EXHIBIT 10.31

VONAGE HOLDINGS CORP.

2006 INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

“Participant”:                                 

“Date of Award”:                     

This Agreement, effective as of the Date of Award set forth above, represents
the grant of Nonqualified Stock Options by Vonage Holdings Corp., a Delaware
corporation (the “Company”), to the Participant named above, pursuant to the
provisions of the Vonage Holdings Corp. 2006 Incentive Plan (the “Plan”).
Capitalized terms have the meanings ascribed to them under the Plan, unless
specifically set forth herein.

The parties hereto agree as follows:

 

  1. Grant of Options

The Company hereby grants to the Participant Nonqualified Stock Options to
purchase Shares in the manner and subject to the terms and conditions of the
Plan and this Agreement as follows:

(a) Number of Shares Covered by the Options:                     

(b) “Option Price”: $             per Share

(c) “Option Term”: The Options have been granted for a period of ten years,
ending on the tenth anniversary of the Date of Award.

 

  2. Vesting of Options

(a) Subject to Section 2(e) below, the Options vest and become exercisable [for
initial sign-on option grants: over a period of four (4) years, with 25% vesting
on the first anniversary of the Date of Award and the remainder vesting in equal
quarterly installments thereafter provided that the Participant continues to
serve as a Non-Employee Director of the Company or a Subsidiary on the
applicable vesting date] [for annual option grants: quarterly over a period of
one (1) year on the first day of each quarter after the quarter that includes
the Date of the Award provided that the Participant continues to serve as a
Non-Employee Director of the Company or a Subsidiary on the applicable vesting
date].

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(b) To the extent not previously vested in accordance with this Section 2, in
the event that a Change of Control becomes effective while the Participant
continues to serve as a Non-Employee Director of the Company or a Subsidiary,
the Options will vest and become exercisable as to all the Shares covered
thereby as of the effective date of the Change of Control.

(c) To the extent not previously vested in accordance with this Section 2, in
the event of the Participant’s death, the Options will (i) vest and become
exercisable as of the date thereof as to all the Shares covered thereby and
(ii) remain exercisable until they terminate in accordance with Section 4 below.

(d) To the extent not previously vested in accordance with this Section 2, in
the event of the Participant’s Disability, the Options will (i) vest and become
exercisable as of the date thereof as to all the Shares covered thereby and
(ii) remain exercisable until they terminate in accordance with Section 4 below.

(e) To the extent not previously vested in accordance with Section 2(a) above,
if the Participant’s service as a Non-Employee Director of the Company is
terminated for cause as determined by the Committee under the terms of the Plan,
the Options will terminate immediately and be of no force or effect.

(f) To the extent vested in accordance with this Section 2, the Options will
remain exercisable until they terminate in accordance with Section 4 below.

(g) For purposes of this Section 2, the following term shall have the meaning
set forth below:

“Disability” means the Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months.

 

  3. Exercise of Options

(a) The Options may be exercised by written notice to the Company, specifying
the number of Shares the Participant then desires to purchase, accompanied by
the Option Price of such Shares, and as soon as practicable after receipt of
such notice and payment, such Shares will be issued in the Participant’s name.
The Committee reserves the right to modify the exercise procedures from time to
time.

(b) Except as otherwise provided in this Section 3, the Participant must submit
a check payable to the order of Vonage Holdings Corp. for an amount in United
States dollars equal to the Option Price of such Shares, or tender Shares to the
Company having an aggregate Fair Market Value on the date of exercise equal to
such Option Price, or a combination thereof. If permitted by the Committee, the
Participant may direct the Company to withhold a number of Shares covered by the
Option having an aggregate Fair Market Value on the date of exercise equal to
such Option Price.

 

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  4. Termination of Options

To the extent vested in accordance with Section 2 above, the Options will
terminate, and be of no force or effect, upon the earlier of:

(a) the date of termination of the Participant’s service as a Non-Employee
Director of the Company if such termination is for cause as determined by the
Board, or the first anniversary of such date if the Participant’s service as a
Non-Employee Director of the Company terminates for any other reason; and

(b) the expiration of the Option Term.

 

  5. Rights as Stockholder

The Participant shall have no rights as a stockholder of the Company with
respect to the Shares covered by the Options until such time as the Option Price
has been paid and the Shares have been issued and delivered to the Participant.

 

  6. Transferability

Unless permitted by the Committee in accordance with the terms of the Plan, the
Options may not be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent and distribution,
and, during the Participant’s lifetime, may be exercised only by the Participant
or in the event of the Participant’s legal incapacity, the Participant’s legal
guardian or representative.

 

  7. Miscellaneous

(a) This Agreement and the rights of the Participant hereunder are subject to
the terms and conditions of the Plan, as the same may be amended from time to
time, as well as to such rules and regulations as the Committee may adopt for
administration of the Plan. If there is any inconsistency between the terms of
this Agreement and the terms of the Plan, the Plan’s terms shall completely
supersede and replace the conflicting terms of this Agreement.

 

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(b) This Agreement shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required or, the Committee determines are
advisable. The Participant agrees to take all steps the Company determines are
necessary to comply with all applicable provisions of federal and state
securities law in exercising his or her rights under this Agreement. The
Committee shall have the right to impose such restrictions on any Shares
acquired pursuant to the exercise of the Option as it deems necessary or
advisable under applicable federal securities laws, the rules and regulations of
any stock exchange or market upon which Shares are then listed or traded, and/or
any blue sky or state securities laws applicable to Shares. It is expressly
understood that the Committee is authorized to administer, construe, and make
all determinations necessary or appropriate to the administration of the Plan
and this Agreement, all of which shall be binding upon the Participant.

(c) The Options are intended not to provide for a “deferral of compensation”
within the meaning of Section 409A of the Code. Notwithstanding the forgoing or
any provision of the Plan or this Agreement, if any provision of this Agreement
or the Plan contravenes Section 409A of the Code or could cause the Participant
to incur any tax, interest or penalties under Section 409A of the Code, the
Committee may, in its sole discretion and without the Participant’s consent,
modify such provision in order to comply with the requirements of Section 409A
of the Code or to satisfy the conditions of any exception therefrom, or
otherwise to avoid the imposition of the additional income tax and interest
under Section 409A of the Code, while maintaining, to the maximum extent
practicable, the original intent and economic benefit to the Participant,
without materially increasing the cost to the Company, of the applicable
provision.

(d) Delivery of the Shares underlying the Options upon exercise will be subject
to the Participant satisfying all applicable federal, state, local and foreign
taxes. The Company shall have authority to deduct or withhold from all amounts
payable to the Participant in connection with the Options, or require the
Participant to remit to the Company, an amount sufficient to satisfy any
applicable taxes required by law.

(e) To the extent not preempted by federal law, this Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.

 

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IN WITNESS WHEREOF, the Company and the Participant have executed this Agreement
as of the Date of Award.

 

VONAGE HOLDINGS CORP. By:        Name:   Title:        Participant

 

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