EMPLOYMENT AGREEMENT by JBI, INC.

EMPLOYMENT AGREEMENT

 

This Employment Agreement ("Agreement") is made and entered into, effective May 14, 2012 (the "Effective Date"), by and between JBI, Inc., (the "Company"), and John Bordynuik (the "Employee").

 

RECITALS

 

A.           Employee is currently the CEO of Company

 

B.           Company and Employee agree that it is in the best interests of Company and Employee, that Employee resign as CEO of Company and enter into this new Employment Agreement to be employed as Chief of Technology of Company.

 

ARTICLE I - EMPLOYMENT

 

1.1    Employment.  The Company hereby employs the Employee, and the Employee hereby accepts employment with the Company, upon the terms and conditions set forth in this Agreement.

 

1.2    Term.  The term of this Agreement shall begin on the Effective Date and shall continue for a period of five (5) years after the Effective Date, unless this Agreement is terminated as provided for herein.

 

1.3    Title.  Employee shall be the Chief of Technology of the Company.

 

1.4    Employee Duties

 

(a)    General Duties.  The Employee shall do and perform all services, acts or things necessary or advisable to manage, supervise and where available, enhance the P2O® processor and technology of the Company in connection with the Company's operations at 20 Iroquois St., Niagara Falls, New York ("Iroquois Facility").  The employee will present the technology to the public, shareholders, and clients. The Employee shall report to the Board of Directors.  Employee shall loyally, conscientiously, and professionally perform all of his duties and responsibilities, which may be revised from time to time, as Company deems appropriate or necessary.  At all times during his employment, Employee shall adhere to all rules, policies, and guidelines of Company that are now in effect or as they may be modified by the Company's management, in its sole discretion, from time to time.

 

(b)    Protection of Plastic2Oil Trade Secrets.  The Company has certain extremely valuable and confidential information in the nature of trade secrets relating to its Plastic2Oil processor ("Plastic2Oil Trade Secrets").  The Plastic2Oil Trade Secrets consist of know-how, formulas, designs and catalyst compositions.  Currently, Employee is the only person with knowledge of these Plastic2Oil Trade Secrets.  Company and Employee agree that within three months of the execution of this Agreement, these Plastic2Oil Trade Secrets shall be known to Employee and one other employee of P2O.  Such employee will remain nameless and only be known to Matthew Ingham, the Chief Financial Officer of the Company.  Due to the sensitive nature of these Trade Secrets, no member of the Company's Board of Directors or Executive Management shall be privy to this information.  Any writings reflecting or relating to these Plastic2Oil Trade Secrets are now and shall in the future be kept locked in a bank vault.  That bank vault shall not be opened, except in the event of the death or incapacity of Employee or the other employee and only then upon a resolution of the Company's Board of Directors.  To the extent that this provision is inconsistent with or contrary to anything in the more general provisions of Article IV of this Agreement, this paragraph 1.4 (b) shall govern.

 

 

(c)           Iroquois Facility Permits, Management and Budget

 

(i)           Permits.  The Company's operations at the Iroquois Facility depend upon certain operational/site permits and environmental permits ("Permits"). Those Permits require that an individual assume personal responsibility for the Company's compliance, and the failure of the Company to comply can result in potential liability for the individual that has assumed that responsibility.  Historically, Employee has been the person at the Company that has assumed the personal responsibility for the Company's compliance.  Company and Employee agree that if Employee is to perform the General Duties in paragraph 1.4(a) hereof, and for the sake of the Company's ongoing relationships with the Iroquois Facility permitting authorities, Employee should continue to assume personal responsibility for the Company's compliance with the Permits.

 

(ii)           Management and Budget Employee is willing to continue to assume personal responsibility for the Company's compliance with the Permits, provided that, in the performance of his General Duties set forth in paragraph 1.4 hereof, Employee is given control over the staff and operations at the Iroquois Facility that comprise fabrication personnel, engineers, a plant manager, and IT and R&D administrative personnel ("Iroquois Facility Technology Staff") and the Company agrees to budget sufficient staff and capital funds devoted to the operations at the Iroquois Facility that are reasonably required by such facility, subject  to reasonable availability of funding, including necessary and customary budgetary reserves.  Accordingly, it is agreed between Company and Employee that Employee will continue to assume personal responsibility for the Company's compliance with the Permits that have been issued at the Iroquois Facility, and that Employee shall have full management authority over the Iroquois Facility Technology Staff and technology operations at the Iroquois Facility, including research and development, product enhancement, maintenance procedures, permit support and add-on development (e.g., processing waste oils).    For the avoidance of doubt, excluded from the Iroquois Facility Technology Staff are the Executive and Administrative Staff located at the Iroquois Facility, including Head Office, Finance and Accounting, Legal, Human Resources, and other employees that would generally be considered administrative or corporate functions.  Subject to reasonable availability of funding, including necessary and customary budgetary reserves: (i) for the year 2012 the Iroquois Facility will have a staff budget of $350,000 per month; (ii) for the year 2013 the Iroquois Facility will have a staff budget of $450,000 per month. These amounts can be amended due to growth or otherwise of the Iroquois Facility. Subject to reasonable availability of funding, including necessary and customary reserves, at no time during the term of this Agreement will the monthly staff budget be less than that of 2013, except for 2012.  This budget shall be examined annually, to ensure that this budget is not excessively burdensome to the Company.  Additionally, Employee will be provided with the authority to allocate2,000,000 options among Iroquois Facility Technology Staff (excluding the Employee) to purchase the Company's common stock, as part of the employees' compensation at the Iroquois Facility. The strike price and other terms of such options shall be determined by the Board and shall be consistent with customary practices.  The Iroquois Facility will also retain for its budget 30% of the gross revenue from all Plastic2Oil processors operating at the Iroquois Facility which will be used in short order to build additional processors at the Iroquois Facility (subject to availability of permits, availability of land, etc.).  Until the time when there are six processors running at the Iroquois Facility, at least one-third of all processors will be located at the Iroquois Facility.

 

 

ARTICLE II - COMPENSATION

 

2.1    Base Salary.  Company shall pay Employee, and Employee shall accept an annual base salary of Two Hundred Seventy Five Thousand Dollars ($275,000.00), payable bi-weekly in 26 equal installments, subject to standard withholding and other deductions required by law.  Employee's Base Salary shall never be less than that of any other employee of the Company during the term hereof.

 

2.2           Signing Bonus.  On the Effective Date of this Agreement, Employee shall receive Four Million (4,000,000) options to purchase shares of the Company's common stock, vesting in equal annual installments beginning one year from the Effective Date for five years as follows.

 

●    Vesting immediately upon execution of this Agreement; 750,000 options to purchase common stock at $1.50 per share

 

●    Vesting one (1) year from the Effective Date; 650,000 options to purchase common stock at $1.50 per share

 

●    Vesting two (2)