Exhibit 10.4


 


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                     ,
20   (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 1/48 (2.08333%) of the
Shares on the first day of each calendar month following the month that
includes the date hereof provided
that the Optionee continues to serve as a director of 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 serve
as a director of the Company, the Option shall at once become fully vested and
exercisable as to the entire number of shares 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, constituted 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 service as a director
of the Company terminates for any reason, the applicable date determined from
the following table:


 


	
   

  	
   

  	
  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 service

  



 


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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 right of first refusal 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 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


 


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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:  John S.
  Rego

  
	
   

  	
   

  	
  Title:  Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Optionee

  



 


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