EMPLOYMENT AGREEMENT

Exhibit 10.23

EMPLOYMENT AGREEMENT

I, Charles M. Dauber, agree to the terms and conditions of employment with American Electric Technologies, Inc., a Florida corporation (the “ Company ”), set forth in this Employment Agreement (“ Agreement ”).

1. Term of Employment . My employment under this Agreement shall commence on March 1, 2009 (“ Effective Date ”) and end on December 31, 2009 (“ Expiration Date ”), or such earlier date on which my employment is terminated under Section 5 of this Agreement. If the Company continues to employ me beyond the Expiration Date without entering into a written agreement extending the term of this Agreement, all obligations and rights under this Agreement shall prospectively lapse as of the Expiration Date, except the Company’s obligation to pay me two years salary and expected bonus under 5.a. Change of Control, the Company’s ongoing indemnification obligation under Section 4(g), my confidentiality and other obligations under Section 6, and our mutual waiver under Section 8, and I thereafter shall be an at-will employee of the Company.

2. Nature of Duties . Company’s Board of Directors will elect me Senior Vice-President of Company and President of M&I Electric. As such, I shall work exclusively for the Company and shall have all of the customary powers and duties associated with those positions. I will serve as chief executive officer of M&I Electric and I will be responsible for all of M&I Electric’s operations and assets except those specifically assigned to others by the CEO of AETI. I recognize and agree that the Company may alter my duties from time to time. I shall devote my full business time and effort to the performance of my duties for the Company, which I shall perform faithfully and to the best

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of my ability. I shall be subject to the Company’s policies, procedures and approval practices, as generally in effect from time to time. Notwithstanding the foregoing or any other provision of this Agreement, it shall not be a breach or violation of this Agreement for me to (i) serve on non-profit, civic or charitable boards or committees, (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, (iii) serve on the board of directors of a non-competing company, or (iv) manage personal investments, so long as such activities do not significantly interfere with or significantly detract from the performance of my responsibilities to the Company in accordance with this agreement.

3. Place of Performance . I shall be based at the Company’s headquarters in Houston, Texas, except for required travel on the Company’s business.

4. Compensation and Related Matters .

c. The Expected Bonus will be paid to me if Company meets its annual budget and operating plan objectives. A greater bonus may be paid if performance is above target based on the operating plan objectives at the discretion of the Board of Directors of Company.

d. If I am still employed by the Company on December 31, 2009, I will receive a Retention Bonus of $35,000 which will be paid to me on or before March 15, 2010.

e. I will be eligible to participate in the Company’s Employee Stock Incentive Plan. If Company meets its annual budget and operating plan objectives I will be eligible

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to receive a grant of 15,000 shares of stock that will vest over a four year period in accordance with the Company’s equity bonus plan.

f. Automobile Allowance . The Company shall provide an automobile, or shall provide to me an automobile allowance equal to $800.00 per month.

g. Standard Benefits . During my employment, I shall be entitled to continue to participate in all executive benefit plans and programs, including paid vacations, and other benefits generally available to other similarly situated Company executives in accordance with the terms of those plans and programs and applicable law. The Company shall have the right to terminate or change any such plan or program at any time.

h. Indemnification . The Company shall extend to me the same indemnification arrangements as are generally provided to other similarly situated Company executives, including after termination of my employment.

i. Expenses . I shall be entitled to receive prompt reimbursement for all reasonable and customary travel and business expenses I incur in connection with my employment, but I must incur and account for those expenses in accordance with the policies and procedures established by the Company.

j. Sarbanes-Oxley Act Loan Prohibition . To the extent that any Company benefit, program, practice, arrangement, or this Agreement would or might otherwise result in my receipt of an illegal loan (“ Loan ”), the Company shall use reasonable efforts to provide me with a substitute for the Loan that is lawful and of at least equal value to me. If this cannot be done, or if doing so would be significantly

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more expensive to the Company than making the Loan, the Company need not make the Loan to me or provide me substitute for it.

5. Termination .

a. Rights and Duties . If my employment is terminated, I shall be entitled to the amounts or benefits shown on the applicable row of the following table, subject to the balance of this Section 5. The Company and I shall have no further obligations to each other, except the Company’s Change of Control obligation, the Company’s ongoing indemnification obligation under Section 4(g), my confidentiality and other obligations under Section 6, and our mutual waiver under Section 8, or as set forth in any written agreement I subsequently enter into with the Company.

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b. Discharge for Cause . The Company may terminate my employment at any time if it believes in good faith that it has Cause to terminate me. “ Cause ” shall include, but not be limited to:

i. my refusal to follow the Company’s lawful directions or my material failure to perform my

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agreed upon duties (other than by reason of physical or mental illness, injury, or condition), in either case, after I have been given notice of my default and a reasonable opportunity to cure my default;

ii. my material failure to comply with Company policies;

iii. my engaging in conduct that is or may be unlawful or disreputable, to the possible detriment of the Company and its subsidiaries and affiliates, and their predecessors and successors (“ Group ”), or my own reputation;

iv. my seeking, exploring, or accepting a full time position with another business enterprise or venture without the Company’s written consent at any time more than 90 days before the Expiration Date; or

v. my engaging in activities on behalf of an enterprise which competes or plans to compete with the Company or any of its subsidiaries or affiliates.

c. Termination for Disability . Except as prohibited by applicable law, the Company may terminate my employment on account of Disability, or may transfer me to inactive employment status, which shall have the same effect under this Agreement as a termination for Disability. “ Disability ” means a physical or mental illness, injury, or condition that prevents me from performing my duties, as determined under Company policies relating to disability applicable to me and other similarly situated employees.

d. Discharge Other Than for Cause or Disability . The Company may terminate my employment at any time for any reason, and without advance notice. If I

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am terminated by the Company other than for Cause under Section 5(b) or for Disability under Section 5(c), I will only receive the special benefits provided for a Discharge other than for Cause under Section 5(a) if I sign a general release form furnished to me by the Company (which may include any provision customary in formal settlement agreements and general releases, including such things as my release of the Company and all conceivably related persons or entities (“affiliates”) from all known and unknown claims, my covenant never in the future to pursue any released claim, my promise never to seek employment with the Company or any affiliate in the future, my promise not to solicit current or former customers, employees, suppliers or, to the fullest extent lawful, engage in business activities that compete with the Company or any affiliate, or disclose or use any of their proprietary or trade secret information) within 60 days after my employment ends and I do not thereafter properly revoke the release.

e. Resignation . I promise not to resign my employment before the Expiration Date without giving the Company at least 30 days advance written notice. If I resign, the Company may accept my resignation effective on the date set forth in my notice or any earlier date.

f. Death . If I die while employed under this Agreement, the payments required by Section 5(a) in the event of my death shall be made.

g. Change of Control. “Change of Control” as used herein occurs (i) if one or more persons or entities acting in concert acquire stock in the Company that constitutes, in the aggregate, more than 50 percent of

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the total fair market value or voting power of the stock of the Company, and such persons or entities did not own more than 50 percent before such acquisition, (ii) if there is a reorganization, merger or consolidation of the Company with one or more entities and thereafter, shares of the surviving entity are less than fifty percent (50%) owned by the Company or Company’s shareholders as of the date of the execution of this Agreement, or (iii) if there is a transfer of substantially all of the property of the Company to another entity neither directly nor indirectly controlled by the Company’s present shareholders. (For purposes of this provision, “controlled” means ownership of more than fifty percent (50%) of the voting stock.)

h. Amounts Owed to the Company . Any amounts payable to me under this section shall first be applied to repay any amounts I owe the Company.

6. Confidentiality . I acknowledge that as an integral part of the Company’s business, the Company has developed, and will develop, at a considerable investment of time and expense, marketing and business plans and strategies, procedures, methods of operation and marketing, financial data, lists of actual and potential customers and suppliers, and independent sales representatives and related data, technical procedures, engineering and product specifications, plans for development and exp