Vonage Holdings 10-Q 2009
July 15, 2009
18 Ardmore Rd
Scarsdale, NY 10583
We are pleased to inform you that after careful consideration Vonage America, Inc. (the Company) has decided to extend this offer of employment, subject to the required approvals of the Board of Directors of Vonage Holdings Corp. This Offer Letter sets forth the terms of the Companys offer, which, if you accept, will govern your employment.
You will work at the Companys headquarters on a regular full-time basis, presently located in Holmdel, NJ.
4. Stock Options
In addition, you will be granted an option under Vonage Holding Corp.s Incentive Plan to purchase 450,000 shares of Vonage Holding Corp.s common stock in accordance with the Incentive Plan (the number of shares and exercise price are subject to adjustment based on subsequent stock splits, reverse stock splits, other adjustments, or recapitalizations). The options will vest and become exercisable as to 1/4th of the shares on each of the first, second, third and fourth anniversaries of the date of the award, which will be the first trading day of the month following approval by the Board of Directors. The exercise price will be the closing price of a share of Vonage stock on the date of the award. The stock option grant will be governed by and subject to the terms of Vonage Holding Corp.s Incentive Plan and your individual stock option agreement. A copy of the Incentive Plan and form of individual stock option agreement are included with this Offer Letter. Your actual individual stock option agreement will be forwarded to you at a later time, once the Board of Directors approves the grant and the exercise price is established.
The Company shall provide you, for period of twelve (12) months, lodging accommodations, in accordance with our Travel & Expense policy when working at the Holmdel, NJ location.
In addition, in the event your employment is terminated by the Company without Cause or by you with Good Reason, as defined below, you will be entitled to severance pay equal to twelve (12) months of your then-current base salary., less applicable withholding, which will be paid by the Company during its regular payroll cycle over the twelve (12) month period following your employment termination, provided you execute (and do not revoke) a Separation Agreement and General Release.
Cause means (i) material willful failure to perform your employment duties (not as consequence of any illness, accident or other disability), (ii) continued, willful failure to carry out any reasonable lawful direction of the Company, (iii) diverting or usurping a corporate opportunity of the Company, (iv) fraud, willful malfeasance, gross negligence or recklessness in the performance of employment duties, (v) other serious, willful misconduct which causes material injury to the Company or its reputation, including, but not limited to, willful or gross misconduct toward any of the Companys other employees, and (vi) conviction of a felony or a crime involving moral turpitude.
Good Reason means: (i) a material decrease in your base salary; (ii) a material diminution of your authorities, duties or responsibilities; (iii) a change in principle work location more than 25 miles south, or west of Holmdel, NJ (iv) a failure of the Company to pay material compensation due and payable to you in connection with your employment; provided, however, that no event or condition described in clauses (i) through (iii) shall constitute Good Reason unless (x) you give the Companys most senior Human Resources employee written notice of your intention to terminate your employment for Good Reason and the grounds for such termination within 45 days after the occurrence of the event giving rise to the Good Reason termination and (y) such grounds for termination (if susceptible to correction) are not corrected by the Company within 30 days of its receipt of such notice (or, in the event that such grounds cannot be corrected within such 30-day period, the Company has not taken all reasonable steps within such 30 day period to correct such grounds as promptly as practicable thereafter). If the Company does not correct the grounds for termination during such 30-day cure period, your
termination of employment for Good Reason may become effective within 30 days after the end of the cure period. Unless otherwise advised by the Company, you will be expected to perform services for the Company during the cure period.
If section 409A applies to payments under this Offer Letter, this Offer Letter shall be administered in accordance with section 409A, including the six-month delay
for specified employees. Any payments under this Agreement that are required to be postponed pursuant to section 409A shall be postponed for a period of six months after termination of employment, as required by section 409A. The accumulated postponed amount, with interest as described below, shall be paid to you in a lump sum payment within ten days after the end of the six-month period. If you die during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of section 409A, with interest, shall be paid to the personal representative of your estate within 60 days after the date of your death. If amounts are postponed on account of section 409A, the postponed amounts will be credited with interest for the postponement period at the prime rate published in the Wall Street Journal on your termination date.
Distributions upon termination of employment may only be made upon a separation from service as determined under section 409A. Each payment under this Offer Letter shall be treated as a separate payment for purposes of section 409A. In no event may, directly or indirectly, designate the calendar year of any payment to be made under this Offer Letter. All reimbursements and in kind benefits provided under this Offer Letter shall be made or provided in accordance with the requirements of section 409A of the Code.
United States law requires all companies to verify an employees authorization to work in the United States. If you accept this offer, you will need to bring certain documents with you on your first day that allows the Company to verify your work authorization. Enclosed is an Employment Eligibility Verification (form I-9). Please review the form and bring the appropriate documents required for employment verification on your start date. You will be asked to complete the form in the presence of a witness on your start date.
Also enclosed are a Direct Deposit Authorization Form and an Employee Withholding Allowance Certificate (W-4). Please complete these forms and bring them with you on your start date.
If these terms are agreeable to you, please sign and date the Offer Letter in the appropriate space at the bottom and return it to me by July 17, 2009. We are excited at the prospect of your joining the Company, and look forward to your future contributions.