Exhibit 10.4
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement ("Agreement") is made and entered into, effective May
15, 2012 (the “Effective Date”), by and between JBI, Inc., (the “Company"), and
Matthew Ingham (the “Employee”).
 
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 three (3) years after the Effective
Date, unless this Agreement is terminated as provided for herein.
 
1.3           Title.  Employee shall be the Chief Financial Officer of the
Company.
 
1.4          Duties.  The Employee shall do and perform all services, acts or
things necessary or advisable to manage and supervise the financial and
accounting functions of the Company and that are normally associated with the
position of Chief Financial Officer of the Company.  The Employee shall report
to the Chief Executive Officer.  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.  While employed
by Company, Employee shall not, directly or indirectly, render any services of a
business, commercial or professional nature to any other person, firm or
organization, whether for compensation or otherwise, unless he has obtained the
prior written consent of Company’s Chief Executive Officer.
 
ARTICLE II  – COMPENSATION
 
2.1           Base Salary.  Company shall pay Employee, and Employee shall
accept an annual base salary of $175,000 (One hundred and seventy five thousand
dollars), payable weekly in 52 equal installments, subject to standard
withholding and other deductions required by law.
 
2.2          Signing Bonus.  On the Effective Date of this Agreement, Employee
shall receive Three Hundred Thousand (300,000) options to purchase the Company’s
common stock, vesting in equal annual installments beginning one year from the
Effective Date for five years as follows.
 
 
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·  
Vesting one (1) year from the Effective Date; 100,000 options to purchase common
stock at $1.50 per share

 
·  
Vesting two (2) years from the Effective Date; 100,000 options to purchase
common stock at $1.50 per share

 
·  
Vesting three (3) years from the Effective Date; 100,000 options to purchase
common stock at $1.50 per share

 
o  
At the time of exercise, the Employee will have the option to issue payment to
the Company for the option price times the number of options being
exercised.  For example, if the Employee exercises 100,000 options, Employee
would provide cash in the amount of $150,000 to the Company and in turn receive
100,000 shares of JBI Common Stock.

 
o  
Additionally, the Employee can perform a cashless exercise, in which the total
number of shares to be issued will be offset by the amount the Employee would be
required to remit to the Company.  For example, if 100,000 shares are exercised
when the price of the Company’s common stock is $5.00, then the Employee would
receive Common Stock in the amount of the options exercised multiplied by the
market price less the number of options exercised multiplied by the $1.50 per
option (100,000*$5) - (100,000*1.50) = $350,000 of shares of JBI Common Stock
(valued at the market price on the date of exercise).

 
·  
The term of the options will be seven (7) years from the date of vesting;

 
·  
All shares, vested and unvested, will immediately vest upon the change in
control of the Company other than any change in voting control of the Company
resulting from (i) the transfer of the Series A Super Voting Preferred Stock of
the Company from Mr. John Bordynuik to any of the other parties signatory to a
letter agreement dated May 14, 2012 between Mr. John Bordynuik and the other
parties signatory thereto; and (ii) the redemption or purchase of such Series A
Super Voting Preferred Stock by the Company.

 
·  
The Company will have a formal stock compensation plan in place within one month
of the Effective Date of this agreement under which these options will be
formally issued.

 
2.3          Performance Bonus.  Beginning one year after the Effective Date of
this Agreement and annually thereafter while employed, Employee shall receive a
performance bonus equal to the Base Salary multiplied by the JBI Share Price
divided by $10. For these purposes, the JBI Share Price shall be the weighted
average share price in the month prior to the annual bonus date. The bonus shall
be payable in JBI stock, with the value of the each JBI share equal to the JBI
Share Price for the purposes of calculating the number of JBI shares. Employee
will have the option to receive up to $100,000 of the Performance Bonus in
cash.  Such cash payment will be approved based on the Company’s consolidated
cash balances being greater than $5 million at the time of the Performance Bonus
payment.
 
2.4          Employee Benefits.  In addition to the compensation specified
above, the Employee shall be entitled to the benefits generally made available
by the Company to management employees, including but not limited to health
insurance and dental insurance, subject to the terms, conditions, and
limitations governing those programs.   In addition, Employee shall be provided
with a computer and cell phone at company expense.
 
 
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2.5          Vacation.  Employee shall be entitled to four weeks paid vacation
during the term of this Agreement.
 
2.6          Expenses.  The Company shall reimburse Employee for all reasonable
expenses incurred by Employee during the Term in the course of performing
Employee’s duties under this Agreement and which are sought in accordance with
the Company’s reimbursement policies in effect from time to time.
 
ARTICLE III  – TERMINATION OF EMPLOYMENT
 
3.1          Grounds for Termination.
 
3.1.1       Termination by the Company.  Employee’s employment with the Company
is not at will but may be terminated by the Company either for “Cause” (as
defined below), or without Cause.  In either event, Employee’s compensation upon
such termination is limited to the compensation expressly provided for in this
Agreement.  The Company may terminate Employee’s employment under this Agreement
by delivery of written notice to the Employee specifying the nature of the
termination and, if applicable, the Cause or Causes relied upon for such
termination.  Any such notice of termination shall effect termination as of the
date specified in the notice, except as otherwise extended to the last day of
any applicable cure period(s) provided below.
 
3.1.2       Termination for Death or Disability.  Employee’s employment with the
Company shall automatically terminate effective upon the date of Employee’s
death or Complete Disability as defined in this Agreement; provided, however,
that this Section 3.1.2 shall in no way limit the Company’s obligation to
provide such reasonable accommodations to the Employee as may be required by
law.
 
3.1.3       Termination by the Employee for Good Reason.  The Employee may
terminate his employment under this Agreement at any time upon the giving of
adequate notice of termination to the Company as provided below.  If during the
Initial Term Employee terminates this Agreement and his employment hereunder for
“Good Reason” (as defined below), he shall do so in accordance with the
procedures specified in Section 3.3.3 below.  If Employee during or after the
Initial Term terminates his employment for any other reason or no reason, he
shall provide the Company with at least 30 days written notice.
 
3.1.4       Termination by Mutual Agreement of the Parties.  The Employee’s
employment pursuant to this Agreement may be terminated at any time upon a
mutual agreement in writing of the Parties.
 
 
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3.2          Compensation Upon Termination.
 
3.2.1       Termination for Cause or Without Good Reason.  If at any time
employment is terminated by the Company for Cause, or if at any time Employee
terminates his employment hereunder without Good Reason, , the Company shall pay
or provide to Employee the Base Salary accrued through the date of termination
and eighteen months of Base Salary as severance, and any applicable benefits as
provided under the corresponding plans, including accrued and unused vacation
benefits earned through the date of termination at the rate in effect at the
time of termination, less standard deductions and withholdings. Employee shall
be entitled to retain any vested shares of common stock.  Employee will forfeit
any unvested options.  Employee will be entitled to continued health and dental
coverage under COBRA.
 
3.2.2        Death or Complete Disability.  If Employee’s employment is
terminated by death or Complete Disability as provided in Section 3.1.2, the
Company shall pay or provide to Employee, or to Employee’s heirs, the Base
Salary accrued through the date of termination and eighteen additional months of
Base Salary for death or Complete Disability, and any applicable benefits as
provided under the corresponding plans, including accrued and unused vacation
benefits earned through the date of termination at the rate in effect at the
time of termination, less standard deductions and withholdings. Employee shall
be entitled to retain any vested shares of common stock.  Employee will forfeit
any unvested options. For the purpose of determining the number of vested
options, the date of termination under this 3.2.2 shall be assumed to be 12
months after the actual date of termination (i.e. there shall be a 12 month
acceleration of vesting).  Employee will be entitled to six (6) months continued
health and dental coverage paid for by the Company and then will be eligible to
continue coverage through COBRA.
 
3.2.3       Without Cause or With Good Reason.  If the Company terminates
Employee’s employment without Cause or Employee terminates his employment for
Good Reason, the Company shall pay or provide to the Employee: (a) (i) the Base
Salary accrued through the date of termination, and (ii) any applicable benefits
as provided under the corresponding plans, including accrued and unused vacation
earned through the date of termination at the rate in effect at the time of
termination, less standard deductions and withholdings; plus (b) an amount equal
to the greater of the Base Salary to which Employee would be eligible to receive
in the event he had remained employed through the end of the Term or eighteen
months of Base Salary as severance, and any applicable benefits as provided
under the corresponding plans, including accrued and unused vacation benefits
earned through the date of termination at the rate in effect at the time of
termination, less standard deductions and withholdings, such payments to be made
at the times and in the amounts that the Base Salary would have been paid had
this Agreement not been so terminated. In the case of termination without Cause,
Employee shall be entitled to retain all vested and unvested shares of common
stock.   In the case of termination for Good Reason Employee shall be entitled
to retain all vested shares of common stock. For the purpose of determining the
number of vested options, the date of termination under this 3.2.3 shall be
assumed to be 12 months after the actual date of termination (i.e. there shall
be a 12 month acceleration of vesting). For the purposes of this 3.2.3, the JBI
Share Price shall equal the weighted average share price in the six months prior
to the termination.  The Employee will be entitled to payment and eighteen
months of Base Salary as severance Employee will be entitled to six (6) months
continued health and dental coverage paid for by the Company and then will be
eligible to continue coverage through COBRA.
 
3.2.4       Relocation.  If there comes a time at which point the Company
determines that the functions of the Employee and the Duties to be performed by
the Employee cannot be performed in Niagara Falls, NY, the Employee or the
Company will have the option to terminate this Agreement in accordance with
Section 3.2.3.
 
 
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3.3          Definitions.  For purposes of this Agreement, the following terms
shall have the following meanings:
 
3.3.1       Complete Disability.  “Complete Disability” shall mean the inability
of the Employee to perform the Employee’s essential duties under this Agreement,
whether with or without reasonable accommodation, because the Employee has
become permanently disabled within the meaning of any policy of disability
income insurance covering employees of the Company then in force.  In the event
the Company has no policy of disability income insurance covering employees of
the Company in force when the Employee becomes disabled, the term “Complete
Disability” shall mean the inability of the Employee to perform the Employee’s
essential duties under this Agreement, whether with or without reasonable
accommodation, by reason of any incapacity, physical or mental, which the Board,
based upon medical advice or an opinion provided by a licensed physician
reasonably acceptable to the Board, determines to have incapacitated the
Employee from satisfactorily performing all of the Employee’s usual services for
the Company, with or without reasonable accommodation, for a period of at least
one hundred twenty (120) days during any twelve (12) month period (whether or
not consecutive).
 
3.3.2        Cause.  “Cause” for the Company to terminate the Employee’s
employment hereunder shall mean the occurrence of any of the following events:
 
(a)  
the Employee’s conviction of any felony or crime involving moral turpitude;

 
(b)  
the Employee’s engaging or in any manner participating in any material act of
intentional misconduct against the Company, or its employees, agents or
customers, including but not limited to fraud or the use or appropriation for
his personal use or benefit of any funds or properties of the Company not
authorized by the Company’s Board of Directors to be so used or appropriated;
or,

 
(c)  
the Employee’s refusal to implement or follow a lawful policy or directive of
the Company following a written request or order to do so.

 
3.3.3        Good Reason.  “Good Reason” shall mean the Employee’s termination
of his employment upon the occurrence of a material reduction in the Employee’s
duties, authority, or responsibilities relative to the duties, authority, or
responsibilities in effect immediately prior to such reduction.   Provided,
however that, such termination by the Employee shall only be deemed for Good
Reason pursuant to the foregoing definition if: (a) the Employee gives the
Company written notice of the intent to terminate for Good Reason within thirty
(30) days following the first notice to the Employee of the occurrence of the
condition(s) that the Employee believes constitutes Good Reason, which notice
shall describe such condition(s);and (b) the Company fails to remedy such
condition(s) within thirty (30) days following receipt of the written notice.
 
 
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ARTICLE IV – CONFIDENTIAL INFORMATION;
NON-INTERFERENCE; NON-COMPETITION
 
4.1          Trade Secrets.  During the course of Employee's employment,
Employee may receive, develop, otherwise acquire, have access to or become
acquainted with trade secrets or other confidential information relating to the
business of Company (collectively called "Confidential Information").  In this
regard, Employee understands and agrees that the term "Confidential Information"
shall include, but not be limited to:  names and addresses of members,
customers, employees or applicants for employment; methods of operation; all
manuals, books, and notes regarding Company's products and services; all
drawings, designs, patterns, devices, methods, techniques, compilations,
processes, product specifications, future plans, financial information, cost and
pricing information, computer programs, formulas, and equations; the names,
buying habits or practices and preferences of any of Company's members or
customers; the cost to Company of supplying its products and services; written
business records, files, documents, specifications, plans, and compilations of
information concerning the business of Company; reports, correspondence,
records, account lists, price lists, budgets, indexes, invoices, and telephone
records.
 
4.2           Non-Disclosure.  Employee shall not, at any time whatsoever,
either during the term of this Agreement or after its termination, disclose to
others, either directly or indirectly, or take or use for Employee's own
competitive purposes or the competitive purposes of others, either directly or
indirectly, any Confidential Information, knowledge or data of Company.
 
4.3          Special Relief.  Employee understands and acknowledges that the
Confidential Information of Company is a special, unique, unusual,
extraordinary, and intellectual in character, which gives it a particular value,
the loss of which cannot be reasonably compensated in damages in an action at
law.  Employee understands and acknowledges that in addition to any other rights
or remedies that Company may possess, Company shall be entitled to injunctive
and other equitable relief to prevent a breach of any provision of this Article
IV of this Agreement by Employee.
 
4.4          Non-Interference.  Employee shall not now or in the future disrupt,
damage, impair, interfere with, or otherwise harm Company, its business or other
interests in any way, including, without limit, doing any of the following: (i)
inducing an employee to leave the Company's employ; (ii) inducing a consultant,
sales representative or independent contractor to sever that person's
relationship with the Company; (iii) disrupt the Company's relationship with a
customer, vendor or anyone else.
 
 
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ARTICLE V – ARBITRATION OF DISPUTES
 
5.1          Arbitration.  Any dispute over the validity, enforcement, scope,
breach or interpretation of this Agreement and any dispute of any kind
whatsoever between Employee and Company, if any, shall be submitted and resolved
in final and binding arbitration before a single arbitrator through the American
Arbitration Association ("AAA") pursuant to the provisions of the AAA Employment
Arbitration Rules or successor rules then in effect, applicable to individually
negotiated agreements; except, no arbitrator shall have jurisdiction to grant
any remedy or relief that would have been unavailable to the parties had the
matter been heard in court in accordance with applicable law, including, but not
limited to, awards of attorney's fees and costs.
 
ARTICLE VI – MISCELLANEOUS PROVISIONS
 
6.1           Indemnification.  The Employee shall be indemnified to the extent
permitted by the Company’s organizational documents and by-laws in effect at the
time of this Agreement and to the extent permitted by law.
 
6.2          Interpretation.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be valid and effective under
applicable law.  If any provision of this Agreement is found to be invalid or
unenforceable, the validity and enforceability of the remaining parts, terms and
provisions shall not be affected thereby, and a suitable and equitable provision
shall be substituted to carry out, so far as may be enforceable and valid, the
intent and purpose of the invalid or unenforceable provision.  This Agreement
shall be construed whenever possible to comply with all applicable laws, and the
rights and obligations of the parties shall be enforced to the fullest extent
possible.
 
6.3           Assignment And Binding Effect.  This Agreement shall be binding
upon and inure to the benefit of Employee and his heirs, executors, personal
representatives, administrators and legal representatives.  Because of the
unique and personal nature of the Employee's duties under this Agreement,
however, neither this Agreement nor any rights or obligations under this
Agreement shall be assignable by Employee.  This Agreement shall be binding upon
and inure to the benefit of the Company and its successors, assigns and legal
representatives.  Any successor of the Company will be deemed substituted for
the Company under the terms of this Agreement for all purposes.  For this
purpose, "successor" means any person, firm, corporation or other business
entity which at any time, whether by purchase, merger or otherwise, directly or
indirectly acquires all or substantially all of the assets or business of the
Company.
 
6.4           Construction And Interpretation.  The headings set forth in this
Agreement are for convenience of reference only and shall not be used in
interpreting this Agreement.  All parties have cooperated in the drafting and
preparation of this Agreement.  Hence, in any construction to be made of this
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
 
 
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6.5           Voluntary Agreement.  Employee acknowledges and agrees that he is
fully aware that he may discuss any and all aspects of this Agreement with an
attorney of his choice, that he has carefully read and fully understands all of
the provisions of this Agreement, and that he is voluntarily entering into this
Agreement.
 
6.6          Counterparts.  This Agreement may be executed in counterparts, and
each counterpart when executed shall have the efficacy of a signed
original.  Photographic copies of such signed counterparts may be used in lieu
of the originals for any purpose.
 
6.7          Entire Agreement.  This Agreement constitutes the entire agreement
and understanding between the parties and supersedes any and all other
agreements, communications, understandings, promises, stipulations,
arrangements, whether any of the same are either oral or in writing, or express
or implied, between the parties hereto with respect to the subject matter
hereof, including, but not limited to, any implied-in-law or implied-in-fact
covenants or duties relating to employment or the termination of employment.  No
change to or modification of this Agreement shall be valid or binding unless the
same shall be in writing and signed by Employee and Company.
 
6.8          Governing Law.  The validity and effect of this Agreement shall be
governed by, construed, and enforced in accordance with the laws of the State of
New York, exclusive of its conflict of law rules.
 
 
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IN WITNESS WHEREOF, the parties hereto acknowledge that they have read this
Agreement, fully understand it, and have freely and voluntarily entered into it
as of the effective date stated above.
 

       
DATED:  May 15, 2012  
By:
/s/ Matthew Ingham       MATTHEW INGHAM          

 

 
JBI, INC.,
a Nevada corporation
                 
DATED:  May 15, 2012  
By:
/s/ John Bordynuik      
Name:  John Bordynuik
     
Title:  Chief Executive Officer
 

 
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