Exhibit 10.14

KENNETH P. MUELLER
EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is made as of February 11, 2011 by
and between Metalico, Inc., a Delaware corporation (the “Employer”), and Kenneth
P. Mueller (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Employer desires to employ the Executive, and Executive desires to
be employed by Employer, as the Chief Operating Officer of the Employer’s
Ferrous and Nonferrous Scrap Metal Recycling Division or other title as
directed, subject to the direction and control of the Employer, upon the terms
and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises, and of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:

§1. Definitions.

For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this §1:

“Annual Adjustment” for any given year means an amount equal to the product of
(x) the Executive’s Salary for the immediately preceding year times (y) the
applicable CPI Multiplier.

“Arbitration Referral Period” has the meaning set forth in §9(o) below.

“Basic Compensation” means Salary and Benefits.

“Benefits” has the meaning set forth in §3(a)(ii) below.

“Board” means the board of directors of the Employer.

“Cause” has the meaning set forth in §6(c) below.

“Change in Control” has the meaning set forth in §6(e)(iii) below.

“Confidential Information” means any and all information concerning the business
and affairs of the Employer that is not generally available to the public,
including, without limitations:

(i) trade secrets concerning the business and affairs of the Employer, product
specifications, data, know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas, past,
current, and planned research and development, current and planned manufacturing
or distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans, computer
software and programs (including object code and source code), computer software
and database technologies, systems, structures, and architectures (and related
formulae, compositions, processes, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information), and any other
information, however documented, that is a trade secret within the meaning of
the laws of the State of New Jersey; and

(ii) information concerning the business and affairs of the Employer (which
includes historical financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel, personnel training and techniques and
materials), however documented; and

(iii) notes, analysis, compilations, studies, summaries, and other material
prepared by or for the Employer containing or based, in whole or in part, on any
information included in the foregoing.

“CPI Multiplier” means the most recently calculated and published change,
expressed as a percentage, in the Consumer Price Index for urban wage earners
and clerical workers, U.S. City Average, All Items (1982-1984=100) published by
the United States Department of Labor, Bureau of Labor Statistics or the most
recent successor of that index (the “CPI”) from the second most recent
third-quarter average to the most recent third-quarter average; provided,
however, that if the change in the CPI for any measuring period is greater than
3.5%, then the CPI Multiplier as determined from such change shall be 3.5%. For
avoidance of confusion, the Employer and the Executive acknowledge and agree
that the change in the CPI contemplated under this definition is the change
announced annually in October by the U.S. Social Security Administration.

“Disability” has the meaning set forth in §6(b) below.

“Effective Date” means February 21, 2011.

“Executive Invention” means any idea, invention, technique, modification,
process, or improvement (whether patentable or not), any industrial design
(whether registerable or not), any mask work, however fixed or encoded, that is
suitable to be fixed, embedded or programmed in a semiconductor product (whether
recordable or not), and any work of authorship (whether or not copyright
protection may be obtained for it) created, conceived, or developed by the
Executive, either solely or in conjunction with others, during the Employment
Period, or a period that includes a portion of the Employment Period, that
relates in any way to the business then being conducted or proposed to be
conducted by the Employer, and any such item created by the Executive, either
solely or in conjunction with others, following termination of the Executive’s
employment with the Employer, that is based upon or uses Confidential
Information.

“Employment Period” means the term of the Executive’s employment under this
Agreement as set forth in §2(b).

“Good Cause” has the meaning set forth in §6(e)(iii) below.

“Non-Competition Territory” means, collectively, (a) a one-hundred-fifty-mile
(150) radius around each and every operating location of the Employer and its
affiliates and (b) the Greater New York metropolitan area.

“person” means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, or governmental body.

“Post-Employment Period” means a period of time, determined as of and commencing
on the last day of the Executive’s employment by the Employer or any affiliate
of the Employer, equal to the lesser of (a) one-half of the duration of such
employment of the Executive and (b) three years. By way of example and for the
avoidance of confusion, the Employer and the Executive agree that: (i) if the
Executive is so employed for a period of one year, then “Post-Employment Period”
will mean six months; (ii) if the Executive is so employed for a period of three
years, then “Post-Employment Period” will mean eighteen months; and (iii) if the
Executive is so employed for a period of eight years, then “Post-Employment
Period” will mean three years.

“Proprietary Items” has the meaning set forth in §7(b)(i)(D) below.

“Salary” has the meaning set forth in §3(a) below.

“Termination Date” has the meaning set forth in §2(b) below.

§2. Employment Terms and Duties.

(a) Employment. The Employer hereby employs the Executive as Chief Operating
Officer of the Employer’s Ferrous and Nonferrous Scrap Metal Recycling Division,
and the Executive hereby accepts employment by the Employer, upon the terms and
conditions set forth in this Agreement. The Executive will report directly to
the President and Chief Executive Officer and the Executive Vice President of
the Employer.

(b) Term. Subject to the provisions of §6, the term of the Executive’s
employment under this Agreement will be three (3) years, beginning on the
Effective Date and ending on the day before the third (3rd) anniversary of the
Effective Date (the “Termination Date”).

(c) Duties. The Executive will have such supervisory and management-level duties
as are assigned or delegated to the Executive by the Board or Chief Executive
Officer of the Employer. Without limiting the generality of the foregoing,
Executive will have primary managerial responsibility for Employer’s scrap metal
operations, including management of the internal operations of the Employer’s
scrap metal business. The Executive will work closely with the General Managers
of the Employer’s operating scrap subsidiaries on buyers’ scrap practices and
pricing, sales and marketing, including:

(i) Inventory control and sales strategies;

     
(ii)
(iii)
(iv)
  Employee/HR matters;
Creation and improvement of operating policies and procedures; and
Coordination and promotion of intercompany buy/sell programs.

The Executive will devote his entire business time, attention, skill, and energy
exclusively to the business of the Employer. In addition, the Executive will use
his best efforts to promote the success of the Employer’s business and will
cooperate fully with the Board in the advancement of the best interests of the
Employer. Nothing in this §2(c), however, will prevent the Executive from
engaging in additional activities relating to personal investments and community
affairs, provided that such activities are not inconsistent with the Executive’s
duties under the terms provided in this Agreement.

§3. Compensation.

(a) Salary.

(i) General. The Executive will be paid an annual salary commencing on the
Effective Date of $300,000, subject to adjustment as provided in §3(a)(ii) below
(the “Salary”), which will be payable in equal periodic installments according
to the Employer’s customary payroll practices, but no less frequently than
monthly. The Employer agrees that during the term of this Agreement the
Executive’s Salary will not be reduced below its then-current level unless a
salary reduction is imposed by the Employer or Metalico generally on a
group-wide basis as a result of financial difficulty, in which case the
Executive will be subject to the same salary reduction as other employees of the
Employer or Metalico within the identified group.

(ii) Annual Increases. The Executive will be entitled to an annual increase in
Salary, effective as of each anniversary of the Effective Date, equal to the
Annual Adjustment.

(b) Bonuses; Annual Review. The Employer will provide the Executive with an
annual review of his and the Employer’s Scrap Metal Recycling Division’s
performance on or about each anniversary of the Effective Date. The Executive
will be eligible for an annual performance bonus for each year in a range of 20%
to 60% of the Executive’s Salary for the year or portion thereof discussed in
such annual review, the exact bonus to be based on such performance. Each annual
bonus will be payable in accordance with the customary bonus policy of the
Employer or Metalico in effect at the time such payment is made.

(c) Benefits. The Executive will, during the Employment Period, be permitted to
participate in such stock option, pension, profit sharing, 401(k), life
insurance, hospitalization, major medical, dental, disability, and other
employee benefit plans of the Employer that may be in effect from time to time,
to the extent the Executive and his dependants are eligible under the terms of
those plans (collectively, the “Benefits”); provided, however, that at a minimum
the Employer will provide the Executive with participation in stock option,
pension, medical and all other benefit plans consistent with such plans offered
to manager-level employees of the Employer. The Employer will provide in the
Executive’s name term life insurance in the face amount of not less than Five
Hundred Thousand Dollars ($500,000), payable to the beneficiary or beneficiaries
of the Executive’s choice.

(d) Moving Allowance, Living Expenses, Initial Options and Restricted Stock. As
inducements to the Executive to accept employment hereunder:

(i) The Employer agrees to pay to the Executive a one-time relocation and home
search allowance equal to the actual amount of the Executive’s relocation and
home search costs, payable (in either single or multiple draws) after the
commencement of employment within five days of the Employer’s receipt of
evidence of the Executive’s actual relocation and home search costs justifying
such amounts with appropriate back-up, using a direct billing arrangement to the
Employer. The Employer and the Executive agree to use their respective best
efforts to minimize such relocation and home search costs.

(ii) The Employer agrees to reimburse the temporary living expenses of the
Executive and his family in the Ohio Valley, using a direct billing arrangement
to the Employer, for a period to be determined by the parties commencing on the
Effective Date.

(iii) The Employer agrees to provide for a grant of 20,000 options for the
Employer’s common stock, vesting monthly over three years with a five-year term
commencing on the date of grant (which shall be no later than the Effective
Date) pursuant to an Option Agreement to be executed by the Employer and the
Executive. Such options will bear a per-share exercise price equal to the lower
of (a) $5.50 and (b) the closing price for the Employer’s stock on the NYSE Amex
as of the trading day before the Effective Date. Notwithstanding anything herein
to the contrary, any grant of options and any Option Agreement executed by the
parties will be null and void and of no further force or effect if the Executive
fails to commence employment with the Employer on the Effective Date.

(iv) The Employer agrees to provide twelve (12) equal consecutive grants of four
thousand (4,000) shares of its common stock , such grants to be made quarterly
commencing on the date occurring three months after the Effective Date and on
the last day of each quarterly period occurring three, six, and nine months
thereafter until the earlier to occur of (A) the Employee has received all
twelve grants contemplated hereunder for an aggregate of forty-eight thousand
(48,000) shares of common stock, and (B) the termination of the Executive’s
employment by the Employer. All such shares will be fully vested upon grant.
Notwithstanding anything herein to the contrary, no grant of stock will be made
hereunder if the Executive fails to commence employment with the Employer on the
Effective Date, and no additional grants of stock will be made hereunder as of
and after any termination of the Executive’s employment by the Employer.

§4. Facilities and Expenses.

(a) Facilities. The Employer will furnish the Executive with such office space,
equipment, supplies, and such other facilities and personnel as appropriate for
the performance of the Executive’s duties under this Agreement. The Executive
will relocate to a suitable location in the Ohio Valley within a reasonable
period of time after the Effective Date.

(b) Vehicle. The Employer will provide to Executive a monthly automobile
allowance of $600 and full automobile insurance coverage.

(c) Expenses. The Employer will reimburse the Executive for all reasonable and
necessary out-of-pocket expenses incurred by the Executive in connection with
the performance of services under this Agreement, subject to any recordkeeping,
reporting or similar requirements imposed pursuant to policies and procedures of
the Employer in effect from time to time. The Employer may, at its option,
reimburse the Executive for the costs and expenses of cell phone and BlackBerry
service or provide the Executive with a cell phone and BlackBerry to be billed
directly to the Employer. All rights and obligations under this §4(c) will be
consistent with the general policies of the other affiliates of the Employer.

§5. Vacations and Holidays.

The Executive will be entitled to five (5) weeks paid vacation each calendar
year in accordance with the vacation policies of the Employer in effect for its
executive officers from time to time. Vacation must be taken by the Executive at
such time or times as will be determined to be mutually convenient for both the
Executive and the Employer. The Executive will also be entitled to the paid
holidays and other paid leave set forth in the Employer’s policies. Vacation
days and holidays during any year that are not used by the Executive during such
year may not be used in any subsequent year.

§6. Termination.

(a) Termination upon Death. If the Executive dies during the Employment Period,
this Agreement will terminate, except that the representative of the Executive’s
estate will be entitled to receive the compensation herein provided for the
month in which death occurs, together with all amounts accrued and payable under
§§3 and 5 hereof, except as otherwise stated herein.

(b) Termination upon Disability. If during the Employment Period, the Executive
becomes physically or mentally disabled, whether totally or partially, so that
the Executive is unable substantially to perform his services hereunder for
(i) a period of six consecutive months, or (ii) for shorter periods aggregating
six months during any consecutive twelve month period (the Executive’s
disability for such period “Disability”), the Employer may, at its option, at
any time after the last day of the six consecutive months of Disability or the
day on which such shorter periods of Disability during any consecutive twelve
month period equal an aggregate of six months, by written notice to the
Executive, terminate the Employment Period. Nothing in this §6(b) will be deemed
to extend the Employment Period. Upon such termination, the Executive will be
entitled to receive within 30 days the compensation herein provided for the
month in which termination of the Executive as a result of Executive’s
Disability occurs, together with amounts accrued and payable under §§3 and 5
hereof, except as otherwise stated herein.

(c) Termination for Cause. If the Executive (i) neglects his duties hereunder
and such neglect is not discontinued promptly after written notice thereof; or
(ii) commits an act of fraud against, or the misappropriation of property
belonging to, the Employer or any affiliate of the Employer or an act of
dishonesty materially affecting the business or affairs of the Employer or any
affiliate of the Employer or which is materially injurious to the Employer or
any affiliate of the Employer; or (iii) appropriates (or attempts to
appropriate) a material business opportunity of the Employer or any affiliate of
the Employer, including attempting to secure or securing any personal profit in
connection with any transaction entered into on behalf of the Employer or any
affiliate of the Employer; or (iv) is convicted of or pleads “guilty” or “no
contest” to any felony or act of moral turpitude, other than an
automobile-related or support-related action or proceeding; or (v) fails or
refuses to comply with the reasonable written policies of the Employer or
directives of the executive officers of the Employer that are not inconsistent
with his position and such failure is not discontinued promptly after written
notice thereto; or (vi) breaches affirmative or negative covenants or
undertakings hereunder and such breach is not remedied promptly; or (vii) fails
or refuses to comply with the written policies of Metalico, including, without
limitation, the Metalico Code of Business Conduct and Ethics and the Metalico
Insider Securities Trading Policy (the terms of clauses (i) through (vii) of
this §6(c) referred to collectively as “Cause”); then the Employer may at any
time, by not less than ten (10) days written notice to the Executive, terminate
the Employment Period. Except for accrued and unpaid salary and vacation (which
will be paid within 30 days of termination) together with accrued and vested
options to the date of termination, the Executive will have no right to receive
unvested options, grants or any compensation or benefits from the Employer
hereunder.

(d) Termination by the Employer Without Cause. If the Executive’s employment
hereunder is terminated by the Employer without Cause prior to the end of the
Employment Period, the Employer will continue to pay to the Executive, as
liquidated damages and not as a penalty, all Salary to which the Executive would
otherwise have been entitled hereunder for the period of twelve (12) months
commencing on the date of termination. It is expressly understood and agreed
that the Executive will not be obligated to mitigate the damages caused by a
termination of this employment for which he could be entitled to such liquidated
damages. It is further expressly agreed and understood that said payments of
liquidated damages will be in complete satisfaction of any and all claims,
liabilities and damages of any nature whatsoever against the Employer or its
affiliates relating to or growing out of the Executive’s employment or the
Employer’s termination without Cause of the Executive’s employment, except as
otherwise stated herein. Upon any termination by the Employer without Cause, all
unvested options and stock grants granted the Executive will immediately be 100%
fully vested. No options or stock grants will be forfeited as a result of such
termination.

(e) Voluntary Termination.

(i) General. In the event the Executive voluntarily terminates his employment
with the Employer, other than for Good Reason as provided in §6(e)(ii), during
or after the Employment Period, the Executive will have no right to receive any
compensation or benefit from the Employer hereunder, except for accrued and
unpaid compensation due on the date of such termination (which will be paid
within 30 days of such termination) and reimbursement of appropriately
documented expenses incurred prior to the date of such termination (which will
be paid in accordance with the Employer’s reimbursement procedures as then in
effect), except as otherwise expressly stated herein.

(ii) Good Reason. In the event the Executive voluntarily resigns from his
employment with the Employer during the Employment Period for Good Reason (as
hereinafter defined), the Executive will be entitled to all compensation and
benefits provided under §6(d) as though such resignation were deemed to be a
termination thereunder.

(iii) Definitions.

“Change in Control” means the occurrence of: (A) the acquisition at any time by
a “person” or “group” (as those terms are used in Sections 13(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (excluding, for
this purpose, the Employer or any subsidiary or any employee benefit plan of the
Employer or any subsidiary) of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly, of securities representing 50%
or more of the combined voting power in the election of directors of the
then-outstanding securities of the Employer or Metalico or any successor of the
Employer or Metalico; (B) the termination of service as directors, for any
reason other than death or disability, from the Board of Directors of the
Employer, during any period of two (2) consecutive years or less, of individuals
who at the beginning of such period constituted a majority of the Board, unless
the election of or nomination for election of each new director during such
period was approved by a vote of at least two-thirds of the directors still in
office who were directors at the beginning of the period; (C) approval by the
stockholders of the Employer or Metalico of any merger or consolidation or
statutory share exchange as a result of which the common stock of Employer or
Metalico shall be changed, converted or exchanged (other than a merger or share
exchange with a wholly-owned subsidiary of Metalico) or liquidation of the
Employer or Metalico or any sale or disposition of 50% or more of the assets or
earning power of the Employer or Metalico except for a tax free distribution of
any portion of the Employer to its shareholders; or (D) approval by the
stockholders of the Employer or Metalico of any merger or consolidation or
statutory share exchange to which the Employer or Metalico is a party as a
result of which the persons who were stockholders of the Employer or Metalico
immediately prior to the effective date of the merger or consolidation or
statutory share exchange shall have beneficial ownership of less than 50% of the
combined voting power in the election of directors of the surviving corporation
following the effective date of such merger or consolidation or statutory share
exchange. “Change in Control” shall not include any reduction in ownership by
the Employer of a subsidiary of the Employer or any other entity designated by
the Board in which the Employer owns at least a 50% interest (including, but not
limited to, partnerships and joint ventures.)

“Good Reason” means the occurrence, without the Executive’s prior written
consent, of any of the following events:

(A) a substantial reduction of the Executive’s duties, responsibilities, or
status as a manager (except temporarily during any period of disability), or the
Executive being required to report to any person or persons other than the Board
, the President and Chief Executive Officer of the Employer, or the Executive
Vice President of the Employer, provided that, if the Executive retains similar
title, authority, and status with the Employer or any entity that acquires the
Employer (or any affiliate or subsidiary of such entity) following a Change in
Control, the parties agree that any change in the title of the Executive shall
not constitute a significant reduction of the Executive’s duties and authorities
hereunder;

(B) a breach by the Employer of any material term of this Agreement; or

(C) a significant change in the Employer’s operating approach, methods, tactics,
or philosophy following a Change in Control;

provided that a termination by the Executive with Good Reason will be effective
only if the Executive delivers a notice of termination for Good Reason to the
Employer, and the Employer within sixty (60) days following its receipt of such
notification has failed to cure the circumstances giving rise to Good Reason.

§7. Non-Disclosure Covenant; Executive Inventions.

(a) Acknowledgments by the Executive. The Executive acknowledges that (i) during
the Employment Period and as a part of his employment, the Executive will be
afforded access to Confidential Information; (ii) public disclosure of such
Confidential Information could have an adverse effect on the Employer and its
business; (iii) because the Executive possesses substantial technical expertise
and skill with respect to the Employer’s business, the Employer desires to
obtain exclusive ownership of each Executive Invention, and the Employer will be
at a substantial competitive disadvantage if it fails to acquire exclusive
ownership of each Executive Invention; and (iv) the provisions of this §7 are
reasonable and necessary to prevent the improper use or disclosure of
Confidential Information and to provide the Employer with exclusive ownership of
all Executive Inventions.

(b) Agreements of the Executive. In consideration of the compensation and
benefits to be paid or provided to the Executive by the Employer under this
Agreement, the Executive covenants as follows:

(i) Confidentiality.

(A) During the Employment Period and the Post-Employment Period, the Executive
will hold in confidence the Confidential Information and will not disclose it to
any person except (I) with the specific prior written consent of the Employer,
(II) as required in connection with the performance of his duties hereunder,
(III) as necessary to comply with any legal process, provided that the Executive
will provide the Employer with prompt notice of such legal process and the
documents requested (unless such disclosure is prohibited by the terms of the
applicable process) so that the Employer may seek an appropriate protective
order and/or waive the Executive’s compliance with the provisions of this
Agreement, or (IV) as otherwise expressly permitted by the terms of this
Agreement.

(B) Any trade secrets of the Employer will be entitled to all of the protections
and benefits under any trade secrets law as adopted by the State of New Jersey
and any other applicable law. If any information that the Employer deems to be a
trade secret is found by a court of competent jurisdiction not to be a trade
secret for purposes of this Agreement, such information will, nevertheless, be
considered Confidential Information for purposes of this Agreement. The
Executive hereby waives any requirement that the Employer submit proof of the
economic value of any trade secret or post a bond or other security.

(C) None of the foregoing obligations and restrictions applies to any part of
the Confidential Information that: (I) can be demonstrated to have been in the
public domain prior to the date hereof; (II) subsequently becomes part of the
public domain by publication or otherwise and not due to any unauthorized act or
omission on the Executive’s part; (III) was supplied to the Executive by a third
party who did not obtain it from Employer under any obligation of
confidentiality and who discloses the information or data without restriction as
to the confidential treatment thereof; (IV) can be demonstrated to have been
known to the Executive from a source other than the Employer or its agents or
representatives at the time it was received from the Employer; or (V) is
required to be disclosed as part of any legal process, provided that the
Executive will provide the Employer with prompt notice of such legal process and
the documents requested (unless such disclosure is prohibited by the terms of
the applicable process) so that the Employer may seek an appropriate protective
order and/or waive the Executive’s compliance with the provisions of this
Agreement.

(D) The Executive will not remove from the Employer’s premises (except to the
extent such removal is for purposes of the performance of the Executive’s duties
at home or while traveling, or except as otherwise specifically authorized by
the Employer) any document, record, notebook, plan, model, component, device, or
computer software or code, whether embodied in a disk or in any other form
(collectively, the “Proprietary Items”). The Executive recognizes that, as
between the Employer and the Executive, all of the Proprietary Items, whether or
not developed by the Executive, are the exclusive property of the Employer. Upon
termination of this Agreement by either party, or upon the request of the
Employer during the Employment Period, the Executive will return to the Employer
all of the Proprietary Items in the Executive’s possession or subject to the
Executive’s control, and the Executive will not retain any copies, abstracts,
sketches, or other physical embodiment of any of the Proprietary Items.

(ii) Executive Inventions. Each Executive Invention will belong exclusively to
the Employer. The Executive acknowledges that all of the Executive’s writing,
works of authorship, and other Executive Inventions are works made for hire and
the property of the Employer, including any copyrights, patents, or other
intellectual property rights pertaining thereto. If it is determined that any
such works are not works made for hire, the Executive hereby assigns to the
Employer all of the Executive’s right, title, and interest, including all rights
of copyright, patent, and other intellectual property rights, to or in such
Executive Inventions. The Executive covenants that he will promptly:

(A) disclose to the Employer in writing any Executive Invention;

(B) assign to the Employer or to a party designated by the Employer, at the
Employer’s request and without additional compensation, all of the Executive’s
right to the Executive Invention for the United States and all foreign
jurisdictions;

(C) execute and deliver to the Employer such applications, assignments, and
other documents as the Employer may request in order to apply for and obtain
patents or other registrations with respect to any Executive Invention in the
United States and any foreign jurisdictions;

(D) sign all other papers necessary to carry out the above obligations; and

(E) give testimony and render any other assistance but without expense to the
Executive in support of the Employer’s rights to any Executive Invention.

(c) Disputes or Controversies. The Executive recognizes that should a dispute or
controversy arising from or relating to this Agreement be submitted for
adjudication to any court, arbitration panel, or other third party, the
preservation of the secrecy of Confidential Information may be jeopardized. The
Executive and the Employer will use their best efforts to cause all pleadings,
documents, testimony, and records relating to any such adjudication to be
maintained in secrecy and to be available for inspection by the Employer, the
Executive, and their respective attorneys and experts, and the Executive and the
Employer will use their best efforts to cause their respective attorneys and
experts to agree, in advance and in writing, to receive and maintain all such
information in secrecy, except as may be limited by such attorneys and experts
in writing.

§8. Non-Competition and Non-Interference.

(a) Acknowledgments by the Executive. The Executive acknowledges that: (i) the
services to be performed by him under this Agreement are of a special, unique,
unusual, extraordinary, and intellectual character; (ii) the Employer competes
with other businesses that are or could be located in any part of the United
States; and (iii) the provisions of this §8 are reasonable and necessary to
protect the Employer’s business.

(b) Covenants of the Executive. In consideration of the acknowledgments by the
Executive, and in consideration of the compensation and benefits to be paid or
provided to the Executive by the Employer, the Executive covenants that he will
not, directly or indirectly:

(i) during the Employment Period, except in the course of his employment
hereunder, and, except as provided below, during the Post-Employment Period,
engage or invest in, own, manage, operate, finance, control, or participate in
the ownership, management, operation, financing, or control of, be employed by,
associated with, or in any manner connected with, lend the Executive’s name or
any similar name to, lend the Executive’s credit to or render services or advice
to, any business whose products or activities compete in whole or in part with
the business of the Employer in the Non-Competition Territory; provided,
however, that the Executive may purchase or otherwise acquire up to (but not
more than) one percent of any class of securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if such securities
are listed on any national or regional securities exchange or have been
registered under §12(g) of the Securities Exchange Act of 1934, and provided
further that nothing herein will limit the Executive’s equity ownership in the
Employer or Metalico;

(ii) whether for the Executive’s own account or for the account of any other
person, at any time during the Employment Period or the Post-Employment Period,
solicit business of the same or similar type being carried on by the Employer,
from any person known by the Executive to be a customer of the Employer, whether
or not the Executive had personal contact with such person during and by reason
of the Executive’s employment with the Employer;

(iii) whether for the Executive’s own account or the account of any other person
at any time during the Employment Period and the Post-Employment Period,
(A) solicit, employ, or otherwise engage as an employee, independent contractor,
or otherwise, any person who is or was an employee of the Employer at any time
during the Employment Period or in any manner induce or attempt to induce any
employee of the Employer to terminate his employment with the Employer; or
(B) interfere with the Employer’s relationship with any person, including any
person who at any time during the Employment Period was an employee, contractor,
supplier, or customer of the Employer ; or

(iv) at any time during or after the Employment Period, disparage Metalico, the
Employer, or any of their respective shareholders, directors, officers,
employees, affiliates, or agents.

If any covenant in this §8(b) is held to be unreasonable, arbitrary, or against
public policy, such covenant will be considered to be divisible with respect to
scope, time, and geographic area, and such lesser scope, time, or geographic
area, or all of them, as a court of competent jurisdiction may determine to be
reasonable, not arbitrary, and not against public policy, will be effective,
binding, and enforceable against the Executive.

The period of time applicable to any covenant in this §8(b) will be extended by
the duration of any violation by the Executive of such covenant, provided that
such period will not be extended solely by an allegation of a violation that is
not reasonably substantiated or a violation that is expressly waived by the
Employer.

The Executive will, while the covenant under this §8(b) is in effect, give
notice to the Employer, within ten days after accepting any other employment, of
the identity of the Executive’s employer. The Employer or any affiliate of the
Employer may notify such employer that the Executive is bound by this Agreement
and, at the Employer’s election, furnish such employer with a copy of this
Agreement or relevant portions thereof.

§9. General Provisions.

(a) Injunctive Relief and Additional Remedy. The Executive acknowledges that the
injury that would be suffered by the Employer as a result of a breach of the
provisions of this Agreement (including any provision of §§7 and 8) would be
irreparable and that an award of monetary damages to the Employer for such a
breach would be an inadequate remedy. Consequently, the Employer will have the
right, in addition to any other rights, at law or in equity, it may have, to
obtain injunctive relief to restrain any breach or threatened breach or
otherwise to specifically enforce any provision of this Agreement and the
Employer will not be obligated to post bond or other security in seeking such
relief.

(b) Covenants of §§7 and 8 Are Essential and Independent Covenants. The
covenants by the Executive in §§7 and 8 are essential elements of this
Agreement. The Executive’s covenants in §§7 and 8 are independent covenants and
the existence of any claim by the Executive against the Employer under this
Agreement or otherwise, or against any affiliate of the Employer, will not
excuse the Executive’s breach of any covenant in §§7 or 8. If the Executive’s
employment hereunder expires or is terminated, this Agreement will continue in
full force and effect as is necessary or appropriate to enforce the covenants
and agreements of the Executive in §§7 and 8.

(c) Representations and Warranties by the Executive. The Executive represents
and warrants to the Employer that the execution and delivery by the Executive of
this Agreement do not, and the performance by the Executive of the Executive’s
obligations hereunder will not, with or without the giving of notice or the
passage of time, or both: (i) violate any judgment, writ, injunction, or order
of any court, arbitrator, or governmental agency applicable to the Executive; or
(ii) conflict with, result in the breach of any provisions of or the termination
of, or constitute a default under, any agreement to which the Executive is a
party or by which the Executive is or may be bound.

(d) Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by either
party in exercising any right, power, or privilege under this Agreement will
operate as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law,
(i) no claim or right arising out of this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (ii) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (iii) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement.

(f) Binding Effect; Delegation of Duties Prohibited. This Agreement will inure
to the benefit of, and will be binding upon, the parties hereto and their
respective successors, assigns, heirs, and legal representatives, including any
entity with which the Employer may merge or consolidate or to which all or
substantially all of its assets may be transferred, provided that any such
successor-in-interest or transferee agrees to comply with and be bound by all of
the terms and conditions of this Agreement. The duties and covenants of the
Executive under this Agreement, being personal, may not be delegated.

(g) Employer Policies. The Executive understands and agrees that, as an employee
of the Employer, the Executive is and will be subject to the policies and
procedures of the Employer, expressly including without limitation the Metalico,
Inc. Code of Business Conduct and Ethics and the Metalico, Inc. Insider
Securities Trading Policy.

(h) Notices. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder will be in writing and
will be deemed given only if delivered as hereinafter provided, as follows:

      If to the Employer, to:   METALICO, INC.    
186 North Avenue East
Cranford, New Jersey 07016
Attention:President
Telephone:(908) 497-9610
Fax: (908) 497-1097
Email:
If to the Executive, to:  
KENNETH P. MUELLER

         
 
    ,  
 
       
Telephone:
Fax:
Email:
  (      )     
(      )     

or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Each such notice, request or other
communication will be given (i) by hand delivery, (ii) by U.S. mail, (iii) by
nationally recognized courier service, or (iv) by facsimile, receipt confirmed.
Each such notice, request or communication will be effective (i) if delivered by
hand or by nationally recognized courier service, when delivered at the address
specified in this §9(h) (or in accordance with the last unrevoked written
direction from such party), (ii) if sent by mail, three (3) days after deposit
therein, and (iii) if given by facsimile when such facsimile is transmitted to
the facsimile number specified in this Section (or in accordance with the latest
unrevoked written direction from such party), and the appropriate confirmation
is received. All notices, requests, demands, claims, and other communications
hereunder will be in writing.

(i) Entire Agreement; Amendments. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, between the parties hereto
with respect to the subject matter hereof. This Agreement may not be amended
orally, but only by an agreement in writing signed by the parties hereto.

(j) Governing Law. This Agreement will be governed by the laws of the State of
New Jersey without regard to conflicts of laws principles.

(k) Section Headings, Construction. The headings of Sections in this Agreement
are provided for convenience only and will not affect its construction or
interpretation. All references to “Section” or “Sections” refer to the
corresponding Section or Sections of this Agreement unless otherwise specified.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word “including” does not limit the preceding words or terms.

(l) Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

(m) Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.

(n) IRS §409A Compliance. Any payments made pursuant to this Agreement will be
subject to any tax or similar withholding requirements under applicable federal,
state or local employment or income tax laws or similar statutes or other
provisions of law then in effect. This Agreement is intended to comply with the
requirements of Section 409A of the U.S. Internal Revenue Code, as amended (the
“Code”) and the regulations thereunder (“Section 409A”). To the extent that any
provision in this Agreement is ambiguous as to its compliance with Section 409A,
the provision will be interpreted in a manner so that no payment due to the
Executive hereunder will be deemed subject to an “additional tax” within the
meaning of Section 409A(a)(1)(B) of the Code. For purposes of Section 409A, each
payment made under this Agreement will be treated as a separate payment.
Notwithstanding anything contained herein to the contrary, the Executive will
not be considered to have terminated employment with the Employer for purposes
of this Agreement unless the Executive has incurred a “termination of
employment” from the Employer within the meaning of Treasury Regulation
§1.409A-1(h)(1)(ii) promulgated under Section 409A. Notwithstanding the
foregoing, if applicable and necessary to comply with the restriction in
Section 409A(a)(2)(B) of the Code concerning payments to “specified employees,”
any payment made to the Executive pursuant to this Agreement on account of the
Executive’s separation from service that would otherwise be due hereunder within
six months after such separation from service will nonetheless be delayed until
the first business day of the seventh month following the Executive’s separation
from service. In no event may the Executive, directly or indirectly, designate
the calendar year of any payment. All reimbursements provided under this
Agreement will be made or provided in accordance with the requirements of
Section 409A, including, where applicable, the requirement that (i) any
reimbursement is for expenses incurred during the Executive’s lifetime (or
during a shorter period of time specified in this Agreement), (ii) the amount of
expenses eligible for reimbursement during a calendar year may not affect the
expenses eligible for reimbursement in any other calendar year, (iii) the
reimbursement of an eligible expense will be made on or before the last day of
the calendar year following the year in which the expense is incurred, and
(iv) the right to reimbursement is not subject to liquidation or exchange for
another benefit. The Executive further acknowledges that, while this Agreement
is intended to comply with Section 409A, any tax liability incurred by the
Executive under Section 409A is solely the responsibility of the Executive.

(o) Arbitration. Either party hereto will have the option of referring any claim
or dispute to arbitration by written notice to the other party within sixty
(60) calendar days (or such longer period of time as may be agreed to by the
parties) following the giving of any written notice of the claim or dispute
hereunder, or the initiation of litigation by either party against any other
party (the “Arbitration Referral Period”). If the matter is referred to
arbitration, each party will select an arbitrator and the two so selected will
agree on a third arbitrator. The arbitration will be pursuant to the Rules of
the American Arbitration Association and will be conducted in Buffalo, New York
or such other location in New York as the parties may agree upon. Judgment upon
any resulting arbitration award may be entered in any court of competent
jurisdiction. As part of such award, the arbitrators will establish their fees
and expenses in connection therewith and allocate equally such fees and expenses
between the parties, who will promptly pay their equal shares. Any award will be
a conclusive determination of the matter and either party may reduce such award
to a judgment. If neither party properly refers the matter to arbitration prior
to the expiration of the Arbitration Referral Period, then the parties will be
free to pursue such remedies as may be available at law or in equity.

IN WITNESS WHEREOF, the parties have executed and delivered this Employment
Agreement as of the date first written above.

     
Employer:
  Executive:
METALICO, INC.
 

By: /s/ Carlos E. Agüero
  /s/ Kenneth P. Mueller
 
   
Carlos E. Agüero
  KENNETH P. MUELLER
President