Letter Agreement, dated May 8, 2011, between Vonage Corp. and Scott Ballantyne



 Exhibit 10.2 
 May 8, 2011 
 Scott Ballantyne 
 18745 Alicante Drive 
 Morgan Hill, CA 95037 

Dear Scott: 
 We are pleased to
inform you that after careful consideration, Vonage Holdings Corp. (the “Company”) is extending an offer of employment, subject to the approval of the Board of Directors of the Company. This offer letter (the “Offer
Letter”), if accepted by you and approved by the Board of Directors, shall set forth the terms of your employment. 
 1.
Employment 
  

	 	(a)	You will be employed in the position of Chief Marketing Officer. 

  

	 	(b)	You will report to Marc Lefar, Chief Executive Officer. 

  

	 	(c)	Your employment will commence on Monday, May 23, 2011 (the “Commencement Date”). 


2. Location 
 Your
primary office location will be at the Company’s headquarters, which is located in Holmdel, NJ. While the amount of time spent in this location may change over time depending upon business needs, acknowledging that more may be necessary early
in your tenure, the expectation is that you will be on site at least (3) three to (4) four days per week. The parties acknowledge that you will be commuting weekly between your home in Morgan Hill, California and the Company’s
headquarters. 
 3. Compensation 
  

	 	(a)	The Company will pay you an annual base salary (“Base Salary”) of $390,000, less applicable withholding, payable in equal installments in accordance
with the Company’s regular payroll practices for similarly situated employees, but in no event less frequently than biweekly in arrears. 

  

	 	(b)	 In addition to base salary, you will be eligible for a Target Bonus Opportunity (“TBO”) of 60% of your base salary. TBO payouts are
not guaranteed and are granted in the Company’s sole discretion. Your actual bonus payout may be greater or less than 60%, depending upon individual and Company performance.











	 	When made, TBO payouts are generally paid in late February/early March. You must be employed on the payout date to receive any TBO payout. 


 

	 	(c)	A one time sign-on bonus of $20,000 payable within the first two weeks of your employment, less applicable tax withholding. In the event your employment is
terminated by the Company for Cause (as defined below) or you voluntarily resign other than for Good Reason prior to the first anniversary of the Commencement Date, you agree to repay this one-time bonus. 


4. Stock Options 
 In addition, you will be granted an option under Vonage Holding Corp.’s 2006 Incentive Plan (the “Incentive Plan”) to purchase 1,000,000 shares of Vonage Holding Corp.’s common
stock, pursuant to a stock option agreement (the “Stock Option Agreement”) substantially in the form of the Company’s form of stock option agreement 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, as provided in the Incentive Plan). Subject to your continued employment on the applicable vesting dates, 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 [assuming Board approval and executive’s start date occur in the
same month; the executive’s grant date should not occur before his start date]. The exercise price will be the closing price of a share of Company stock on the date of the award. The stock option grant will be governed by and subject to the
terms of the Incentive Plan and the Stock Option Agreement and in the event of a conflict between this paragraph and the Incentive Plan and Stock Option Agreement, the terms of the Incentive Plan and Stock Option Agreement shall control. 

5. Housing and Travel 

The Company shall provide you with housing and travel benefits within the parameters listed below. 

 

	 	(a)	Shipping of Household Goods: The Company will arrange for personal belongings and household goods to be shipped to the destination location aboard a qualified
household goods carrier. Services include packing, loading and unloading household goods (excluding plants, food and other perishable items) from origin to final destination. 


 

	 	(b)	Housing Benefits: Reimbursement of reasonable expenses up to $4,000 per month for the cost of an apartment, furniture (if necessary), utilities, phone and
Internet access. 


  
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	 	(c)	Shipping of Auto: One (1) registered auto to be shipped on qualified carrier (does not include recreational vehicles, boats, motorcycles, jet skis,
snowmobiles, ATVs or antique vehicles). 

  

	 	(d)	Travel: Airfare for weekly trips between your home in Morgan Hill, CA and Holmdel, NJ. Travel and expense reimbursement in accordance with the Company’
travel and entertainment policy. 

  

	 	(e)	Tax Gross-Up: Possible tax liabilities that may result from the benefits provided under this paragraph 5 will not be paid by The Company


 any amounts paid or provided to you by the Company under Section (a) and (c) of this paragraph 5, as
well as any early lease termination fees, within thirty (30) days after such termination of your employment. 
 6. Severance

 In addition, in the event your employment is terminated by the Company without Cause or by you with Good
Reason, each 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 that the first payment shall be made on the sixtieth (60th) day after your termination of employment, and such first payment shall include payment of any amounts that
otherwise would be due prior thereto; provided, further, that the Company shall not be required to make the payments set forth in this paragraph 6 unless you execute and deliver to the Company a Separation Agreement and General Release
in a form reasonably acceptable to the Company in its sole discretion (the “Release”), and such Release has become effective and irrevocable in its entirety within sixty (60) days of your termination of employment. For the
avoidance of doubt, any severance payments payable pursuant to this paragraph 6 shall be forfeited unless an effective Release has been received by the Company and has become irrevocable no later than sixty (60) days following your termination
of employment. 
 “Cause” means (i) material 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) willful failure to comply with any of the material terms of this Offer Letter, (vi) 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 Company’s other employees, and (vii) conviction of, or plea of nolo contendre to, a felony or a crime involving moral
turpitude. 

  
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 “Good Reason” means: (i) a material decrease in your base salary;
(ii) a material diminution of your authorities, duties or responsibilities; (iii) 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 Company’s 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 (or take all reasonable steps within such 30 day period to correct such grounds as promptly as practicable thereafter), your
termination of employment for “Good Reason” shall become effective on the first business day following 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. 
 7. Benefits 
  

	 	(a)	You shall be entitled to participate in all employee health and welfare plans, programs and arrangements of the Company, in accordance with their respective terms, as
may be amended from time to time and on the basis no less favorable than that made available to other senior executives of the Company. 

  

	 	(b)	The Company will reimburse you for your reasonable out-of-pocket expenses actually incurred or paid by you for the continuation of your current medical and dental
benefits (excluding all other benefits, including vision benefits, which shall be your responsibility) during the sixty (60) day waiting period in the amount of 100% of such costs up to a maximum of $3,000 per month. 


 

	 	(c)	You are eligible to participate in the Company’s 401(k) plan on the first day of the month following the completion of three (3) months of employment.


  

	 	(d)	If you choose to participate in these benefits, you will receive a Summary Plan Description for the health and dental insurance, as well as the 401k plans. A copy of
the plan documents is available from the Plan Administrator (as defined in the Summary Plan Description). 

 8.
Miscellaneous 
  

	 	(a)	 In connection with your employment you will be required to enter into a Confidentiality and Innovations Agreement with the Company. You also will be
subject to a non-compete agreement under which you will be subject to non-



  
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solicitation and non-competition restrictive covenants during the term of your employment and for a period of one (1) year thereafter. 


 

	 	(b)	You hereby represent to the Company that you are under no obligation or agreement that would prevent you from becoming an employee of the Company or adversely impact
your ability to perform the expected responsibilities. By accepting this offer, you agree that no trade secret or proprietary information not belonging to you or the Company will be disclosed or used by you at the Company. 


 

	 	(c)	This Offer Letter is not an employment contract and does not create an implied or express guarantee of continued employment. By accepting this offer, you are
acknowledging that you are an employee at-will. This means that either you or the Company may terminate your employment at any time and for any reason or for no reason. This Offer Letter contains the entire agreement and understanding between you
and the Company with respect to the terms of your employment and supersedes any prior or contemporaneous agreements, understandings, communications, offers, representations, warranties, or commitments by or on behalf of the Company, whether written
or oral with respect to the terms of your employment. Except for amendments to increase compensation payable to you, the terms of this Offer Letter may not be amended except pursuant to a written agreement between you and the Company.


  

	 	(d)	Section 409A 

  

	 	(i)	The intent of the parties is that payments and benefits under this Offer Letter comply with or be exempt from Internal Revenue Code Section 409A and the
regulations and guidance promulgated there under (collectively “Section 409A”) and, accordingly, to the maximum extent permitted, this Offer Letter shall be interpreted to be exempt from Section 409A or in compliance therewith,
as applicable. If you notify the Company that you have received advice of tax counsel of national reputation with expertise in Section 409A that any provision of this Offer Letter (or of any award of compensation, including equity compensation
or benefits) would cause you to incur any additional tax or interest under Section 409A (with specificity as to the reason thereof) or the Company independently makes such determination, the Company shall, after consulting with you, reform such
provision to try to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A. To the extent that any provision hereof is modified in order to comply with or be
exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to you and the Company of the applicable provision without violating
the provisions of Section 409A. 


  
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	 	(ii)	A termination of employment shall not be deemed to have occurred for purposes of any provision of this Offer Letter providing for the payment of any amounts or benefits
that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a “separation from service” within the meaning of Section 409A and the
payment thereof prior to a “separation from service” would violate Section 409A. For purposes of any such provision of this Offer Letter relating to any such payments or benefits, references to a “termination,”
“termination of employment” or like terms shall mean “separation from service.” 

  

	 	(iii)	If, as of the date of your “separation from service” from the Company, you are a “specified employee” (within the meaning of that term under
Section 409A(a)(2)(B)), then with regard to any payment or the provision of any benefit that is considered “nonqualified deferred compensation” under Section 409A (whether under this Offer Letter, any other plan, program, payroll
practice or any equity grant) and is payable upon your separation from service, such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6) month-and-one-day period
measured from the date of your “separation from service,” and (B) the date of your death (the “Delay Period”) and this Offer Letter and each such plan, program, payroll practice or equity grant shall hereby be deemed
amended accordingly. Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this paragraph (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid
or reimbursed to you in a lump sum with interest at the prime rate as published in the Wall Street Journal on the first business day of the Delay Period (provided that any payment measured by a change in value that continues during the
Delay Period shall not be credited with interest for the Delay Period), and any remaining payments and benefits due under this Offer Letter shall be paid or provided in accordance with the regularly scheduled payment dates specified for them herein.


  

	 	(iv)	For purposes of Section 409A, your right to receive any installment payments pursuant to this Offer Letter shall be treated as a right to receive a series of
separate and distinct payments. Whenever a payment under this Offer Letter specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”),
the actual date of payment within the specified period shall be within the sole discretion of the Company. 

  

	 	(v)	 To the extent any reimbursement or in-kind payment provided pursuant to this Offer Letter is deemed nonqualified deferred compensation subject to
Section 409A then (i) all such expenses or other reimbursements as provided herein shall be payable in accordance with the Company’s policies in effect from time to time, but in any event shall be made on or prior to the last day




  
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of the taxable year following the taxable year in which such expenses were incurred by you; (ii) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any
way affect the expenses eligible for reimbursement in any other taxable year; and (iii) the right to such reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit. 


 

	 	(vi)	No amounts payable to you by the Company or any of its subsidiaries or affiliates under this Agreement or any other agreement that constitute nonqualified deferred
compensation subject to Section 409A shall be subject to offset by any other amount, except as permitted under Section 409A. 

 United States law requires all companies to verify an employee’s 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 Thursday, May 12, 2011. This Offer Letter will be of no force and effect if not signed and postmarked by Thursday,
May 12, 2011. We are excited at the prospect of your joining the Company, and look forward to your future contributions. 
 Sincerely,

 /s/ Marc Lefar 
 Marc Lefar

 Chief Executive Officer 
 Agreed
and Accepted: 
  

			
		
	Name:	 	/s/ Scott Ballantyne
		 	Scott Ballantyne
	Date: 	 	5/9/11


  
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