**Exhibit 10.31**

 

**AMENDMENT TO OPTION AGREEMENT**

 

THIS AMENDMENTTO OPTION AGREEMENT (the “Amendment”) is made and entered into as of this     day of                    ,2003, by and between Avocent Corporation, a Delaware corporation (“Avocent”),and                        ****(“Optionee”).  

 

RECITALS

 

WHEREAS,Optionee has been a director of Avocent [and one of its predecessors, ApexInc./Apex PC Solutions, Inc. (now known as Avocent Huntsville Corp.)] since                  ;

 

WHEREAS,Optionee has received certain stock option grants from Avocent [and Apex];and  

 

WHEREAS,Avocent and Optionee now wish to amend each existing Option Agreement betweenOptionee and Avocent [and Apex] to provide for the immediate vesting andacceleration of all outstanding options in the event of a Change of Control (asdefined below) of Avocent.

 

**AGREEMENT**

 

NOW,THEREFORE, Option and Avocent hereby agree as follows:

 

1.                                       DEFINITIONS.  For purposes of this Amendment, thefollowing terms shall have the following meanings:

 

(a)                                  “TERMINATIONUPON A CHANGE IN CONTROL” shall mean that Optionee ceases to be a member of theBoard of Directors of Avocent at any time following any “Change in Control.”

 

(b)                                 “CHANGEIN CONTROL” shall mean, after the date of this Amendment, any one of the followingevents:

 

(i)                                     Anyperson acquires beneficial ownership of Avocent Corporation’s securities and isor thereby becomes a beneficial owner of securities entitling such person toexercise twenty-five percent (25%) or more of the combined voting power ofAvocent Corporation’s then outstanding stock. For purposes of this Amendment, “beneficial ownership” shall bedetermined in accordance with Regulation 13D under the Securities Exchange Actof 1934, or any similar successor regulation or rule; and the term “person”shall include any natural person, corporation, partnership, trust, orassociation, or any group or combination thereof, whose ownership of AvocentCorporation’s securities would be required to be reported under such Regulation13D, or any similar successor regulation or rule.

 

(ii)                                  Withinany twenty-four (24) month period, the individuals who were Directors ofAvocent Corporation at the beginning of any such period, together with anyother Directors first elected as directors of Avocent Corporation pursuant tonominations approved or ratified by at least two-thirds (2/3) of the Directorsin office immediately prior to any such election, cease to constitute amajority of the Board of Directors of Avocent Corporation.

 

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(iii)                               AvocentCorporation’s stockholders approve:

 

(1)                                  anyconsolidation or merger of Avocent Corporation in which Avocent Corporation isnot the continuing or surviving corporation or pursuant to which shares ofAvocent Corporation common stock would be converted into cash, securities orother property, other than a merger or consolidation of Avocent Corporation inwhich the holders of Avocent Corporation’s common stock immediately prior tothe merger or consolidation have substantially the same proportionate ownershipand voting control of the surviving corporation immediately after the merger orconsolidation; or

 

(2)                                  anysale, lease, exchange, liquidation or other transfer (in one transaction or aseries of transactions) of all or substantially all of the assets of AvocentCorporation.

 

Notwithstandingsubparagraphs (b)(iii)(1) and (b)(iii)(2) above, the term “Change in Control”shall not include a consolidation, merger, or other reorganization if uponconsummation of such transaction all of the outstanding voting stock of AvocentCorporation is owned, directly or indirectly, by a holding company, and theholders of Avocent Corporation’s common stock immediately prior to thetransaction have substantially the same proportionate ownership and votingcontrol of such holding company after such transaction.

 

2.                                       ACCELERATEDVESTING.  Effective on the date of thisAmendment, Avocent and Optionee hereby agree that, in the event of a “Change ofControl,” any and all outstanding option grants to Optionee will become fullyvested and immediately available for exercise, and each and every Stock OptionAgreement between Optionee and Avocent [and Apex] is hereby amended to thateffect. 

 

3.                                       INDEMNIFICATIONFOR SECTION 4999 EXCISE TAXES.  Inthe event that it shall be determined that any payment or other benefit paid byAvocent Corporation to or for the benefit of Optionee under this Amendment (the“Payments”) would be subject to the excise tax imposed by Section 4999 ofthe Internal Revenue Code (the “Excise Tax”), then Avocent Corporation shall indemnifyOptionee for such Excise Tax in accordance with the following:

 

(a)                                  Optioneeshall be entitled to receive an additional payment from Avocent Corporationequal to (i) one hundred percent (100%) of any Excise Tax actually paid orfinally or payable by Optionee in connection with the Payments, plus (ii) anadditional payment in such amount that after all taxes, interest and penaltiesincurred in connection with all payments under this Section 3(a), Optioneeretains an amount equal to one hundred percent (100%) of the Excise Tax.

 

(b)                                 Alldeterminations required to be made under this Section shall be made byAvocent Corporation’s primary independent public accounting firm, or any othernationally recognized accounting firm reasonably acceptable to AvocentCorporation and Optionee (the “Accounting Firm”).  Avocent Corporation shall cause the Accounting Firm to providedetailed supporting calculations of its determinations to Optionee.  All fees and expenses of the Accounting Firmshall be borne solely by Avocent Corporation. For purposes of making the calculations required by this Section, theAccounting Firm may make reasonable assumptions and approximations concerningapplicable taxes and may rely on reasonable, good faith interpretations

 

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concerning theapplication of Sections 280G and 4999 of the Internal Revenue Code, providedthe Accounting Firm’s determinations must be made with substantial authority(within the meaning of Section 6662 of the Internal Revenue Code). Thepayments to which Optionee is entitled pursuant to this Section shall bepaid by Avocent Corporation to Optionee in cash and in full not later thanthirty (30) calendar days following the date Optionee becomes subject to theExcise Tax.

 

4.                                       MISCELLANEOUS.

 

4.1                                 ENTIREAGREEMENT; MODIFICATIONS.  Except asotherwise provided herein, this Amendment represents the entire understandingamong the parties with respect to the subject matter hereof, and this Amendmentsupersedes any and all prior understandings, agreements, plans andnegotiations, whether written or oral with respect to the subject matterhereof.  All modifications to thisAmendment must be in writing and signed by the party against whom enforcementof such modification is sought.

 

4.2                                 SEVERABILITY.  If a court or other body of competentjurisdiction determines that any provision of this Amendment is excessive inscope or otherwise invalid or unenforceable, such provision shall be adjustedrather than voided, if possible, and all other provisions of this Amendmentshall be deemed valid and enforceable to the extent possible.

 

4.3                                 COUNTERPARTS.  This Amendment may be executed in one ormore counterparts, all of which taken together shall constitute one and thesame Amendment.

 

4.4                                 REMAININGTERMS UNCHANGED.  Except as specificallyset forth in this Amendment, the remaining terms and conditions of each andevery Stock Option Agreement between Optionee and Avocent [and Apex] shallremain unchanged and in full force and effect

 

IN WITNESSWHEREOF, the parties hereto have executed this Amendment as of the day and yearfirst above written.

 
|   | **AVOCENT CORPORATION**on behalf of itself and  its wholly owned subsidiary Avocent Redmond Corp. (formerly known as Apex.  Inc. and Apex PC Solutions, Inc.)**:** |
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|   | **OPTIONEE:**                                                                                                                                                      |
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