Exhibit
10.3


VONAGE HOLDINGS CORP.


NONQUALIFIED STOCK OPTION
AGREEMENT


Under
the 2001 Stock Incentive Plan


VONAGE HOLDINGS CORP.
(the “Company”), a Delaware corporation, hereby grants, effective as of
__________ 200___ (the “Effective Date”), to ______ (the “Optionee”)
the right and option (the “Option”) to purchase up to ______ shares of
its Common Stock, $0.001 par value per share, at a price of $__ per share,
subject to the following terms and conditions.


1.             Relationship to Plan.  The Option is
granted pursuant to the Company’s 2001 Stock Incentive Plan, as amended (the “Plan”)
and is in all respects subject to the terms and conditions of the Plan, a copy
of which has been provided to the Optionee (the receipt of which the Optionee
hereby acknowledges).  Capitalized terms
used and not otherwise defined in this Agreement are used as defined in the
Plan.  The Optionee hereby accepts the
Option subject to all the terms and provisions of the Plan (including without
limitation provisions relating to expiration and termination of the Option and
adjustment of the number of shares subject to the Option and the exercise price
therefor).  The Optionee further agrees
that all decisions under and interpretations of the Plan by the Company will be
final, binding, and conclusive upon the Optionee and his or her successors,
permitted assigns, heirs, and legal representatives.


2.             Vesting.  The Option vests and
becomes exercisable as to [(for employees at or above the level of Vice
President:) 1/48 of the Shares on the last day of the month following the month
that includes the date hereof and on the last day of each of the following 47
months] [(for all other employees, consultants, advisors and other service
providers) 25% of the Shares on each of the first four anniversaries of the
date hereof] provided that the Optionee
continues to be employed by the Company or a Subsidiary (as defined in the
Plan) on the applicable vesting date; and provided further
that if a Change of Control of the Company becomes effective while the Optionee
continues to be employed by the Company, the Option shall, upon termination of
the Optionee’s employment with the Company becoming effective not later than
180 days after the date on which the Change of Control of the Company becomes
effective, by reason of—


•                  termination by the Company without Cause, or


•                  termination by the Optionee as a consequence of either
of the following actions taken by the Company without the Optionee’s consent:


•                  reduction in the Optionee’s title, compensation,
duties and/or responsibilities or


•                  relocation of the place of Optionee’s employment to a
location more than 30 miles distant from its location at the time the Change of
Control of the Company occurred,


 

















vest and become
exercisable to the extent of one-half the number of shares (rounded up to the
next whole share) covered thereby.  A “Change
of Control of the Company” shall occur or be deemed to have occurred only
if any of the following events takes place:


(i)                                     any “person,”
as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (“Exchange Act”) (other than the Company, any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company, or any corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportion as the ownership of stock
of the Company) is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing more than 50% of the combined voting power of the Company’s then
outstanding securities; or


(ii)                                  individuals
who, as of June 1, 2004, constitute the Board of Directors of the Company (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the
Board, provided that any person becoming a director subsequent to the effective
date whose election, or nomination for election by the Company’s stockholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall be, for purposes of the Plan, considered as though such
person were a member of the Incumbent Board; or


(iii)                               the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than (I) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 60%
of the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation or
(II) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person or group of persons acting
in concert acquires more than 50% of the combined voting power of the Company’s
then outstanding securities; or


(iv)                              the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.


3.             Termination of Option.  The Option will
terminate on the earlier of (a) the tenth anniversary of the date hereof, and
(b) if the Optionee’s employment with the Company terminates for any reason,
the applicable date determined from the following table:


 


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  Reason For Termination

  	
   

  	
  Option Termination Date

  
	
  (i)

  	
  death of Optionee

  	
   

  	
  Twelve months
  thereafter

  
	
  (ii)

  	
  total and permanent
  disability of Optionee (as defined in Section 22(e)(3) of the Internal
  Revenue Code of 1986, as amended)

  	
   

  	
  Twelve months
  thereafter

  
	
  (iii)

  	
  termination for any
  reason other than death, disability, or Cause

  	
   

  	
  Twelve months
  thereafter

  
	
  (iv)

  	
  Termination for Cause

  	
   

  	
  Upon termination of
  employment

  



 


Military or sick leave
will not be deemed a termination of employment provided that it does not exceed
the longer of 90 days or the period during which the absent employee’s
reemployment rights are guaranteed by statute or by contract.


4.             “Lock-Up” Agreement.  The Optionee agrees
that if the Company at any time or from time to time deems it necessary or
desirable to make any registered public offering(s) of shares of Common Stock,
then upon the Company’s request, the Optionee will not sell, make any short
sale of, loan, grant any option for the purchase of, pledge, or otherwise
encumber or otherwise dispose of any of the shares of Common Stock issued or
issuable upon exercise of the Option during such period (not to exceed 180
days) commencing on the effective date of the registration statement relating
to any such offering as the Company may request, except with the prior written
consent of the Company.


5.             Methods of Exercise.  Except as may
otherwise be agreed by the Optionee and the Company, the Option will be
exercisable only by a written notice in form and substance acceptable to the
Company, specifying the number of shares to be purchased and accompanied by
payment in cash of the aggregate purchase price for the shares for which the
Option is being exercised.


6.             Characterization of Option for Tax
Purposes.  The Option is intended not to qualify
as an “incentive stock option” under the Internal Revenue Code of 1986, as
amended, and will be subject to different tax treatment than accorded incentive
stock options (including the possibility of income tax withholding in
accordance with the Plan).


7.             Company Right of First Refusal.  The Optionee understands
and acknowledges that the Company has a first refusal right respecting any
sale, transfer or other disposition by the Optionee of the shares covered by
the Option, as more fully set forth in Section 12 of the Plan.


8.             Compliance with Laws.  The obligations of
the Company to sell and deliver Shares upon exercise of the Option are subject
to all applicable laws, rules, and regulations, including all applicable
federal and state securities laws, and the obtaining of all such approvals by
government agencies as may be deemed necessary or appropriate by the Board or
the relevant committee of the Board.  If
so required by the Board or such committee, no shares will be delivered upon
the exercise of the Option until the Optionee has given the Company a 


 


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satisfactory written statement that he
is purchasing such shares for investment, and not with a view to the sale or
distribution of any such shares, and with respect to such other matters as the
Board may deem advisable in order to assure compliance with applicable
securities laws.  All shares issued upon
exercise of the Option will bear appropriate restrictive legends.


9.             General.  The Optionee may not
transfer, assign, or encumber any of his or her rights under this Agreement
without the prior written consent of the Company, and any attempt to do so will
be void.  This Agreement will be governed
by and interpreted and construed in accordance with the internal laws of the
State of Delaware (without reference to principles of conflicts or choice of
law); provided that in the event that the
Company is party to a merger or consolidation in which the surviving or
resulting corporation is not a Delaware corporation, then this agreement
thereafter will be governed by and interpreted and construed in accordance with
the internal laws of the state of incorporation of such surviving or resulting
corporation (without reference to principles of conflicts or choice of law).  The captions of the sections of this Agreement
are for reference only and will not affect the interpretation or construction
of this Agreement.  This Agreement will
bind and inure to the benefit of the parties and their respective successor,
permitted assigns, heirs, devisees, and legal representatives.


IN WITNESS WHEREOF, the Company and the Optionee have
executed and delivered this Agreement as of the Effective Date.


	
   

  	
  VONAGE HOLDINGS CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Optionee

  



 


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