EXHIBIT 10.3

January 20, 2012

Graham McGonigal
5015 Eves Place
Roswell, GA 30076

Dear Graham:

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

1. Employment

(a)
You will be employed in the position of Senior Vice President Network
Operations.

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

(c)
Your employment will commence on February 6, 2012 (the “Commencement Date”).

2. Location
Your office location will be at the Company's headquarters, which is located in
Holmdel, NJ.

3. Compensation

(a)
The Company will pay you an annual base salary (“Base Salary”) of $300,000, 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 onetime sign-on bonus of $50,000 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 within thirty (30) days following
such termination of employment.

4. Stock Options

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In addition, you will be granted an option under Vonage Holding Corp.’s 2006
Incentive Plan (the “Incentive Plan”) to purchase 250,000 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 your
Commencement 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 Relocation

The Company shall provide you with housing and relocation 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 in connection with
your relocation to the Holmdel, NJ area 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)
Temporary Housing Benefits: The Company will arrange an apartment within the
Holmdel, NJ area for a period of up to six (6) months from your Commencement
Date.

(c)
Shipping of Auto: One (1) registered auto to be shipped to the destination
location in connection with your relocation to the Holmdel, NJ area on qualified
carrier (does not include recreational vehicles, boats, motorcycles, jet skis,
snowmobiles, ATVs or antique vehicles).

(d)
No Tax Gross-Up: You shall be responsible for any possible tax liabilities that
may result from the benefits provided under this paragraph 5 and such
liabilities will not be paid by the Company.

You understand that if your employment is terminated by the Company for Cause
(as defined below) or you voluntarily resign other than for Good Reason prior to
twelve (12) months from the Commencement Date you must repay 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 following 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 nine (9) months of your then-current base salary, less
applicable withholding, which will be paid by the Company during its regular
payroll cycle over the nine (9) month period following the date of 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

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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, (vii)
conviction of, or plea of nolo contendre to, a felony or a crime involving moral
turpitude, and (viii) violation of any written Company policies or procedures.

“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, to the extent you are eligible to
participate in such plans, 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)
Participation in the health and dental plan of the Company begins on the first
day of the month immediately after your start date in accordance with the terms
of the plans.

(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 401(k),
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

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Innovations Agreement with the Company. You also will be subject to a
non-compete agreement under which you will be subject to non-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.

(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

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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 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.

(e)
Withholding: The Company may withhold any tax (or other governmental obligation)
that may result from the payments made and benefits provided to you under this
Offer Letter or require you to make other arrangements satisfactory to the
Company to enable it to satisfy all such withholding requirements.

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 Monday, January 16,
2012. This Offer Letter will be of no force and effect if not signed

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and postmarked by Monday, January 16, 2012. We are excited at the prospect of
you joining the Company, and look forward to your future contributions.    

Sincerely,

/s/ Marc Lefar
    
Marc Lefar
Chief Executive Officer

Agreed and Accepted:

Name: ___Graham McGonigal_________
Graham McGonigal