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 and approve the corporate
goals and objectives relevant to the compensation of the Company's Chief Executive Officer ("CEO"), evaluate the CEO's
performance in light of those goals and objectives, and, as a committee or
together with the other independent directors (as directed by the Board), determine
and approve the CEO's compensation in light of such evaluation. It shall also determine and approve corporate
goals and objectives relevant to the 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 and
approve, as a committee or together with the other independent directors (as
directed by the Board), 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.
Committee shall annually prepare a report on executive officer compensation as
required by the Securities and Exchange Commission under the Securities 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. Membership and Qualifications
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 the recommendation of 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.
Committee member shall meet the independence criteria of the rules of the New
York Stock Exchange, including the standards specifically applicable to
compensation committee members, 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, and the Company's
Any action duly taken by the Committee shall be valid
and effective, whether or not the members of the Committee at the time of such
action are later determined not to have satisfied the requirements for
membership provided herein.
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 set the Committee's agenda for each
meeting. The Committee shall meet
without management in separate executive sessions. The Committee may form and delegate such
authority of the Committee as it deems appropriate to one or more
subcommittee(s) so long as such subcommittee is solely comprised of one or more
members of the Committee and subject to the applicable requirements of the
exemptions from Section 16(b) of the Exchange Act and Section 162(m).
Committee shall have the sole discretion to retain or obtain advice from,
oversee and terminate any compensation consultant, legal counsel or other
adviser to the Committee and be directly responsible for the appointment,
compensation and oversight of any work of such adviser retained by the
Committee. The Committee may request any
officer or employee of the Company or the Company's outside legal counsel or
outside auditor to attend a meeting of the Committee or to meet with any
members of, or compensation consultants, legal counsel or other advisers to, the
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 and recommend any changes to the
Board for approval. 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.
operating procedures for the Committee with respect to meetings, notice of
meetings, quorums and records shall be the same as stipulated for the Board in
the Company's By-laws.
IV. Committee Authority and Responsibilities
Committee shall have the authority necessary to further the above described
purposes, and such authority shall include, without limitation, the following
On an annual
basis (i) determine and approve corporate goals and objectives relevant to CEO
and executive officer compensation, (ii) evaluate performance of the CEO and
executive officers in light of these goals and objectives, and (iii) either as
a committee or together with the other independent directors (as directed by
the Board), determine and approve the CEO's compensation and the compensation
of the other executive officers, including base salary, annual and
long-term incentive compensation, retirement, welfare and other benefits and
perquisites. The Committee shall also review and approve the
compensation of the head of Internal Audit.
periodically and discuss with management (i) the Company's
general compensation philosophy (which shall be performance-based), and (ii)
the Company's incentive compensation program for key executive and management
employees, including (a) after receiving and reviewing the recommendations of
management, determining the employees who are to participate in such
incentive compensation plan and the 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.
performance goals and review and certify the attainment thereof, to the extent
applicable, pursuant to Section 162(m).
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.
approve all equity awards pursuant to the Company's
equity-based plans and set procedures for administering any equity-based
conjunction with management and in consultation with the Board, 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 key executive and management
positions. The Committee shall review
the Company's succession plan on an annual basis.
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
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, as well as
the Company's incentive compensation recoupment policy and procedures.
In the case
of any plans or amendments adopted pursuant to, or equity compensation grants made
in reliance on, an exemption from the shareholder approval requirements of Section
303A.08 of the New York Stock Exchange Listed Company Manual, approve such plans, amendments or grants.
discuss annually with management the Company's "Compensation Discussion and
Analysis" required by Item 402(b) of Regulation S-K (the "CD&A").
annually whether it will recommend to the Board that the CD&A be included
in the Company's Annual Report on Form 10-K, proxy statement on Schedule 14A
for the election of directors or information statement on Schedule 14C.
results of the most recent shareholder advisory vote on executive compensation
as required by Section 14A of the Exchange Act.
annual Compensation Committee Report required by Item 407(e)(5) of Regulation
connection with any proposed acquisitions, review and approve compensation and
benefit arrangements for directors and executive officers of the acquired
least annually the Company's compensation policies and practices for
executives, management employees and employees generally as they relate to the
Company's risk management practices, including (i) the relationship between the
Company's incentive programs and risk-taking, (ii) the manner in which risks
arising out of the Company's compensation policies and practices are monitored
and mitigated, and (iii) any adjustment of the Company's compensation policies
and practices to address changes in the Company's risk profile.
compliance of executive officers with the Company's program of required stock
to any compensation consultant who has been engaged by the Committee to provide
advice on the amount or form of executive compensation, (i) review and
pre-approve any other engagement of such consultant by the Company, (ii) review
at least annually the nature of any other services provided by such consultant
to the Company or management, as well as all related remuneration provided to
such consultant, and (iii) evaluate at least annually whether the work of any such
consultant has raised any conflict of interest in accordance with Item
407(e)(3)(iv) of Regulation S-K, and review any related disclosure required to
be provided in the Company's annual proxy statement.
receiving advice and then no less frequently than annually, assess the
independence of compensation consultants, legal counsel and other advisers to
the Committee, taking into consideration all relevant factors the Committee
deems appropriate to such adviser's independence, including factors specified
in the listing standards of the New York Stock Exchange.
years or more frequently as appropriate, make a recommendation to the Board
regarding the frequency of the advisory vote on the compensation of the
Company's named executive officers as required by Rule 14a-21 of the Exchange
other duties or responsibilities delegated to the Committee by the Board from
time to time.
V. Compensation Committee Funding
determined by the Committee, and without further action
by the Board, the Company shall provide for appropriate funding for payment of
compensation to any compensation consultant, legal counsel or other adviser
retained by the Committee and ordinary administrative expenses of the Committee
that are necessary or appropriate in carrying out its duties.