Exhibit 10.10


 


AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT


 


This AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the 25th day of February, 2019,
to be effective as of January 1, 2019 (the “Effective Date”), by and between AudioEye, Inc., a Delaware corporation
with an address at 5210 E Williams Circle, Suite 750, Tucson, Arizona 85711 (the “Company”), and Todd Bankofier,
a natural person (“Executive”).


 


WITNESSETH:


 


WHEREAS, Executive is employed
by the Company as its Chief Executive Officer (the “Position”) and the Company desires to continue to employ
Executive in such capacity, while updating Executive’s January 1, 2018 Executive Employment Agreement;


 


NOW, THEREFORE, in consideration
of the foregoing recitals and the respective covenants and agreements of the parties contained in this document, the Company and
Executive hereby agree as follows:


 


1.         Employment
and Duties. The Company agrees to employ and Executive agrees to serve in the Position. The duties and responsibilities of
Executive shall include the duties and responsibilities set forth in Executive’s Job Description, attached as Attachment
A, and those the Board of Directors of the Company (the “Board”) may from time to time reasonably assign to
Executive.


 


Executive shall devote
such amount of his time, attention, and energies to the business of the Company as the Company and Executive shall reasonably and
mutually agree is necessary for Executive to fulfill the duties and responsibilities of the Position. Provided that none of the
additional activities materially interfere with the performance of the duties and responsibilities of Executive, nothing in this
Section 1 shall prohibit Executive from (a) serving as a director or member of a committee of, making investments in, or consulting
or working with entities that do not, in the good faith determination of the Board, compete directly with the Company or otherwise
create, in the good faith determination of the Board, a conflict of interest with the business of the Company; (b) delivering lectures,
fulfilling speaking engagements, and any writing or publication relating to Executive’s area of expertise; (c) serving as
a director or trustee of any governmental, charitable or educational organization; or (d) engaging in additional activities in
connection with personal investments and community affairs; provided that such activities are not inconsistent with Executive’s
duties under this Agreement and do not violate the terms of Section 13. For the avoidance of doubt, Executive agrees that this
is a full-time position with the Company, and any such additional activities will not interfere with the fulfillment of the duties
and responsibilities of the Position.


 


2.         Term.
The term of this Agreement shall be the same as was established in Executive’s January 1, 2018 Executive Employment Agreement,
which commenced on January 1, 2018, for a period of two (2) years from January 1, 2018, through December 31, 2019. This Agreement
shall be automatically renewed for successive one (1) year periods, beginning on January 1, 2020, thereafter unless either party
provides the other party with written notice of his, her or its intention not to renew this Agreement at least four (4) months
prior to the expiration of the initial term or any renewal term of this Agreement, as applicable. In the event the Company fails
to provide Executive with written notice of its intention not to renew this Agreement at least four (4) months prior to the expiration
of the initial term or any renewal term of this Agreement, then the term of this Agreement automatically shall be extended until
the date which is six (6) months after the date such notice is given, during which time Executive may seek alternative employment
while still being employed by the Company. “Employment Period” shall mean the initial two (2) year term plus
renewal periods, if any.


 






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3.         Place
of Employment. Executive’s job site shall be at an office sublet to Audio Eye in Scottsdale, Arizona and at 5210 E Williams
Circle, Suite 750, in Tucson, Arizona (the “Job Site”). Executive shall primarily work from the Scottsdale office
location, and shall work occasionally from the Tucson office location. The parties acknowledge, however, that Executive may be
required to travel in connection with the performance of his duties hereunder.


 


4.         Base
Salary. For all services to be rendered by Executive pursuant to this Agreement, the Company agrees to pay Executive during
the Employment Period a base salary (the “Base Salary”) at a minimum annual rate of $250,000 during 2018 and
of $300,000 during the remainder of the Employment Period. The Base Salary shall be paid in periodic installments in accordance
with the Company’s regular payroll practices. The parties shall meet at least annually to discuss increases to the Base Salary.


 


5.         Bonuses.
During each year in the Employment Period, Executive shall be eligible to receive an annual bonus (each, a “Bonus”)
in an amount (the “Annual Bonus Amount”) to be determined by the Compensation Committee of the Board (the “Compensation
Committee”) (or by the independent members of the Board, if there is no Compensation Committee) if the Company and Executive
meets or exceeds criteria adopted by the Compensation Committee (or by the independent members of the Board, if there is no Compensation
Committee) for earning the Bonuses. The Bonus normally will be paid in cash; provided, however, that the Company
and Executive can mutually agree that any particular Bonus can be paid in equity of the Company or a combination of cash and equity
of the Company. Payment of each Bonus, if any, will be made within fifteen (15) days after the Audit Committee of the Company’s
Board approves the Company’s annual financial statements for the applicable fiscal year but in no event later than the last
day of the fiscal year immediately following the applicable fiscal year. The Compensation Committee (or the independent members
of the Board, if there is no Compensation Committee) may provide for additional bonus payments for Executive upon achievement of
additional criteria established or determined from time to time by the Compensation Committee (or by the independent members of
the Board, if there is no Compensation Committee).


 


6.       Severance Compensation.If,
at any time prior to the expiration of the Employment Period, the Company terminates Executive without Cause (as defined below)
or Executive terminates his employment with Good Reason (as defined below), then the Company shall pay or provide all of the following
to Executive:


 


(a)       Executive
shall be entitled to (1) reimbursement of any and all business expenses paid or incurred by Executive through the termination
date, pursuant to Section 9 below, (2) receipt of any accrued but unused paid time off through the termination date in
accordance with Company policy, as in effect as of the date of termination, (3) receipt of any earned but unpaid Base Salary
accrued through Executive’s last date of employment with the Company, and (4) receipt of an amount equal to a portion
of the Executive’s Base Salary, as set forth in Section 6(c) below (all of these payments are collectively the
“Separation Payment”), provided that to be eligible to be paid the Base Salary portion of the
Separation Payment described in Section 6(a)(4), Executive must execute an agreement releasing Company and its affiliates
from any liability associated with this Agreement in form and terms satisfactory to the Company and that all time periods
imposed by law permitting cancellation or revocation of such release by Executive shall have passed or expired; and


 




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(b)      Subject
to Executive’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended (“COBRA”) with respect to the Company’s group health insurance plans in which the Employee
participated immediately prior to the termination date (“COBRA Continuation Coverage”), the Company will pay
the cost of COBRA Continuation Coverage for Executive and his eligible dependents until the earliest of (i) Executive and his eligible
dependents, as the case may be, ceasing to be eligible under COBRA, or (ii) twelve (12) months following the termination date (the
benefits provided under this Section 6(b), the “Medical Continuation Benefits”) or until such time as Executive
shall obtain reasonably equivalent benefits for him and his eligible dependents from subsequent employment or spousal benefits.


 


(c)       The Base Salary
portion of the Separation Payment described in Section 6(a)(4) above shall be the remaining salary that would otherwise be
paid to Executive for the remainder of the Employment Period, but in no event shall this amount be less than twelve (12)
months of Executive’s Base Salary (at the rate that was in effect at the time of termination). Such Base Salary portion
shall be paid at such time and in such manner as such Base Salary would have been paid had Executive remained employed in
accordance with the customary payroll practices of the Company, except that, to the extent Executive becomes entitled to a
Separation Payment on account of a separation from service that occurs within 120 days after a Change of Control (to the
extent such Change of Control meets the requirements for a change in control event under Section 409A), the Base Salary
portion of such Separation Payment shall be payable in a lump sum within 60 days following such separation from service
subject to all other terms and conditions herein. Notwithstanding anything herein to the contrary, in the event that the
period in which a release agreement could be considered and become irrevocable spans two taxable years, any Separation
Payment that becomes payable hereunder shall be paid or commence in the later of the two taxable years, subject to all other
terms and conditions herein.


 


7.         Equity
Awards. Executive shall be eligible for such grants of awards at the discretion of the Compensation Committee (or the Board,
if there is no Compensation Committee) may from time to time determine (the “Share Awards”). Awards shall be
subject to the applicable Plan terms and conditions; provided, however, that Awards shall be subject to any additional terms
and conditions as are provided herein or in any award certificate(s), which shall supersede any conflicting provisions governing
Share Awards provided under the Plan. Subject to the approval by the Board or Compensation Committee, Executive would receive a
grant of restricted stock units in an amount equal to approximately $75,000, which would be subject to vesting requirements as
determined by the Board or Compensation Committee, as applicable.


 




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8.         Clawback
Rights. All amounts paid to Executive by the Company during the Employment Period and any time thereafter (other than Executive’s
Base Salary, Bonuses, accrued but unused paid time off, reimbursement of expenses pursuant to Section 9 hereof, Medical Continuation
Benefits, and the Separation Payment) and any and all stock based compensation (such as options and equity awards) granted during
the Employment Period and any time thereafter (collectively, the “Clawback Benefits”) shall be subject to “Clawback
Rights” as follows: during the period that Executive is employed by the Company and upon the termination or expiration
of Executive’s employment and for a period of three (3) years thereafter, if any of the following events occur, Executive
agrees to repay or surrender to the Company the Clawback Benefits if a restatement (a “Restatement”) of any
financial results from which any Clawback Benefits to Executive shall have been determined (such restatement resulting from material
non-compliance of the Company with any financial reporting requirement under the federal securities laws and shall not include
a restatement of financial results resulting from subsequent changes in accounting pronouncements or requirements which were not
in effect on the date the financial statements were originally prepared), then Executive agrees to immediately repay or surrender
upon demand by the Company any Clawback Benefits which were determined by reference to any Company financial results which were
later restated, but only to the extent the Clawback Benefits amounts paid exceed the Clawback Benefits amounts that would have
been paid, based on the restatement of the Company’s financial information. All Clawback Benefits amounts resulting from
such Restatements shall be retroactively adjusted by the Compensation Committee (or the Board, if there is no Compensation Committee)
to take into account the restated results and if any excess portion of the Clawback Benefits resulting from such restated results
is not so repaid or surrendered by Executive within ninety (90) days of the revised calculation being provided to Executive by
the Company following a publicly announced restatement, the Company shall have the right to take any and all action to effectuate
such adjustment.


 


The Clawback Rights shall
terminate following a Change of Control, subject to applicable law, rules and regulations. The amount of Clawback Benefits to be
repaid or surrendered to the Company shall be determined by the Compensation Committee (or the Board, if there is no Compensation
Committee) in accordance with applicable law, rules and regulations. All determinations by the Compensation Committee (or the Board,
if there is no Compensation Committee) with respect to the Clawback Rights shall be final and binding on the Company and Executive.
The parties acknowledge it is their intention that the foregoing Clawback Rights as relates to Restatements conform in all respects
to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd Frank Act”)
and requires recovery of all “incentive-based” compensation, pursuant to the provisions of the Dodd Frank Act and any
and all rules and regulations promulgated thereunder from time to time in effect. Accordingly, the terms and provisions of this
Agreement shall be deemed automatically amended from time to time to assure compliance with the Dodd Frank Act and such rules and
regulation as hereafter may be adopted and in effect.


 


9.         Expenses.
Executive shall be entitled to prompt reimbursement by the Company for all reasonable ordinary and necessary travel, entertainment,
and other expenses incurred by Executive while employed (in accordance with the policies and procedures established by the Company
for its senior executive officers) in the performance of his duties and responsibilities under this Agreement; provided,
that Executive shall properly account for such expenses in accordance with Company policies and procedures.


 


10.       Other
Benefits; Vacation. During the Employment Period, Executive shall be eligible to participate in incentive, stock
purchase, savings, retirement (401(k)), and welfare benefit plans, including, without limitation, health, medical, dental,
vision, life (including accidental death and dismemberment) and disability insurance plans (collectively, “Benefit
Plans”), in substantially the same manner and at substantially the same levels as the Company makes such
opportunities available to the Company’s managerial or salaried executive employees. During the term of this Agreement,
Executive shall be entitled to accrue, on a pro rata basis, twenty (20) paid vacation days per year, which if not taken, will
accrue and be carried forward into the next year. No carry forward of vacation past the second year will be granted without
the approval of the Compensation Committee of the Board. Vacation shall be taken at such times as are mutually convenient to
Executive and the Company and no more than twenty (20) consecutive days shall be taken at any one time without the advance
approval of the Board.


 






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11.       Termination
of Employment.


 


(a)       Death.
If Executive dies during the Employment Period, this Agreement and Executive’s employment with the Company shall automatically
terminate and the Company shall have no further obligations to Executive or his heirs, administrators or executors with respect
to compensation and benefits accruing thereafter, except for the obligation to pay to Executive’s spouse if living (and in
the event she predeceases Executive, then to his heirs, administrators or executors): (i) any earned but unpaid Base Salary accrued
through the date of death, (ii) reimbursement of any and all business expenses paid or incurred by Executive through the termination
date, pursuant to Section 9 above, (iii) any accrued but unused paid time off through the termination date in accordance with Company
policy, and (iv) an amount equal to three (3) months of Executive’s Base Salary (at the rate that was in effect at the time
of death) to be paid within 10 days of Executives' death. The Company shall deduct, from all payments made hereunder, all applicable
taxes, including income tax, FICA and FUTA, and other deductions required by law. In addition, Executive’s spouse and minor
children shall be entitled to Medical Continuation Benefits.


 


(b)       Disability.
In the event that, during the term of this Agreement, Executive shall be prevented from performing, with or without reasonable
accommodation, his essential duties and responsibilities as Chief Executive Officer by reason of Disability (as defined below),
this Agreement and Executive’s employment with the Company shall automatically terminate and the Company shall have no further
obligations or liability to Executive or his heirs, administrators or executors with respect to compensation and benefits accruing
thereafter, except for the obligation to pay Executive or his spouse if living (and in the event she predeceases Executive, then
his heirs, administrators or executors): (i) any earned but unpaid Base Salary accrued through Executive’s last date of employment
with the Company, (ii) reimbursement of any and all business expenses paid or incurred by Executive through the period ending on
the termination date, pursuant to Section 9 above, and (iii) any accrued but unused paid time off through the termination date
in accordance with Company policy. The Company shall deduct, from all payments made hereunder, all applicable taxes, including
income tax, FICA and FUTA, and other deductions required by law. In addition, Executive’s spouse and minor children shall
be entitled to Medical Continuation Benefits. For purposes of this Agreement, “Disability” shall mean a physical
or mental disability that prevents the performance by Executive, with or without reasonable accommodation, of the essential duties
of his job as Chief Executive Officer for a period of not less than an aggregate of three (3) months during any twelve (12) consecutive
months. The Company shall provide reasonable accommodations to Executive in accordance with applicable federal, state and local
law.


 




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(c)       Cause.


 


(1)       At
any time during the Employment Period, the Company may terminate this Agreement and Executive’s employment hereunder for
Cause. For purposes of this Agreement, “Cause” shall mean: (a) the willful and continued failure of Executive to perform
substantially his duties and responsibilities for the Company (other than any such failure resulting from Executive’s death
or Disability) after a written demand by the Board for substantial performance is delivered to Executive by the Company, which
specifically identifies the manner in which the Board believes that Executive has not substantially performed his duties and responsibilities,
which willful and continued failure is not cured by Executive within thirty (30) days of his receipt of such written demand; (b)
the conviction of, or plea of guilty or nolo contendere to, a felony, or (c) fraud, dishonesty or gross misconduct which
is materially and demonstratively injurious to the Company. Termination under clauses (b) or (c) of this Section 11(c)(1) shall
not be subject to cure.


 


(2)       For
purposes of this Section 11(c), no act, or failure to act, on the part of Executive shall be considered “willful” unless
done, or omitted to be done, by him in bad faith and without reasonable belief that his action or omission was in, or not opposed
to, the best interest of the Company. Prior to any termination for Cause, Executive will be given five (5) business days written
notice specifying the alleged Cause event and will be entitled to appear (with counsel) before the full Board to present information
regarding his views on the Cause event, and after such hearing, there is at least a majority vote of the full Board (other than
Executive) to terminate him for Cause. After providing the notice in foregoing sentence, the Board may suspend Executive with full
pay and benefits until a final determination pursuant to this Section 11(c) has been made.


 


(3)       Upon
termination of this Agreement for Cause, the Company shall have no further obligations or liability to Executive or his heirs,
administrators or executors with respect to compensation and benefits thereafter, except for the obligation to pay Executive (i)
any earned but unpaid Base Salary accrued through Executive’s last date of employment with the Company, (ii) reimbursement
of any and all business expenses paid or incurred by Executive through the period ending on the termination date, pursuant to Section
9 above, and (iii) any accrued but unused paid time off through the termination date in accordance with Company policy. The Company
shall deduct, from all payments made hereunder, all applicable taxes, including income tax, FICA and FUTA, and other deductions
required by law.


 


(d)       Good
Reason and Without Cause.


 


(1)       At
any time during the term of this Agreement, subject to the conditions set forth in Section 11(d)(2) below, Executive may terminate
this Agreement and Executive’s employment with the Company for “Good Reason.” For purposes of this Agreement,
“Good Reason” shall mean the occurrence of any of the following events: (A) the assignment, without Executive’s
written consent, to Executive of duties that are significantly different from, and that result in a substantial diminution of,
the duties that he had on the Effective Date as set forth in Attachment A (including reporting to anyone other than the Executive
Chairman or to the Board); (B) the assignment, without Executive’s written consent, to Executive of a title that is different
from and subordinate to the Position title; provided, however, for the absence of doubt following a Change of Control, should
Executive cease to retain either the title or responsibilities he had on the Effective Date, or Executive is required to serve
in a diminished capacity or lesser title in a division or unit of another entity (including the acquiring entity), such event shall
constitute Good Reason regardless of the title of Executive in such acquiring company, division or unit; (C) the occurrence of
a Change of Control; (D) material breach by the Company of this Agreement; or (E) the re-location of Executive to an office other
than the Job Site.


 




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(2)       Except
with respect to subparagraph “(C)” in Section 11(d)(1) above, Executive shall only be entitled to terminate this Agreement
for Good Reason if: (i) he shall have delivered written notice to the Company within one hundred and eighty (180) days of the date
upon which the facts giving rise to Good Reason occurred (the “Good Reason Date”) of his intention to terminate this
Agreement and his employment with the Company for Good Reason, which notice specifies in reasonable detail the circumstances claimed
to provide the basis for such termination for Good Reason, (ii) the Company shall not have eliminated the circumstances constituting
Good Reason within thirty (30) days of its receipt from Executive of such written notice; and (iii) Executive’s employment
with the Company ends within two hundred and forty (240) days after the Good Reason Date.


 


(3)       In
the event that Executive terminates this Agreement and his employment with the Company for Good Reason or the Company terminates
this Agreement and Executive’s employment with the Company without Cause, the Company shall pay or provide to Executive (or,
following his or her death, to Executive’s spouse if living; but in the event she predeceases Executive, then to his heirs,
administrators or executors) the Separation Payment amount and Medical Continuation Benefits, pursuant to Section 6 above; provided,
however, that in the event Executive elects to terminate this Agreement for Good Reason in accordance with subparagraph “(C)”
in Section 11(d)(1), such election must be made and termination of employment occur within one hundred and twenty (120) days of
the occurrence of the Change of Control and Executive shall be entitled to receive the Separation Payment in one lump sum cash
payment within sixty (60) days after the termination date (to the extent the Change of Control meets the requirements under Section
409A). The Company shall deduct, from all payments made hereunder, all applicable taxes, including income tax, FICA and FUTA, and
other deductions required by law.


 


(4)       Executive
shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by Executive as the result
of employment by another employer or business or by profits earned by Executive from any other source at any time before and after
the termination date. The Company’s obligation to make any payment pursuant to, and otherwise to perform its obligations
under, this Agreement shall not be affected by any offset, counterclaim or other right that the Company may have against Executive
for any reason.


 


(e)       Without
“Good Reason” by Executive. At any time during the term of this Agreement, Executive shall be entitled to terminate
this Agreement and Executive’s employment with the Company without Good Reason by providing prior written notice of at least
thirty (30) days to the Company. Upon termination by Executive of this Agreement or Executive’s employment with the Company
without Good Reason, the Company shall have no further obligations or liability to Executive or his heirs, administrators or executors
with respect to compensation and benefits thereafter, except for the obligation to pay Executive (i) any earned but unpaid Base
Salary accrued through Executive’s last date of employment with the Company, (ii) reimbursement of any and all business expenses
paid or incurred by Executive through the period ending on the termination date, pursuant to Section 9 above, and (iii) any accrued
but unused paid time off through the termination date in accordance with Company policy. The Company shall deduct, from all payments
made hereunder, all applicable taxes, including income tax, FICA and FUTA, and other deductions required by law.


 




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(f)       Change
of Control. For purposes of this Agreement, “Change of Control” shall mean the occurrence of any one or more of
the following: (i) the accumulation (if over time, in any consecutive twelve (12) month period), whether directly, indirectly,
beneficially or of record, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) of 50.1% or more of the shares of the outstanding common stock of the Company, whether by merger,
consolidation, sale or other transfer of shares of Company common stock (other than a merger or consolidation where the stockholders
of the Company prior to the merger or consolidation are the holders of a majority of the voting securities of the entity that survives
such merger or consolidation), (ii) a sale of all or substantially all of the assets of the Company, or (iii) during any period
of twelve (12) consecutive months, the individuals who, at the beginning of such period, constitute the Board, and any new director
whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the beginning of the 12-month period or whose election
or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board; provided,
however, that the following acquisitions shall not constitute a Change of Control for the purposes of this Agreement: (A) any
acquisitions of Company common stock or securities convertible, exercisable or exchangeable into Company common stock directly
from the Company, or (B) any acquisition of Company common stock or securities convertible, exercisable or exchangeable into Company
common stock by any employee benefit plan (or related trust) sponsored by or maintained by the Company.


 


(g)       Any
termination of Executive’s employment by the Company or by Executive (other than termination by reason of Executive’s
death) shall be communicated by written Notice of Termination to the other party of this Agreement. For purposes of this Agreement,
a “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated, provided, however, failure to provide timely
notification shall not affect the employment status of Executive.


 





12.       Confidential
Information.


 


(a)       Disclosure
of Confidential Information. Executive recognizes, acknowledges and agrees that he has had and will continue to have access
to non-public, secret, and confidential information regarding the Company, its subsidiaries and their respective businesses (“Confidential
Information”), including but not limited to, its products, methods, formulas, software code, patents, sources of supply,
customer dealings, data, know-how, trade secrets and business plans, provided such information is not in or does not hereafter
become part of the public domain, or become known to others through no fault of Executive. Executive acknowledges that such information
is of great value to the Company, is the sole property of the Company, and has been and will be acquired by him in confidence.
In consideration of the obligations undertaken by the Company herein, Executive will not, at any time, during or after his employment
hereunder, reveal, divulge or make known to any person, any Confidential Information acquired by Executive during the course of
his employment, which is treated as confidential by the Company, and not otherwise in the public domain or publicly accessible.
Nothing in this Section 12 prohibits Executive from disclosing Confidential Information, in the course and scope of his employment,
to employees and/or agents of the Company who have a need to know and/or receive such Confidential Information to perform their
duties on behalf of the Company. The provisions of this Section 12 shall survive the termination of Executive’s employment
hereunder for a period of three (3) years. Information will not be deemed to be Confidential Information if: (i) the information
was in Executive’s possession or within Executive’s knowledge before the Company disclosed it to Executive; (ii) the
information was or became generally known to those who could take economic advantage of it; (iii) Executive obtained the information
from a third party that was not known by Executive to be bound by a confidentiality agreement or other obligation of confidentiality
to the Company or any other party with respect to such information; or (iv) Executive is required to disclose the information pursuant
to legal process (e.g. a subpoena), provided that Executive notifies the Company promptly upon receiving or becoming aware
of such legal process.


 






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(b)       Executive
affirms that he will not rely upon the protected trade secrets or confidential or proprietary information of any prior employer(s)
in providing services to the Company or its subsidiaries.


 


(c)       In
the event that Executive’s employment with the Company terminates for any reason, Executive shall deliver forthwith to the
Company any and all originals and copies, including those in electronic or digital formats, of Confidential Information; provided,
however, Executive shall be entitled to retain (i) papers and other materials of a personal nature, including, but not limited
to, photographs, correspondence, personal diaries, calendars and rolodexes, personal files and phone books, (ii) information showing
his compensation or relating to reimbursement of expenses, (iii) information that he reasonably believes may be needed for tax
purposes, and (iv) copies of plans, programs and agreements relating to his employment, or termination thereof, with the Company.


 


13.       Non-Competition
and Non-Solicitation.


 


(a)       Executive
agrees and acknowledges that the non-competition restrictions set forth herein are reasonable and necessary and do not impose undue
hardship or burdens on Executive. Executive also acknowledges that the products and services developed or provided by the Company,
its affiliates and/or its clients or customers are or are intended to be sold, provided, licensed and/or distributed to customers
and clients primarily in and throughout the United States (the “Territory”) (to the extent the Company comes
to operate, either directly or through the engagement of a distributor or joint or co-venturer, or sell a significant amount of
its products and services to customers located, in areas other than the United States during the term of the Employment Period,
the definition of Territory shall be automatically expanded to cover such other areas), and that the Territory, scope of prohibited
competition, and time duration set forth in the non-competition restrictions set forth below are reasonable and necessary to maintain
the value of the Confidential Information of, and to protect the goodwill and other legitimate business interests of, the Company,
its affiliates and/or its clients or customers. The provisions of this Section 13 shall survive the termination of Executive’s
employment hereunder.


 




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(b)       Executive
hereby agrees and covenants that he shall not without the prior written consent of the Company, directly or indirectly, in any
capacity whatsoever, including, without limitation, as an employee, employer, consultant, principal, partner, shareholder, officer,
director or any other individual or representative capacity (other than (i) as a holder of less than ten (10%) percent of the outstanding
securities of a Company whose shares are traded on any national securities exchange or (ii) as a limited partner, passive minority
interest holder in a venture capital fund, private equity fund or similar investment entity which holds or may hold an equity or
debt position in portfolio companies that are competitive with the Company; provided however, that Executive shall be precluded
from serving as an operating partner, general partner, manager or governing board designee with respect to such portfolio companies),
or whether on Executive’s own behalf or on behalf of any other person or entity or otherwise, during the “Non-Competition
and Non-Solicitation Period” (as defined below) and within the Territory:


 


(1)       Engage,
own, manage, operate, control, be employed by, consult for, or participate in the ownership, management, operation or control of
any business in competition with the business of the Company.


 


(2)       Recruit,
solicit or hire, or attempt to recruit, solicit or hire, any employee, or independent contractor of the Company to leave the employment
(or independent contractor relationship) thereof, whether or not any such employee or independent contractor is party to an employment
agreement, for the purpose of competing with the business of the Company;


 


(3)       Attempt
in any manner to solicit from any customer of the Company, with whom Executive had significant contact during Executive’s
employment by the Company (whether under this Agreement or otherwise), business that is competitive with the business done by the
Company, or to persuade or attempt to persuade any such customer to cease to do business or to reduce the amount of business which
such customer has customarily done with the Company, or if any such customer elects to move its business to a person other than
the Company, provide any services of the kind or competitive with the business of the Company for such customer, or have any discussions
regarding any such service with such customer, on behalf of such other person; or


 


(4)       Interfere
with any relationship, contractual or otherwise, between the Company and any other party, including, without limitation, any supplier,
distributor, co-venturer or joint venturer of the Company, for the purpose of soliciting such other party to discontinue or reduce
its business with the Company.


 


With respect to the activities
described in Paragraphs (1), (2), (3) and (4) above, the restrictions of this Section 13(b) shall continue during the Employment
Period and until one (1) year after the termination of Executive’s employment with the Company (hereinafter the “Non-Competition
and Non-Solicitation Period”); provided, however, that if this Agreement or Executive’s employment is terminated
by Executive for Good Reason or by the Company without Cause, then the restrictions of this Section 13 shall terminate concurrently
with the termination and shall be of no further effect.


 




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14.       Inventions.
All systems, inventions, discoveries, apparatus, techniques, methods, know-how, formulae or improvements made, developed or conceived
by Executive during Executive’s employment by the Company that (i) are directly relevant to the Company’s business
as then constituted, (ii) are developed as a part of the tasks and assignments that are the duties and responsibilities of Executive,
and (iii) were created using substantially the Company’s resources, such as time, materials and space, shall be and continue
to remain the Company’s exclusive property, without any added compensation or any reimbursement for expenses to Executive
(except expenses pursuant to Section 9 must be paid to Executive), and upon the conception of any and every such invention, process,
discovery or improvement during the Employment Period and without waiting to perfect or complete it, Executive promises and agrees
that Executive will immediately disclose it to the Company and to no one else and thenceforth will treat it as the property and
secret of the Company. Executive will also execute any instruments requested from time to time by the Company to vest in it complete
title and ownership to such invention, discovery or improvement and will, at the request of the Company, do such acts and execute
such instruments as the Company may require, but at the Company’s expense to obtain patents, trademarks or copyrights in
the United States and foreign countries, for such invention, discovery or improvement and for the purpose of vesting title thereto
in the Company, all without any reimbursement for expenses (except as provided in Section 9 or otherwise) and without any additional
compensation of any kind to Executive.


 


15.       Section
409A.


 


The provisions of this
Agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)
and any final regulations and guidance promulgated thereunder (“Section 409A”) and shall be construed in a manner
consistent with the requirements for avoiding taxes or penalties under Section 409A. The Company and Executive agree to work together
in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or
desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.


 


To the extent that Executive
will be reimbursed for costs and expenses or in-kind benefits, except as otherwise permitted by Section 409A, (a) the right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, (b) the amount of expenses eligible
for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided, in any other taxable year; provided that the foregoing clause (b) shall not be violated
with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are
subject to a limit related to the period the arrangement is in effect and (c) such payments shall be made on or before the last
day of the taxable year following the taxable year in which you incurred the expense.


 


A termination of employment
shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination constitutes a “Separation from Service”
within the meaning of Section 409A and, for purposes of any such provision of this Agreement references to a “termination,”
“termination of employment” or like terms shall mean Separation from Service.


 


Each installment payable
hereunder shall constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b), including Treasury Regulation
Section 1.409A-2(b)(2)(iii). Each payment that is made within the terms of the “short-term deferral” rule set forth
in Treasury Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral” rule. Each other payment
is intended to be a payment upon an involuntary termination from service and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii),
et. seq., to the maximum extent permitted by that regulation, with any amount that is not exempt from Code Section 409A being subject
to Code Section 409A.


 






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Notwithstanding anything
to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A, any payment
otherwise due to Executive on or within the six (6) month period following Executive’s termination will accrue during such
six (6) month period and will become payable in one lump sum cash payment on the date six (6) months and one (1) day following
the date of Executive’s termination of employment, to the extent required to avoid any adverse tax consequences under Section
409A. Any remaining payment(s) will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding
anything herein to the contrary, if Executive dies following termination but prior to the six (6) month anniversary of Executive’s
termination date, then any payments delayed in accordance with this paragraph will be payable in a lump sum upon the date of Executive’s
death and all other amounts will be payable in accordance with the payment schedule applicable to each payment or benefit, to the
extent and in a manner consistent with Section 409A.


 


16.       Miscellaneous.


 


(a)       Executive
acknowledges that the services to be rendered by him under the provisions of this Agreement are of a special, unique and extraordinary
character and that it would be difficult or impossible to replace such services. Furthermore, the parties acknowledge that monetary
damages alone would not be an adequate remedy for any breach by Executive of Section 12 or Section 13 of this Agreement. Accordingly,
Executive agrees that any breach by Executive of Section 12 or Section 13 of this Agreement shall entitle the Company, in addition
to all other legal remedies available to it, to apply to any court of competent jurisdiction to seek to enjoin such breach. The
parties understand and intend that each restriction agreed to by Executive hereinabove shall be construed as separable and divisible
from every other restriction, that the unenforceability of any restriction shall not limit the enforceability, in whole or in part,
of any other restriction, and that one or more or all of such restrictions may be enforced in whole or in part as applicable law
allows. If any provision in this Agreement is determined to be invalid or unenforceable by a court of competent jurisdiction, the
parties agree that the remaining provisions of the Agreement will nevertheless continue to be valid and enforceable. The remedy
of injunctive relief herein set forth shall be in addition to, and not in lieu of, any other rights or remedies that the Company
may have at law or in equity.


 


(b)       Neither
Executive nor the Company may assign or delegate any of their rights or duties under this Agreement without the express written
consent of the other; provided, however, that the Company shall have the right to delegate its obligation of payment
of all sums due to Executive hereunder, provided that such delegation shall not relieve the Company of any of its obligations
hereunder.


 


(c)      During the term
of this Agreement, the Company (i) shall indemnify and hold harmless Executive and his heirs and representatives as, and to the
extent, provided in the Company’s bylaws and (ii) shall cover Executive under the Company’s directors’ and officers’
liability insurance on the same basis as it covers other senior executive officers and directors of the Company.


 


(d)       This
Agreement constitutes and embodies the full and complete understanding and agreement of the parties with respect to
Executive’s employment by the Company, supersedes all prior understandings and agreements, whether oral or written,
between Executive and the Company, and shall not be amended, modified or changed except by an instrument in writing executed
by the party to be charged (it being understood that, pursuant to Section 7, Share Awards shall govern with respect to the
subject matter thereof). The invalidity or partial invalidity of one or more provisions of this Agreement shall not
invalidate any other provision of this Agreement. No waiver by either party of any provision or condition to be performed
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or any prior or subsequent
time.


 






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(e)       This
Agreement shall inure to the benefit of, be binding upon and enforceable against, the parties hereto and their respective successors,
heirs, beneficiaries and permitted assigns.


 


(f)       The
headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.


 


(g)       All
notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by registered or certified mail, return receipt requested, postage
prepaid, or by reputable national overnight delivery service (e.g. Federal Express) for overnight delivery to the Company at its
principal executive office or to Executive at his address of record in the Company’s records, or to such other address as
either party may hereafter give the other party notice of in accordance with the provisions hereof. Notices shall be deemed given
on the sooner of the date actually received or the third business day after deposited in the mail or one business day after deposited
with an overnight delivery service for overnight delivery.


 


(h)       This
Agreement shall be governed by and construed in accordance with the internal laws of the State of Arizona without reference to
principles of conflicts of laws and each of the parties hereto irrevocably consents to the jurisdiction and venue of the federal
and state courts located in the County of Pima, State of Arizona.


 


(i)        This
Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one of the same instrument. The parties hereto have executed this Agreement as of the date set forth
above.


 


(j)        Executive
represents and warrants to the Company that he has the full power and authority to enter into this Agreement and to perform his
obligations hereunder and that the execution and delivery of this Agreement and the performance of his obligations hereunder will
not conflict with any agreement to which Executive is a party.


 


(k)       The
Company represents and warrants to Executive that it has the full power and authority to enter into this Agreement and to perform
its obligations hereunder and that the execution and delivery of this Agreement and the performance of its obligations hereunder
will not conflict with any agreement to which the Company is a party.


 


[Remainder of page intentionally left blank;
signature page follows.]


 




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IN WITNESS WHEREOF, Executive
and the Company have caused this Executive Employment Agreement to be executed as of the date first above written.


 


	 	THE COMPANY:
	 	 
	 	AUDIOEYE, INC.
	 	 	 
	 	By:	/s/ Carr Bettis
	 	 	 
	 	 	Name: Carr Bettis
	 	 
	 	 	Title: Executive Chairman
	 	 
	 	EXECUTIVE:
	 	 
	 	/s/ Todd A. Bankofier
	 	 
	 	Todd Bankofier


 






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