Exhibit 10.2
 
EMPLOYMENT AGREEMENT
 

THIS EMPLOYMENT AGREEMENT is made and entered into as of this 3rd day of June,
2014 (the “Effective Date”), by and between Drone Aviation Holding Corp., a
Nevada corporation f/k/a Macrosolve, Inc., an Oklahoma corporation with offices
at 11653 Central Parkway, Jacksonville, FL 32224 (the “Corporation”), and
Felicia Hess, residing at 916 Fiddlers Creek Road, Ponte Vedra Beach, FL 32082
(the “Executive”), under the following circumstances:
 
RECITALS:
 

A.           The Corporation desires to secure the services of the Executive
upon the terms and conditions hereinafter set forth; and
 
B.           The Executive desires to render services to the Corporation upon
the terms and conditions hereinafter set forth.
 
NOW, THEREFORE, the parties mutually agree as follows:
 
1. Employment. The Corporation hereby employs the Executive and the Executive
hereby accepts employment as an executive of the Corporation, subject to the
terms and conditions set forth in this Agreement.
 
2. Duties. The Executive shall serve as the Chief Executive Officer of the
Corporation, with such duties, responsibilities and authority as are
commensurate and consistent with her position, as may be, from time to time,
assigned to her by the Board of Directors (the “Board”) of the Corporation. The
Executive shall report directly to the Board. The Executive shall also serve as
a member of the Company’s Board.  During the Term (as defined in Section 3), the
Executive shall devote her full business time and efforts to the performance of
her duties hereunder unless otherwise authorized by the Board. Notwithstanding
the foregoing, the expenditure of reasonable amounts of time by the Executive
for the making of passive personal investments, the conduct of business affairs
and charitable and professional activities shall be allowed, provided such
activities do not materially interfere with the services required to be rendered
to the Corporation hereunder and do not violate the restrictive covenants set
forth in Section 9 below.
 
3. Term of Employment. The term of the Executive’s employment hereunder, unless
sooner terminated as provided herein (the “Initial Term”), shall be for a period
of one (1) year commencing on the Effective Date. The term of this Agreement
shall automatically be extended for additional terms of one (1) year each (each
a “Renewal Term”) unless either party gives prior written notice of non-renewal
to the other party no later than thirty (30) days prior to the expiration of the
Initial Term (“Non-Renewal Notice”), or the then current Renewal Term, as the
case may be. For purposes of this Agreement, the Initial Term and any Renewal
Term are hereinafter collectively referred to as the “Term.”
 
4. Compensation of Executive.
 
(a) The Corporation shall pay the Executive as compensation for her services
hereunder, in equal bi-weekly installments during the Term, the sum of $150,000
(the “Base Salary”), less such deductions as shall be required to be withheld by
applicable law and regulations. The Corporation shall review the Base Salary on
an annual basis and has the right but not the obligation to increase it but such
salary shall not be decreased during the Term.
 
 
 
 
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(b) (i)           In addition to the Base Salary set forth in Section 4(a), the
Executive shall be entitled to receive an annual cash bonus in an amount equal
to up to one hundred percent (100%) of her then-current Base Salary if the
Corporation meets or exceeds criteria adopted by the Compensation Committee of
the Board of Directors (the “Compensation Committee”) for earning bonuses which
criteria shall be adopted by the Compensation Committee annually.  Bonuses shall
be paid by the Corporation to the Executive promptly after determination that
the relevant targets have been met, it being understood that the attainment of
any financial targets associated with any bonus shall not be determined until
following the completion of the Corporation’s annual audit and public
announcement of such results and bonuses shall be paid promptly following the
Corporation’s announcement of earnings.
 
(ii)           The Executive shall be entitled to a starting bonus equal to
$25,000, which shall be paid within seven (7) calendar days from the Effective
Date.
 
(c) Equity Awards.  Executive shall be eligible for such grants of awards under
stock option or other equity incentive plans of the Corporation adopted by the
Board and approved by the Corporation’s stockholders (or any successor or
replacement plan adopted by the Board and approved by the Corporation’s
stockholders) (the “Plan”) as the Compensation Committee of the Corporation may
from time to time determine (the “Share Awards”).  Share Awards shall be subject
to the applicable Plan terms and conditions, provided, however, that Share
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.
 
(d)  The Corporation shall pay or reimburse the Executive for all reasonable
out-of-pocket expenses actually incurred or paid by the Executive in the course
of her employment, including all reasonable expenses for the use of a cell phone
in connection with Executive’s employment with the Corporation, consistent with
the Corporation’s policy for reimbursement of expenses from time to time.
 
(e) The Executive shall be entitled to participate in such pension, profit
sharing, group insurance, hospitalization, and group health and benefit plans
and all other benefits and plans, including perquisites, if any, as the
Corporation provides to its senior executives, including group family health
insurance coverage which shall be paid by the Corporation (the “Benefit
Plans”).  In the event the Corporation does not have a health benefit plan in
place, the Corporation shall reimburse the Executive for expenses incurred in
maintaining health and dental insurance for Executive and her dependents, in an
amount not to exceed $1,500 per month.
 
(f) The Corporation shall execute and deliver in favor of the Executive an
indemnification agreement on the same terms and conditions entered into with the
other officers and directors of the Corporation.  Such agreement shall provide
for the indemnification of the Executive for the term of his employment.  The
Corporation shall maintain directors’ and officers’ insurance during the Term in
an amount of not less than Five Million Dollars ($5,000,000).
 
5. Termination.
 
(a) This Agreement and the Executive’s employment hereunder shall terminate upon
the happening of any of the following events:
 
(i) upon the Executive’s death;
 
(ii) upon the Executive’s “Total Disability” (as herein defined);
 
(iii) upon the expiration of the Initial Term of this Agreement or any Renewal
Term thereof, if either party has provided a timely notice of non-renewal in
accordance with Section 3, above;
 
(iv) at the Executive’s option, upon thirty (30) days prior written notice to
the Corporation;
 
(v) at the Executive’s option, in the event of an act by the Corporation,
defined in Section 5(c), below, as constituting “Good Reason” for termination by
the Executive; and
 
(vi) at the Corporation’s option, in the event of an act by the Executive,
defined in Section 5(d), below, as constituting “Cause” for termination by the
Corporation.
 
(b) For purposes of this Agreement, the Executive shall be deemed to be
suffering from a “Total Disability” if the Executive has failed to perform her
regular and customary duties to the Corporation for a period of 180 days out of
any 360-day period and if before the Executive has become “Rehabilitated” (as
herein defined) a majority of the members of the Board, exclusive of the
Executive, vote to determine that the Executive is mentally or physically
incapable or unable to continue to perform such regular and customary duties of
employment. As used herein, the term “Rehabilitated” shall mean such time as the
Executive is willing, able and commences to devote her time and energies to the
affairs of the Corporation to the extent and in the manner that he did so prior
to her Total Disability. Nothing in this Section 5(b) shall be construed to
waive the Executive’s rights, if any, under existing law including, without
limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. s.2601 et seq.
and the Americans with Disabilities Act, 42 U.S.C. s12101 et seq.
 
 
 
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(c) For purposes of this Agreement, the term “Good Reason” shall mean that the
Executive has resigned due to (i) any diminution of duties inconsistent with
Executive’s title, authority, duties and responsibilities (including, without
limitation, a change in the chain of reporting); (ii) any reduction of or
failure to pay Executive compensation provided for herein, except to the extent
Executive consents in writing prior to any reduction, deferral or waiver of
compensation, which non-payment continues for a period of ten (10) days
following written notice to the Corporation by Executive of such non-payment;
(iii) any relocation of the principal location of Executive’s employment outside
of Jacksonville, FL without the Executive’s prior written consent; (iv) the
consummation of any Change in Control Transaction (as defined below); (vi) any
material violation by the Corporation of its obligations under this Agreement
that is not cured within thirty (30) days after receipt of written notice
thereof from the Executive.  For purposes of this Agreement, the term “Change in
Control Transaction” means the sale of the Corporation to an un-affiliated
person or entity or group of un-affiliated persons or entities pursuant to which
such party or parties acquire (i) shares of capital stock of the Corporation
representing at least fifty percent (50%) of outstanding capital stock or
sufficient to elect a majority of the Board of the Corporation (whether by
merger, consolidation, sale or transfer of shares (other than a merger where the
Corporation is the surviving corporation and the shareholders and directors of
the Corporation prior to the merger constitute a majority of the shareholders
and directors, respectively, of the surviving corporation (or its parent)) or
(ii) all or substantially all of the Corporation’s assets determined on a
consolidated basis.
 
(d) For purposes of this Agreement, the term “Cause” shall mean:
 
(i)           conviction of a felony or a crime involving fraud or moral
turpitude; or
 
(ii)           theft, material act of dishonesty or fraud, intentional
falsification of any employment or Corporation records, or commission of any
criminal act which impairs Executive’s ability to perform appropriate employment
duties for the Corporation; or
 
(iii)           intentional or reckless conduct or gross negligence materially
harmful to the Corporation or the successor to the Corporation after a Change in
Control Transaction, including violation of a non-competition or confidentiality
agreement; or
 
(iv)           willful failure to follow lawful and reasonable instructions of
the person or body to which Executive reports, which failure, if curable, is not
cured within thirty (30) days after written notice to the Executive thereof; or
 
(v)           gross negligence or willful misconduct in the performance of
Executive’s assigned duties; or

(vi)           any material breach of this Agreement by Executive, which breach,
if curable, is not cured within fifteen (15) days after written notice to the
Executive of such breach.
 
6. Effects of Termination.
 
(a) Upon termination of the Executive’s employment pursuant to Section 5(a)(i)
or (ii), in addition to the accrued but unpaid compensation and vacation pay
through the date of death or Total Disability and any other benefits accrued to
her under any Benefit Plans outstanding at such time and the reimbursement of
documented, unreimbursed expenses incurred prior to such date, the Executive or
her estate or beneficiaries, as applicable, shall be entitled to the following
severance benefits: (i) continued provision for a period of twelve (12) months
following the Executive’s death  or Total Disability of benefits under Benefit
Plans extended from time to time by the Corporation to its senior executives;
and (ii) payment on a pro-rated basis of any bonus or other payments earned in
connection with any bonus plan to which the Executive was a participant as of
the date of death or Total Disability.
 
(b) Upon termination of the Executive’s employment pursuant to Section
5(a)(iii), where the Corporation has offered to renew the term of the
Executive’s employment for an additional one (1) year period and the Executive
chooses not to continue in the employ of the Corporation, the Executive shall be
entitled to receive only the accrued but unpaid compensation and vacation pay
through the date of termination and any other benefits accrued to her under any
Benefit Plans outstanding at such time and the reimbursement of documented,
unreimbursed expenses incurred prior to such date. In the event the Corporation
tenders a Non-Renewal Notice to the Executive, then the Executive shall be
entitled to the same severance benefits as if the Executive’s employment were
terminated pursuant to Section 5(a)(v); provided, however, if such Non-Renewal
Notice was triggered due to the Corporation’s statement that the Executive’s
employment was terminated due to Section 5(a)(vi) (for “Cause”), then payment of
severance benefits will be contingent upon a determination as to whether
termination was properly for “Cause.”
 
 
 
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(c) Upon termination of the Executive’s employment pursuant to Section 5(a)(v)
or other than pursuant to Section 5(a)(i), 5(a)(ii), 5(a)(iii), 5(a)(iv), or
5(a)(vi) (i.e., without “Cause”), in addition to the accrued but unpaid
compensation and vacation pay through the end of the Term or any then applicable
extension of the Term and any other benefits accrued to her under any Benefit
Plans outstanding at such time and the reimbursement of documented, unreimbursed
expenses incurred prior to such date, the Executive shall be entitled to the
following severance benefits: (i) a cash payment, based on the current scale of
Executive’s Base Salary, equal to six months of Base Salary, to be paid in a
single lump sum payment not later than sixty (60) days following such
termination, less withholding of all applicable taxes; (ii) continued provision
for a period of twelve (12) months after the date of termination of the benefits
under Benefit Plans extended from time to time by the Corporation to its senior
executives; and (iii) payment on a pro-rated basis of any bonus or other
payments earned in connection with any bonus plan to which the Executive was a
participant as of the date of the Executive’s termination of employment.  In
addition, any options or restricted stock shall be immediately vested upon
termination of Executive’s employment pursuant to Section 5(a)(v) or by the
Corporation without “Cause”.
 
(d) Upon termination of the Executive’s employment pursuant to Section 5(a)(iv)
or (vi), in addition to the reimbursement of documented, unreimbursed expenses
incurred prior to such date, the Executive shall be entitled to the following
severance benefits: (i) accrued and unpaid Base Salary and vacation pay through
the date of termination, less withholding of applicable taxes and any other
benefits accrued to her under any Benefit Plans outstanding at such time; and
(ii) continued provision, for a period of one (1) month after the date of the
Executive’s termination of employment, of benefits under Benefit Plans extended
to the Executive at the time of termination.  Executive shall have any
conversion rights available under the Corporation’s Benefit Plans and as
otherwise provided by law, including the Comprehensive Omnibus Budget
Reconciliation Act.
 
(e) Any payments required to be made hereunder by the Corporation to the
Executive shall continue to the Executive’s beneficiaries in the event of her
death until paid in full.
 
7. Vacations. The Executive shall be entitled to a vacation of three (3) weeks
per year, during which period her salary shall be paid in full. The Executive
shall take her vacation at such time or times as the Executive and the
Corporation shall determine is mutually convenient. Any vacation not taken in
one (1) year shall accrue, up to a maximum of six (6) weeks’ vacation shall
carry over to the subsequent year.
 
8.           Disclosure of Confidential Information.
 
(a) The Executive recognizes, acknowledges and agrees that he has had and will
continue to have access to secret and confidential information regarding the
Corporation, 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 (i) is not in or
does not hereafter become part of the public domain, or (ii) became known to
others through no fault of the Executive.  The Executive acknowledges that such
information is of great value to the Corporation, is the sole property of the
Corporation, and has been and will be acquired by her in confidence.  In
consideration of the obligations undertaken by the Corporation herein, the
Executive will not, at any time, during or after her employment hereunder,
reveal, divulge or make known to any person, any Confidential Information
acquired by the Executive during the course of her employment, which is treated
as confidential by the Corporation, and not otherwise in the public domain,
except as required by law (but only after Executive has provided the Corporation
with reasonable notice and opportunity to take action against any legally
required disclosure. The provisions of this Section 8 shall survive the
termination of the Executive’s employment hereunder.
 
(b)           The Executive affirms that he does not possess and will not rely
upon the protected trade secrets or confidential or proprietary information of
any prior employer(s) in providing services to the Corporation or its
subsidiaries, except his prior knowledge of Lighter Than Air Systems Corp. which
was or will be acquired by the Corporation.
 
(c)           In the event that the Executive’s employment with the Corporation
terminates for any reason, the Executive shall deliver forthwith to the
Corporation 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 her 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 her employment, or
termination thereof, with the Corporation.
 
9. Non-Competition and Non-Solicitation.
 
(a)           The Executive agrees and acknowledges that the Confidential
Information that the Executive has already received and will receive is valuable
to the Corporation and that its protection and maintenance constitutes a
legitimate business interest of the Corporation, to be protected by the
non-competition restrictions set forth herein. The 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 the
Executive. The Executive also acknowledges that the Corporation’s business is
conducted worldwide (the “Territory”), 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 Corporation, its affiliates and/or its
clients or customers. The provisions of this Section 9 shall survive the
termination of the Executive’s employment hereunder for the time periods
specified below.
 
 
 
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(b)           The Executive hereby agrees and covenants that he shall not
without the prior written consent of the Corporation, 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 two (2%) 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 Corporation; provided
however, that the Executive shall be precluded from serving as an operating
partner, general partner, manager or governing board designee with respect to
such portfolio companies), whether on the Executive's own behalf or on behalf of
any other person or entity or otherwise howsoever, during the Term and
thereafter to the extent described below, within the Territory.
 
(1)           Engage, own, manage, operate, control, be employed by, consult
for, participate in, or be connected in any manner with the ownership,
management, operation or control of any business in competition with the
Business of the Corporation, as defined in the next sentence.  “Business” shall
mean the development and sale of lighter than air and heavier than air tethered
aerostats.
 
(2)           Recruit, solicit or hire, or attempt to recruit, solicit or hire,
any employee, or independent contractor of the Corporation 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 Corporation;
 
(3)           Attempt in any manner to solicit or accept from any customer of
the Corporation, with whom Executive had significant contact during Executive’s
employment by the Corporation (whether under this Agreement or otherwise),
business competitive with the Business done by the Corporation with such
customer 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 Corporation, or if any such customer elects to move its business
to a person other than the Corporation, provide any services of the kind or
competitive with the Business of the Corporation for such customer, or have any
discussions regarding any such service with such customer, on behalf of such
other person for the purpose of competing with the Business of the Corporation;
or
 
(4)           Interfere with any relationship, contractual or otherwise, between
the Corporation and any other party, including, without limitation, any
supplier, distributor, co-venturer or joint venturer of the Corporation, for the
purpose of soliciting such other party to discontinue or reduce its business
with the Corporation for the purpose of competing with the Business of the
Corporation.
 
With respect to the activities described in Paragraphs (1), (2), (3) and (4)
above, the restrictions of this Section 9 shall continue during the Employment
Period and, upon termination of the Executive’s employment for a period of one
(1) year thereafter.
 
10. Clawback Rights.  The Annual Bonus, and any and all stock based compensation
(such as options and equity awards, including any Share Awards (collectively,
the “Clawback Benefits”) shall be subject to “Corporation Clawback Rights” as
follows: During the period that the Executive is employed by the Corporation
and  upon the termination of the Executive’s employment and for a period of
three (3) years thereafter, if there is a Restatement (as defined below) of any
financial results from which any Clawback Benefits to Executive shall have been
determined, Executive agrees to repay any amounts which were determined by
reference to any Corporation financial results which were later restated, to the
extent the Clawback Benefits amounts paid exceed the Clawback Benefits amounts
that would have been paid, based on the Restatement of the Corporation’s
financial information.  All Clawback Benefits amounts resulting from such
restated financial results shall be retroactively adjusted by the Compensation
Committee to take into account the restated results, and any excess
portion  of  the Clawback Benefits  resulting from such restated results shall
be immediately surrendered to the Corporation and if not so surrendered within
ninety (90) days of the revised calculation being provided to the Executive by
the Compensation Committee following a publicly announced restatement, the
Corporation shall have the right to take any and all action to effectuate such
adjustment. The calculation of the Revised Clawback Benefits amount shall be
determined by the Compensation Committee in good faith and applicable law, rules
and regulations.  All determinations by the Compensation Committee with respect
to the Corporation Clawback Rights shall be final and binding on the Corporation
and Executive.  The Corporation Clawback Rights shall terminate following a
Change of Control, subject to applicable law, rules and regulations. For
purposes of this Section 10, a restatement of financial results that requires a
repayment of a portion of the Clawback Benefits amounts shall mean a restatement
resulting from material non-compliance of the Corporation 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 (“Restatements”).  Additionally,
if any material breach of  any agreement by Executive relating to
confidentiality, non-competition, non-raid of employees, or non-solicitation of
vendors or customers (including, without limitation, Sections 8 or 9 hereof) or
if any material breach of Corporation policy or procedures which causes material
harm to the Corporation occurs, as determined by the Board in its sole
discretion, then the Executive agrees to repay or surrender any Clawback
Benefits upon demand by the Corporation and if not so repaid or surrendered
within ninety (90) days of such demand, the Corporation shall have the right to
take any and all action to effectuate such adjustment.  The parties acknowledge
it is their intention that the foregoing Corporation 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.
 
 
 
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11. 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 Corporation 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.
 
Notwithstanding anything to the contrary in this Agreement, if Executive is a
“specified employee” within the meaning of Section 409A at the time of
Executive’s termination, then only that portion of the severance and benefits
payable to Executive pursuant to this Agreement, if any, and any other severance
payments or separation benefits which may be considered deferred compensation
under Section 409A (together, the “Deferred Compensation Separation Benefits”),
which (when considered together) do not exceed the Section 409A Limit (as
defined herein) may be made within the first six (6) months following
Executive’s termination of employment in accordance with the payment schedule
applicable to each payment or benefit.  Any portion of the Deferred Compensation
Separation Benefits in excess of the Section 409A Limit 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.  All subsequent
Deferred Compensation Separation Benefits, if any, 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
as soon as administratively practicable after the date of Executive’s death and
all other Deferred Compensation Separation Benefits will be payable in
accordance with the payment schedule applicable to each payment or benefit.
 
For purposes of this Agreement, “Section 409A Limit” will mean a sum equal (x)
to the amounts payable prior to March 15 following the year in which Executive
terminations plus (y) the lesser of two (2) times: (i) Executive’s annualized
compensation based upon the annual rate of pay paid to Executive during the
Corporation’s taxable year preceding the Corporation’s taxable year of
Executive’s termination of employment as determined under Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1) and any IRS guidance issued with respect thereto; or
(ii) the maximum amount that may be taken into account under a qualified plan
pursuant to Section 401(a)(17) of the Code for the year in which Executive’s
employment is terminated.
 
12. Miscellaneous.
 
a. The Executive acknowledges that the services to be rendered by her 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.
Accordingly, the Executive agrees that any breach or threatened breach by her of
Sections 8 or 9 of this Agreement shall entitle the Corporation, in addition to
all other legal remedies available to it, to apply to any court of competent
jurisdiction to seek to enjoin such breach or threatened breach. The parties
understand and intend that each restriction agreed to by the 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 the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which the
Corporation seeks enforcement thereof, such restriction shall be limited to the
extent permitted by law. 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
Corporation may have at law or in equity.
 
 
 
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b. Neither the Executive nor the Corporation 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 Corporation shall have the right to delegate
its obligation of payment of all sums due to the Executive hereunder, provided
that such delegation shall not relieve the Corporation of any of its obligations
hereunder.
 
c. This Agreement constitutes and embodies the full and complete understanding
and agreement of the parties with respect to the Executive’s employment by the
Corporation, supersedes all prior understandings and agreements, whether oral or
written, between the Executive and the Corporation, and shall not be amended,
modified or changed except by an instrument in writing executed by the party to
be charged. 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.
 
d. 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.
 
e. 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.
 
f. 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 private overnight mail service (e.g.
Federal Express) to the party at the address set forth above or to such other
address as either party may hereafter give 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 sending.
 
g. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York 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 State of
New York.
 
h. 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.
 
 
CORPORATION:
 
 DRONE AVIATION HOLDING CORP. f/k/a MACROSOLVE, INC.
 
 
____________________________
 
By:
 

 
Title:
 
EXECUTIVE:
 

____________________________
 
FELICIA HESS
 

 
 
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