Exhibit
10.32


 


AUDIOEYE, INC.


STOCK OPTION AGREEMENT


FOR


[·]


 


Agreement


 


1.          Grant
of Option. AudioEye,
Inc., a Delaware corporation (the “Company”), hereby grants, as of the effective date of this Agreement specified
on Schedule I hereof beside the caption “Date of Grant” (“Date of Grant”), to [·]
(the “Optionee”) an option (the “Option”) to purchase an aggregate number of shares set forth on Schedule
I hereof beside the caption “Number of Optioned Shares” (such number being subject to adjustment as provided in
Section 10(c) of the Plan) of the Company’s common stock, $.00001 par value per share (the “Shares”), at an
exercise price per share set forth on Schedule I hereof beside the caption “Exercise Price” (such exercise
price being subject to adjustment as provided in Section 10(c) of the Plan)(the “Exercise Price”). The Option shall
be subject to the terms and conditions set forth herein. The Option is being issued pursuant to the AudioEye, Inc. [·]
Incentive Compensation Plan (the “Plan”), which is incorporated herein for all purposes. This Option is designated
on Schedule I as either an Incentive Stock Option or a Non-Qualified Stock Option. If designated on Schedule I hereof
as an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the
Code, and this Agreement shall be interpreted accordingly. 


 


2.          Definitions.
Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.


 


3.          Exercise
Schedule. Except as otherwise provided in Sections 6 or 10 of this Agreement, or in the Plan, the Option is exercisable
in installments as specified on Schedule I hereof beside the caption “Vesting”, which shall be cumulative.
To the extent that the Option has become exercisable with respect to a percentage of Shares as provided on Schedule I hereof
beside the caption “Vesting” on each date (the “Vesting Date”) upon which the Optionee shall be entitled
to exercise the Option with respect to the percentage of Shares granted as indicated for each Vesting Date (provided that the
Continuous Service of the Optionee continues through and on the applicable Vesting Date), the Option may thereafter be exercised
by the Optionee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein.
Except as otherwise specifically provided herein, there shall be no proportionate or partial vesting in the periods prior to each
Vesting Date, and all vesting shall occur only on the appropriate Vesting Date. Upon the termination of the Optionee’s Continuous
Service, any unvested portion of the Option shall terminate and be null and void.


 


4.          Method
of Exercise. 


 


(a)          General.
The vested portion of this Option shall be exercisable in whole or in part in accordance with the exercise schedule set forth
in Section 3 hereof, by delivery, in person or by certified mail, of the form attached hereto as Exhibit A to the Secretary
of the Company. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised
after both (a) receipt by the Company of such written notice accompanied by the Exercise Price and (b) arrangements that are satisfactory
to the Committee in its sole discretion have been made for Optionee’s payment to the Company of the amount, if any, that
is necessary to be withheld in accordance with applicable Federal or state withholding requirements. No Shares shall be issued
pursuant to the Option unless and until such issuance and such exercise shall comply with all relevant provisions of applicable
law, including the requirements of any stock exchange upon which the Shares then may be traded.


 




     


     


    

 


(b)          Cashless
Exercise. Notwithstanding the foregoing, the vested portion of this
Option shall be exercisable in whole or in part in accordance with the exercise schedule set forth in Section 3 hereof, by delivery
of the form attached hereto as Exhibit A, which shall state the election to exercise the Option through a cashless exercise
(such exercise, a “Cashless Exercise”). Such written notice shall be signed by the Optionee and shall be delivered
in person or by certified mail to the Secretary of the Company. Upon a Cashless Exercise, the Company shall issue to the Optionee
the number of Shares determined as follows:


 


X
= Y (A-B)/A


where:


 


X
= the number of Shares to be issued to the Optionee.


Y
= the number of Shares subject to Cashless Exercise.


A
= the average of the closing sale price of the Shares for the five (5) trading days immediately prior to the date of exercise
(if the Shares are not then publicly traded, then the fair market value per share of the Shares (as determined by the Company’s
Board of Directors)).


B
= the Exercise Price.


 


5.          Method
of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee: (a) cash; (b) check; (c) to the extent permitted by the
Committee or as provided on Schedule I hereof beside the caption “Permission to Pay with Shares”, with Shares
owned by the Optionee, or the withholding of Shares that otherwise would be delivered to the Optionee as a result of the exercise
of the Option, or pursuant to the “cashless exercise” procedure set forth in Section 4(b), or (d) such other consideration
or in such other manner as may be determined by the Committee in its absolute discretion.


 


6.          Termination
of Option. 


 


(a)          General.
Any unexercised portion of the Option shall automatically and without notice terminate and become null and void at the time of
the earliest to occur of the following:


 


(i)          unless
the Committee otherwise determines in writing in its sole discretion, three months after the date on which the Optionee’s
Continuous Service is terminated other than by reason of (A) by the Company or a Related Entity for Cause, (B) a Disability of
the Optionee as determined by a medical doctor satisfactory to the Committee, or (C) the death of the Optionee;


 




     


     


    

 


(ii)         immediately
upon the termination of the Optionee’s Continuous Service by the Company or a Related Entity for Cause;


 


(iii)        twelve
months after the date on which the Optionee’s Continuous Service is terminated by reason of a Disability as determined by
a medical doctor satisfactory to the Committee;


 


(iv)        twelve
months after the date of termination of the Optionee’s Continuous Service by reason of the death of the Optionee; or


 


(v)         the
tenth anniversary of the date as of which the Option is granted (or, if a different date is shown on Schedule I hereof
beside the caption “Termination Date”, such date).


 


(b)          Cancellation.
To the extent not previously exercised, (i) the Option shall terminate immediately in the event of (A) the liquidation or dissolution
of the Company, or (B) any reorganization, merger, consolidation or other form of corporate transaction in which the Company does
not survive or the Shares are exchanged for or converted into securities issued by another entity, or an affiliate of such successor
or acquiring entity, unless the successor or acquiring entity, or an affiliate thereof, assumes the Option or substitutes an equivalent
option or right pursuant to Section 10(c) of the Plan, and (ii) the Committee in its sole discretion may by written notice (“cancellation
notice”) cancel, effective upon the consummation of any transaction that constitutes a Change in Control, the Option (or
portion thereof) that remains unexercised on such date. The Committee shall give written notice of any proposed transaction referred
to in this Section 6(b) a reasonable period of time prior to the closing date for such transaction (which notice may be given
either before or after approval of such transaction), in order that the Optionee may have a reasonable period of time prior to
the closing date of such transaction within which to exercise the Option if and to the extent that it then is exercisable (including
any portion of the Option that may become exercisable upon the closing date of such transaction). The Optionee may condition his
exercise of the Option upon the consummation of a transaction referred to in this Section 6(b).


 


7.          Transferability.
Unless (i) transfers are expressly permitted in the language appearing beside the caption “Expanded Rights to Transfer Option”
on Schedule I hereof or (ii) otherwise determined by the Committee, the Option granted hereby is not transferable otherwise
than by will or under the applicable laws of descent and distribution, and during the lifetime of the Optionee the Option shall
be exercisable only by the Optionee, or the Optionee’s guardian or legal representative. In addition, the Option shall not
be assigned, negotiated, pledged or hypothecated in any way (whether by operation of law or otherwise), and the Option shall not
be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, negotiate, pledge or hypothecate
the Option, or in the event of any levy upon the Option by reason of any execution, attachment or similar process contrary to
the provisions hereof, the Option shall immediately become null and void. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee. 


 


8.          No
Rights of Stockholders. Neither the Optionee nor any personal representative (or beneficiary) shall be, or shall have
any of the rights and privileges of, a stockholder of the Company with respect to any Shares purchasable or issuable upon the
exercise of the Option, in whole or in part, prior to the date on which the Shares are issued.


 




     


     


    

 


9.           Acceleration
of Exercisability of Option.


 


(a)          Acceleration
Upon Certain Terminations or Cancellations of Option. This Option
shall become immediately fully exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof,
(i) the Option is terminated pursuant to Section 6(b)(i) hereof, or (ii) the Company exercises its discretion to provide a cancellation
notice with respect to the Option pursuant to Section 6(b)(ii) hereof. 


 


(b)          Acceleration
Upon Change in Control. This Option shall become immediately fully
exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof, and during the Optionee's
Continuous Service, there is a “Change in Control”, as defined in Section 9(b) of the Plan.


 


10.         No
Right to Continuous Service. Neither the Option nor this Agreement
shall confer upon the Optionee any right to Continuous Service with the Company or any Related Entity.


 


11.         Information
Confidential. As partial consideration for the granting of the Option,
the Optionee agrees with the Company to keep confidential all information and knowledge that the Optionee has relating to the
manner and amount of the Optionee’s participation in the Plan; provided, however, that such information may be disclosed
as required by law and may be given in confidence to the Optionee’s spouse, the Optionee’s tax and financial advisors,
or financial institutions to the extent that such information is necessary to secure a loan.


 


12.         Interpretation
/ Provisions of Plan Control. This Agreement is subject to all the
terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules,
regulations and interpretations relating to the Plan adopted by the Committee as may be in effect from time to time. If and to
the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall
control, and this Agreement shall be deemed to be modified accordingly. The Optionee accepts the Option subject to all of the
terms and provisions of the Plan and this Agreement. The undersigned Optionee hereby accepts as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions arising under the Plan and this Agreement, unless shown to
have been made in an arbitrary and capricious manner.


 


13.         Notices.
All notices, requests, demands, and other communications hereunder shall be in writing and shall be personally delivered, delivered
by facsimile or courier service, or mailed, certified with first class postage prepaid to the address specified by the person
who is to receive the same. Each such notice, request, demand, or other communication hereunder shall be deemed to have been given
(whether actually received or not) on the date of actual delivery thereof, if personally delivered or delivered by facsimile transmission
(if receipt is confirmed at the time of such transmission by telephone or facsimile-machine-generated confirmation), or on the
third day following the date of mailing, if mailed in accordance with this Section, or on the day specified for delivery to the
courier service (if such day is one on which the courier service will give normal assurances that such specified delivery will
be made). Any notice, request, demand, or other communication given otherwise than in accordance with this Section shall be deemed
to have been given on the date actually received. Each such notice, request, demand, or other communication hereunder shall be
addressed, in the case of the Company, to the Company’s Secretary at AudioEye, Inc., 5210 E. Williams Circle, Suite 750
Tucson, Arizona 85711, or if the Company should move its principal office, to such principal office, and, in the case of the Optionee,
to the Optionee’s last permanent address as shown on the Company’s records, subject to the right of either party to
designate some other address at any time hereafter in a notice satisfying the requirements of this Section. Any person entitled
to any notice, request, demand, or other communication hereunder may waive the notice, request, demand, or other communication.



 




     


     


    

 


14.        Section
409A.


 


(a)          It
is intended that the Option awarded pursuant to this Agreement be exempt from Section 409A of the Code (“Section 409A”)
because it is believed that (i) the Exercise Price may never be less than the Fair Market Value of a Share on the Date of Grant
and the number of shares subject to the Option is fixed on the original Date of Grant, (ii) the transfer or exercise of the Option
is subject to taxation under Section 83 of the Code and Treas. Reg. 1.83-7, and (iii) the Option does not include any feature
for the deferral of compensation other than the deferral of recognition of income until the exercise of the Option. The provisions
of this Agreement shall be interpreted in a manner consistent with this intention, and the provisions of this Agreement may not
be amended, adjusted, assumed or substituted for, converted or otherwise modified without the Optionee’s prior written consent
if and to the extent that the Company believes or reasonably should believe that such amendment, adjustment, assumption or substitution,
conversion or modification would cause the award to violate the requirements of Section 409A. In the event that either the Company
or the Optionee believes, at any time, that any benefit or right under this Agreement is subject to Section 409A, then the Committee
may (acting alone and without any required consent of the Optionee) amend this Agreement in such manner as the Committee deems
necessary or appropriate to be exempt from or otherwise comply with the requirements of Section 409A (including without limitation,
amending the Agreement to increase the Exercise Price to such amount as may be required in order for the Option to be exempt from
Section 409A).


 


(b)          Notwithstanding
the foregoing, the Company does not make any representation to the Optionee that the Option awarded pursuant to this Agreement
is exempt from, or satisfies, the requirements of Section 409A, and the Company shall have no liability or other obligation to
indemnify or hold harmless the Optionee or any Beneficiary for any tax, additional tax, interest or penalties that the Optionee
or any Beneficiary may incur in the event that any provision of this Agreement, or any amendment or modification thereof or any
other action taken with respect thereto, that either is consented to by the Optionee or that the Company reasonably believes should
not result in a violation of Section 409A, is deemed to violate any of the requirements of Section 409A.


 


15.         Incentive
Stock Option Treatment. If designated on Schedule I hereof
as an Incentive Stock Option: (a) the terms of this Option shall be interpreted in a manner consistent with the intent of the
Company and the Optionee that the Option qualify as an Incentive Stock Option under Section 422 of the Code; (b) if any provision
of the Plan or this Agreement shall be impermissible in order for the Option to qualify as an Incentive Stock Option, then the
Option shall be construed and enforced as if such provision had never been included in the Plan or the Option; and (c) if and
to the extent that the number of Options granted pursuant to this Agreement exceeds the limitations contained in Section 422 of
the Code on the value of Shares with respect to which this Option may qualify as an Incentive Stock Option, this Option shall
be a Non-Qualified Stock Option.


 




     


     


    

 


16.        Section
Headings. The Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.


 


17.        Governing
Law and Venue. THIS AGREEMENT SHALL AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE. EACH PARTY HEREBY IRREVOCABLY SUBMITS
TO THE PERSONAL JURISDICTION OF THE COURTS LOCATED IN THE STATE OF ARIZONA AND AGREES THAT ANY LITIGATION BETWEEN THE PARTIES
WILL BE FILED IN COURTS LOCATED IN TUSCON, ARIZONA.


 


18.        Arbitration.
By execution hereof, the parties hereto expressly agree that upon the request of any party, whether made before or after the institution
of any legal proceeding, any action, dispute, claim or controversy of any kind, whether in contract or in tort, statutory or common
law, legal or equitable, arising between the parties in any way arising out of any of the provisions contained in this Agreement
shall be resolved by binding arbitration administered by the American Arbitration Association (the “AAA”) and in Tucson,
Arizona. Such arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the AAA and, to the maximum
extent applicable, the Federal Arbitration Act (Title 9 of the United States Code) except as otherwise specified herein. Judgment
upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction. The arbitrator shall resolve
all disputes in accordance with the applicable substantive law. A single arbitrator shall be chosen and shall decide the dispute,
unless the amount sought in the dispute exceeds $100,000, in which case a panel of three arbitrators shall decide the dispute.
In all arbitration proceedings in which the amount of any award exceeds $100,000, in the aggregate, the arbitrator(s) shall make
specific, written findings of fact and conclusions of law. In all arbitration proceedings in which the amount of any award exceeds
$100,000, in the aggregate, the parties shall have, in addition to the limited statutory right to seek a vacation or modification
of an award pursuant to applicable law, the right to vacation or modification of any award that is based, in whole or in part,
on an incorrect or erroneous ruling of law by appeal to an appropriate court having jurisdiction; provided, however, that any
such application for a vacation or modification of such an award based on an incorrect ruling of law must be filed in a court
having jurisdiction over the dispute within 15 days from the date the award is rendered. The findings of fact of the arbitrator(s)
shall be binding on all parties and shall not be subject to further review except as otherwise allowed by applicable law. No provision
of this Agreement nor the exercise of any rights hereunder shall limit the right of any party, and any party shall have the right
during any dispute, to seek, use, and employ ancillary or preliminary remedies, such as injunctive relief (including, without
limitation, specific performance), from a court having jurisdiction before, during, or after the pendency of any arbitration.
The institution and maintenance of any action for judicial relief or pursuit of provisional or ancillary remedies shall not constitute
a waiver of the right of any party to submit any dispute to arbitration nor render inapplicable the compulsory arbitration provisions
hereof.


 




     


     


    

 


19.        Attorney’s
Fees. If any action is brought to enforce or interpret the terms
of this Agreement (including through arbitration), the prevailing party shall be entitled to reasonable attorneys’ fees,
costs, and necessary disbursements in addition to any other relief to which such party may be entitled.


 


20.         Counterparts.
This Agreement may be executed in any number of counterparts and shall be effective when each party hereto has executed at least
one counterpart, with the same effect as if all signing parties had signed the same document. All counterparts will be construed
together and evidence only one agreement, which, notwithstanding the actual date of execution of any counterpart, shall be deemed
to be dated the day and year first written above. In making proof of this Agreement, it shall not be necessary to account for
a counterpart executed by any party other than the party against whom enforcement is sought or to account for more than one counterpart
executed by the party against whom enforcement is sought.


 


21.         Execution
by Facsimile. The manual signature of any party hereto that is transmitted
to any other party by facsimile or in portable document format (PDF) shall be deemed for all purposes to be an original signature.


 


Remainder
of page intentionally left blank; signature page follows.


 




     


     


    

 


IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the [·]
day of [·].


 


	 	COMPANY:
	 	 
	 	AudioEye,
    Inc.
	 	 
	 	By:	 
	 	 	Name:
    
	 	 	Title:
    


 


The
Optionee acknowledges receipt of a copy of the Plan and represents that he or she has reviewed the provisions of the Plan and
this Agreement in their entirety, is familiar with and understands their terms and provisions, and hereby accepts this Option
subject to all of the terms and provisions of the Plan and this Agreement. The Optionee further represents that he or she has
had an opportunity to obtain the advice of counsel prior to executing this Agreement.


 


	Dated:	 	 	OPTIONEE:
	 	 	 	 
	 	 	 	 
	 	 	 	Name:
    [·]
	 	 	 	 
	 	 	 	Address:  	[·]
	 	 	 	 	[·]


 




     


     


    

 


SCHEDULE
I


 


	NAME
    OF OPTIONEE:	 	[·]
	DATE
    OF GRANT:	 	[·]
	TYPE
    OF OPTION:	 	[·]
	 	 	 
	NUMBER
    OF OPTIONED SHARES:	 	[·]
	EXERCISE
    PRICE:	 	$[·]
    per Share
	TERMINATION
    DATE:	 	5th
    year anniversary of Date of Grant
	VESTING:	 	(i)
                                         50% of the shares subject to the Option (the “Option
                                         Shares”) shall vest
                                         in equal monthly installments beginning on [·]
                                         and continuing on the first day of each month through [·];
                                         (ii) 25% of the Option Shares shall vest in equal monthly installments beginning on [·]
                                         and continuing on the first day of each month through [·];
                                         and (iii) 25% of the Option Shares shall vest in equal monthly installments beginning
                                         on [·]
                                         and continuing on the first day of each month, through [·],
                                         in each case, subject to the Continuous Service (as defined in the Plan) of the holder
                                         of such Option on such vesting date. 

         

	PERMISSION
    TO PAY WITH SHARES:	 	_   Granted  __________ Denied

	EXPANDED
    RIGHTS TO TRANSFER OPTION:	 	None


 




     


     


    

 


Exhibit
A


 


	 ̈
    Incentive
    Stock Option	Participant:
    	 
	 ̈
    Nonstatutory
    Stock Option	 	 
	 	Date:
    	 


 


STOCK
OPTION EXERCISE NOTICE


 


AudioEye,
Inc.


		Attention:	Todd
Bankofier, Chief Executive Officer



		Address:	5210
East Williams Circle, Suite 750, Tucson, Arizona 85711



 


Ladies
and Gentlemen:


 


1.       Option.
I was granted an option (the “Option”)
to purchase shares of the common stock (the “Shares”)
of AudioEye, Inc. (the “Company”) pursuant
to the Company’s [YEAR] Incentive Compensation Plan (the “Plan”)
and my Stock Option Agreement (the “Option Agreement”)
as follows:


 


	Date
    of Grant:	 	 
	 	 	 
	Number
    of Option Shares:	 	 
	 	 	 
	Exercise
    Price per Share:	$	 


 


2.       Exercise
of Option. I hereby elect to exercise the Option to purchase the following number of Shares, all of which are Vested Shares,
in accordance with the Option Agreement:


 


	Total
    Shares Purchased:	 
	 	 
	Total
    Exercise Price (Total Shares  X  Price per Share)	 


 


3.       Payments.
I enclose payment in full of the total exercise price for the Shares in the following form(s), as authorized by my Option Agreement:


 


	 ̈
    Cash:	$	 
	 	 	 
	 ̈
    Check:	$	 
	 	 	 
	 ̈
    Cashless
    Exercise:	N/A


 


4.       Tax
Withholding. I authorize payroll withholding and otherwise to make adequate provision for the federal, state, local and foreign
tax withholding obligations of the Company, if any, in connection with the Option. If I am exercising a Nonstatutory Stock Option,
I enclose payment in full of my withholding taxes, if any, as follows:


 


	 ̈ Cash:	$	 
	 	 	 
	 ̈ Check:	$	 


 




     


     


    

 


5.           Participant
Information.


 


	My address is: 	 
	 	 




 


My
Social Security Number is:    ______


 


6.           Notice
of Disqualifying Disposition. If the Option is an Incentive Stock Option, I agree that I will promptly notify the Chief Executive
Officer or other officer as designated by the Company if I transfer any of the Shares within one (1) year from the date I exercise
all or part of the Option or within two (2) years of the Date of Grant.


 


7.           Binding
Effect. I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and conditions
of the Option Agreement and the Plan, to all of which I hereby expressly assent. This Agreement shall inure to the benefit of
and be binding upon my heirs, executors, administrators, successors and assigns. 


 


8.           Transfer.
I understand and acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities
Act”), and that consequently the Shares must be held indefinitely
unless they are subsequently registered under the Securities Act, an exemption from such registration is available, or they are
sold in accordance with Rule 144 or Rule 701 under the Securities Act. I further understand and acknowledge that the
Company is under no obligation to register the Shares. I understand that the certificate or certificates evidencing the Shares
will be imprinted with legends which prohibit the transfer of the Shares unless they are registered or such registration is not
required in the opinion of legal counsel satisfactory to the Company.


 


I
am aware that Rule 144 under the Securities Act, which permits limited public resale of securities acquired in a nonpublic
offering, is not currently available with respect to the Shares and, in any event, is available only if certain conditions are
satisfied. I understand that any sale of the Shares that might be made in reliance upon Rule 144 may only be made in limited
amounts in accordance with the terms and conditions of such rule and that a copy of Rule 144 will be delivered to me upon
request.


 


I
understand that I am purchasing the Shares pursuant to the terms of the Plan and my Option Agreement, copies of which I have received
and carefully read and understand.


 


	 	Very
    truly yours,
	 	 
	 	 
	 	(Signature)


 




     


     


    

 


Receipt
of the above is hereby acknowledged.


 


	AUDIOEYE,
    INC.	 
	 	 
	 	 
	By:  Todd
    Bankofier	 
	Title:  Chief
    Executive Officer	 


 


	Dated: