Exhibit 10.3
 
 
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
Kevin Rauber (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 President and Chief Executive Officer of the
Company.
 
1.4   Duties. The Employee shall do and perform all services, acts or things
necessary or advisable to manage the Company. This will include Employee being
expected to oversee, execute and manage the rollout of JBI’s business plan with
Rock-Tenn. 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. The Employee agrees that the hiring of one
operations senior executive by the Company is considered essential to performing
his duties. No other senior management hires are permitted until the Company has
a minimum of six processors running consistently, unless such hire is made out
of commercial necessity and agreed to by the Board of Directors of the Company.
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. Employee
will sign all environmental permitting document on behalf of the Company in his
capacity as CEO/ President.
 
ARTICLE II – COMPENSATION
 
2.1   Base Salary. Company shall pay Employee, and Employee shall accept an
annual base salary of Two hundred and Fifty Thousand Dollars ($250,000.00),
payable weekly in 52 equal installments, subject to standard withholding and
other deductions required by law.
 
 
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2.2   Signing Bonus. On the Effective Date of this Agreement, Employee shall
receive Five Hundred Thousand (500,000) 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 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

 
●
Vesting four (4) years from the Effective Date; 100,000 options to purchase
common stock at $1.50 per share

 
●
Vesting five (5) years from the Effective Date; 100,000 options to purchase
common stock at $1.50 per share

 
m
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.

 
m
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*$5.00) - (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 options, vested and unvested, will immediately vest upon the change in
voting 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 __, 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.
 
 
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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. Employee’s health and dental insurances will allow for
coverage in St. Louis, MO. If the Company does not have a national health and
dental plan in place at the Effective Date, the Company will reimburse the
Employee for costs of COBRA. In addition, Employee shall be provided with a
computer and cell phone at company expense.
 
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.
 
 
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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.
 
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 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 options. 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 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 options. 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 Base Salary to which Employee would be eligible to receive in the event
he had remained employed through the end of the Term; 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 options. In the case of termination for Good Reason
Employee shall be entitled to retain all vested options. 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. 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.
 
 
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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 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/ Kevin Rauber      
KEVIN RAUBER
 

 
DATED: May 15, 2012
JBI, INC.,
a Nevada corporation
       
 
By:
/s/ Matthew J. Ingham     Name:  Matthew J. Ingham    
Title:
Chief Financial Officer          

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