UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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FORM
CURRENT REPORT
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 15, 2023, AudioEye, Inc. (the “Company”) and Dominic Varacalli, the Company’s Chief Operating Officer, mutually agreed that Mr. Varacalli’s employment with the Company would terminate as of a subsequent date. On August 21, 2023, the Company and Mr. Varacalli entered into a Transition and Separation Agreement (the “Agreement”) pursuant to which Mr. Varacalli resigned as Chief Operating Officer effective as of August 18, 2023. Under the Agreement, Mr. Varacalli agrees to provide transition assistance as an employee to the Company at the same base salary rate through September 30, 2023, after which his employment would terminate. The Agreement provides that following his termination, subject to certain customary conditions such as execution of a release, Mr. Varacalli will receive $62,500 in cash severance. Further, the Agreement amends Mr. Varacalli’s outstanding equity award agreements to revise vesting provisions as described below. The Agreement also provides that, for a period of one year following September 30, 2023, Mr. Varacalli will be prohibited from competing against the Company.
On August 21, 2023, the Company and Mr. Varacalli also entered into a Consulting Agreement (the “Consulting Agreement”) effective as of September 30, 2023, pursuant to which Mr. Varacalli agreed to continue to provide transition assistance as a consultant until November 15, 2023 (the “Consulting Agreement Termination Date”), in exchange for the accelerated vesting of 30,000 restricted stock units as of the Consulting Agreement Termination Date, subject to certain customary conditions. All other outstanding equity awards held by Mr. Varacalli will be forfeited.
The foregoing summary of the Agreement and the Consulting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the agreements, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this report and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit | |
| Number | Description |
| 10.1 | Transition and Separation Agreement effective as of August 18, 2023 between the Company and Dominic Varacalli |
| 10.2 | Consulting Agreement effective as of September 30, 2023 between the Company and Dominic Varacalli |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| August 21, 2023 | AudioEye, Inc. | |
| (Registrant) | ||
| By | /s/ James Spolar | |
| Name: James Spolar | ||
| Title: General Counsel and Secretary | ||