EXHIBIT 10.1
IES Commercial, Inc. Logo [iescomm.jpg]
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
 
THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is
entered into on January 15, 2009 (the “Effective Date”), by and between IES
Commercial, Inc. (the “Company”) a Delaware corporation and a wholly owned
subsidiary of Integrated Electrical Services, Inc. a Delaware corporation
(“IES”), and Johnny Menninga (the “Executive”).
 
WHEREAS, Executive and IES have previously entered into an Amended and Restated
Employment Agreement  (“Original Amended and Restated Agreement”) as of May 30,
2003; and
 
WHEREAS, the parties to the Original Amended and Restated Agreement deem it
desirable to amend and restate such Agreement in its entirety; and
 
WHEREAS, as of the Effective Date, IES and the subsidiary companies of IES
(collectively, the “IES Companies”) are engaged primarily in the providing of
any electrical contracting, information technology principally related to the
electrical contracting or cabling industry, and related services business; and
 
WHEREAS, Executive is employed hereunder by the Company and IES in a
confidential relationship wherein Executive, in the course of his employment
with the Company and IES, has and will continue to become familiar with and
aware of information as to the Company and IES’ customers and specific manner of
doing business, including the processes, techniques and trade secrets utilized
by IES, and future plans with respect thereto, all of which has been and will be
established and maintained at great expense to the Company and IES.  This
information is a trade secret and constitutes the valuable goodwill of the
Company and IES.
 
NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and
undertakings contained in this Agreement, and intending to be legally bound, the
Company and Executive agree as follows:
 
AGREEMENTS
 
    1. Employment and Duties. The Company hereby employs Executive as Vice
President and Division General Manager or in such other position with the
Company, IES or another IES Company as from time to time is determined by the
Company or IES.  
 
    2.Term.  The term of this Agreement shall commence on the Effective Date and
continue until terminated by either the Executive or the Company or IES upon ten
(10) days’ prior written notice.  In the event of termination of the Agreement,
except as provided in paragraph 10, the provisions of paragraphs 4, 5, 6, 7, and
8 herein shall survive pursuant to their terms.
 
    3.Compensation.  
 
  (a)  Base Salary.  Effective January 1, 2009, Executives base salary shall be
reduced to the annual rate of $280,000 (“Base Salary”) and shall be payable in
accordance with the Company’s regular payroll practices.
 
     Effective January 1, 2010, Executives base salary shall be reduced to the
annual rate of $260,000 unless the Executives geographical scope of
responsibility and accountability has appreciably increased whereby the
Executive’s annual rate of pay will remain $280,000.
 
     Thereafter, the Executive shall be entitled to such increases in Base
Salary, if any, as may be determined on at least an annual basis in the sole
discretion of IES.
 
  (b)  Annual Bonus.  During the Employment Term, Executive shall be given the
opportunity to earn an incentive bonus (the “Annual Bonus”) on the same basis as
others employed in the same position as Executive.  The actual amount payable to
Executive as an Annual Bonus with respect to a Fiscal Year (or portion thereof)
shall be dependent upon the achievement of performance objectives established by
the Compensation Committee (“Committee”) during such Fiscal Year and may be
greater or less than the annual target.  That portion of the Executive’s Annual
Bonus that is tied to objective targets established by the Committee may not be
subsequently reduced by the Committee.  The Committee reserves the sole and
exclusive right to determine whether the Executive may be entitled to a
discretionary bonus and to determine what if any criteria may be considered in
making such decision. Any Annual Bonus shall be paid at the same time as similar
bonuses are payable to other executive officers of the Company.
 
     For the 2009 Fiscal Year, Executive is guaranteed an Annual Bonus of not
less than $140,000 provided Executive is actively employed on the last day of
the fiscal year or if the Executive is terminated without cause, as defined in
Section 10, during the Fiscal 2009 year.  If Executive is terminated for Cause
as defined in Section 10, the Executive shall not be entitled to any Annual
Bonus.

  (c)  Long Term Incentive Plan.  Executive shall remain eligible to participate
in the Fiscal 2009 Long Term Incentive Plan (“LTIP Plan”) at the same
participant level as he did in Fiscal year 2008.  Thereafter, Executives shall
participate in the LTIP Plan on the same basis as similarly employed executives.
 
  (d)  Employee Benefits.  Employee Benefits.  During the Employment Term,
Executive shall be eligible to participate in the Company’s employee benefit
plans as in effect from time to time (collectively, “Employee Benefits”) on the
same basis as such employee benefit plans are generally made available to other
comparable executives of the Company.
 
    i. Vacation.  Executive shall be entitled to four (4) weeks of annual
vacation leave (prorated for Executive’s initial year, if not a full
year).  Such leave shall be administered in accordance with the Company’s
policy.
 
    ii. Automobile Allowance.  Executive shall be entitled to receive a monthly
auto allowance of $1,500 less applicable payroll taxes.
 
    iii. Executive Supplemental Life Insurance.   Executive shall be eligible to
continue participation in the Company’s Executive Supplemental Life Insurance
plan at the same coverage level in effect on the Effective Date of this
Agreement.  The cost of coverage shall be paid by the Company and provided to
Executive on a tax neutral basis.
 
  (e)  Retention Bonus.  Executive shall be eligible to receive the Retention
Bonus of $30,000 if Executive is actively employed by the Company as of October
1, 2009 (“First Payout Date”) and an additional $20,000 if the Executive is
actively employed on March 1, 2010 (“Second Payout Date”).  Payment of any
Retention Bonus due Executive shall be paid in a lump sum payment within 15 days
of the respective payout date.
 
   If Executive is terminated by the Company without Cause prior to the First
Payout Date or Second Payout Date the Executive shall be entitled to receive any
unpaid Retention Bonus payments.
 
   Executive shall not be eligible to receive the prescribed Retention Bonus
payment above if he is terminated for Cause as defined in Section 10 below or if
Executive voluntarily resigns his employment prior to the First Payout Date or
Second Payout Date.
 
    4.Non-Competition Agreement.
 
    (a)  Executive recognizes that the Company’s and IES’ willingness to enter
into this Agreement is based in material part on Executive’s agreement to the
provisions of this paragraph 4 and that Executive’s breach of the provisions of
this paragraph 4 could materially damage the Company or any other IES
company.  Subject to the further provisions of this Agreement, Executive will
not, during the term of his employment with any IES Company, and for a period of
twelve (12) months immediately following the termination of such for any reason
whatsoever, except as may be set forth herein, directly or indirectly, for
himself or on behalf of or in conjunction with any other person, company,
partnership, corporation or business of whatever nature:
 
     (i)engage, as an officer, director, shareholder, owner, partner, joint
venturer, or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales representative, in any
electrical contracting or communications business in direct competition with any
IES Company within 100 miles of where any IES Company conducts business,
including any territory serviced by an IES Company during the term of
Executive’s employment (the “Territory”);  
 
     (ii)hire, employ (or offer to hire or employ) any IES Company employee for
the purpose or with the intent of enticing such employee away from or out of the
employ of the IES Company;
 
     (iii)call upon any person or entity which is, at that time, or which has
been, within one (1) year prior to that time, a customer of an IES national
account or IES Company within the Territory for the purpose of soliciting or
selling electrical or communications contracting products or services;
 
     (iv)call upon any prospective acquisition candidate, on Executive’s own
behalf or on behalf of any competitor, which candidate was, to Executive’s
knowledge after due inquiry, either called upon by an IES Company or for which
an IES Company made an acquisition analysis, for the purpose of acquiring such
entity; or
 
     (v)disclose customers, whether in existence or proposed, of an IES Company
to any person, firm, partnership, corporation or business for any reason or
purpose whatsoever except to the extent that the IES Company has in the past
disclosed such information to the public for valid business reasons.
 
    Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Executive from acquiring as an investment not more than one percent
(1%) of the capital stock of a competing business, whose stock is traded on a
national securities exchange, the NASDAQ Stock Market or on an over-the-counter
or similar market, unless the Board of Directors of the Company consents to such
acquisition.
 
    (b)Because of the difficulty of measuring economic losses to the IES
Companies as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to the IES Companies for
which they would have no other adequate remedy, Executive agrees that foregoing
covenant may be enforced by the Company or IES, in the event of breach by
Executive, by injunctions and restraining orders.  
 
    (c)It is agreed by the parties that the foregoing covenants in this
paragraph 4 impose a reasonable restraint on Executive in light of the
activities and business of the IES Companies on the date of the execution of
this Agreement and the current plans of the IES Companies; but it is also the
intent of the Company and IES and Executive that such covenants be construed and
enforced in accordance with the changing activities, business and locations of
the IES Companies throughout the term of this covenant, whether before or after
the date of termination of the employment of Executive, unless the Executive was
conducting such new business prior to any IES Company conducting such new
business.  For example, if, during the term of this Agreement, an IES Company
engages in new and different activities, enters a new business or establishes
new locations for its current activities or business in addition to or other
than the activities or business enumerated under the Recitals above or the
locations currently established therefore, then Executive will be precluded from
soliciting the customers or employees of such new activities or business or from
such new location and from directly competing with such new business within 100
miles of its then-established operating location(s) through the term of this
covenant, unless the Executive was conducting such new business prior to any IES
Company conducting such new business.
 
    (d)It is further agreed by the parties hereto that, in the event that
Executive shall cease to be employed hereunder and shall enter into a business
or pursue other activities not in competition with the electrical contracting
activities of the IES Companies or similar activities or business in locations
the operation of which, under such circumstances, does not violate clause (a)(i)
of this paragraph 4, and in any event such new business, activities or location
are not in violation of this paragraph 4 or of Executive’s obligations under
this paragraph 4, if any, Executive shall not be chargeable with a violation of
this paragraph 4 if the IES Companies shall thereafter enter the same, similar
or a competitive (i) business, (ii) course of activities or (iii) location, as
applicable.
 
    (e)The covenants in this paragraph 4 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant.  Moreover, in the event any court of competent jurisdiction
shall determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent that the court deems reasonable, and the
Agreement shall thereby be reformed.
 
    (f)All of the covenants in this paragraph 4 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Executive against the IES
Companies, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by IES or the Company of such covenants.
It is specifically agreed that the period of twelve (12) months (subject to the
further provisions of this Agreement) following termination of employment stated
at the beginning of this paragraph 4, during which the agreements and covenants
of Executive made in this paragraph 4 shall be effective, shall be computed by
excluding from such computation any time during which Executive is in violation
of any provision of this paragraph 4.
 
    (g)The Company, IES and Executive hereby agree that this covenant is a
material and substantial part of this transaction.
 
 5.Return of Company Property.  All records, designs, patents, business plans,
financial statements, manuals, memoranda, lists and other property delivered to
or compiled by Executive by or on behalf of the Company, IES or any IES
Companies or their representatives, vendors or customers which pertain to the
business of the Company or IES or any IES Companies shall be and remain the
property of the Company or IES or the IES Company, as the case may be, and be
subject at all times to their discretion and control.  Likewise, all
correspondence, reports, records, charts, advertising materials and other
similar data pertaining to the business, activities or future plans of the
Company or IES or the IES Company which is collected by Executive shall be
delivered promptly to the Company without request by it upon termination of
Executive’s employment.
 
 6.Inventions.  Executive shall disclose promptly to the Company (or to IES or
his then-current IES Company employer if it is other than the Company) any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by
Executive, solely or jointly with another, during the period of employment or
within one year thereafter, if conceived during employment, and which are
directly related to the business or activities of the IES Companies and which
Executive conceives as a result of his employment by the IES
Companies.  Executive hereby assigns and agrees to assign all his interests
therein to the Company or its nominee.  Whenever requested to do so by the
employing IES Company, Executive shall execute any and all applications,
assignments or other instruments that such IES Company shall deem necessary to
apply for and obtain Letters Patent of the United States or any foreign country
or to otherwise protect the IES Company’s interest therein.
 
 7.Trade Secrets.  Executive agrees that he will not, during or after the term
of this Agreement, disclose the specific terms of the Company’s, IES’ or IES
Companies’ relationships or agreements with their respective significant vendors
or customers or any other significant and material trade secret of the Company,
IES or IES Companies, whether in existence or proposed, to any person, firm,
partnership, corporation or business for any reason or purpose whatsoever.
 
 8. Confidentiality.  
 
    (a)Executive acknowledges and agrees that all Confidential Information (as
defined below) of the IES Companies is confidential and a valuable, special and
unique asset of the IES Companies that gives the IES Companies an advantage over
their actual and potential, current and future competitors.  Executive further
acknowledges and agrees that Executive owes the IES Companies a fiduciary duty
to preserve and protect all Confidential Information from unauthorized
disclosure or unauthorized use, that certain Confidential Information
constitutes “trade secrets” under applicable laws and, that unauthorized
disclosure or unauthorized use of the IES Companies’ Confidential Information
would irreparably injure the IES Companies.
 
    (b)Both during the term of Executive’s employment and after the termination
of Executive’s employment for any reason (including wrongful termination),
Executive shall hold all Confidential Information in strict confidence, and
shall not use any Confidential Information except for the benefit of the IES
Companies, in accordance with the duties assigned to Executive.  Executive shall
not, at any time (either during or after the term of Executive’s employment),
disclose any Confidential Information to any person or entity (except other
employees of the IES Companies who have a need to know the information in
connection with the performance of their employment duties), or copy, reproduce,
modify, decompile or reverse engineer any Confidential Information, or remove
any Confidential Information from the IES Companies’ premises, without the prior
written consent of the President of the employing IES Company, or permit any
other person to do so.  Executive shall take reasonable precautions to protect
the physical security of all documents and other material containing
Confidential Information (regardless of the medium on which the Confidential
Information is stored).  This Agreement applies to all Confidential Information,
whether now known or later to become known to Executive.
 
    (c)Upon the termination of Executive’s employment with the IES Company for
any reason, and upon request of the employing IES Company at any other time,
Executive shall promptly surrender and deliver to the IES Company all documents
and other written material of any nature containing or pertaining to any
Confidential Information and shall not retain any such document or other
material.  Within five days of any such request, Executive shall certify to the
IES Company in writing that all such materials have been returned.
 
    (d)As used in this Agreement, the term “Confidential Information” shall mean
any information or material known to or used by or for the IES Companies
(whether or not owned or developed by the IES Company and whether or not
developed by Executive) that is not generally known to persons in the electrical
contracting business.  Confidential information includes, but is not limited to,
the following: all trade secrets of the IES Companies; all information that the
IES Companies have marked as confidential or has otherwise described to
Executive (either in writing or orally) as confidential; all nonpublic
information concerning the IES Companies’ products, services, prospective
products or services, research, product designs, prices, discounts, costs,
marketing plans, marketing techniques, market studies, test data, customers,
customer lists and records, suppliers and contracts; all IES Companies business
records and plans; all IES Companies personnel files; all financial information
of or concerning the IES Companies; all information relating to operating system
software, application software, software and system methodology, hardware
platforms, technical information, inventions, computer programs and listings,
source codes, object codes, copyrights and other intellectual property; all
technical specifications; any proprietary information belonging to the IES
Companies; all computer hardware or software manual; all training or instruction
manuals; and all data and all computer system passwords and user codes.
 
9.Release.  Notwithstanding anything in this Agreement to the contrary,
Executive shall not be entitled to receive any payments pursuant to this
Agreement unless Executive has executed (and not revoked) a general release of
all claims Executive may have against the IES Companies in a form of such
release reasonably acceptable to the employing IES Company.
 
    10.Termination.
 
    (a)By the Company Without Cause or Resignation by Executive.  In the event
the employing IES Company determines to terminate Executive Without Cause or
Executive voluntarily terminates his employment during the term of this
Agreement, the employing IES Company, shall pay Executive twelve (12) months of
his then-current base salary within thirty (30) days of the date of such
termination in return for Executive’s continuing to be bound by the terms of
paragraph 4 of this Agreement for a period of twelve (12) months from the date
of termination.  In the event the employing IES Company does not exercise the
option to make the above-described payment to Executive, the terms of paragraph
4 of this Agreement shall terminate effective with the termination of employment
of Executive.
 
    (b)By the Company For Cause.  In the event Executive is terminated by the
employing IES Company for cause (as provided for below), no payment shall be due
and the terms of paragraph 4 of this Agreement shall continue for a period of
twelve (12) months from the date of termination.  
 
    For purposes of this Agreement, “Cause” shall mean (i) Executive’s willful,
material and irreparable breach of his terms of employment as provided herein or
otherwise (which remains uncured ten (10) business days after delivery of
written notice specifically identifies such breach); (ii) Executive’s negligence
in the performance or intentional nonperformance (in either case continuing for
ten (10) business days after receipt of written notice of need to cure and sets
forth such duty and responsibility) of any of Executive’s material duties and
responsibilities to the Company; (iii) Executive’s dishonesty or fraud with
respect to the business, reputation or affairs of the Company which materially
and adversely affects the Company (monetarily or otherwise); (iv) Executive’s
conviction of a felony or crime involving moral turpitude; (v) Executive’s
confirmed drug or alcohol abuse that materially affects Executive’s service or
results in a material violation of the Company’s drug or alcohol abuse policy;
or (vi) Executive’s material violation of the Company’s personnel or similar
policy, or material violation of the IES’ Code of Conduct policies, or other
policies having been made available to Executive by the Company or IES which
materially and adversely affects the Company and which remains uncured or
continues ten (10) business days after delivery of written notice) and such
notice specifically sets forth said violation.
 
    11.Complete Agreement.  This Agreement sets forth the entire agreement
between the parties and fully supersedes all prior written and oral agreements,
understandings and representations between the parties.  This Agreement is
executed, effective and enforceable only after both parties have signed the
Agreement and an original executed Agreement has been returned to
Company.  Executive has no oral representations, understandings or agreements
with the Company, IES or any of their officers, directors or representatives
covering the same subject matter as this Agreement.  This written Agreement is
the final, complete and exclusive statement and expression of the agreement
between the Company, IES and Executive and of all the terms of this Agreement,
and it cannot be varied, contradicted or supplemented by evidence of any prior
or contemporaneous oral or written agreements.  This written Agreement may not
be later modified except by a further writing signed by a duly authorized
officer of the Company, IES and Executive, and no term of this Agreement may be
waived except by writing signed by the party waiving the benefit of such
term.  Without limiting the generality of the foregoing, either party’s failure
to insist on strict compliance with this Agreement shall not be deemed a waiver
thereof.
 
    12.Notice. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:
 

 To the Company:   IES Commercial, Inc.    Attn: Regional Operating Office  
 1800 West Loop South, Ste. 500    Houston, TX 77027      with a copy to:
 Integrated Electrical Services, Inc.    Law Department    1800 West Loop South,
Suite 500    Houston, Texas 77027      To Executive:  Johnny Menninga    1299
Emerald Drive    Otley, IA 50214

  
    Notice shall be deemed given and effective on the earlier of three (3) days
after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually
received.  Either party may change the address for notice by notifying the other
party of such change in accordance with this paragraph 11.
 
13.Severability; Headings.  If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative.  The paragraph
headings herein are for reference purposes only and are not intended in any way
to describe, interpret, define or limit the extent or intent of the Agreement or
of any part hereof.
 
14.Governing Law.  This Agreement shall in all respects be construed according
to the laws of the State of Texas without regard to its conflicts of law
provisions.
 
15.Counterparts.  This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective
for all purposes as of the Effective Date.
                    

    EXECUTIVE            By:       /s/ Johnny Menninga       Name:Johnny
Menninga    Title:  Division General Manager                 IES COMMERCIAL,
INC.            By:        /s/ Curt L. Warnock       Name:  Curt L. Warnock  
 Title:     Vice President and Secretary                INTEGRATED ELECTRICAL
SERVICES, INC.            By:       /s/ Robert B. Callahan       Name:Robert B.
Callahan    Title:Sr. Vice President, Human Resources