Exhibit 10.16
METALICO, INC.
DEFERRED STOCK
AWARD AGREEMENT
           This Deferred Stock Award Agreement (this “Agreement”) is made as of
                    , 20     (the “Date of Grant”) between Metalico, Inc. (the
“Company”), and                          (“Grantee”). This Agreement is made
pursuant to the Company’s 2006 Long-Term Incentive Plan (the “Plan”), the terms
and provisions of which are incorporated herein by reference.
          1. Deferred Stock Award: The Company hereby grants to Grantee and
Grantee hereby accepts, on the terms and conditions hereinafter set forth, the
right (the “Award”) to receive
_________________________ (___________) shares (“Shares”)
of the Company’s Stock (as defined in Section 2 of the Plan) (the “Deferred
Stock”) on the terms and conditions of the Plan and this Agreement, to be issued
in three equal tranches as follows:

  •   1/3 of the Shares (“Tranche 1”) to be issued __________, 20__ (“Settlement
Date 1”)     •   1/3 of the Shares (“Tranche 2”) to be issued __________, 20__
(“Settlement Date 2”)     •   1/3 of the Shares (“Tranche 3”) to be issued
__________, 20__ (“Settlement Date 3”)

Notwithstanding anything in this Agreement to the contrary, this grant shall be
rescinded and no longer of any force or effect if the Grantee does not execute
and return this Agreement to the Company by ___________, 20_.
          2. Vesting: Subject to the terms and restrictions set forth in the
Plan and Sections 5 and 6 of this Agreement, the Shares in Tranche 1 (with
Tranche 2 and Tranche 3, each a “Tranche”) will become vested on Settlement Date
1 (with Settlement Date 2 and Settlement Date 3, each a “Settlement Date”), the
Shares in Tranche 2 will become vested on Settlement Date 2, and the Shares in
Tranche 3 will become vested on Settlement Date 3. Grantee will have the rights
of a shareholder only as to shares actually issued to Grantee and not with
respect to Shares subject to the Award but not issued to Grantee.
          3. Certificates; Book Entry: As soon as practicable after each
Settlement Date and subject to the terms of the Plan and this Agreement, the
Company will issue the Shares in the applicable Tranche and either (i) cause a
certificate evidencing such Shares to be issued and registered in Grantee’s name
on the stock transfer books of the Company and delivered to Grantee at Grantee’s
last address filed with the Company, or (ii) if directed by Grantee, cause such
Shares to be transferred to and registered electronically by book entry in a
brokerage account designated by Grantee.
          4. Employment with the Company: Except as may otherwise be provided in
Section 5 of this Agreement, each Tranche of the Deferred Stock granted
hereunder is granted on the condition that Grantee remains an employee of the
Company or a subsidiary of the Company during the period from the Date of Grant
through (and including) the applicable Settlement Date. By way of illustration:
(a) if Grantee’s employment terminates before Settlement Date 1, Grantee will
not be entitled to any of the Deferred Stock; (b) if Grantee’s employment
terminates after Settlement Date 1 but before Settlement Date 2, Grantee will be
entitled to all Shares of Deferred Stock in Tranche 1 but no Shares in Tranche 2
or Tranche 3; and (c) if Grantee’s employment terminates after Settlement Date 2
but before Settlement Date 3, Grantee will be entitled to all Shares of Deferred
Stock in Tranche 1 and Tranche 2 but no Shares in Tranche 3. For purposes of
this Agreement, the term “employee” is understood to include any “Eligible
Person” (as that term is defined in the Plan) granted an Award hereunder
regardless of status as an employee, consultant, or otherwise as permitted under
the Plan, and the term “employment” is understood to include any arrangement for
the provision of services to the Company or its subsidiaries as contemplated
under the eligibility provisions of the Plan.

 

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     5. Acceleration of Vesting:
          (a) Termination of Employment Due to Death or Disability. If Grantee’s
employment termination occurs due to Grantee’s death or Disability (as defined
in Section 2 of the Plan), all remaining Tranches of Deferred Stock awarded to
Grantee on the date of such employment termination will immediately become
vested as of such date without regard to any deferral and such date will be
deemed a Settlement Date for purposes of Section 3 of this Agreement.
          (b) Change in Control. In accordance with the terms and restrictions
of Section 9 of the Plan, if there is a Change in Control of the Company (as
defined in Section 9(c) of the Plan), all remaining Tranches of Deferred Stock
awarded to Grantee will become fully vested as of the time of the Change in
Control, subject to applicable restrictions set forth in Section 11(a) of the
Plan, without regard to any termination of employment or service by Grantee
other than a termination for Cause and without regard to any deferral. The date
of such Change in Control will be deemed a Settlement Date for purposes of
Section 3 of this Agreement.
     6. Forfeiture:
          (a) Termination of Employment for Cause or Upon Occurrence of
Forfeiture Event. In accordance with the terms and restrictions of Section 10 of
the Plan, if Grantee’s employment is terminated for Cause (as defined in
Section 2 of the Plan), or if any other Forfeiture Event occurs (as defined in
Section 10 of the Plan), including but not limited to Grantee’s violation of the
material terms of any employment or other agreement entered into with the
Company, the Deferred Stock, whether or not vested or issued, will be
immediately forfeited and canceled. Furthermore, Grantee will be subject to the
forfeiture provisions of Section 10 of the Plan and, in accordance therewith,
will be obligated to repay the Company the total amount of Award Gain (as
defined in Section 10(a)(ii) of the Plan) realized by Grantee.
          (b) Termination of Employment for Other Than Cause, Death or
Disability. If Grantee’s employment with the Company is terminated for other
than Cause, death or Disability, Grantee’s right to any Tranche which is not
vested as of Grantee’s employment termination date will become immediately
cancelled and of no further force or effect upon the date of the termination of
Grantee’s employment.
     7. Non-Transferable: Subject to the terms and restrictions of Section 11(b)
of the Plan, Grantee may not transfer rights in or to any unvested Shares of the
Deferred Stock except by will or the laws of descent and distribution. Rights in
or to unvested Shares will not be otherwise transferred, assigned, pledged,
hypothecated or encumbered or subject to any lien, obligation or liability of
Grantee to any party (other than the Company or a subsidiary or affiliate
thereof), whether by operation of law or otherwise. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of unvested Shares
contrary to the provisions of the Plan or this Agreement, or the levy of any
execution, attachment or similar process upon unvested Shares, will be null and
void and without effect. Vested Shares of Deferred Stock issued hereunder will
not be subject to any additional transfer restrictions.
     8. Adjustments and Corporate Reorganizations: In the event that any large,
special and non-recurring dividend or other recapitalization, forward or reverse
split, stock dividend, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other
similar corporate transaction or event affects the unvested Deferred Stock such
that an adjustment is determined by the Committee (as defined in the Plan) to be
appropriate under the Plan, then the Committee will, in such manner as it may
deem equitable, make certain adjustments in accordance with the terms of Section
11(c) of the Plan, including but not necessarily limited to any or all of the
following: (a) adjustment to the number and kind of shares of Deferred Stock,
and (b) if deemed appropriate, the Committee may make provision for a payment of
cash or property to the holder of unvested Shares of Deferred Stock (subject to
Section 11(k) of the Plan). The Committee’s determinations as to what
adjustments will be made, and the extent thereof, will be final, binding and
conclusive.

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     9. Taxes:
          (a) Withholding. Grantee will be liable for any and all taxes,
including withholding taxes, arising out of the Award and the vesting and
issuance of Shares of Deferred Stock hereunder. Grantee will pay to the Company
promptly upon request, and in any event at the time Grantee recognizes taxable
income in respect of all or any Tranche of the Deferred Stock, an amount equal
to the taxes the Company determines it is required to withhold under applicable
tax laws with respect to such Deferred Stock. Such payment will be made in the
form of cash in an amount equal to such withholding liability, provided that the
Committee may, in its sole discretion, to the extent permitted by applicable
law, allow such withholding obligation to be satisfied by any other method
described in Section 11(d) of the Plan.
          (b) Section 83(b) Election. Grantee may elect to be immediately taxed
on the Deferred Stock provided in the Award under Internal Revenue Code (“Code”)
Section 83(b), “Property transferred in connection with performance of
services/Election to include in gross income in year of transfer.” Grantee will
notify the Company of such election within thirty (30) days of the Date of
Grant.
          (c) Section 409A. To the extent applicable, this Agreement will be
interpreted in accordance with Section 409A of the Code and Department of
Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or guidance that may be issued
after the Date of Grant. Without limiting the authority of the Committee under
the terms of the Plan to make modifications to the Award of Deferred Stock
hereunder by reason of changes in law or circumstances that would result in any
substantial dilution or enlargement of the rights granted to, or available for,
Grantee in respect of this Award or otherwise as a participant in the Plan or
which otherwise warrants equitable adjustment to the terms and conditions of
this Award because such event interferes with the operation of the Plan, and
notwithstanding any provision of this Agreement to the contrary, in the event
that the Committee or an authorized officer of the Company determines that any
amounts will be immediately taxable to Grantee under Section 409A of the Code
and related Department of Treasury guidance (or subject Grantee to a penalty
tax) in connection with the Award or vesting of Deferred Stock hereunder or any
other provision of this Agreement or the Plan, the Company may (a) adopt such
amendments to the Award, including amendments to this Agreement (having
prospective or retroactive effect), that the Committee or such authorized
officer determines to be necessary or appropriate to preserve the intended tax
treatment of the Award hereunder and/or (b) take such other actions as the
Committee or such authorized officer determines to be necessary or appropriate
to comply with the requirements of Section 409A of the Code and related
Department of Treasury guidance, including such Department of Treasury guidance
and other interpretive materials as may be issued after the Date of Grant.
     10. No Rights as Grantee: This Agreement is not an employment agreement and
no provisions hereof should be interpreted as such. No provisions of this
Agreement will provide Grantee with any guarantee of future employment or confer
any right to continue as an employee of the Company. Nothing in this Agreement
will interfere in any way with the right of the Company to terminate Grantee’s
employment at any time. All matters concerning the employment relationship
between the Company and Grantee will be governed by applicable law and the terms
of a separate employment agreement, if any, between the parties.
     11. Requirements of Law and of Stock Exchanges: The Board of Directors of
the Company (the “Board”) will have the right to impose such restrictions on any
shares granted pursuant to this Agreement as it may deem advisable, including
restrictions under applicable federal securities law, under the requirements of
any stock exchange or market upon which such shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such
shares. Grantee agrees to take all steps necessary to comply with all applicable
provisions of federal and state securities laws in exercising his or her rights
under this Agreement. This Agreement will be subject to all applicable laws,
rules and regulations and to such approvals by any governmental agencies or
national securities exchanges as may be required.
     12. Miscellaneous:
          (a) Further Assurances. The parties agree to execute such further
instruments and to take such action as may reasonably be necessary to carry out
the intent of this Agreement.

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          (b) Confidentiality of the Agreement. Grantee agrees to keep
confidential the terms of this Agreement, unless and until such terms have been
disclosed publicly other than through a breach by Grantee of this covenant,
provided that this provision will not prohibit Grantee from providing this
information on a confidential and privileged basis to Grantee’s attorneys or
accountants for purposes of obtaining legal or tax advice or as otherwise
required by law.
          (c) Waiver. Any right of the Company contained in this Agreement may
be waived in writing by the Board. No waiver of any right hereunder by any party
will operate as a waiver of any other right, or as a waiver of the same right
with respect to any subsequent occasion for its exercise, or as a waiver of any
right to damages. No waiver by any party of any breach of this Agreement will be
held to constitute a waiver of any other breach or a waiver of the continuation
of the same breach.
          (d) Notices. Any notice hereunder by Grantee will be given to the
Company in writing and such notice will be deemed duly given only upon receipt
thereof at the Company’s principal offices located at 186 North Avenue East,
Cranford, New Jersey 07016, or at such other address as the Company may
designate by notice to Grantee. Any notice hereunder by the Company will be
given to Grantee in writing and such notice will be deemed duly given only upon
receipt thereof at the address set forth below Grantee’s signature to this
Agreement or at such other address as Grantee may designate by notice to the
Company.
          (e) Construction. The construction of this Agreement is vested in the
Board or the Committee, as applicable, and their respective construction will be
final and conclusive.
          (f) Severability. The invalidity or unenforceability of any provision
of this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement will be
severable and enforceable to the extent permitted by law.
          (g) Entire Agreement. This Agreement and the Plan contain all of the
understandings and agreements between the Company and Grantee concerning this
Award and supersede all earlier agreements, negotiations and understandings,
whether written or oral, between the parties with respect thereto. The Company
and Grantee have made no promises, agreements, conditions or understandings,
either orally or in writing, that are not included in this Agreement or the
Plan.
          (h) Governing Law. This Agreement will be construed and enforced in
accordance with the laws of the State of Delaware, without reference to the
conflicts of laws principles thereof.
          (i) Counterparts. This Agreement may be executed in two or more
counterparts, each one of which will be deemed an original, but all of which
together will constitute one and the same agreement.
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                    METALICO, INC.       GRANTEE      
 
                 
By:
                 
 
                 
Name:
         
Name:
     
 
 
 
         
 
 
Title:
          Address:      
 
                   
 
                 
 
                 
 
          Soc. Sec. No.:      
 
                 

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