EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (this
“ Agreement ”), dated April 29, 2009, with an
effective date of January 2, 2009, is by and between IDT
Corporation, a Delaware corporation (the “ Company
”) and Abilio Pereira, an individual (the “
Employee ”).
WHEREAS, in recognition of the
Employee’s experience and abilities, the Company desires to
assure itself of the employment of the Employee in accordance with
the terms and conditions provided herein; and
WHEREAS, the Employee wishes to
continue to perform services for the Company in accordance with the
terms and conditions provided herein; and
NOW, THEREFORE, in consideration of
the promises and the respective covenants and agreements of the
parties herein contained, and intending to be legally bound hereby,
the parties hereto agree as follows:
1. Employment
. The Company hereby agrees to employ the Employee, and
the Employee hereby agrees to be employed by and perform services
for the Company or its subsidiaries and affiliates, on the terms
and conditions set forth herein.
2. Term
. The term of this Agreement is for a three (3) year
period (the “ Term ”) and shall commence as of
the date set forth above (the “ Start Date ”)
and terminate on January 1, 2012, or upon the Employee's earlier
death, or other termination of employment pursuant to Section 9
hereof. The Term shall automatically be renewed or
extended for additional one year periods beyond its otherwise
scheduled expiration unless, not later than ninety (90) days prior
to any such expiration, either party hereto shall have notified the
other party in writing that such renewal extension shall not take
effect.
3. Position .
During the Term, the Employee shall serve as the Chief Financial
Officer and Treasurer of the Company and in such other capacities
as shall be designated by the Board of Directors of the Company
(the “ Board ”) and agreed to by the Employee
from time to time.
4. Duties and
Reporting Relationship . During the Term, the
Employee shall, on a full-time basis, use his skills and render
services to the best of his abilities on behalf of the Company. The
Employee shall report directly to the Chairman and the Chief
Executive Officer (“ CEO ”) of the
Company. The Employee shall comply with all of the
policies and procedures of the Company.
5. Place of
Performance . The Employee shall perform his duties
and conduct his business on a full-time basis at the
Company’s Headquarters, except for required travel on Company
business.
6. Compensation
and Related Matters .
(a) Annual Base
Salary . The Company shall pay to the Employee an
annual base salary (the “ Base Salary ”) at a
rate of Four Hundred Thirty Five Thousand Dollars ($435,000.00),
payable in accordance with the Company’s standard payroll
practices, less applicable taxes and customary
withholdings. While this Agreement is in effect, the
Employee’s total “ Compensation ” (Base
Salary plus all bonus payments) shall be increased via a bonus
payment, if necessary, so that the Employee’s Compensation
remains at least 8.75% higher than the total compensation (base
salary plus any bonus payments) of the highest paid financial
officer/employee of the Company (during the prior fiscal year) or
any of its controlled entities (the “ Catch-up Bonus
”). The Catch-up Bonus shall be calculated at the
end of the Company’s fiscal year and shall be paid at the
same time bonuses are paid to other similarly situated executives
of the Company.
(b) Executive
Management Bonus Program . In the event the Company
establishes a bonus program for its senior executive management,
the Employee shall also be entitled to participate in such program
at a level as shall be approved by the Compensation Committee of
the Board.
(c) Employee
Benefits . During the Term, the Employee will be
eligible to participate in the Company’s medical, dental,
life and disability programs (collectively the " Programs ")
subject to the terms and conditions of the Programs. In
addition, during the Term, the Employee will be eligible to
participate in the Company’s 401(k) savings plan (the “
401(k) plan ”) subject to the terms and conditions of
the 401(k) plan.
(d)
Business Expenses . The Company shall reimburse the Employee
for all ordinary and necessary business expenses incurred by him in
connection with his employment (including without limitation,
expenses for travel (via coach class) and entertainment incurred in
conducting or promoting business for the Company) upon submission
by the Employee of receipts and other documentation in accordance
with the Company's normal business expense reimbursement
procedures. The Employee must use the Company’s
travel department to arrange for all business related
travel.
(e)
Paid Vacation . The Company will provide the Employee with
four (4) weeks of paid vacation during each calendar year during
the Term. The Employee shall be entitled to Paid
Holidays, Personal Days, and Sick Days as outlined in the
Company’s Policy Handbook for Employees.
7. Non-Disclosure
and Non-Competition Agreement . The Employee agrees that upon
execution of this Agreement, he will simultaneously execute the
Company’s standard Non-Disclosure and Non-Competition
Agreement, a copy of which is attached hereto as Exhibit
“A”. Notwithstanding anything to the
contrary contained herein, the remedies provided for in the
Non-Disclosure and Non-Competition Agreement are separate and
distinct from those provided for in this Agreement and in no event
shall such remedies be superseded by any provision contained
herein.
8.
Representations . The Employee represents and warrants to
the Company that the execution and delivery of this Agreement, and
the Non-Disclosure and Non-Competition Agreement, do not, and the
performance by the Employee of his obligations hereunder shall not,
conflict with, result in the breach of any provisions of or the
termination of, or constitute a default under, any agreement,
contract, or other obligation to assign inventions or to keep
information confidential, to which the Employee is a party or by
which the Employee was, is, or may be bound.
9.
Termination . The Employee’s employment
hereunder may be terminated without breach of this Agreement as
follows:
(a)
Death; Disability . The Employee’s
employment hereunder shall terminate upon his death or “
Disability ” (as hereinafter defined). Upon
any such termination, the Employee (or, in the event of his death,
his estate) (i) shall receive any accrued or vested compensation,
including salary, commission, bonus(es), through the “
Date of Termination ” (as hereinafter defined), (ii)
shall be reimbursed for unpaid and approved business expenses (in
accordance with the Company’s normal business expense
reimbursement procedures) through such Date of
Termination. The Employee (and in the event of his
death, his estate) shall not be entitled to any other amounts or
benefits from the Company or otherwise, except payments pursuant to
any Company life insurance program / policy then in
effect. For purposes of this Agreement, “
Disability ” shall mean the inability of the Employee
to perform his duties on account of a physical or mental illness
for a period of sixty (60) consecutive days or ninety (90) days in
any six (6) month period. If, during the Term, the
Employee’s employment is terminated by reason of the Employee
becoming Disabled, the Company shall pay to the Employee (or his
estate as applicable) any accrued or vested compensation including
salary, commission, bonus(es), through the Date of Termination and
the Employee (or his estate as applicable) shall be reimbursed for
unpaid and approved business expenses (in accordance with the
Company’s normal business expense reimbursement procedures)
through such Date of Termination. Notwithstanding
anything contained herein to the contrary, during any period of
Disability, the Company shall not be obligated to pay any
compensation or other amounts to the Employee except as expressly
provided by the Programs then in effect. In addition, in
the event of the Employee’s death, the Company shall pay to
the Employee’s estate his Base Salary (at the rate in effect
at the time of his death) for the greater of (I) the six
month period following the Employee’s death or (II) the
remainder of the Term of the Agreement, not to exceed one
year.
(b)
Cause; Resignation Without Good Reason . The
Company may terminate the Employee’s employment hereunder for
“ Cause ” (as hereinafter defined) or the
Employee may resign from his position with the Company without
“ Good Reason ” (as hereinafter
defined). For purposes of this Agreement, the Company
shall have “ Cause ” to terminate the
Employee’s employment hereunder (i) upon the Employee’s
indictment or conviction for the commission of an act or acts
constituting a felony under the laws of the United States or any
State thereof, (ii) upon the Employee’s commission of fraud,
embezzlement or gross negligence, (iii) upon the Employee’s
willful or continued failure to perform an act permitted by the
Company’s rules, policies or procedures, including without
limitation, the Company’s Code of Business
Conduct and Ethics that is within his material duties hereunder
(other than by reason of physical or mental illness or disability)
or directives of the Board after written notice has been delivered
to the Employee by the Company, which notice specifically
identifies the manner in which the Employee has not substantially
performed his duties, and the Employee's failure to substantially
perform his duties is not cured within fifteen (15) business days
after notice of such failure has been given to the Employee; (iv)
upon any misrepresentation by the Employee of a material fact to or
concealment by the Employee of a material fact from the Board, the
Chairman, the CEO and/or general counsel; or (v) upon
any material violation of the Company’s rules, policies or
procedures, including without limitation, the Company’s
Code of Business Conduct and Ethics. For
purposes of this Section 7(b), no act or failure to act on the
Employee's part shall be deemed "willful" unless done or omitted to
be done, by the Employee not in good faith and without reasonable
belief that the Employee's act, or failure to act, was in the best
interest of the Company.
If the Company terminates the
Employee’s employment for Cause, or if the Employee shall
resign from the Company without Good Reason, the Employee shall not
be entitled to any severance payments, any unvested stock options,
or other unvested equity incentive awards shall terminate, and the
Employee shall relinquish any and all rights to any amounts payable
and to any benefits otherwise provided for herein, provided that
the Employee shall (A) be entitled to receive accrued or vested
compensation, including salary, commission, and bonus(es), through
the Date of Termination, and (B) have the right to be
