SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 1, 2015
DRONE AVIATION HOLDING CORP.
(Exact name of registrant as specified in its charter)
| Nevada | 333-150332 | 46-5538504 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
11651 Central Parkway #118, Jacksonville, FL 32224
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code (904) 245-1788
11653 Central Parkway, Jacksonville FL 32224
(Registrant's former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| ITEM 3.02 | UNREGISTERED SALES OF EQUITY SECURITIES |
The information set forth in Item 5.02 is incorporated by reference into Item 3.02.
On June 1, 2015, the Board of Directors (the “Board”) of Drone Aviation Holding Corp., a Nevada corporation (the “Company”) granted nonqualified options to purchase up to an aggregate of 10,000,000 shares of the Company’s common stock, par value $0.0001 per share, to certain employees of the Company, including the below listed officers:
| Name and Title | Amount of Options |
| Felicia Hess (CEO) | 3,000,000 |
| Daniyel Erdberg (COO) | 3,000,000 |
| Kendall Carpenter (CFO) | 1,000,000 |
The above options have a term of three years and an exercise price of $0.15 per share, and vest as follows: 50% on the earlier of (i) the one year anniversary of the date of grant or (ii) the listing of the Company’s common stock on a national exchange and 50% on the earlier of (i) the two year anniversary of the date of grant or the listing of the Company’s common stock on a national exchange.
In addition, the Board also granted four-year options to an employee of the Company to purchase 1,500,000 shares of the Company’s common stock with an exercise price of $0.27 per share, vesting in three equal installments on May 4, 2016, 2017 and 2018.
The issuance of these securities was deemed to be exempt from the registration requirements of the Securities Act of 1933, as amended by virtue of Section 4(a)(2) thereof, as a transaction by an issuer not involving a public offering.
| ITEM 5.02 | DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS |
Resignation of Chairman
On June 1, 2015, the Board accepted the resignation of General Wayne Jackson as Chairman of the Board. General Jackson will remain a director of the Company. His resignation as Chairman of the Board is not in connection with any disagreement with the management of the Company.
Election of Chairman
On June 1, 2015, the Board elected Jay Nussbaum as Chairman of the Board and a member of the Strategic Advisory Board of the Company for a term of two years. There is no family relationship between Mr. Nussbaum and any of our other officers and directors. Other than disclosed herein, there are no understandings or arrangements between Mr. Nussbaum and any other person pursuant to which Mr. Nussbaum was appointed as director.
Jay H. Nussbaum, Age 71
Mr. Nussbaum has extensive executive experience and expertise in government and commercial sales and management. Mr. Nussbaum is the Founder of Agilex Technologies, Inc. and served as its Vice Chairman and Chief Operating Officer from 2006 to March 2015, when it was acquired by Accenture Federal Services, a provider of mission and technology solutions to the national security, healthcare and public sectors of the U.S. government.
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He previously served as Executive Vice President of Oracle Service Industries (“Oracle”), under Oracle's Chairman and CEO Larry Ellison, where he oversaw Government, Education, Health, Communications, Utilities and Financial Services operations.
He also served as Global Head of Sales, Marketing and Business Development for Citigroup Global Transaction Services, and as President of Integrated Systems Operation at Xerox Corp.
Mr. Nussbaum has been a Director of Grand Slam Acquisition Corp. since October 24, 2007, an Independent Director of Victory Acquisition Corp. since January 12, 2007 and a Director at Agilex Technologies, Inc. since 2006.
Compensation
In consideration for Mr. Nussbaum’s services as Chairman of the Board, the Company shall grant to him:
| (i) | Monthly fee of $4,000; |
| (ii) | Annual bonus as shall be determined by the Board; |
| (iii) | 2,000,000 shares of restricted common stock of the Company, subject to reverse monthly vesting over a successive twenty-four (24) month period based on Mr. Nussbaum’s continued service to the Company; |
| (iv) | Three- year options to purchase 5,000,000 shares of the Company’s common stock with an exercise price of $0.25 per share vesting as follows: |
| a. | with respect to 1,000,000 shares of the Company’s common stock at any time between June 1, 2015 and June 1, 2017 when an aggregate of $1,000,000 in revenue is recorded based upon Mr. Nussbaum direct business development efforts; |
| b. | with respect to an additional 1,000,000 shares of the Company’s common stock at any time between June 1, 2015 and June 1, 2017 when an additional aggregate of $1,000,000 in revenue is recorded based upon Mr. Nussbaum direct business development efforts; |
| c. | with respect to an additional 1,000,000 shares of the Company’s common stock at any time between June 1, 2015 and June 1, 2017 when an additional aggregate of $1,000,000 in revenue is recorded based upon Mr. Nussbaum direct business development efforts; |
| d. | with respect to an additional 1,000,000 shares of the Company’s common stock at any time between June 1, 2015 and June 1, 2017 when an additional aggregate of $1,000,000 in revenue is recorded based upon Mr. Nussbaum direct business development efforts; and |
| e. | with respect to an additional 1,000,000 shares of the Company’s common stock at any time between June 1, 2015 and June 1, 2017 when an additional aggregate of $1,000,000 in revenue is recorded based upon Mr. Nussbaum direct business development efforts; and |
| (v) | Three-year options to purchase 3,000,000 shares of the Company’s common stock with an exercise price of $0.25 per share vesting in two (2) equal installments on each annual anniversary of the date of grant. |
Compensation of Directors
On June 1, 2015, the Board also approved a monthly fee of $2,000 to General Jackson and Mr. Haas for their services on the Board.
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits. The following exhibits are filed with this Report:
| Exhibit Number | Description | |
| 10.1 | Director Agreement between Drone Aviation Holding Corp. and Jay Nussbaum dated June 4, 2015 |
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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.
| Drone Aviation Holding Corp. | |||
| (Registrant) | |||
| Date: June 5, 2015 | By: | /s/ Kendall Carpenter | |
| Name: Kendall Carpenter | |||
| Title: Chief Financial Officer | |||
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Exhibit 10.1
DIRECTOR AGREEMENT
DIRECTOR AGREEMENT (this “ Agreement ”) made as of the 01 day of June 2015 by and between Drone Aviation Holding Corp., a Nevada corporation (the “ Company ”) and Jay Nussbaum (“ Nominee ”).
WHEREAS , the Company desires to attract and retain a director who will consent to serve as Chairman of the Board of Directors of the Company (the “ Board ”); and
WHEREAS , the Company believes that Nominee possesses valuable qualifications and abilities to serve on the Company’s Board and as its Chairman.
NOW, THEREFORE , the parties agree as follows:
1. Service to the Board .
( a) Service as a Director . Nominee consents to serve as the Chairman of the Board of Directors of the Company for a term of two (2) years if elected or appointed and, upon appointment or election to the Board of the Company, to serve as a member of the Board of the Company.
Nominee agrees that upon appointment or election he will dutifully perform his responsibilities as a director in good faith, in accordance with applicable law, and in accordance with the Articles of Incorporation, bylaws and other policy and procedures applicable to such service. Upon appointment to the Board, Nominee shall resign from the Board of Directors of the Company, upon the request of the Chief Executive.
Nominee understands that this Agreement does not constitute an offer to serve as a director of the Company, or as an employee, or in any other capacity and that appointment shall only occur by vote of the Board or shareholders of the Company. Nominee understands and agrees that if the Company offers Nominee employment, the Company will request a background check consisting of a criminal history and other background checks to be used solely for employment-related purposes and understands an offer and any position will be contingent on the receipt and evaluation of the background check report.
( b) Service on Committees . Nominee will serve on the following committees and in the capacities stated:
| Member | Chairperson | ||
| Audit Committee | X | ---- | |
| Compensation/Nominating Committee | X | ---- | |
To the extent Nominee serves as Audit Committee Chairperson, Nominee represents that Nominee possesses the necessary skills and experience by which he is qualified to serve as a qualified financial expert for purposes of such position, and before the United States Securities and Exchange Commission (“ SEC ”).
2. Compensation and Expenses .
(a) Compensation . The Company agrees to adopt or has adopted compensation plans for directors applicable to Nominee, in the event Nominee becomes a director, as follows:
| · | Annual fee of $48,000, payable in monthly installments in accordance with the Company’s past accounting practices; |
| · | 2,000,000 shares of restricted common stock of the Company, subject to reverse monthly vesting over a successive twenty-four (24) month period based on Mr. Nussbaum’s continued service to the Company; |
| · | Three-year options to purchase up to 5,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share, vesting as follows: |
| o | (i) 20% of the above options shall vest at any time between June 1, 2015 and June 1, 2017 when an aggregate of $1,000,000 in revenue is recorded based upon Nominee’s direct business development efforts; |
| o | (ii) another 20% of the above options shares shall vest at any time between June 1, 2015 and June 1, 2017 when an additional aggregate of $1,000,000 in revenue is recorded based upon Nominee’s direct business development efforts; |
| o | (iii) another 20% of the above options shares shall vest at any time between June 1, 2015 and June 1, 2017 when an additional aggregate of $1,000,000 in revenue is recorded based upon Nominee’s direct business development efforts; |
| o | (iv) another 20% of the above options shares shall vest at any time between June 1, 2015 and June 1, 2017 when an additional aggregate of $1,000,000 in revenue is recorded based upon Nominee’s direct business development efforts; and |
| o | (v) another 20% of the above options shares shall vest at any time between June 1, 2015 and June 1, 2017 when an additional aggregate of $1,000,000 in revenue is recorded based upon Nominee’s direct business development efforts. |
| · | Three-year options to purchase up to 3,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share, vesting in two (2) equal installments on each annual anniversary of the date of this Agreement. |
(b) Expenses . The Company shall reimburse Nominee for all reasonable and necessary out-of-pocket expenses, including travel, incurred in connection with the performance of Nominee’s duties as a director on behalf of the Company (“ Expenses ”), upon submission of adequate documentation therefor.
(c) Insurance . The Company presently maintains a policy of directors’ and officers’ insurance coverage with a liability limit of $2,000,000 (“ D&O Insurance ”). In the event any notice of termination or significant change in coverage or terms of D&O Insurance are received by the Company, prompt written notice shall be provided Nominee for so long as he serves as a director of the Company and during any subsequent period during which Nominee may be entitled to the benefit of such D&O Insurance.
3. Confidentiality . Nominee acknowledges that he shall be obtaining access to certain confidential information concerning the Company and its plans and affairs, including, but not limited to, business methods, systems, scheduling, financial data, intellectual property and strategic plans which are unique assets (“ Confidential Information ”). Nominee covenants and agrees to not, directly or indirectly, in any manner, utilize or disclose to any person, firm or entity, such Confidential Information.
4. Termination . This Agreement shall terminate upon resignation or removal of Nominee as a director of the Company, provided that any provision of this Agreement not capable of performance prior to termination shall survive, shall survive such termination for the period necessary for performance.
5. Assignment . The duties and obligations of Nominee under this Agreement are personal and therefore Nominee may not assign any right or duty under this Agreement without the prior written consent of the Company.
6. Counterparts . This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one instrument. Facsimile execution and delivery of this Agreement is legal, valid and binding for all purposes.
[ Signature Page Follows ]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and signed as of the day and year first above written.
| DRONE AVIATION HOLDING CORP. |
| By: _____________________________ |
| Name: Felicia A. Hess |
| Title: Chief Executive Officer |
| NOMINEE: |
| ________________________________ |
| Name: Jay H. Nussbaum |
|
Address: 9324 Georgetown Pike Great Falls VA 22066 |
|
_________________________________ SS#______________________________ Place of Birth:______________________ |
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