COMPENSATION AND STOCK OPTION COMMITTEE CHARTER

I. PURPOSE: The primary function of the Compensation Committee (the "Committee") of WorldGate Communication, Inc. (the "Company") is to review the Company's compensation practices and policies, evaluate CEO performance and annually review and approve the compensation for the CEO, annually review and approve the compensation for the other senior executives. Consistent with this function, the Committee should encourage continuous improvement of, and should foster adherence to, the Company's policies, procedures and practices at all levels.

II. MEMBERSHIP: The Committee's membership is determined by the Board and consists of at least two directors. All members of the Committee shall meet the independence requirements of the listing standards of NASDAQ, qualify as "Non-employee Director" for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and satisfy the requirements of "outside directors" for purposes of Section 162(m) of the Internal Revenue Code. The members of the Committee shall be elected by the Board at the annual organizational meeting of the Board or until their successors shall be duly elected and qualified. Unless a Chair is elected by the Board, the members of the Committee may designate a Chair by majority vote of the Committee membership. The Committee shall have the authority to retain such consultants and other advisors as the Committee may deem appropriate. The Committee shall have authority to approve related fees and retention terms for such consultants and advisors. Except to the extent prohibited by law or regulation, the Committed shall have the authority to delegate any of its responsibilities to subcommittees or individual(s) as the Committee may deem appropriate.

III. MEETINGS. The Committee shall hold regular meetings, reporting significant matters arising from such meetings to the Board. A majority of the members shall constitute a quorum. A majority of the members present may decide any matter brought before the Committee.

IV. RESPONSIBILITIES AND DUTIES: To fulfill its responsibilities and duties the Committee shall:

(1) Review compensation practices and policies of the Company to ensure that they are competitive and that they provide appropriate motivation for corporate performance and increased shareholder value.

(2) Oversee the administration of the Company's compensation programs, and review and approve the employees who receive awards and the nature of awards under such programs.

(3) Make recommendations to the board of directors and to the Company regarding the adoption, amendment or termination of compensation programs.

(4) Approve the adoption, amendment and termination of compensation programs for employees of the Company.

(5) Periodically survey the executive compensation practices of other companies.

(6) Annually review and approve, for the senior executives of the Company (other than the CEO), (i) the annual base salary, and (ii) bonus targets.

(7) Establish and certify the satisfaction of performance goals for performance-based compensation as required under Section 162(m) of the Internal Revenue Code.

(8) Review shareholder proposals relating to executive compensation matters and recommend to the Board the Company's response to such proposals.

(9) Review and approve annual corporate goals and objectives for the CEO.

(10) Evaluate the CEO's performance against such goals and objectives.

(11) Annually review and approve (based on this evaluation) (i) the CEO's annual base salary, (ii) the CEO's bonus, and (iii) any stock option grants and other awards to the CEO under the Company's compensation programs. In determining the CEO compensation, the Committee will consider the Company's performance and relative shareholder return, the compensation of CEOs at other companies, and the CEO compensation in past years.

(12) Prepare a compensation report as required by the rules of the Securities and Exchange Commission for inclusion in the Company's annual proxy statement.

(13) Review and reassess the adequacy of this Charter at least annually and submit any changes to the Board for approval.

(14) Conduct an annual performance evaluation of the Committee.