distribution date, our Board of Directors will establish an Audit Committee, a Nominating Committee, a Compensation Committee, and a Corporate Governance Committee. All members of the Audit, Nominating, Compensation and Governance Committees will meet the criteria for independence as established by our Corporate Governance Guidelines and under the Sarbanes-Oxley Act of 2002. Each of the Committees is described in greater detail below. The Board will establish written charters for each of the Committees, which will be available on our website located at www.ctmholdings.com following the spin-off. Following the spin-off, any changes to the charters will be reflected on our website.

Audit Committee

We expect to designate members of our Audit Committee on or prior to the spin-off. The principal duties of the Audit Committee under its written charter will include: (i) responsibilities associated with our external and internal audit staffing and planning; (ii) accounting and financial reporting issues associated with our financial statements and filings with the SEC; (iii) financial and accounting organization and internal controls; (iv) auditor independence and approval of non-audit services; and (v) “whistle-blower” procedures for reporting questionable accounting and audit practices.

The Audit Committee charter will require that the Committee be comprised of at least three directors, all of whom must be independent under our Corporate Governance Guidelines and the Sarbanes-Oxley Act of 2002. In addition, each member of the Audit Committee will be financially literate within the meaning of our Corporate Governance Guidelines , and at least one member will have sufficient accounting or financial management expertise to qualify as an “audit committee financial expert,” as determined by the Board in accordance with SEC rules.

Nominating Committee

We expect to designate members of our Nominating Committee on or prior to the spin-off. The principal duties of the Nominating Committee under its charter will include: (i) developing the criteria and qualifications for membership on the Board of Directors; (ii) recommending candidates to fill new or vacant positions on the Board of Directors; and (iii) conducting appropriate inquiries into the backgrounds of potential candidates.

Compensation Committee

We expect to designate members of our Compensation Committee on or prior to the spin-off. The principal duties of the Compensation Committee under its charter will include: (i) ensuring that a succession plan for the Chief Executive Officer is in place; (ii) reviewing management’s recommendations for executive officers and making recommendations to the Board of Directors; (iii) approving the compensation for the Chief Executive Officer; (iv) reviewing and approving compensation policies and practices for other executive officers including their annual salaries; (v) reviewing and approving major changes in employee benefit plans; (vi) reviewing short and long-term incentive plans and equity grants; and (vii) recommending to the full Board changes to the compensation of the independent members of the Board of Directors.  The Compensation Committee charter will require that the Committee be comprised of at least three directors, all of whom must be independent under our Corporate Governance Guidelines.

Corporate Governance Committee

We expect to designate members of our Corporate Governance Committee on or prior to the spin-off. The principal duties of the Corporate Governance Committee under its charter will include: (i) reviewing our Corporate Governance Guidelines and other policies and governing documents and recommending revisions as appropriate; (ii) reviewing any potential conflicts of independent directors; (iii) reviewing and monitoring related person transactions; and (iv) overseeing the self-evaluations of the Board of Directors, the Audit Committee and the Compensation Committee. The Corporate Governance Committee charter will require that the Committee be comprised of at least three directors, all of whom must be independent under our Corporate Governance Guidelines .

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Governance Practices

Following the spin-off, we will observe corporate governance practices and principal governance documents which are designed to ensure that we maximize stockholder value in a manner that is consistent with both the legal requirements applicable to us and a business model that requires our employees to conduct business with the highest standards of integrity. Prior to the spin-off, our Board will adopt and will adhere to corporate governance principles which the Board and senior management believe promote this purpose, are sound and represent best practices, and will review these governance practices, the corporate laws of the State of Delaware under which we were incorporated and the regulations of the SEC, as well as best practices recognized by governance authorities to benchmark the standards under which it operates. Our principal governance documents will be as follows:

·   Corporate Governance Guidelines;

·   Board of Directors committee charters, including:

§   Audit Committee charter;

§   Nominating Committee charter;

§   Compensation Committee charter;

§   Corporate Governance Committee charter; and

·   Code of Business Conduct and Ethics.

Our governance documents will be available following the distribution date on our web site at www.ctmholdings.com

Our Board of Directors, with assistance from its Corporate Governance Committee, will regularly assess our governance practices in light of legal requirements and governance best practices.

Executive Director Sessions

Under our Corporate Governance Guidelines, the outside directors will meet in regularly scheduled executive sessions without management. We expect that a lead independent director will be selected by the Board to serve as the presiding director at these meetings.

Communications with the Board of Directors

After the spin-off, stockholders and other interested persons seeking to communicate directly with the Board of Directors, with the lead independent director or the independent directors as a group, should submit their written comments c/o Lead Independent Director at our principal executive offices set forth on page 4. The lead independent director will review any such communication at the next regularly scheduled Board meeting unless, in his or her judgment, earlier communication to the Board is warranted.

If a stockholder communication raises concerns about the ethical conduct of us or our management, it should be sent directly to our Corporate Secretary at our principal executive offices set forth on page 4. The Corporate Secretary will promptly forward a copy of any such communication to the Chairman of the Audit Committee and, if appropriate our Chairman, and take such actions as they authorize to ensure that the subject matter is addressed by the appropriate committee of the Board, by management and/or by the full Board.

At the direction of the Board, we reserve the right to screen all materials sent to its directors for potential security risks, harassment purposes or routine solicitations.

Code of Business Conduct and Ethics

Prior to the distribution date, we will adopt a Code of Business Conduct and Ethics which will apply to our directors, Chief Executive Officer, Chief Financial Officer and other Holdings employees.

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DIRECTOR COMPENSATION

Each non-employee director of the Company who attend at least 75% of the meetings of the Board of Directors during a calendar year will receive an annual cash retainer of $10,000. Such payment is made in January of the calendar year following attendance of at least 75% of the Board meetings during the preceding year, and is pro-rated for non-employee directors who join the Board of Directors or depart from the Board of Directors during the prior year, if such director attended 75% of the applicable board meetings for such partial year. The Company’s Chief Executive Officer may, in his discretion, waive the requirement of 75% attendance by a director to receive the annual retainer in the case of mitigating circumstances.  Direcotrs will not receive any annual fees for committee services, nor will there be any additional fees paid to the lead independent director or audit committee financial expert.

EXECUTIVE COMPENSATION

Compensation of our Named Executive Officers

Prior to the spin-off, all of the named executive officers were employees of IDT and all compensation for fiscal year 2008 disclosed in the table below was paid by IDT for services provided by the named executive officers to our business segments and other units of IDT. During fiscal year 2008, Howard Jonas served as the Chairman of the Board of Directors of IDT, Marc Knoller served as an Executive Vice President of IDT and Les Rozner served as the Chief Financial Officer of IDT Spectrum, Inc.

The historical compensation of Marc Knoller and Howard Jonas was set by the Compensation Committee of the Board of Directors of IDT after discussions with management about the recommended levels and components of compensation for each of the individuals. The historical compensation of Les Rozner was set by the management of IDT.

Howard Jonas has an employment agreement with IDT, which is summarized in IDT’s Proxy Statement for its 2008 Annual Meeting of Shareholders and the agreement and all amendments to the agreement have been filed as exhibits to IDT’s reports it files with the SEC. No other named executive officers have employment agreements with the Company or IDT.   Mr. Jonas’ annual base compensation has been set at $250,000 .  Mr. Jonas will continue to serve as the Chairman of IDT following the spin-off.

SUMMARY COMPENSATION TABLE (With respect to IDT Corporation)
Name and Principal Position	Fiscal Year	Salary		Bonus		Stock Awards(1)		Option Awards (1)		All Other Compensation			Total
Marc Knoller Chief Executive Officer	2008	$	510,485		—	$	47,036	$	99,560	$	52,784	(2)	$	709,865
Howard Jonas Chairman	2008	$	586,038	$	502,934		—		—	$	8,175	(3)	$	1,097,147
Leslie B. Rozner Chief Financial Officer	2008	$	105,000		—		—		—		—		$	105,000

_______

(1)   The amounts shown in this column reflect the dollar amounts recognized by IDT for stock option and restricted stock awards for financial statement reporting purposes in accordance with FAS 123R. In valuing such awards, IDT made certain assumptions. For a discussion of those assumptions, please see Note 1 to the Consolidated Financial Statements included in IDT’s Annual Report on Form 10-K for the Fiscal Year ended July 31, 2008.

(2)   Represents $1,005 paid for life insurance premiums, $40,483 of earnings distributed to Mr. Knoller under IDT’s Key Employee Share Option Plan, $4,546 paid for long-term disability insurance premiums, and $6,750 matching contribution to Mr. Knoller’s IDT stock account established under the IDT 401(k) plan and invested in IDT’s stock.

(3)   Represents $1,425 paid for life insurance premiums, and $6,750 matching contribution to Mr. Jonas’s IDT stock account established under the IDT 401(k) plan and invested in IDT’s stock.

Following the spin-off, the compensation of our executive officers will be set by the Compensation Committee of our Board of Directors after discussions with management about the recommended levels and components of compensation for each of the individuals.

In general, it is anticipated that each of our executive officers will receive base compensation that is commensurate with the officer’s duties, responsibilities and compensation levels for similarly situated individuals in comparable positions. In addition, executive officers may receive bonus compensation and compensatory equity-based awards.

Any bonus compensation to executive officers will be determined by our Compensation Committee based on factors it deems appropriate, including the achievement of specific performance targets and our financial and business performance.   No such targets have yet been established.

Equity compensation awards will generally be granted pursuant to the Long-Term Incentive Plan described below at levels determined by the Compensation Committee.  No grants have been made nor has the Company agreed to any specific grant or level of grants.

Prior to the spin-off, we intend to adopt a long-term incentive plan to provide equity compensation to our Board of Directors, our management and our employees. We have not committed to make any grants under such plan. Following the spin-off, the plan will be administered by our Compensation Committee.

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Long-Term Incentive Plan

We intend to adopt, effective as of the distribution date, a long-term incentive plan, which is expected to be approved by IDT as our sole stockholder before the spin-off. The following is a general description of the plan, which is subject to change prior to its adoption.

Objectives. The plan will be designed to attract and retain officers and employees, to encourage the sense of proprietorship of such officers and employees and to stimulate the active interest of such persons in our development and financial success. These objectives are to be accomplished by making awards under the plan and thereby providing participants with a proprietary interest in our growth and performance.

Eligibility. All of our employees and directors will be eligible for awards under the plan. Our Compensation Committee will select the participants from time to time by the grant of awards.

Shares Available for Awards.[____] shares of our Class A common stock and shares of our Class B common stock will be available for awards granted, wholly or in part, in Class A common stock or Class B common stock, as applicable (including rights or options which may be exercised for or settled in such common stock) under the plan. We anticipate that the maximum number of shares of Class A common stock that may be issued for awards other than options and stock appreciation rights will be [____] shares.   We anticipate that the maximum number of shares of Class B common stock that may be issued for awards other than options and stock appreciation rights will be [____] shares.

Administration. We intend that the plan will be administered by our Compensation Committee. The committee and our Board of Directors will have full and exclusive power to interpret the plan and to adopt such rules, regulations and guidelines for carrying out the plan as they may deem necessary or proper, all of which powers shall be exercised in our best interests and in keeping with the objectives of the plan.

Awards. At the discretion of the Compensation Committee, awards may be in the form of (1) options, representing rights to purchase a specified number of shares of Class A common stock or Class B common stock at a specified price; (2) stock appreciation rights, representing rights to receive a payment, in cash or common stock, equal to the excess of the fair market value or other specified value of a number of shares of Class A common stock or Class B common stock on the rights’ exercise date over a specified strike price; and (3) grants of restricted or unrestricted Class A common stock or Class B common stock or units denominated in Class A common stock or Class B common stock . The Compensation Committee will determine the type or types of awards to be made to each participant under the plan and the terms, conditions and limitations applicable to each such award. Each award will be embodied in an award agreement containing such terms, conditions and limitations as determined by the Compensation Committee in its sole discretion.

Payment of Awards. Generally, payment of awards may be made in the form of cash, Class A common stock or Class B common stock or combinations thereof and may include such restrictions as the Compensation Committee determines including, in the case of Class A common stock or Class B common stock , as applicable , restrictions on transfer and forfeiture provisions.

The following is a brief description of these awards:

Stock Options. An award may consist of a right to purchase a specified number of shares of Class A common stock or Class B common stock, as applicable at a price specified by the Compensation Committee in the award agreement or otherwise. A stock option may be in the form of an incentive stock option to a participant who is an employee, which in addition to being subject to applicable terms, conditions and limitations established by the Committee, complies with Section 422 of the Code, or, in the case of participants who are employees or directors, in the form of a nonqualified option. The plan authorizes the Committee to specify the manner of payment of the option price.

Stock Appreciation Rights. A stock appreciation right (“SAR”), consists of a right to receive a payment, in cash or Class A common stock or Class B common stock, as applicable, equal to the excess of the fair market value or other specified valuation of a specified number of shares of Class A common stock or Class B common stock, as applicable on the date the SAR is exercised over a specified strike price as set forth in the award agreement.

Stock Awards. A stock award may consist of Class A common stock or Class B common stock, as applicable or may be denominated in units of Class A common stock or Class B common stock, as applicable . All or part of any stock award may be subject to conditions established by the Compensation Committee and set forth in the award agreement. The Committee may permit dividend equivalents with respect to restricted stock units. Such awards may be based on fair market value or other specified valuations.

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SECURITY OWNERSHIP BY

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

All of the outstanding shares of our common stock are, and will be, prior to the distribution, held beneficially and of record by IDT.  The following table sets forth information concerning shares of our Class A common stock, Class B common stock and Class C Common Stock projected to be beneficially owned immediately after the distribution date by:

·   each person or entity known by us to be the beneficial owner of 5% or more of the outstanding shares each of IDT’s classes of common stock;

·   each person who we currently anticipate will be one of our directors at the time of the distribution;

·   each person who we currently anticipate will be one of our named executive officers at the time of the distribution; and

·   all persons who we currently anticipate will be our directors and executive officers at the time of the distribution as a group.

The projected share amounts in the table below are based on the number of shares of IDT common stock, Class A common stock and Class B common stock owned by each person or entity at June 3 , 2009.   Percentage ownership information is based on the following amount of Holdings’ outstanding shares: (i) 1,431,418 shares of Class A common Stock (based on 4,294,254 shares of IDT common stock outstanding on June 3 , 2009), (ii) 5,436,396 shares of Class B common Stock (based on 16,309,190 shares of IDT Class B common stock outstanding on June 3, 2009 and (iii) 1,090,776 shares of Class C common stock (based on 3,272,329 shares of IDT Class A common stock outstanding on June 3, 2009). To our knowledge, except as otherwise indicated in the footnotes below, each person or entity has sole or shared voting and investment power with respect to the shares of common stock set forth opposite such persons or entity’s name.  Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to the securities.

Name	Number of Shares of Class A Common Stock		Percentage of Ownership of Class A. Common Stock	Number of Shares of Class B Common Stock		Percentage of Ownership of Class B. Common Stock	Number of Shares of Class C Common Stock		Percentage of Ownership of Class C. Common Stock	Percentage of Aggregate Voting Powerd
Howard S. Jonas Chairman and Director 11 Largo Drive South Stamford, CT 06907	497,237	(1)	34.7%	609,239	(2)	11.2%	1,090,776	(3)	100%	73.0%
Barclays Global Investors, N.A. 400 Howard Street San Francisco, CA 94105	—		—	274,543	(4)	5.1%	—		—	*
Dimensional Fund Advisors, Inc. 1299 Ocean Avenue Santa Monica, CA 90401	138,948	(5)	9.7%	419,441	(5)	7.7%	—		—	3.5%
Kahn Brothers & Co., Inc. 555 Madison Avenues, 22nd Floor New York, NY 10022	251,601	(6)	17.6%	—		—	—		—	4.8%
Mihaljevic Capital Management, L.L.C. 141 East 56th Street, Suite 9K New York, NY 10022	116,593	(7)	8.1%	—		—	—		—	2.2%
Renaissance Technologies Corp. 800 Third Avenue, 33rd Floor New York, NY 10022	—		—	315,033	(8)	5.8%	—		—	*
Marc E. Knoller Chief Executive Officer  and Director	—		—	5,101	(9)	*	—		—	*
Leslie B. Rozner Chief Financial Officer	—		—	322	(10)	*	—		—	*
Jay Buchsbaum Independent Director	—		—	—		—	—		—	—
Betty A. Llantin Independent Director	—		—	—		—	—		—	—
All directors and executive officers as a group	497,237		34.7%	614,662		11.3%	1,090,776		100%	73.0%

*	Less than 1%
d	Voting power represents combined voting power of Class A common stock (one vote per share), Class B common stock (1/10 of a vote per share and Class C common stock (3 votes per share ).

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(1)   Based on beneficial ownership of the following shares of IDT: 608,380 shares of common stock and 883,333 shares of restricted common stock.

(2)    Based on beneficial ownership of 1,827,717 shares of IDT Class B common stock.

(3)    Based on beneficial ownership of 3,272,328 shares of IDT Class A common stock.

(4)    Based on beneficial ownership of 823,631 shares of IDT Class B common stock.

(5)    Based on beneficial ownership of 416,845 shares of IDT common stock and 1,258,324 shares of IDT Class B Common Stock.

(6)    Based on beneficial ownership of 754,805 shares of IDT common stock.

(7)    Based on beneficial ownership of 349,779 shares of IDT common stock.

(8)    Based on beneficial ownership of 945,099 shares of IDT Class B common stock.

(9)    Based on beneficial ownership of 15,303 shares of IDT Class B common stock.

(10)    Based on beneficial ownership of 966 shares of IDT Class B common stock.

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OUR RELATIONSHIP WITH IDT AFTER THE SPIN-OFF

AND RELATED PERSON TRANSACTIONS

General

In connection with the spin-off, we and IDT will enter into a Separation and Distribution Agreement, which we refer to as the “Separation Agreement,” and some other ancillary agreements to complete the separation of our businesses from IDT and to distribute our common stock to IDT stockholders. This agreement will govern the relationship between us and IDT after the distribution and will also provide for the allocation of employee benefits, taxes and other liabilities and obligations attributable to periods prior to the distribution. These agreements will have been prepared before the distribution, and will reflect agreement between affiliated parties established without arms-length negotiation. However, we believe that the terms of this agreement will equitably reflect the benefits and costs of our ongoing relationships with IDT. Along with the Separation Agreement, the other ancillary agreements include a Master Services Agreement and a Tax Separation Agreement.

The expected terms of these agreements , which are subject to change prior to the spin-off, are summarized below. We may enter into other agreements with IDT prior to or concurrently with the separation that would relate to other aspects of our relationship with IDT following the spin-off. Following the separation, we may enter into other commercial agreements with IDT from time to time, the terms of which will be determined at those relevant times.

Copies of the forms of the agreements described below are filed as exhibits to our Form 10 , of which this information statement is a part. The summaries of the material agreements are qualified in their entireties by reference to the full text of the agreements. We encourage you to read the full text of these material agreements .

Separation and Distribution Agreement

The Separation and Distribution Agreement will set forth the agreement between us and IDT with respect to the principal corporate transactions required to effect our separation from IDT; the distribution of our shares to IDT stockholders; and other agreements governing the relationship between IDT and us following the separation. IDT will only consummate the spin-off if specified conditions are met. These conditions are intended to include, among others, final approval of the distribution given by the Board of Directors of IDT, and the actions and filings necessary or appropriate under Federal and state securities laws and state blue sky laws of the United States (and any comparable laws under any foreign jurisdictions) in connection with the distribution shall have been taken and, where applicable, become effective or accepted. For additional information regarding conditions to the distribution, see “The Spin-Off--Spin-Off Conditions and Termination” on page 16.

Even if these conditions are satisfied, other events or circumstances could occur that could impact the timing or terms of the spin-off or IDT’s ability or plans to consummate the spin-off. As a result of these factors, the spin-off may not occur and, if it does occur, it may not occur on the terms or in the manner described, or in the timeframe currently contemplated.

The Contribution

In connection with the distribution, IDT has contributed or will contribute to us certain business segments, as described in this information statement. It will effect this contribution by transferring, or causing its subsidiaries to transfer, stock of the operating subsidiaries themselves or entities owning interests in the operating subsidiaries. IDT will have no interest in our assets and business and will have no obligation with respect to our liabilities after the distribution other than as described below and set forth in more detail in the Separation Agreement . Similarly, we will have no interest in the assets of IDT’s other business segments and will have no obligation with respect to the liabilities of IDT’s retained businesses after the distribution other than as described below and set forth in more detail in the Separation Agreement.

The Distribution

Following the satisfaction or waiver of all conditions to the distribution as set forth in the Separation Agreement, IDT will deliver to the distribution agent certificates representing all of the outstanding shares of our Class A common stock, Class B common stock and Class C common stock. IDT will instruct the distribution agent to distribute those shares on [____ __,] 2009 or as soon thereafter as practicable, so that each IDT stockholder will receive one share of our Class A common stock for every three shares of IDT common stock, one share of our Class B common stock for every three shares of IDT Class B common stock, and one share of our Class C common stock for every three shares of IDT Class A common stock, each as such stockholder owns as of the record date of the spin-off.

Termination.

The Separation Agreement will provide that it may be terminated by IDT at any time prior to the distribution date.

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Liabilities and Indemnification

 Following the spin-off, we will liable for all liabilities and obligations (i) primarily relating to, arising out of or resulting from the operation of the businesses of CTM, IDW or WMET, the ownership or use of our assets, as conducted at any time on or after the distribution date (including any liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative of ours, IDT, or any of our respective affiliates; (ii) set forth or represented on the our balance sheet, except as provided otherwise in the Separation Agreement or other ancillary agreement; (iii) relating to, arising out of or resulting from any termination, sale, discontinuance or divesture of  entity, business, real property, or asset formerly and primarily owned or managed by, or associated with any of CTM, IDW or WMET or our business which occurs after the distribution, or arising out of such entity, business, real property, or asset; (iv) relating to, arising out of or resulting from any indebtedness of CTM, IDW or WMET (whether incurred prior to, on or after the distribution); (v) relating to, resulting from, or arising out of any legal action that is primarily related to the operation of our businesses following the distribution; and (vi) as otherwise set forth in the Separation Agreement.

 Following the spin-off, IDT will liable for all liabilities and obligations (i) of IDT and its subsidiaries other than CTM, IDW or WMET under the Separation Agreement or other ancillary agreement; (ii) of CTM, IDW or WMET arising, or related to the period, prior to the distribution; and (iii) as otherwise set forth in the Separation Agreement.

 Generally, IDT will indemnify us, and we will indemnify IDT, for losses related to the failure of the other to pay , perform or otherwise discharge, any of the its liabilities and obligations set forth in the Separation Agreement.

Expenses

Except as expressly set forth in the Separation Agreement, whether or not the separation and distribution are completed, all third party fees, costs and expenses paid or incurred in connection with the transactions contemplated by the Separation Agreement will be paid by IDT.

Non-Solicitation of Employees

We and IDT will agree not to, for a period of 18 months following the spin-off, directly or indirectly solicit or hire employees of the other party or its subsidiaries with the exception of solicitations made by non-targeted job opportunity advertisements or similar means and employees who were terminated by the other party prior to the solicitation.

Services Agreement

In connection with the spin-off, we and IDT will enter into a Master Services Agreement pursuant to which IDT will provide us, among other things, certain administrative and other services following the distribution date, such as insurance, health and welfare plans, pension/401(k) and compensation. For each of these areas, a service schedule will summarize the services to be provided and the responsibilities of the IDT and us. The services will be paid for by us as calculated in the Master Services Agreement.

Employee Benefits

To provide us with an orderly transition to being independent from IDT, IDT will provide us with various services, including services relating to employee benefits and payroll. The Separation Agreement will allocate liabilities and responsibilities relating to employee compensation and benefit plans and programs and other related matters in connection with the spin-off, including the treatment of certain outstanding and long-term incentive awards and certain retirement and welfare benefit obligations. The terms of the agreement that will be in effect following the spin-off have not yet been finalized and are subject to a number of uncertainties and therefore changes may be made prior to the spin-off. However, our Board and management are considering all options available to them at the current time and will communicate with employees as decisions are taken. Their expectation is currently as follows:

·   As a general rule, it is intended that our employees, immediately following the spin-off, will participate in employee benefit plans which will provide substantially comparable benefits as those provided to those employees before the spin-off.

·   Effective on or before the spin-off, we will adopt a qualified 401(k) plan for the benefit of our employees. For purposes of eligibility and vesting, our 401(k) plan will credit our employees for service with IDT and its affiliates.

·   From the date of the spin-off until no later than December 31, 2009, our employees will be eligible to continue to participate in certain of the IDT health and welfare plans in which they participated prior to the spin-off. Thereafter, it is expected that our employees will be eligible to participate in comparable health and welfare plans to be established by us and administered so that credit is given for our employees’ pre-spin-off service with IDT.

Tax Separation Agreement

In connection with the spin-off, we and IDT will enter into a tax separation agreement, which sets forth the responsibilities of IDT and us with respect to, among other things, liabilities for federal, state, local and foreign taxes for periods before and including the spin-off, the preparation and filing of tax returns for such periods and disputes with taxing authorities regarding taxes for such periods. IDT will be generally responsible for our federal, state, local and foreign income taxes for periods before and including the spin-off. We will be generally responsible for all other taxes relating to our business. We and IDT will each generally be responsible for managing those disputes that relate to the taxes for which each of us is responsible and, under certain circumstances, may jointly control any dispute relating to taxes for which both of us are responsible.

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Related Person Transactions

CTM distributes brochures for ETR Brochures, Inc., a brochure distribution firm controlled by Howard S. Jonas. ETR Brochures also distributes brochures for CTM. In Fiscal 2008, CTM billed ETR Brochures approximately $35,000 for distribution services and ETR Brochures billed CTM approximately $144,000 for distribution services. The net balance owed to ETR Brochures, Inc. by CTM was approximately $8,000 as of July 31, 2008.  This transaction was approved in accordance with IDT’s Related Person Transaction policy described in its 2008 Proxy Statement.  We intend for the relationship between CTM and ETR to continue after the spin-off.

For a complete list of IDT’s fiscal 2008 related person transactions, please see IDT’s 2008 Proxy Statement, filed with the SEC on November 7, 2008.

LEGAL PROCEEDINGS

On January 30, 2009, IDW received a letter from a law firm representing George and Ginger Criswell and Green School Network, Inc. demanding $500,000 as a result of alleged infringement of intellectual property of the Criswells related to the Michael Recycle book published by IDW.  In June 2009, the parties agreed to a settlement consisting of the following material terms : (a) upfront remuneration from IDW of $25,000; (b) a co-existence agreement and full release; (c) a book publication contract from IDW for Ms. Criswell’s Recycle Michael: I’ll Do My Part book; (d) IDW’s right of first refusal regarding the publication of a second Recycle Michael title by Ms. Criswell; and (e) a royalty of 1.5% of net sales arising from IDW’s publication of the book entitled Michael Recycle Meets Litterbug Doug.

We are involved in various litigation matters in the ordinary course of their business. We are not currently involved in any litigation which we expect, either individually or in the aggregate, will have a material adverse effect on our financial condition or results of operations.

DESCRIPTION OF OUR CAPITAL STOCK

As of the date of the spin-off, our authorized capital stock will consist of (i)  35 million shares of Class A common stock, (ii) 65 million  shares of Class B common stock , (iii) 15 million shares of Class C common stock and (iii) 10 million shares of Preferred Stock.  We are registering shares of our Class A common stock and Class B common stock under the Securities Exchange Act of 1934 , as amended , under our registration statement on Form 10 filed with the SEC.  We are not registering our Class C common stock.  We do not anticipate that any shares of Preferred Stock will be outstanding as of the date of the spin-off.

The following statements set forth the material terms of our classes of authorized stock; however, reference is made to the more detailed provisions of, and such statements are qualified in their entirety by reference to, our Certificate of Incorporation, which has been filed as an exhibit to the registration statement of which this Information Statement forms a part.

Class A Common Stock

Holders of shares of Class A common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of Class A common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available therefor.  There are no conversion or redemption rights or sinking fund provisions with respect to the Class A common stock.  In the distribution, each IDT stockholder will receive one share of Holdings Class A common stock for every three shares of IDT common stock held at 5:00 p.m. on the record date.

As of June 1 , 2009, there were 4.3 million shares of IDT common stock.  Based on those numbers, we anticipate that upon the distribution, there will be approximately 1.4 million shares of our Class A common stock outstanding.

Class B Common Stock

Holders of shares of Class B common stock are entitled to one-tenth of one vote for each share on all matters to be voted on by the stockholders. Holders of Class B common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available therefor.   Other than our right that Class B common stock may be converted, at any time at our option, into one fully paid non-assessable share of our Class A common stock, provided that all shares of Class B common stock are converted, there are no conversion or redemption rights or sinking fund provisions with respect to the Class B common stock.  In the distribution, each IDT stockholder will receive one share of Holdings Class B common stock for every three shares of IDT Class B common stock held at 5:00 p.m. on the record date.

As of June 1, 2009, there were 16.3 million shares of IDT common stock.  Based on those numbers, we anticipate that upon the distribution, there will be approximately 5.4 million shares of our Class A common stock outstanding.

Class C Common Stock

Holders of shares of Class C common stock are entitled to three votes for each share on all matters to be voted on by the stockholders. Holders of Class C common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available therefor .   Each share of Class C common stock may be converted, at any time and at the option of the holder thereof, into one fully paid and non-assessable share of Class A common stock.  In the distribution, each IDT stockholder will receive one share of Holdings Class C common stock for every three shares of IDT Class A common stock, held at 5:00 p.m. on the record date.

As of June 1 , 2009, there were 3.3 million shares of IDT Class A common stock outstanding.  Based on those numbers, we anticipate that upon the distribution, there will be approximately 1.1 million shares of our Class C common stock outstanding.

47

Preferred Stock

The Board of Directors has the authority to fix the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action by the stockholders.  

As of June 1, 2009, no shares of IDT preferred stock were outstanding. We do not anticipate that there will be any shares of our preferred stock outstanding upon the distribution.

Anti-Takeover Effects of Our Charter and By-Laws

Some provisions of Delaware law and our Certificate of Incorporation and By-Laws could make the following more difficult:

·   acquisition of us by means of a tender offer;

·   acquisition of us by means of a proxy contest or otherwise; or

·   removal of our incumbent officers and directors.

These provisions, summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions also are designed to encourage persons seeking to acquire control of us to first negotiate with our Board of Directors. We believe that the benefits of increased protection give us the potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us and outweigh the disadvantages of discouraging those proposals because negotiation of them could result in an improvement of their terms.

Certificate of Incorporation; By-Laws

Our Certificate of Incorporation and By-Laws contain provisions that could make more difficult the acquisition of us by means of a tender offer, a proxy contest or otherwise. These provisions are summarized below.

Undesignated Preferred Stock. The authorization of our undesignated preferred stock makes it possible for our Board of Directors to issue our preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us. These and other provisions may have the effect of deferring hostile takeovers or delaying changes of control of our management.

Size of Board and Vacancies. Our Certificate of Incorporation provides that the number of directors on our Board of Directors will be fixed exclusively by our Board of Directors. Newly created directorships resulting from any increase in our authorized number of directors or any vacancies in our Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause will be filled solely by the vote of our remaining directors in office.

Stockholder Meetings. Under our By-Laws, only our (i) Chairman of the Board, (ii) Chief Executive Officer, or (iii) Secretary may call special meetings of our stockholders.

Indemnification and Limitation of Liability of Directors and Officers

Our Certificate of Incorporation provides that, to the fullest extent permitted by the Delaware General Corporate Law (“DGCL”), our directors shall not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director. Section 102(7) of the DGCL, however, states that such a provision may not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to us or our stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, relating to unlawful dividends, distributions or the repurchase or redemption of stock or (iv) for any transaction from which the director derives an improper personal benefit.

Our By-Laws provide we shall indemnify and hold harmless, to the fullest extent permitted by the DGCL, any person against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred in connection with any threatened, pending or completed legal proceedings in which such person is involved by reason of the fact that he is or was a director or officer of ours if he acted in good faith and in a manner that he reasonably believed to be in or not opposed to our best interests, and, with respect to any criminal action or proceeding, if he had no reasonable cause to believe that his conduct was unlawful. If the legal proceeding, however, is by or in our right, such director or officer may not be indemnified in respect of any claim, issue or matter as to which he shall have been adjudged to be liable to us unless a court determines otherwise.

We may enter into agreements to indemnify our directors and officers in addition to the indemnification provided for in our Certificate of Incorporation. Such agreements, among other things, would indemnify our directors and officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts incurred by such person in any action or proceeding, including any action by or in our rights, on account of services as our director or officer or as a director or officer of any subsidiary of ours, or as a director or officer of any other company or enterprise to which the person provides services at our request.

We intend to obtain directors and officers’ liability insurance providing coverage to our directors and officers.

Annual Meeting of Stockholders

Our By-Laws provide that an annual meeting of stockholders will be held each year on a date fixed by resolution of our Board of Directors. The first annual meeting of our stockholders after the spin-off is expected to be held on [____].

48

In order for a stockholder to bring, pursuant to our By-Laws, nominations or other proposals before the 2010 annual stockholders meeting, the stockholder must comply with the requirements for stockholder proposals set forth in the Proxy Statement relating to such meeting and submit such proposals by [___________].

Submission of Proposals for the [_____] 2010 Annual Meeting of Stockholders

Stockholders who wish to present proposals for inclusion in our proxy materials in connection with the 2010 annual meeting of stockholders must submit such proposals in writing to our Corporate Secretary at 11 Largo Drive South, Stamford, Connecticut 06907, which proposals must be received at such address no later than [_________].

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form 10 with respect to the shares of our common stock to be received by the stockholders of IDT in the spin-off. This information statement does not contain all of the information set forth in the Form 10 registration statement and the exhibits to the Form 10 registration statement. For further information with respect to Holdings and the shares of our common stock, reference is hereby made to the Form 10 registration statement, including its exhibits. Statements made in this information statement relating to the contents of any contract, agreement or other documents are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document, with each such statement being qualified in all respects by reference to the document to which it refers. You may review a copy of the Form 10 registration statement, including its exhibits, at the SEC’s public reference room, located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain copies of all or any part of these materials from the SEC upon the payment of certain fees prescribed by the SEC. You may obtain further information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. In addition, copies of the Form 10 registration statement and related documents may be obtained through the SEC Internet address at http://www.sec.gov.

As a result of the spin-off, we will become subject to the information and reporting requirements of the Securities Exchange Act of 1934 and, in accordance with the Exchange Act, will file reports, proxy statements and other information with the SEC. After the spin-off, these reports, proxy statements and other information may be inspected and copied at the public reference facilities of the SEC listed above. You also will be able to obtain copies of this material from the public reference facilities of the SEC as described above, or inspect them without charge at the SEC’s website.

In addition, we intend to furnish holders of our common stock with annual reports containing consolidated financial statements audited by an independent accounting firm.

49

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS*

CONSOLIDATED FINANCIAL STATEMENTS OF

CTM MEDIA HOLDINGS, INC.

Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements	F-2
Consolidated Balance Sheets as of  July 31, 2008 and 2007	F-3
Consolidated Statements of Operations for the Years Ended July 31, 2008 and 2007	F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended July 31, 2008 and 2007	F-5
Consolidated Statements of Cash Flows for the Years Ended July 31, 2008 and 2007	F-6
Notes to Consolidated Financial Statements	F-7
Condensed Consolidated Unaudited Balance Sheets as of   April 30 , 2009 and July 31, 2008	F- 21
Condensed Consolidated Unaudited Statements of Operations for the nine months ended April 30 , 2009 and 2008	F- 22
Condensed Consolidated Unaudited Statements of Cash Flows for the nine months ended April 30 , 2009 and 2008	F- 23
Notes to Condensed Unaudited Consolidated Financial Statements	F- 24

* As described in the Risk Factors and elsewhere in the information statement, these financial statements should not be relied upon as an indication of Holdings’ future financial performance or expense structure.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON

CONSOLIDATED FINANCIAL STATEMENTS

The Board of Directors and Stockholders of CTM Media Holdings, Inc,

We have audited the accompanying consolidated balance sheets of CTM Media Holdings, Inc. as of July 31, 2008 and 2007, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended July 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of CTM Media Holdings, Inc. at July 31, 2008 and 2007, and the consolidated results of their operations and their cash flows for each of the two years in the period ended July 31, 2008, in conformity with generally accepted accounting principles in the United States of America.

/s/  Zwick & Steinberger, P.L.L.C.

Zwick & Steinberger, P.L.L.C.

Southfield, Michigan

May 12, 2009, except as to the first paragraph in Note 11,

which is dated June 25, 2009.

F-2

CTM MEDIA HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

July 31 (in thousands)	2008			2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	5,590		$	5,697
Trade accounts receivable, net of allowance for doubtful accounts		4,563			3,149
Inventory		806			267
Prepaid expenses		805			509
TOTAL CURRENT ASSETS		11,764			9, 622
Property and equipment, net		4,594			8,262
Goodwill		32,643			33,411
Licenses and other intangibles, net		825			557
Other assets		184			158
TOTAL ASSETS	$	50,010		$	52,010
LIABILITIES AND STOCKHOLDER’S EQUITY
CURRENT LIABILITIES:
Trade accounts payable	$	1,374		$	602
Accrued expenses		1,530			985
Deferred revenue		2,118			2,326
Due to IDT Corporation		22,924			21,147
Capital lease obligations—current portion		156			76
Other current liabilities		646			501
TOTAL CURRENT LIABILITIES		28,748			25,637
Deferred income tax liabilities, net		—			—
Capital lease obligations—long-term portion		476			275
TOTAL LIABILITIES		29,224			25,912
Minority interests		1,077			1,218
Commitments and contingencies
STOCKHOLDERS’ EQUITY:
Preferred stock, $.01 par value; authorized shares—10,000; no shares issued		—			—
Class A common stock, $.01 par value; authorized shares— 35,000 ; no shares issued		—			—
Class B common stock, $.01 par value; authorized shares— 65,000 ; no shares issued		—			—
Class C common stock, $.01 par value; authorized shares—15,000; no shares issued		—			—
Additional paid-in capital		33,144			33,077
Accumulated other comprehensive income		188			99
Accumulated deficit		(13,623	)		(8,296	)
TOTAL STOCKHOLDERS’ EQUITY		19,709			24,880
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	50,010		$	52,010

See accompanying notes to consolidated financial statements.

F-3

CTM MEDIA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Year ended July 31 (in thousands)	2008			2007
REVENUES	$	32,626		$	23,025
COSTS AND EXPENSES:
Direct cost of revenues (exclusive of depreciation and amortization)		12,566			7,284
Selling, general and administrative		18,277			13,457
Depreciation and amortization		2,078			1,388
Bad debt		472			150
Impairment and severance charges		3,683			116
TOTAL COSTS AND EXPENSES		37,076			22,395
(Loss) income from operations		(4,450	)		630
Interest income, net		57			82
Other (expense) income, net		(99	)		(354	)
(Loss) income before minority interests and income taxes		(4,492	)		358
Minority interests		(378	)		(107	)
Provision for income taxes		(457	)		(532	)
NET LOSS	$	(5,327	)	$	(281	)

See accompanying notes to consolidated financial statements.

F-4

CTM MEDIA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’EQUITY

(in thousands)

	Additional paid-in capital		Accumulated Other Comprehensive Income (Loss)			Accumulated deficit			Total Stockholders’ Equity
BALANCE AT JULY 31, 2006	$	33,035	$	55		$	(8,015	)	$	25,075
Stock based compensation		42		—			—			42
Foreign currency translation adjustment		—		44			—			44
Net loss for the year ended July 31, 2007		—		(281	)		(281	)		(281	)
Comprehensive income			$	(237	)
BALANCE AT JULY 31, 2007		33,077		99			(8,296	)		24,880
Stock based compensation		67		—			—			67
Foreign currency translation adjustment		—		89			—			89
Net loss for the year ended July 31, 2008		—		(5,327	)		(5,327	)		(5,327	)
Comprehensive loss			$	(5,238	)
BALANCE AT JULY 31, 2008	$	33,144	$	188		$	(13,623	)	$	19,709

See accompanying notes to consolidated financial statements.

F-5

CTM MEDIA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended July 31 (in thousands)	2008			2007
OPERATING ACTIVITIES
Net loss	$	(5,327	)	$	(281	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,078			1,388
Impairment charges		3,480			—
Minority interests		378			107
Provision for doubtful accounts receivable		(472	)		(150	)
Stock-based compensation		67			42
Change in assets and liabilities, net of effects from acquisitions/dispositions of businesses:
Trade accounts receivable		(1,900	)		411
Other current assets and other assets		(845	)		(105	)
Trade accounts payable, accrued expenses, other current liabilities and other liabilities		1,622			259
Deferred revenue		(207	)		(156	)
Net cash (used in) provided by operating activities		(182	)		2,025
INVESTING ACTIVITIES
Capital expenditures		(907	)		(718	)
Purchase of businesses by CTM		(158	)		(95	)
Acquisition of IDW, net of cash acquired		—			(2,430	)
Net cash used in investing activities		(1,065	)		(3,243	)
FINANCING ACTIVITIES
Distributions to minority shareholders of subsidiaries		(520	)		—
Funding provided by (repaid to) IDT Corporation		1,777			3,677
Repayments of capital lease obligations		(117	)		(62	)
Net cash provided by financing activities		1,140			3,615
Net increase (decrease) in cash and cash equivalents		(107	)		2,397
Cash and cash equivalents at beginning of year		5,697			3,300
Cash and cash equivalents at end of year	$	5,590		$	5,697
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments made for interest	$	25		$	24
Cash payments made for income taxes	$	65		$	150
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Purchases of property and equipment through capital lease obligations	$	398		$	295

The effect of exchange rate changes on cash and cash equivalents is not material.

See accompanying notes to consolidated financial statements.

F-6

CTM MEDIA HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Description of Business and Summary of Significant Accounting Policies

Description of Business

CTM Media Holdings, Inc. (“Holdings” or the “Company”), following the spin-off, will include the following businesses spanning several industries:

·   CTM Media Group (“CTM”), our brochure distribution company, other advertising-based new product initiatives focused on small to medium sized businesses;

·   Our majority interest in Idea and Design Works, LLC (“IDW”), which is a comic book and graphic novel publisher that creates and licenses original intellectual property; and

·   The WMET-AM radio station in the Washington, D.C. metropolitan area (“WMET”);

IDT Corporation has approved a spin off of these businesses. The spin-off will separate these businesses from IDT Telecom, IDT Energy and IDT’s alternative energy initiatives, as well as other interests of IDT Corporation. The Company, along with IDT Corporation’s management, believes that the operational and growth prospects of the above businesses may best be realized by a separation from those non-spun-off businesses based on several factors including synergies and growth support.

Basis of Accounting and Consolidation

Holdings was incorporated in May 2009 in the state of Delaware. The consolidated financial statements include the assets, liabilities and results of operations of the entities included in Holdings to be spun-off, are reflected as if Holdings existed and owned these entities in all periods presented, or from the date an entity was acquired, if later. All material intercompany balances and transactions have been eliminated in consolidation. The historical cost basis of assets and liabilities has been reflected in these financial statements. Historically, the businesses included in Holdings operated independently on a stand-alone basis. Direct expenses incurred by IDT Corporation on behalf of the businesses included in the consolidated financial statement are reflected in these financial statements.   The most significant expenses are as follows. Medical and dental benefits were allocated to the Company based on rates similar to COBRA health benefit provision rates charged to former IDT employees. Stock-based compensation and retirement benefits under the defined contribution plan were allocated to the Company based on specific identification. Insurance was allocated to the Company based on a combination of headcount and specific policy identification.  Facility costs as well as certain salaries consisting of payroll, human resources, network and telephone services, legal, security and travel were allocated to the Company based on estimates of the incremental cost incurred by IDT related to Holdings, Management believes that the assumptions and methods of allocation used underlying the consolidated financial statements are reasonable. However, the costs as allocated to the Company are not necessarily indicative of the costs that would have been incurred if the Company operated as a stand-alone entity. Therefore the consolidated financial statements included herein may not necessarily be indicative of the financial position, results of operations, changes in stockholders’ equity and cash flows of the Company to be expected in the future or what they would have been had the Company been a separate stand-alone entity during the periods presented.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

Revenue Recognition

Revenues from CTM brochure distribution are recognized based on distribution of brochures into racks.  Revenues from CTM printing services are recognized based on delivery of print job by subcontractors to CTM’s warehouse .  Revenues from CTM publication guides are recognized based on publication release date of guides, which is the same date as distribution . IDW's primary revenue is recognized, net of an allowance for estimated sales returns , at the time of shipment of its graphic novels and comic books by IDW's distributor to its customers, and when all of the conditions specified by Statement of Financial Accounting Standards (“SFAS”) No. 48, Revenue Recognition When Right of Return Exists, are met.   Sales returns allowances represent a reserve for products that may be returned due to dating, competition or other marketing matters, or certain destruction in the field. Sales returns are generally estimated and recorded based on historical sales and returns experience and current trends that are expected to continue. Licensing revenues are recognized upon execution of the agreement for such rights, and other creative revenues are recognized upon completion of services rendered on a contractual basis. WMET recognizes revenue through rental of airtime slots as well as the sale of advertising, upon the airing of the programming or advertising.

Direct Cost of Revenues

Direct cost of revenues excludes depreciation and amortization expense.  Direct costs of revenues for CTM consist primarily of distribution and fulfillment salaries and print and design expenses.  Direct cost of revenues for IDW consists primarily of printing costs, salaries and royalties to artists.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company holds cash and cash equivalents and marketable securities at several major financial institutions, which often exceed FDIC insured limits. Historically, the Company has not experienced any losses due to such concentration of credit risk.

Inventory

Inventory for IDW consists of graphic novels and comic books. Inventory for IDW is stated at the lower of cost or market determined by the first in, first out method.

F-7

Property and Equipment

Equipment, computer software and furniture and fixtures are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives, which range as follows: equipment—5, 7 or 20 years; computer software—2, 3 or 5 years and furniture and fixtures—5, 7 or 10 years. Leasehold improvements are recorded at cost and are depreciated on a straight-line basis over the term of their lease or their estimated useful lives, whichever is shorter.

Long-Lived Assets

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company tests the recoverability of its long-lived assets with finite useful lives whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Company tests for impairment based on the projected undiscounted cash flows to be derived from such asset. If the projected undiscounted future cash flows are less than the carrying value of the asset, the Company will record an impairment loss based on the difference between the estimated fair value and the carrying value of the asset. The Company generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. Cash flow projections and fair value estimates require significant estimates and assumptions by management. Should the estimates and assumptions prove to be incorrect, the Company may be required to record impairments in future periods and such impairments could be material.

Goodwill and Other Intangibles

Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, goodwill and other indefinite lived intangible assets are not amortized. These assets are reviewed annually (or more frequently under various conditions) for impairment using a fair value approach. The goodwill impairment assessment involves estimating the fair value of the reporting unit and comparing it to its carrying amount. If the carrying value of the reporting unit exceeds its estimated fair value, additional steps are followed to determine if an impairment of goodwill is required. The fair value of the reporting units is estimated using discounted cash flow methodologies, as well as considering third party market value indicators. Calculating the fair value of the reporting units requires significant estimates and assumptions by management. Should the estimates and assumptions regarding the fair value of the reporting units prove to be incorrect, the Company may be required to record additional impairments to its goodwill in future periods and such impairments could be material. Costs associated with obtaining the right to use trademark and patents owned by third parties are capitalized and amortized on a straight-line basis over the term of the trademark and patents licenses.

Repairs and Maintenance

The Company charges the cost of repairs and maintenance, including the cost of replacing minor items not constituting substantial betterment, to selling, general and administrative expenses as these costs are incurred.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries denominated in foreign currencies are translated to U.S. Dollars at end-of-period rates of exchange, and their monthly results of operations are translated to U.S. Dollars at the average rates of exchange for that month. Gains or losses resulting from such foreign currency translations are recorded in “Accumulated other comprehensive income (loss)” in the accompanying consolidated balance sheets.

Income Taxes

These financial statements include provisions for federal, state and foreign income taxes on a separate tax return basis . The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in its assessment of a valuation allowance. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of such change.

Effective August 1, 2007, the Company adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS 109 and prescribes that a company should use a more-likely-than-not recognition threshold based on the technical merits of the tax position taken or expected to be taken. Tax positions that meet the more-likely-than-not recognition threshold should be measured in order to determine the tax benefit to be recognized in the financial statements. Additionally, FIN 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

F-8

Commitments and Contingencies

The Company records and discloses commitments and contingencies in accordance with SFAS No. 5, Accounting for Contingencies, and related Interpretations. The Company accrues for loss contingencies when both (a) information available prior to issuance of the financial statements indicates that it is probable that a liability had been incurred at the date of the financial statements and (b) the amount of loss can reasonably be estimated. When the Company accrues for loss contingencies and the reasonable estimate of the loss is within a range, the Company records its best estimate within the range. When no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. In accordance with SFAS 5, an estimated possible loss or a range of loss is disclosed when it is at least reasonably possible that a loss may have been incurred.

Stock-Based Compensation

The Company accounted for stock-based compensation granted to its employees by IDT Corporation in accordance with the fair value recognition provisions of SFAS 123 (revised 2004), Share-Based Payment. Under SFAS 123(R), compensation cost recognized based on the grant-date fair value. In accordance with Staff Accounting Bulletin (“SAB”) No. 107 issued in March 2005, stock-based compensation is included in selling, general and administrative expense.

Vulnerability Due to Certain Concentrations

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, and trade accounts receivable. The Company’s temporary cash investments policy is to limit the dollar amount of investments with any one financial institution and monitor the credit ratings of its counterparties. While the Company may be exposed to credit losses due to the nonperformance of its counterparties, the Company does not expect the settlement of these transactions to have a material effect on its results of operations, cash flows or financial condition. IDW has one single customer, Diamond Comic Distributors, which is the major distributor of comic books in the United States. Revenues from this customer represented approximately 24.8% and 3.9% of the total consolidated revenues for the years ended July 31, 2008 and 2007, respectively. No other single customer accounted for more than 10% of consolidated revenues in fiscal 2008 or fiscal 2007. The receivable balances from this customer represented proximately 21.4% and 24.3% of the total consolidated trade accounts receivable at July 31, 2008 and 2007, respectively. In addition, one customer of CTM represented approximately 13.5% of the total consolidated trade accounts receivable at July 31, 2007.

This concentration of customers increases the Company’s risk associated with nonpayment by those customers. For CTM concentration of credit risk with respect to trade accounts receivable is limited due to the large number of customers in various geographic regions and industry segments comprising the Company’s customer base.

Sales Returns and Allowances

IDW offers its sole distributor, Diamond Comic Distributors, a right of return with no expiration date.  Diamond Comic Distributors then offers this same right of return to its largest chain retailers. IDW records an estimate for sales return reserves from such retailers based on historical return experiences.

The change in the allowance for sales returns is as follows:

Year ended July 31 (in thousands)	Balance at beginning of year		Balance at acquisition		Additions charged to revenues		Actual returns			Balance at end of year
2008
Reserves deducted from accounts receivable:
Allowance for sales returns	$	523	$	—	$	1,156	$	(1,530	)	$	149
2007
Reserves deducted from accounts receivable:
Allowance for sales returns	$	—	$	306	$	276	$	(59	)	$	523

Allowance for Doubtful Accounts

The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. The allowance is determined based on known troubled accounts, historical experience and other currently available evidence.

F-9

The change in the allowance for doubtful accounts is as follows:

Year ended July 31 (in thousands)	Balance at beginning of year		Additions charged to costs and expenses		Deductions(1)			Balance at end of year
2008
Reserves deducted from accounts receivable:
Allowance for doubtful accounts	$	218	$	472	$	(553	)	$	137
2007
Reserves deducted from accounts receivable:
Allowance for doubtful accounts	$	225	$	150	$	(157	)	$	218

(1) Uncollectible accounts written off, net of recoveries.

Fair Value of Financial Instruments

The estimated fair value of financial instruments has been determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. At July 31, 2008 and 2007, the carrying value of the Company’s trade accounts receivable, prepaid expenses, short term investments, trade accounts payable, income taxes payable, accrued expenses, deferred revenue, capital lease obligations—current portion and other current liabilities approximate fair value because of the short period of time to maturity. At July 31, 2008 and 2007, the carrying value of the long term portion of the Company’s capital lease obligations approximate fair value as their contractual interest rates approximate market yields for similar debt instruments.

Recently Issued Accounting Standards Not Yet Adopted

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations. SFAS 141(R) establishes principles and requirements for how the acquirer: (a) recognizes and measures the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase, and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) requires the acquiring entity in a business combination to recognize the full fair value of the assets acquired and liabilities assumed in the transaction at the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date; the immediate expense recognition of transaction costs; changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense; and restructuring plans will be accounted for separately from the business combination, among other things. In April 2009, the FASB issued FSP 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, which amends and clarifies SFAS 141(R) with regards to the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. The Company is required to apply SFAS 141(R) and FSP 141(R)-1 to business combinations with an acquisition date on or after August 1, 2009. SFAS 141(R) fundamentally changes many aspects of existing accounting requirements for business combinations. As such, if the Company enters into any business combinations after the adoption of SFAS 141(R), a transaction may significantly impact the Company’s financial position and results of operations, but not cash flows, when compared to acquisitions accounted for under current US GAAP.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51. SFAS 160 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Also, SFAS 160 requires consolidated net income (loss) to include the amounts attributable to both the parent and the noncontrolling interest, and it requires disclosure of the amounts of net income (loss) attributable to the parent and to the noncontrolling interest. Finally, SFAS 160 requires increases and decreases in the noncontrolling ownership interest amount to be accounted for as equity transactions, and the gain or loss on the deconsolidation of a subsidiary will be measured using the fair value of any noncontrolling equity investment rather than the carrying amount of the retained investment. The Company is required to adopt SFAS 160 on August 1, 2009. Upon the adoption of SFAS 160, the Company will change the classification and presentation of noncontrolling interest in its financial statements, which is currently referred to as minority interests. The Company is still evaluating the impact that SFAS 160 will have on its consolidated financial statements, but the Company does not expect SFAS 160 to have a material impact on its financial position, results of operations or cash flows.

F-10

In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The Company is required to adopt FSP 142-3 on August 1, 2009. The guidance in FSP 142-3 for determining the useful life of a recognized intangible asset shall be applied prospectively to intangible assets acquired after adoption, and the disclosure requirements shall be applied prospectively to all intangible assets recognized as of, and subsequent to, adoption. The Company is currently evaluating the impact of FSP 142-3 on its consolidated financial statements.

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the guidance in US GAAP for assessing whether an impairment of a debt security is other than temporary, and revises the presentation and disclosure in the financial statements of other than temporary impairments of debt and equity securities. The Company is required to adopt FSP 115-2 on May 1, 2009. In addition, in April 2009, the Securities and Exchange Commission (“SEC”) amended Topic 5.M. in the Staff Accounting Bulletin Series entitled Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities to exclude debt securities from its scope. Topic 5.M., as amended, maintains the staff’s previous views related to equity securities. The Company is currently evaluating the impact of FSP 115-2 on its consolidated financial statements. The Company does not expect the amendment to Topic 5.M. to have a material impact on its financial position, results of operations or cash flows.

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, which amends SFAS 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. The FSP also requires entities to disclose the methods and significant assumptions used to estimate fair value of financial instruments in interim financial statements, and to highlight any changes in the methods and assumptions from prior periods. FSP 107-1 became effective for the Company’s financial statements beginning on May 1, 2009. The Company will include the disclosures required by FSP 107-1 in its consolidated financial statements for its first quarter ending October 31, 2009.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events, to establish principles and requirements for subsequent events, in particular: (a) the period after the balance sheet date during which management of a reporting entity shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (b) the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements, and (c) the disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective prospectively for interim or annual financial periods ending after June 15, 2009. SFAS 165 should not result in significant changes in the subsequent events that the Company reports in its financial statements, because it does not change the previous recognition and disclosure guidance in the accounting literature and it does not change the date through which the Company was expected to evaluate subsequent events. This statement requires management to disclose the date through which subsequent events have been evaluated, which the Company will begin to disclose in its financial statements for the year ending July 31, 2009.

In June of 2009, the FASB approved its Accounting Standards Codification, or Codification, as the single source of authoritative United States accounting and reporting standards applicable for all non-governmental entities, with the exception of the SEC and its staff. The Codification, which changes the referencing of financial standards, is effective for interim or annual financial periods ending after September 15, 2009. Therefore, in the first quarter of fiscal 2010, all references made to US GAAP will use the new Codification numbering system prescribed by the FASB. As the Codification is not intended to change or alter existing US GAAP, it is not expected to have any impact on the Company’s consolidated financial position or results of operations.

Note 2—Acquisitions

In June 2007, the Company acquired a controlling interest in IDW for $2.4 million, which is net of cash acquired of $1.6 million. Following the acquisition, the Company contributed cash in the amount of $1.0 million to IDW. IDW is a comic book and graphic novel publisher that creates and licenses original intellectual property.

Note 3—Accounts Receivable

Accounts receivable consists of the following:

July 31 (in thousands)	2008			2007
Trade receivable	$	4,849		$	3,890
Less reserve for returns		(149	)		(523	)
Less allowance for doubtful accounts		(137	)		(218	)
Accounts receivable, net	$	4,563		$	3,149

Note 4—Property and Equipment

Property and equipment consists of the following:

July 31 (in thousands)	2008		2007
Radio Tower	$	3,706	$	7,187
Equipment		6,651		5,937
Vehicles		1,834		1,430

F-11

July 31 (in thousands)	2008			2007
Leasehold improvements		561			513
Computer software		681			621
		13,433			15,688
Less accumulated depreciation and amortization		(8,839	)		(7,426	)
Property, plant and equipment, net	$	4,594		$	8,262

In the fourth quarter of fiscal 2008, the Company assessed the value of its WMET-AM radio station in the Washington, D.C. metropolitan area. The Company measured WMET’s fair value by discounting its estimated future cash flows using an appropriate discount rate. As a result of this assessment, the Company recorded an impairment charge of $3.5 million on certain of WMET’s fixed assets, measured by the excess of the carrying amount of the asset group over the estimated fair value.

Fixed assets under capital leases were $0.8 million and $0.6 million at July 31, 2008 and 2007, respectively. The accumulated depreciation related to these assets under capital leases was $0.2 million and $0.1 million at July 31, 2008 and 2007, respectively. Depreciation of fixed assets under capital leases is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Depreciation and amortization expense of property, plant and equipment was $0.1 million in fiscal 2008 and fiscal 2007.

Note 5—Goodwill, Licenses and Other Intangibles

In the fourth quarter of fiscal 2008, the Company assessed the value and evaluated the financial performance of its reporting units. The Company measured the fair value of the reporting units by discounting their estimated future cash flows using an appropriate discount rate. As a result of this analysis, no impairment was recorded by the Company on goodwill.

The table below reconciles the change in the carrying amount of goodwill by operating segment for the period from July 31, 2006 to July 31, 2008:

(in thousands)	CTM			IDW			WMET		Total
Balance as of July 31, 2006	$	29,435		$	—		$	1,150	$	30,585
Acquisitions		95			—			—		95
Acquisition of IDW		—			2,731			—		2,731
Balance as of July 31, 2007	$	29,530		$	2,731		$	1,150	$	33,411
Acquisitions		158			—			—		158
Purchase price allocation of IDW		—			(925	)		—		(925	)
Foreign currency translation adjustments		(1	)		—			—		(1	)
Balance as of July 31, 2008	$	29,687		$	1,806		$	1,150	$	32,643

F-12

The table below presents information on the Company’s licenses and other intangible assets:

(in thousands)	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Balance
As of July 31, 2008:
Intangible assets with indefinite life:
FCC licenses	Indefinite life	$	499	$	—		$	499
Amortized intangible assets:
Customer lists	5 years		25		—			25
Licenses and other intangible assets	2.5 years		1,138		(837	)		301
Total licenses and other intangibles		$	1,662	$	(837	)	$	825
As of July 31, 2007:
Intangible assets with indefinite life:
FCC licenses	Indefinite life	$	499	$	—		$	499
Amortized intangible assets:
Customer lists	5 years		25		—			25
Other intangible assets	5 years		200		(167	)		33
Total licenses and other intangibles		$	724	$	(167	)	$	557

Amortization expense of licenses and other intangible assets was $0.6 million and nil in fiscal 2008 and fiscal 2007, respectively. The Company estimates that amortization expense of intangible assets with finite lives will be $0.2 million, $0.1 million, and nil in fiscal 2009, fiscal 2010 and fiscal 2011, respectively.

See Note 15 for subsequent event related impairment charges.

Note 6—Income Taxes

Significant components of the Company’s deferred tax assets and deferred tax liabilities consist of the following:

July 31 (in thousands)	2008			2007
Deferred tax assets:
Bad debt reserve	$	54		$	87
Accrued expenses		46			42
Exercise of stock options and lapsing of restrictions on restricted stock		82			55
Depreciation / Amortization		1,392			—
Net operating loss		2,169			1,596
Total deferred tax assets		3,743			1,780
Valuation allowance		(3,743	)		(1,780	)
NET DEFERRED TAX ASSETS	$	—		$	—

The provision for income taxes consists of the following for the years ended July 31:

(in thousands)	2008		2007
Current:
Federal	$	—	$	258
State and local		325		370
Foreign		132		162
		457		790
Deferred:
Federal		—		(258	)
PROVISION FOR INCOME TAXES	$	457	$	532

F-13

The differences between income taxes expected at the U.S. federal statutory income tax rate and income taxes provided are as follows for the years ended July 31:

(in thousands)	2008			2007
U.S. federal income tax at statutory rate	$	(1,572	)	$	225
Change in valuation allowance		1,572			(225	)
Foreign tax rate differential		132			162
State and local income tax, net of federal benefit		310			370
Other		15			—
PROVISION FOR INCOME TAXES	$	457		$	532

At July 31, 2008, the Company had federal and state net operating loss carry-forwards of approximately $6.5 million. This carry-forward loss is available to offset future U.S. federal and state taxable income. The net operating loss carry-forwards will start to expire in fiscal 2026, with fiscal 2008’s loss expiring in fiscal 2029. The Company has no foreign net operating losses. The utilization of the net operating loss carry-forwards is subject to certain limitations as a result of the planned spin-off.

The Company has not recorded U.S. income tax expense for foreign earnings, as such earnings are permanently reinvested outside the U.S. The cumulative undistributed foreign earnings are included in accumulated deficit in the Company’s consolidated balance sheets, and consisted of approximately $1 million at July 31, 2008. Upon distribution of these foreign earnings, the Company may be subject to U.S. income taxes and foreign withholding taxes, however, it is not practicable to determine the amount, if any, which would be paid.

Effective August 1, 2007, the Company adopted FIN 48, which, among other things, clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS 109 and prescribes that a company should use a more-likely-than-not recognition threshold based on the technical merits of the tax position taken or expected to be taken. The adoption of FIN 48 resulted in a one-time decrease in the opening balance of accumulated deficit of $267 thousand.

The table below summarizes the change in the balance of unrecognized income tax benefits for the year ended July 31, 2008:

(in thousands)
Balance, August 1, 2007 (excludes interest)	$	267
Additions based on tax positions related to the current year		263
Additions for tax positions of prior years		16
Reductions for tax positions of prior years		—
Settlements		—
Lapses of statutes of limitations		—
Balance, July 31, 2008	$	546

The Company classifies interest and penalties on income taxes as a component of income tax expense. As of August 1, 2007, accrued interest expense relating to the unrecognized tax benefits was $15,000. In the year ended July 31, 2008, the Company recorded additional interest expense of $16,000. As of July 31, 2008, accrued interest expense included in current income taxes payable was $31,000.

IDT Corporation currently remains subject to examinations of its tax returns as follows: U.S. federal tax returns for fiscal 2005 to fiscal 2008, state and local tax returns generally for fiscal 2001 to fiscal 2008 and foreign tax returns generally for fiscal 2002 to fiscal 2008. The IRS is auditing IDT Corporation’s federal tax returns for fiscal years 2005, 2006 and 2007 .  No changes to Holdings is anticipated as a result of this audit.

Note 7— Additional Paid-in Capital

The additional paid-in capital represents IDT Corporation’s initial investment in the consolidated entities and subsequent investments and adjustments resulting from operations and various transactions between Holdings and IDT Corporation and its subsidiaries.

F-14

Note 8—Stock Based Compensation

Share-Based Compensation Plans

In September 2005, the Board of Directors of IDT Corporation approved and adopted, subject to stockholder approval, the 2005 Stock Option and Incentive Plan (the “Stock Option and Incentive Plan”) of IDT Corporation to provide incentives to executives, employees, directors and consultants of IDT Corporation and its subsidiaries. Incentives available under the Stock Option and Incentive Plan may include stock options, stock appreciation rights, limited rights, deferred stock units, and restricted stock. As part of this plan, stock options and restricted stock were granted to employees of the businesses included in these consolidated financial statements.

Compensation cost is generally recognized using the accelerated method over the vesting period. The compensation cost that has been charged against income for the Company’s share-based compensation plans was $0.1 million for fiscal 2008 and fiscal 2007. No income tax benefits were recognized in the consolidated statements of operations for share-based compensation arrangements during fiscal 2008 or fiscal 2007. The Company does not currently recognize the tax benefits resulting from tax deductions in excess of the compensation cost recognized from its share-based compensation because the Company does not currently expect to realize the tax benefit due to the uncertainty of future taxable income.

Stock Options

Option awards are generally granted with an exercise price equal to the market price of IDT Corporation’s stock at the date of grant. Option awards generally vest on a graded basis over three years of service and have ten-year contractual terms. The fair value of stock options are estimated on the date of the grant using a Black-Scholes valuation model that uses the assumptions noted in the following table. Expected volatility is based on historical volatility of IDT’s Class B common stock and other factors. The Company uses historical data on exercise of IDT Corporation stock options, post vesting forfeitures and other factors to estimate the expected term of the share-based payments granted. The risk free rate is based on the U.S. Treasury yield curve in effect at the time of grant. Generally, share-based payments become exercisable over a three-year graded vesting period, and stock options expire ten years from the date of grant.

	2008			2007
ASSUMPTIONS
Average risk-free interest rate		4.26	%		4.71	%
Expected dividend yield		—			4.4	%
Expected volatility		25	%		26	%
Expected term	5.2 years			5.2 years

Restricted Stock

The fair value of nonvested shares of IDT Corporation’s Class B common stock is determined based on the closing price of IDT Corporation’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service and have ten-year contractual terms.

As part of the expected spin-off, holders of restricted stock of IDT will receive, in respect of those restricted shares, one share of the Company’s Class A common stock for every three restricted shares of IDT that they own as of the record date of the spin-off. Those particular shares of the Company’s stock will be restricted under the same terms as the IDT restricted shares in respect of which they were issued. The restricted shares of the Company’s stock received in the spin-off are subject to forfeiture on the same terms and restrictions as the corresponding IDT shares.

A summary of the status of the IDT Corporation’s nonvested restricted shares as of July 31, 2008 and changes in fiscal 2008 is presented below:

(in thousands)	Number of Nonvested Shares
Nonvested shares at July 31, 2007		591
Granted		247
Vested		(439	)
Forfeited		(5	)
Nonvested shares at July 31, 2008		394

F-15

Note 9—Accumulated Other Comprehensive Income (Loss)

The accumulated balances of comprehensive income (loss) related to foreign currency translation, as follows:

(in thousands)	Foreign currency translation
Balance at July 31, 2006	$	55
Change during the period		43
Balance at July 31, 2007		99
Change during the period		89
BALANCE AT JULY 31, 2008	$	188

Note 10—Impairment and Severance Charges

In fiscal 2008, WMET recorded an impairment charge of $3.5 million related to certain of its fixed assets.  Other severance charges related to workforce reductions.  See Note 15 for subsequent event related impairment charges.

Note 11—Commitments and Contingencies

Legal Proceedings

On January 30, 2009, IDW received a letter from a law firm representing George and Ginger Criswell and Green School Network, Inc. demanding $500,000 as a result of alleged infringement of intellectual property of the Criswells related to the Michael Recycle book published by IDW.  In June 2009, the parties agreed to a settlement consisting of the following material terms : (a) upfront remuneration from IDW of $25,000; (b) a co-existence agreement and full release; (c) a book publication contract from IDW for Ms. Criswell’s Recycle Michael: I’ll Do My Part book; (d) IDW’s right of first refusal regarding the publication of a second Recycle Michael title by Ms. Criswell; and (e) a royalty of 1.5% of net sales arising from IDW’s publication of the book entitled Michael Recycle Meets Litterbug Doug.

In addition to the foregoing, the Company is subject to other legal proceedings that have arisen in the ordinary course of business and have not been finally adjudicated. Although there can be no assurance in this regard, in the opinion of the Company’s management, none of the legal proceedings to which the Company is a party, whether discussed above or otherwise, will have a material adverse effect on the Company’s results of operations, cash flows or its financial condition.

Lease Commitments

The future minimum payments for capital and operating leases as of July 31, 2008 are approximately as follows:

(in thousands)	Operating Leases		Capital Leases
Year ending July 31:
2009	$	490	$	189
2010		264		189
2011		176		185
2012		145		113
2013		40		32
Thereafter		—		—
Total payments	$	1,115		708
Less amount representing interest				(77	)
Less current portion				(156	)
Capital lease obligations—long-term portion			$	475

Rental expense under operating leases was approximately $1.6 million and $1.5 million in fiscal 2008 and fiscal 2007, respectively.

Other Commitments and Contingencies

The Company has purchase commitments and other obligations of approximately $0.2 million as of July 31, 2008.

F-16

Note 12—Related Party Transactions

In fiscal 2008 and 2007, IDT Corporation, the parent company, charged to Holdings certain transactions and allocated routine expenses based on company specific items.  In addition IDT Corporation controlled the flow of the Company’s treasury transactions.  The Company’s allocated expenses amounted to $1.6 million in fiscal 2008, and 2007. It is expected that the total balance of the “Due to IDT Corporation” will be converted to equity upon consummation of the spin-off.

The Company’s liability to IDT Corporation fluctuates primarily due to operating expenses paid by IDT Corporation on behalf of Holdings and the transfers of funds.  The Company’s liability to IDT Corporation at July 31 is as follows:

	Years ended July 31,
	2008		2007
(in thousands)
Opening Balance	$	21,147	$	17,470
Expenses paid by IDT Corporation on behalf of the Company		1,649		1,569
Transfer of funds  from IDT Corporation, net		128		2,108
Ending Balance	$	22,924	$	21,147
Average Balance Owed to IDT Corporation:	$	22,160	$	17,605

CTM distributes brochures for ETR Brochures, Inc., a brochure distribution firm controlled by Howard S. Jonas. ETR Brochures also distributes brochures for CTM. In fiscal 2008, CTM billed ETR Brochures approximately $35,000 for distribution services and ETR Brochures billed CTM approximately $144,000 for distribution services. The net balance owed to ETR Brochures, Inc. by CTM was approximately $8,000 as of July 31, 2008.  In fiscal 2007, CTM billed ETR Brochures approximately $19,000 for distribution services and ETR Brochures billed CTM approximately $127,000 for distribution services.  The net balance owed to ETR Brochures by CTM was approximately $2,500 as of July 31, 2007.   These transactions were approved in accordance with IDT Corporation’s Related Person Transaction policy described in its 2008 Proxy Statement and 2007 Proxy Statement.  We intend for the relationship between CTM and ETR to continue after the spin-off.

For a complete list of IDT Corporation’s fiscal 2008 and fiscal 2007 related person transactions, please see IDT Corporation’s 2008 Proxy Statement, filed with the SEC on November 7, 2008 and 2007 Proxy Statement, filed with the SEC on November 15, 2007.

Note 13—Defined Contribution Plans

IDT Corporation maintains a 401(k) Plan (the “Plan”) available to all employees meeting certain eligibility criteria, which also covered the employees of the Company. The Plan permits participants to contribute up to 20% of their salary, not to exceed the limits established by the Internal Revenue Code. The Plan provided for discretionary matching contributions of 50%, up to the first 6% of compensation, to be invested in IDT Corporation Class B common stock. The discretionary matching contributions vest over five years. The Plan permits the discretionary matching contributions to be granted as of December 31 of each year. All contributions made by participants vest immediately into the participant’s account. In fiscal 2008 and fiscal 2007, the Company’s contributions to the Plan were $0.1 million. The Common stock and Class B common stock of IDT Corporation are not investment options for the Plan’s participants. The Company plans to offer its own 401(K) Plan to its employees after the consummation of the spin-off.

Note 14—Business Segment Information

The Company has the following two reportable business segments: CTM and IDW. CTM consists of our brochure distribution company and other advertising-based new product initiatives focused on small to medium sized businesses. IDW is a comic book and graphic novel publisher that creates and licenses original intellectual property. The results of operations of WMET do not comprise a separate segment and are reported under the heading “Other.” WMET-AM operates a radio station in the Washington, D.C. metropolitan area.

The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker.

F-17

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates the performance of its business segments based primarily on operating income (loss). There are no other significant asymmetrical allocations to segments. Operating results for the business segments of the Company are as follows:

(in thousands)	CTM			IDW		Other			Total
Year ended July 31, 2008
Revenues	$	21,603		$	9,856	$	1,167		$	32,626
Operating income (loss)		(343	)		463		(4,569	)		(4,450	)
Depreciation and amortization		740			661		677			2,078
Impairment and severance charges		203			-		3,480			3,683
Total assets at July 31, 2008	$	38,600		$	7,124	$	4,286		$	50,010
Year ended July 31, 2007
Revenues	$	20,342		$	1,355	$	1,327		$	23,025
Operating income(loss)		1,962			22		(1,354	)		630
Depreciation and amortization		729			1		658			1,388
Severance charges		116								116
Total assets at July 31, 2007	$	37,499		$	6,258	$	8,253		$	52,010

Revenues from customers located outside of the United States represented approximately 9.3% and 12.1% of total consolidated revenues in fiscal 2008 and fiscal 2007, respectively. Revenues by country are determined based on the country where the customer is invoiced. Net long-lived assets and net total assets held outside of the United States, primarily in Canada, totaled approximately $0.3 million and $3.0 million, respectively, as of July 31, 2008 and $0.2 million and $2.6 million, respectively, as of July 31, 2007.

Note 15—Subsequent Events

The Company recorded aggregate preliminary goodwill impairment charges of $32.6 million in the nine months ended April 30, 2009. In the second quarter of fiscal 2009, the following events and circumstances indicated that the fair value of certain of the Company’s reporting units may be below their carrying value: (1) a significant adverse change in the business climate, (2) operating losses of reporting units, and (3) significant revisions to internal forecasts. The Company measured the fair value of its reporting units by discounting their estimated future cash flows using an appropriate discount rate. The carrying value including goodwill of CTM, IDW and WMET exceeded their estimated fair value, therefore additional steps were performed for these reporting units to determine whether an impairment of goodwill was required. As a result of this analysis, in the nine months ended April 30, 2009, the Company recorded preliminary goodwill impairment, which is subject to adjustment, of $29.7 million in CTM, $1.8 million in IDW, and $1.1 million in WMET, which reduced the carrying amount of the goodwill in each of these reporting units to zero. The Company recorded the preliminary amounts because it was probable that goodwill was impaired, and the amount of impairment could be reasonably estimated. The Company expects to complete the goodwill impairment analysis in the fourth quarter of fiscal 2009. Calculating the fair value of the reporting units, and allocating the estimated fair value to all of the tangible assets, intangible assets and liabilities, requires significant estimates and assumptions. Should these estimates or assumptions prove to be incorrect, the Company may adjust its preliminary impairment in future periods.

Prior to consummation of the spin-off, IDT will transfer its ownership in all of the entities that are consolidated with Holdings in these financial statements to the Company.

The authorized capital stock of Holdings consists of (a)  35 million shares of Class A common stock, (b) 65 million shares of Class B common stock, (c ) 15 million shares of Class  C common stock , and ( d ) 10 million shares of Preferred Stock.

Following effectiveness of the registration statement of which these financial statements form apart, the outstanding capital stock of Holdings (currently consisting of 100 shares of Class A common stock, all of which is held by IDT Corporation) will be split so that the number of shares of each of class of common stock that are outstanding equals the number to be distributed in the spin-off of Class A common stock, Class B common stock and Class B common stock described in the Information Statement in which these financial statements are included.  Thereafter, the spin-off, consisting of a distribution of (i) one share of Class A common stock of Holdings for every three shares of common stock of IDT Corporation held as of the record date for the spin-off, (ii) one share of Class B common stock of Holdings for every three shares of Class B common stock of IDT Corporation held as of the record date for the spin-off, and (iii) one share of Class C common stock of Holdings for every three shares of Class A common stock of IDT Corporation held as of the record date for the spin-off, will be completed to the holders of all classes of IDT common stock as of the record date for the spin-off.

F-18

The entities to become direct or indirect subsidiaries of the Company are: CTM Media Group, Inc.; Beltway Acquisition Corporation; IDT Local Media, Inc. (which is an indirect subsidiary of IDT Corporation that conducted certain operations related to CTM Media Group, which business lines are no longer active) and IDT Internet Mobile Group, Inc. (“IIMG”).  IIMG owns approximately 53% of the equity interests in Idea and Design Works, LLC.

All inter-company indebtedness owed by any of the entities to be included in the spin-off to IDT Corporation or its affiliates will be capitalized prior to consummation of the spin-off.

Note 16—Selected Quarterly Financial Data (Unaudited)

The table below presents selected quarterly financial data of the Company for its fiscal quarters for fiscal 2008 and fiscal 2007:

Quarter Ended (in thousands)	Revenues		Direct cost of revenues		(Loss) income from operations			Net (loss) income
2008:
October 31	$	7,782	$	2,919	$	442		$	134
January 31		7,031		2,979		(1,622	)		(1,382	)
April 30		7,463		3,094		(455	)		(427	)
July 31(a)		10,350		3,574		(2,815	)		(3,652	)
TOTAL	$	32,626	$	12,566	$	(4,450	)	$	(5,327	)
2007:
October 31	$	5,768	$	1,503	$	1,153		$	747
January 31		4,926		1,408		(87	)		(144	)
April 30		4,617		1,784		(685	)		(797	)
July 31		7,714		2,589		249			(87	)
TOTAL	$	23,025	$	7,284	$	630		$	(281	)

(a) Included in loss from operations impairment charges of $3.5 million and contribution of IDW operations.

F-19

CTM MEDIA HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	April 30, 2009			July 31, 2008
	(Unaudited)			(Note 1)
	(in thousands)
Assets
Current assets:
Cash and cash equivalents	$	4,009		$	5,590
Short-term investment		1,019			—
Trade accounts receivable, net of allowance for doubtful accounts of $516 at April 30, 2009 and $137 at July 31, 2008		3,500			4,563
Inventory		1,306			806
Prepaid expenses		1,017			805
Total current assets		10,851			11,764
Property, plant and equipment, net		4,133			4,594
Goodwill		—			32,643
Licenses and other intangibles, net		636			825
Other assets		158			184
Total assets	$	15,778		$	50,010
Liabilities and stockholder’s (deficit) equity
Current liabilities:
Trade accounts payable	$	1,032		$	1,374
Accrued expenses		1,998			1,530
Deferred revenue		1,541			2,118
Due to IDT Corporation		24,047			22,924
Capital lease obligations—current portion		177			156
Other current liabilities		429			646
Total current liabilities		29,224			28,748
Capital lease obligations—long-term portion		408			476
Total liabilities		29,632			29,224
Minority interests		—			1,077
Commitments and contingencies
Stockholder’s (deficit) equity:
Preferred stock, $.01 par value; authorized shares—10,000; no shares issued		—			—
Class A common stock, $.01 par value; authorized shares—35,000; no shares issued		—			—
Class B common stock, $.01 par value; authorized shares—65,000; no shares issued		—			—
Class C common stock, $.01 par value; authorized shares—15,000; no shares issued		—			—
Additional paid-in capital		33,140			33,144
Accumulated other comprehensive income		89			188
Accumulated deficit		(47,083	)		(13,623	)
Total stockholder’s (deficit) equity		(13,854	)		19,709
Total liabilities and stockholder’s (deficit) equity	$	15,778		$	50,010

See accompanying notes to condensed consolidated financial statements.

F-20

CTM MEDIA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Nine Months Ended April 30,
	2009			2008
	(in thousands)
Revenues	$	23,392		$	22,276
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)		10,553			8,991
Selling, general and administrative		11,796			13,329
Depreciation and amortization		1,148			1,066
Bad debt		708			326
Impairment and severance charges		33,335			199
Total costs and expenses		57,540			23,911
Loss from operations		(34,148	)		(1,635	)
Interest (expense) income, net		(38	)		58
Other income (expense), net		7			(101	)
Loss from continuing operations before minority interests and income taxes		(34,179	)		(1,678	)
Minority interests		737			(250	)
(Provision for) benefit from income taxes		(19	)		253
Net loss	$	(33,461	)	$	(1,675	)

See accompanying notes to condensed consolidated financial statements.

F-21

CTM MEDIA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended April 30,
	2009			2008
	(in thousands)
Net cash (used in) provided by operating activities	$	(764	)	$	(356	)
Investing activities
Capital expenditures		(454	)		(642	)
Purchase of businesses by CTM		—			(158	)
Purchase of short term investments		(1,019	)		—
Net cash used in investing activities		(1,473	)		(800	)
Financing activities
Funding provided by IDT Corporation		1,123			1,919
Distributions to minority shareholders of subsidiaries		(340	)		(520	)
Repayments of capital lease obligations		(127	)		(67	)
Net cash provided by financing activities		656			1,332
Net (decrease) increase in cash and cash equivalents		(1,581	)		176
Cash and cash equivalents, beginning of period		5,590			5,697
Cash and cash equivalents, end of period	$	4,009		$	5,873
Supplemental schedule of non-cash investing activities
Purchases of property and equipment through capital lease obligations	$	95		$	234

The effect of exchange rate changes on cash and cash equivalents is not material.

See accompanying notes to condensed consolidated financial statements.

F-22

CTM MEDIA HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of CTM Media Holdings, Inc. and its subsidiaries (the “Company” or “Holdings”) have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. Holdings was incorporated in May 2009. The accompanying unaudited condensed consolidated financial statements include the assets, liabilities and results of operations of the entities included in Holdings to be spun-off, are reflected as if Holdings existed and owned these entities in all periods presented.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended April 30 , 2009 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2009. The balance sheet at July 31, 2008 has been derived from the Company’s audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in this registration statement.

Note 2—Fair Value Measurements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement on Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements, which is effective for fiscal years beginning after November 15, 2007 and for interim periods within those years. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, establishes a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value, and expands the related disclosure requirements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements. SFAS 157 indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. SFAS 157 defines fair value based upon an exit price model.

In February 2008, the FASB issued FASB Staff Position (“FSP”) 157-2, Effective Date of FASB Statement No. 157, which delays the effective date of the application of SFAS 157 for all nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis to fiscal years beginning after November 15, 2008. Nonrecurring nonfinancial assets and nonfinancial liabilities include those measured at fair value in goodwill impairment testing, indefinite lived intangible assets measured at fair value for impairment testing, those initially measured at fair value in a business combination, and nonfinancial liabilities initially measured at fair value for exit or disposal activities. The Company is required to adopt SFAS 157 for nonrecurring nonfinancial assets and nonfinancial liabilities on August 1, 2009. The Company does not expect the adoption of SFAS 157 for nonrecurring nonfinancial assets and nonfinancial liabilities to have a material impact on its financial position, results of operations or cash flows.

The Company adopted SFAS 157 except as permitted under FSP 157-2 as of August 1, 2008, which did not have a material impact on its financial statements. On October 10, 2008, the FASB issued FSP 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which clarifies application of SFAS 157 in a market that is not active. FSP 157-3 was effective upon issuance, including prior periods for which financial statements have not been issued. The Company adopted FSP 157-3 in October 2008.

SFAS 157 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

F-23

As of April 30 , 2009, the Company had no balances of assets and liabilities measured at fair value on a recurring basis.

Effective August 1, 2008, the Company adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of SFAS 115. SFAS 159 permits companies to choose to measure selected financial assets and liabilities at fair value. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS 157 and SFAS 107, Disclosures about Fair Value of Financial Instruments. The Company chose not to elect the fair value option for the valuation of any of its eligible assets or liabilities, therefore the adoption of SFAS 159 had no impact on the Company’s financial position, results of operations or cash flows.

Note 3—Comprehensive Loss

The Company’s comprehensive loss consists of the following:

	Nine Months Ended April 30,
	2009			2008
	(in thousands)
Net loss	$	(33,461	)	$	(1,675	)
Foreign currency translation adjustments		(99	)		96
Comprehensive loss	$	(33,560	)	$	(1,579	)

Note 4— Impairment and Severance Charges

The Company recorded aggregate preliminary goodwill impairment charges of $32.6 million in the nine months ended April 30, 2009. In the second quarter of fiscal 2009, the following events and circumstances indicated that the fair value of certain of the Company’s reporting units may be below their carrying value: (1) a significant adverse change in the business climate, (2) operating losses of reporting units, and (3) significant revisions to internal forecasts. The Company measured the fair value of its reporting units by discounting their estimated future cash flows using an appropriate discount rate. The carrying value including goodwill of CTM, IDW and WMET exceeded their estimated fair values, therefore additional steps were performed for these reporting units to determine whether an impairment of goodwill was required. As a result of this analysis, in the nine months ended April 30, 2009, the Company recorded preliminary goodwill impairment, which is subject to adjustment, of $29.7 million in CTM, $1.8 million in IDW, and $1.1 million in WMET, which reduced the carrying amount of the goodwill in each of these reporting units to zero. The Company recorded the preliminary amounts because it was probable that goodwill was impaired, and the amount of impairment could be reasonably estimated. The Company expects to complete the goodwill impairment analysis in the fourth quarter of fiscal 2009. Calculating the fair value of the reporting units, and allocating the estimated fair value to all of the tangible assets, intangible assets and liabilities, requires significant estimates and assumptions. Should these estimates or assumptions prove to be incorrect, the Company may adjust its preliminary impairment in future periods.

The Company’s severance charges in the nine months ended April 30 , 2009 consist of workforce reductions in Holdings.

Note 5—Business Segment Information

The Company has the following two reportable business segments: CTM and IDW. CTM consists of our brochure distribution company and other advertising-based new product initiatives focused on small to medium sized businesses. IDW is a comic book and graphic novel publisher that creates and licenses original intellectual property. The results of operations of WMET do not comprise a separate segment and are reported under the heading “Other.” WMET-AM operates a radio station in the Washington, D.C. metropolitan area.

F-24

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates the performance of its business segments based primarily on operating income (loss). There are no other significant asymmetrical allocations to segments. Operating results for the business segments of the Company are as follows: The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker.

Operating results for the business segments of the Company are as follows:

(in thousands)	CTM			IDW			Other			Total
Nine Months Ended April 30, 2009
Revenues	$	14,214		$	8,254		$	924		$	23,392
Operating loss		(31,097	)		(1,308	)		(1,743	)		(34,148	)
Impairment and severance charges		30,300			1,825			1,210			33,335
Total assets at April 30, 2009		7,187			5,705			2,887			15,778
Nine Months Ended April 30, 2008
Revenues	$	14,778		$	6,626		$	872		$	22,276
Operating (loss) income		(1,046	)		227			(816	)		(1,635	)
Impairment and severance charges		199			—			—			199
Total assets at April 30, 2008		38,649			7,314			6,924			52,887

Note 6—Legal Proceedings

On January 30, 2009, IDW received a letter from a law firm representing George and Ginger Criswell and Green School Network, Inc. demanding $500,000 as a result of alleged infringement of intellectual property of the Criswells related to the Michael Recycle book published by IDW.  In June 2009, the parties agreed to a settlement consisting of the following material terms : (a) upfront remuneration from IDW of $25,000; (b) a co-existence agreement and full release; (c) a book publication contract from IDW for Ms. Criswell’s Recycle Michael: I’ll Do My Part book; (d) IDW’s right of first refusal regarding the publication of a second Recycle Michael title by Ms. Criswell; and (e) a royalty of 1.5% of net sales arising from IDW’s publication of the book entitled Michael Recycle Meets Litterbug Doug.

In addition to the foregoing, the Company is subject to other legal proceedings that have arisen in the ordinary course of business and have not been finally adjudicated. Although there can be no assurance in this regard, in the opinion of the Company’s management, none of the legal proceedings to which the Company is a party, whether discussed above or otherwise, will have a material adverse effect on the Company’s results of operations, cash flows or its financial condition.

Note 7—Recently Issued Accounting Standards Not Yet Adopted

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations. SFAS 141(R) establishes principles and requirements for how the acquirer: (a) recognizes and measures the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase, and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) requires the acquiring entity in a business combination to recognize the full fair value of the assets acquired and liabilities assumed in the transaction at the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date; the immediate expense recognition of transaction costs; changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense; and restructuring plans will be accounted for separately from the business combination, among other things. In April 2009, the FASB issued FSP 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, which amends and clarifies SFAS 141(R) with regards to the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. The Company is required to apply SFAS 141(R) and FSP 141(R)-1 to business combinations with an acquisition date on or after August 1, 2009. SFAS 141(R) fundamentally changes many aspects of existing accounting requirements for business combinations. As such, if the Company enters into any business combinations after the adoption of SFAS 141(R), a transaction may significantly impact the Company’s financial position and results of operations, but not cash flows, when compared to acquisitions accounted for under current US GAAP.

F-25

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51. SFAS 160 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Also, SFAS 160 requires consolidated net income (loss) to include the amounts attributable to both the parent and the noncontrolling interest, and it requires disclosure of the amounts of net income (loss) attributable to the parent and to the noncontrolling interest. Finally, SFAS 160 requires increases and decreases in the noncontrolling ownership interest amount to be accounted for as equity transactions, and the gain or loss on the deconsolidation of a subsidiary will be measured using the fair value of any noncontrolling equity investment rather than the carrying amount of the retained investment. The Company is required to adopt SFAS 160 on August 1, 2009. Upon the adoption of SFAS 160, the Company will change the classification and presentation of noncontrolling interest in its financial statements, which is currently referred to as minority interests. The Company is still evaluating the impact that SFAS 160 will have on its consolidated financial statements, but the Company does not expect SFAS 160 to have a material impact on its financial position, results of operations or cash flows.

In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The Company is required to adopt FSP 142-3 on August 1, 2009. The guidance in FSP 142-3 for determining the useful life of a recognized intangible asset shall be applied prospectively to intangible assets acquired after adoption, and the disclosure requirements shall be applied prospectively to all intangible assets recognized as of, and subsequent to, adoption. The Company is currently evaluating the impact of FSP 142-3 on its consolidated financial statements.

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the guidance in US GAAP for assessing whether an impairment of a debt security is other than temporary, and revises the presentation and disclosure in the financial statements of other than temporary impairments of debt and equity securities. The Company is required to adopt FSP 115-2 on May 1, 2009. In addition, in April 2009, the SEC amended Topic 5.M. in the Staff Accounting Bulletin Series entitled Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities to exclude debt securities from its scope. Topic 5.M. as amended maintains the staff’s previous views related to equity securities. The Company is currently evaluating the impact of FSP 115-2 on its consolidated financial statements. The Company does not expect the amendment to Topic 5.M. to have a material impact on its financial position, results of operations or cash flows.

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, which amends SFAS 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. The FSP also requires entities to disclose the methods and significant assumptions used to estimate fair value of financial instruments in interim financial statements, and to highlight any changes in the methods and assumptions from prior periods. FSP 107-1 became effective for the Company’s financial statements beginning on May 1, 2009. The Company will include the disclosures required by FSP 107-1 in its consolidated financial statements for its first quarter ending October 31, 2009.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events, to establish principles and requirements for subsequent events, in particular: (a) the period after the balance sheet date during which management of a reporting entity shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (b) the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements, and (c) the disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective prospectively for interim or annual financial periods ending after June 15, 2009. SFAS 165 should not result in significant changes in the subsequent events that the Company reports in its financial statements, because it does not change the previous recognition and disclosure guidance in the accounting literature and it does not change the date through which the Company was expected to evaluate subsequent events. This statement requires management to disclose the date through which subsequent events have been evaluated, which the Company will begin to disclose in its financial statements for the year ending July 31, 2009.

In June of 2009, the FASB approved its Accounting Standards Codification, or Codification, as the single source of authoritative United States accounting and reporting standards applicable for all non-governmental entities, with the exception of the SEC and its staff. The Codification, which changes the referencing of financial standards, is effective for interim or annual financial periods ending after September 15, 2009. Therefore, in the first quarter of fiscal 2010, all references made to US GAAP will use the new Codification numbering system prescribed by the FASB. As the Codification is not intended to change or alter existing US GAAP, it is not expected to have any impact on the Company’s consolidated financial position or results of operations.

F-26