Compensation Committee Charter

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I. Purpose

A.       The purposes and responsibilities of the Compensation Committee ("Committee") of the Board of Directors ("Board") of Vonage Holdings Corp. (collectively, referred to with its subsidiaries as the "Company") shall be to discharge the Board's responsibilities relating to compensation of the Company's executive officers, including oversight of the Company's development of a performance-based compensation philosophy focused on long-term shareholder value. The Committee has overall responsibility for approving and evaluating executive officer compensation plans, policies and programs of the Company. In particular, the Committee shall determine the corporate goals and objectives relevant to the Chief Strategist and the Chief Executive Officer ("CEO") and set the Chief Strategist's and the CEO's compensation in light of such goals and objectives. It shall also review and approve corporate goals and objectives relevant to compensation of the other executive officers of the Company, evaluate the performance of such executive officers in light of these goals and objectives, and determine or make recommendations to the Board with respect to the compensation of such executive officers based on this evaluation. The Committee shall also review and make recommendations to the Board with respect to the Company's non-director/executive officer incentive compensation plans, equity-based plans and employee benefit plans.

B.       The Compensation Committee shall annually prepare a report on executive officer compensation as required by the Securities and Exchange Commission under the Securities and Exchange Act of 1934, as amended (the "Exchange Act") to be included in the Company's annual proxy statement or annual report on Form 10-K filed with the Commission.

 

II. Committee Membership

A.       The Committee shall consist of no fewer than three members the exact number of which will be determined from time to time by the Board. The Board will appoint the members and the Chair of the Committee based on nominations made by the Nominating and Governance Committee. Each Committee member shall serve at the pleasure of the Board such term or terms as the Board, based upon the recommendation of the Nominating and Governance Committee, may determine or until such Committee member is no longer a member of the Company's Board.

B.       Each Committee member shall meet the independence criteria of the rules of the New York Stock Exchange and shall be a "non-employee director" within the meaning of the rules under Section 16 of the Exchange Act and an "outside director" for purposes of the regulations under Section 162(m) ("Section 162(m)") of the Internal Revenue Code of 1986, as amended.

 

III. Committee Authority and Responsibilities

A.       The Committee shall have the authority necessary to further the above described purpose, and such authority shall include, without limitation, the following responsibilities:

1.       On an annual basis (i) review and determine corporate goals and objectives relevant to Chief Strategist, CEO and executive officer compensation, (ii) evaluate performance of the Chief Strategist, the CEO and executive officers in light of these goals and objectives, (iii) set the Chief Strategist's and CEO's total compensation and make recommendations to the Board with respect to the total compensation of the executive officers, including base salary, annual and long-term incentive compensation, retirement, welfare and other benefits and perquisites. It shall also review the compensation of the head of Internal Audit.

2.       Review periodically and discuss with management (1) the Company's general compensation philosophy (which shall be performance-based), and (2) the Company's incentive compensation program for key executive and management employees, including, after receiving and reviewing the recommendations of management (a) determining the employees who are to participate in such incentive compensation plan, target bonus levels and forms of incentive compensation payments under the plan, and (b) after reviewing operating results and individual performance, making incentive compensation payments and awards under the plan.

3.       Establish performance goals and review and certify the attainment thereof, to the extent applicable, pursuant to Section 162(m).

4.       Establish and oversee the administration of the Company's equity-based plans, including restricted stock and stock option plans and deferred compensation plans for the Company's executive officers and employees.

5.       Review and approve all awards of shares or share options pursuant to Company's equity-based plans and set procedures for administering any equity-based plan.

6.       In conjunction with management, review the executive organization of the Company and oversee (i) the succession planning process, including the development of personnel to fill key executive and management positions and (ii) the implementation of succession planning for senior executive and management positions. The Committee shall review the Company's succession plan on an annual basis.

7.       Review periodically, make recommendations to the Board regarding, and oversee the administration of the Company's employee benefits plans, including group health and other insurance plans, profit sharing and pension plans, and other employee benefit plans.

8.       Review and make recommendations to the Board regarding all employment contracts and executive perquisite programs and all retirement, severance and other agreements and arrangements with the Company's executive officers.

9.       Annually review the Company's perquisite programs and have oversight for the total compensation of executive officers.

10.    In connection with any proposed acquisitions, review and approve compensation and benefit arrangements for directors and executive officers of the acquired company.

11.    Perform any other duties or responsibilities delegated to the Committee by the Board from time to time.

B.       The Committee shall hold such regular meetings as may be desirable, and such special meetings as may be called by the Chair of the Committee. The Chair of the Committee shall develop and set the Committee's agenda for each meeting. The Committee shall meet without management in separate executive sessions as part of each meeting. The Committee may form and delegate such authority of the Committee as it deems appropriate to one or more subcommittee(s), subject to the applicable requirements of the exemptions from Section 16(b) of the Exchange Act and Section 162(m).

C.      The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain and terminate compensation, accounting or other consultants to advise the Committee and to approve the consultant's fees and other retention terms. The Committee may request any officer or employee of the Company or the Company's outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.

 

IV. Accountability

At each of the Board's regular meetings, the Committee (i) shall report to the Board all actions the Committee has taken since the Board's most recent prior meeting and (ii) shall make recommendations to the Board regarding all items considered by the Committee since the Board's most recent prior meeting that require Board approval. The Committee shall annually review its own performance and this Charter. The Chair of the Committee shall report periodically to the Board in executive session on the Committee's activities, including an annual review of the Committee's performance in relation to its Charter and identify any executive compensation issues or concerns.

 

V. Operating Procedures

The operating procedures for the Committee with respect to meetings, notice of meetings, quorums and records shall be the same as stipulated for the Board set forth in the Company's By-laws.

 

VI. Compensation Committee Funding

As determined by the Committee, and approved by the Board, except as may be inconsistent with the rules of the New York Stock Exchange, the Company shall provide for appropriate funding, for payment of compensation to outside legal counsel or any other advisors employed by the Committee and ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.