Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers (e) 2014 Bonus Metrics and Weightings On February 5, 2014, the Compensation Committee (the "Committee") of the Board of Directors (the "Board") of Vonage Holdings Corp. (the "Company") unanimously approved metrics and weightings with respect to annual bonuses for 2014 that will be payable, if and to the extent earned, in 2015. Upon recommendation of the Committee, on February 6, 2014, the Board ratified the same metrics and weightings for our Chief Executive Officer. The purpose of the Company's annual bonuses is (i) to promote the interests of the Company and its stockholders by incentivizing employees to achieve specified business objectives and (ii) to enable the Company to attract and retain skilled employees by providing attractive compensation opportunities linked to performance results. When determining the annual bonuses of the Company's executive officers and other bonus-eligible employees, the Committee (and the Board, with respect to our CEO) will take into account achievement of objective performance criteria as described below. The Committee may also consider discretionary factors relating to the executive's individual performance. The measures and weighting of those measures initially approved for 2014, are as follows:

              Metrics                     Weighting 
 
Core Business Service Revenue (1)   35% of target bonus 
 
Growth Service Revenue (2)          20% of target bonus 
 
Adjusted EBITDA (3)                 30% of target bonus 
 
Churn (4)                           15% of target bonus 
 
 
 
 
 
(1) Core Business Service Revenue includes revenues from Vonage's core United 
 
States and Canada business, Globe and BasicTalk service offerings. 
 
(2) Growth Service Revenue includes revenues from Vonage's Vonage Business 
 
Solutions, Mobile services (excluding Extensions) and International business and 
 
opportunities. 
 
(3) Adjusted EBITDA is GAAP income (loss) from operations excluding certain 
 
items including depreciation and amortization, share-based expense, and net loss 
 
attributable to non-controlling interest. 
 
(4) Churn relates to the average monthly percentage of customers that terminate 
 
service in our core business. The Company calculates churn by dividing the 
 
number of customers that terminate during the year by the simple average number 
 
of customers during the year, and dividing the result by twelve. The simple 
 
average number of customers is the number of customers on the first day of the 
 
year plus the number of customers on the last day of the year, divided by two. 
 
For each metric, there is (i) a minimum level of performance that would result 
 
in a payment equal to 50% of the weighted target bonus for the metric (and below 
 
which no payment would result), (ii) a target level of performance that would 
 
result in a payment equal to 100% of the weighted target bonus for the metric, 
 
and (iii) an outstanding level of performance that would result in a payment 
 
equal to 175% of the weighted target bonus for the metric. 
 
The Committee has implemented certain limitations and enhancements on the bonus 
 
payment in order to reflect the Company's focus on revenue growth. First, 
 
regardless of performance against any of the bonus metrics, no payments above 
 
90% of the target bonus will be made unless a target level of performance for 
 
the combined Core Business Service Revenue and Growth Service Revenue metrics 
 
("Total Service Revenue") is met. Second, if the target levels of performance 
 
for all four metrics are met, the payments would equal 130% of the weighted 
 
target bonus for each metric with additional payments up to a maximum of 175% 
 
for each metric in proportion to the amount by which the Company's performance 
 
for the metric exceeds the target level of performance compared to the 
 
outstanding level of performance. As a result, in the event that outstanding 
 
levels of performance are attained for all four metrics, the payment will equal 
 
225% of an individual's target bonus. Finally, if the target levels of 
 
performance for Core Business Service Revenue, Growth Service Revenue, and 
 
Adjusted EBITDA are met, maximum level of performance is met for Total Service 
 
Revenue, and the Churn target is exceeded, the payments would equal 175% of the 
 
weighted target bonus for each metric with additional payments up to a maximum 
 
of 175% for each metric in proportion to the amount by which the Company's 
 
performance for the metric exceeds the target level of performance compared to 
 
the outstanding level of performance.