Document:

exv4w3

 

 

 

INTEGRATED ELECTRICAL SERVICES, INC.

     The Corporation will furnish to any stockholder, upon request and without charge, a
statement of the
powers, designations, and relative rights, preferences and
limitations of each class of stock
or series thereof
of the Corporation, and the qualifications, limitations or restrictions of such preferences
and/or rights. Such request may be made to the Corporation or the Transfer Agent.

     The
following abbreviation, when used In the Inscription on the logo of
this certificate,
shall be construed as though they were written out in full
according to applicable laws or regulations:

	 	 	 	 	 	 	 	 	 
	 

	 	TEN COM —
	 	as tenants In common
	 	UNIF GIFT MIN ACT —
	 	                    Custodian                    
	 

	 	TEN ENT —
	 	as tenants by the entireties
	 	 	 	(Cust)                 (Minor)     
	 

	 	JT TEN —
	 	as joint tenants with
	 	 	 	under Uniform Gifts to Minors
	 

	 	 	 	right of survivorship and
	 	 	 	Act                                                            
	 

	 	 	 	not as tenants In common
	 	 	 	(State)
	 

	 	 	 	 	 	UNIF TRF MIN ACT —
	 	                    Custodian (until age                    )
	 

	 	 	 	 	 	 	 	     (Cust) 
	 

	 	 	 	 	 	 	 	                               under Uniform Transfers
	 

	 	 	 	 	 	 	 	               (Minor)
	 

	 	 	 	 	 	 	 	to Minors Act                                         
	 

	 	 	 	 	 	 	 	                  (State)

Additional
abbreviation may also be used though not In the above list

          For
Value
received                    hereby
sell assign and transfer unto

          PLEASE
INSERT SOCIAL SECURITY OR OTHER

                    IDENTIFYING NUMBER OF ASSIGNEE

 

			
	 

	 	 
	 
	 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE
	 	 
	 
	 	 
	 

	 	 
	 

	 	 
	 

	 	 
	                                                                                                                                                                                         
Shares of the capital stock represented by
the within Certificate and do hereby irrovocably constitute and appoint                                             
	 
	 	 
	 

	 	 
	Attorney to transfer the said stock on the books of the within named Company with full power of
substatution in the premises.
	 
	 	 
	Dated                                        
	 	 

	 	 	 
	 

	 	 
	 

	 	(SIGNATURE)
	 
	 	 
	 
	 

	 	 
	 

	 	(SIGNATURE)
	 

	 	NOTICE: THE SIGNATURE(S) TO THIS
ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.

	 	 	 	 	 
	SIGNATURE(S) GUARANTEED BY:
	 	 	 	 
	 	 	 
	 

	 	 	 	THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C
RULE 17Ad-15.exv4w4

 

Integrated Electrical Services, Inc.

2006 Equity Incentive Plan

Effective as of
May 12, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 	Page 	 
	SECTION 1.

	 	PURPOSE
	 	 	1	 
	 
	SECTION 2.

	 	ADMINISTRATION
	 	 	1	 
	 
	SECTION 3.

	 	ELIGIBILITY
	 	 	2	 
	 
	SECTION 4.

	 	STOCK SUBJECT TO PLAN
	 	 	2	 
	 
	SECTION 5.

	 	AWARDS
	 	 	2	 
	 
	SECTION 6.

	 	OPTIONS
	 	 	3	 
	 
	SECTION 7.

	 	STOCK AWARDS
	 	 	5	 
	 
	SECTION 8.

	 	PAYMENT FOR SHARES
	 	 	6	 
	 
	SECTION 9.

	 	TERMINATION OF SERVICE
	 	 	7	 
	 
	SECTION 10.

	 	ADJUSTMENT OF SHARES
	 	 	8	 
	 
	SECTION 11.

	 	GENERAL TERMS
	 	 	9	 
	 
	SECTION 12.

	 	DURATION AND AMENDMENTS
	 	 	10	 
	 
	SECTION 13.

	 	DEFINITIONS
	 	 	11	 
	 
	SECTION 14.

	 	MISCELLANEOUS
	 	 	15	 

 

 

Integrated
Electrical Services, Inc.

2006 Equity Incentive Plan

SECTION 1. PURPOSE.

The purpose of the Integrated Electrical Services, Inc. 2006 Equity Incentive Plan (the
“Plan”) is to promote the success and enhance the value of Integrated Electrical Services,
Inc. (the “Company”) and its Subsidiaries by linking the personal interests of the
employees, consultants and directors of the Company and its Subsidiaries who have been or will be
given responsibility for the management or administration of the Company (or one of its
Subsidiaries) to those of Company stockholders and by providing such individuals with an incentive
for outstanding performance to generate superior returns to Company stockholders. The Plan is
further intended to provide flexibility to the Company in its ability to motivate, attract, and
retain the services of employees, consultants and directors of the Company and its Subsidiaries
upon whose judgment, interest, and special effort the successful conduct of the Company’s operation
is largely dependent. Unless the context otherwise requires, capitalized terms used herein are
defined in Section 13 of the Plan.

SECTION 2. ADMINISTRATION.

(a) Committee. The Plan will be administered by a Compensation Committee of the Board of Directors
and shall be comprised solely of not less than two (2) members who shall be (i) “non-employee
directors” within the meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under the
Exchange Act, (ii) “outside directors” within the meaning of Treasury Regulation Section
1.162-27(e)(3) under Section 162(m) of the Code, and (iii) “independent directors” within
the meaning of the listing standards of the New York Stock Exchange or, if listed thereon, the
Nasdaq Stock Market (and each other exchange on which the Company may be listed).

(b) Authority of the Committee. The Committee shall have full authority and sole discretion to
take any actions it deems necessary or advisable for the administration and operation of the Plan,
including, without limitation, the right to construe and interpret the provisions of the Plan or
any Award Agreement, to provide for any omission in the Plan, to resolve any ambiguity or conflict
under the Plan or any Award Agreement, to accelerate vesting of or otherwise waive any requirements
applicable to any Award, to extend the term or any period of exercisability of any Award, to modify
the purchase price or exercise price under any Award and to establish terms or conditions
applicable to any Award. All decisions, interpretations and other actions of the Committee shall
be final and binding on all participants and other persons deriving their rights from a
participant.

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SECTION 3. ELIGIBILITY

The Committee in its sole discretion is authorized to grant Awards to Employees, Consultants and
Directors. Such persons who have been granted Awards shall be participants in the Plan with
respect to such Awards. No individual shall have the right to be selected to receive an Award
under the Plan, or, having been so selected, to be selected to receive a future Award.

SECTION 4. STOCK SUBJECT TO PLAN.

(a) Basic Limitation. Subject to the provisions of this Section 4 and Section 10 of the Plan, the
maximum number of shares of common stock of the Company that may be issued pursuant to Awards under
the Plan is 2,002,542 Shares. Shares may be treasury shares or authorized but unissued shares.

(b) Annual Award Limitation. Subject to the provisions of Section 10 of the Plan, the maximum
number of Shares with respect to which Options or Stock Awards may be granted to any individual
participant under the Plan in any calendar year shall be 1,001,271 Shares.

(c) Additional Shares. In the event that any outstanding Award expires, is cancelled or otherwise
terminated, Shares allocable to the unexercised or unvested portion of such Award shall again be
available for the purposes of the Plan. In the event that Shares issued under the Plan are
reacquired by the Company pursuant to any forfeiture provision, right of repurchase, right of first
offer or withholding requirements, such Shares shall again be available for purposes of the Plan.
In the event a participant pays for any Award through the delivery of previously acquired Shares,
the number of Shares available shall be increased for purposes of the Plan by the number of Shares
delivered by the participant. To the extent permitted by applicable law or any exchange rule,
Shares issued in assumption of, or in substitution for, any outstanding awards of any entity
acquired in any form of combination by the Company or any Subsidiary shall not be counted against
Shares available for grant pursuant to the Plan.

SECTION 5. AWARDS.

(a) Types of Awards. The Committee may, in its sole discretion, make Awards of one or more of the
following: Options and Stock Awards (including Restricted Stock). The Company shall make Awards
directly to the participant.

(b) Award Agreements. Each Award made under the Plan shall be evidenced by an Award Agreement
between the participant and the Company, and no Award shall be valid without any such agreement.
An Award shall be subject to all applicable terms and conditions of the Plan and to any other terms
and conditions which the Committee in its sole discretion deems appropriate for inclusion in the
Award Agreement provided such terms and conditions are not inconsistent with the Plan.
Accordingly, in the event of any conflict between the provisions of the Plan and any Award
Agreement, the provisions of the Plan shall prevail, unless it is expressly specified in such Award
Agreement or other

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written document that a specific provision of the Plan shall not apply. Each Award Agreement shall
provide, in addition to any terms and conditions required to be provided in such agreement pursuant
to any other provision of this Plan, the following terms:

	 	(i)	 	Number of Shares. The number of Shares subject to the Award, if any,
which number shall be subject to adjustment in accordance with Section 10 of the Plan.
	 
	 	(ii)	 	Price. Where applicable, each Award Agreement shall designate the
price, if any, to acquire any Shares underlying the Award, which price shall be
payable in a form described in Section 8 of the Plan and subject to adjustment
pursuant to Section 10 of the Plan.
	 
	 	(iii)	 	Vesting. Each Award Agreement shall specify the dates and/or events
on which all or any installment of the Award shall be vested and nonforfeitable.
Except as otherwise set forth in the Award Agreement, all unvested Awards shall vest
upon a Change in Control.

(c) No Rights as a Stockholder. A participant, or a transferee of a participant, shall have no
rights as a stockholder with respect to any Shares covered by an Award until Shares are actually
issued in the name of such person (or if Shares will be held in street name, to a broker who will
hold such Shares on behalf of such person).

SECTION 6. OPTIONS.

(a) Generally. The Committee may, in its sole discretion, grant Options. Each Award Agreement
evidencing an Award of Options shall contain the following information, which shall be determined
by the Committee in its sole discretion:

	 	(i)	 	Exercise Price. Each Award Agreement shall specify the exercise
price per Share subject to the Option; provided, however, that the exercise price per
Share shall not be less than 100% of the Fair Market Value of such Share on the date
such Option is granted.
	 
	 	(ii)	 	Exercisability and Vesting. Each Award Agreement shall specify the
dates and/or events when all or any installment of the Option becomes exercisable or
vested, as applicable; provided, however, that by a resolution adopted after an Option
is granted, the Committee may, on such terms and conditions as it may determine to be
appropriate, accelerate the time at which such Option or any portion thereof may be
exercised or vested, as applicable.
	 
	 	(iii)	 	Term. Each Award Agreement shall state the term of each Option
(including the circumstances under which such Option will expire prior to the stated
term thereof), which shall not exceed ten (10) years from the date of grant.

3

 

(b) Persons Eligible to Exercise Options. During the lifetime of a holder of an Option, only the
holder may exercise the Option (or any portion thereof) granted to him or her; provided, however,
that the holder’s Eligible Representative may exercise the holder’s Option during the period of the
holder’s Disability. After the death of the holder, any exercisable portion of an Option may,
prior to the time when such portion becomes unexercisable under the Plan or the applicable Award
Agreement, be exercised by his or her Eligible Representative.

(c) Manner of Exercise of Options. At any time and from time to time prior to the time when the
Option expires or is otherwise cancelled under the Plan or the applicable Award Agreement, the
exercisable portion of an Option may be exercised in whole or in part; provided, however, that the
Company shall not be required to issue fractional shares of stock and the Committee may, by the
terms of the Option, require any partial exercise to exceed a specified minimum number of Shares.

An exercisable Option, or any exercisable portion thereof, may be exercised solely by delivery to
the Secretary of the Company of all of the following prior to the time when such Option or such
portion expires or is otherwise cancelled under the Plan or the applicable Award Agreement:

	 	(i)	 	Notice in writing signed by the holder or his or her Eligible Representative,
stating that such Option or portion thereof is exercised, and specifically stating the
number of Shares with respect to which the Option or a portion thereof is being
exercised;
	 
	 	(ii)	 	Full payment of the aggregate exercise price of the Shares with respect to
which such Option (or portion thereof) is thereby exercised in accordance with any
method prescribed by Section 8 of the Plan;
	 
	 	(iii)	 	The payment to the Company of all amounts necessary to satisfy any and all
federal, state and local tax withholding requirements arising in connection with the
exercise of the Option in accordance with any method prescribed by Sections 8 and
11(d) of the Plan;
	 
	 	(iv)	 	Such representations and documents as the Committee deems necessary or
advisable to effect compliance with all applicable provisions of the Securities Act
and any other federal or state securities laws or regulations. The Committee may, in
its sole discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer orders to transfer agents and registrars; and
	 
	 	(v)	 	In the event that the Option or portion thereof shall be exercised pursuant
to Section 6(b) by any person or persons other than the holder, appropriate proof of
the right of such person or persons to exercise the Option or portion thereof.

4

 

SECTION 7. STOCK AWARDS.

(a) Generally. The Committee may, in its sole discretion, make Stock Awards. Payment in Shares of
all or a portion of any bonus under any other arrangement may be treated by the Committee as a
Stock Award under the Plan. A Stock Award shall not be deemed made until accepted by a participant
in a manner prescribed by the Committee at the time of grant.

(b) Restricted Stock. A Stock Award of Restricted Stock shall be subject to such restrictions on
transferability and other restrictions as the Committee may impose (including, without limitation,
limitations on the right to vote Restricted Stock or the right to receive dividends on Restricted
Stock). These restrictions may lapse separately or in combination at such times, pursuant to such
circumstances, in such installments, or otherwise, as the Committee determines at the time of the
grant of the Award or thereafter.

(c) Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be
evidenced in such manner as the Committee shall determine. If certificates representing Shares of
Restricted Stock are registered in the name of the participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical possession of the
certificates until such time as all applicable restrictions lapse.

(d) No Purchase Price Necessary. In lieu of a purchase price, a Stock Award may be made in
consideration of services previously rendered by a participant to the Company or its Subsidiaries.

SECTION 8. PAYMENT FOR SHARES.

(a) General Rule. The purchase price of Shares issued under the Plan shall be payable in cash or
personal check at the time when such Shares are acquired upon exercise of an Award or otherwise
purchased, except as otherwise provided in this Section.

(b) Surrender of Shares. At the discretion of the participant, all or any part of the purchase
price and any applicable withholding requirements may be paid by surrendering, or attesting to the
ownership of, Shares that are already owned by the participant. Such Shares shall be surrendered
to the Company in good form for transfer and shall be valued at their Fair Market Value on the date
when the Award is exercised. Notwithstanding the foregoing, the participant shall not surrender,
or attest to the ownership of, Shares in payment of any portion of the purchase price (or
withholding) if such action would cause the Company or any Subsidiary to recognize an additional
compensation expense with respect to the applicable Award for financial reporting purposes, unless
the Committee consents thereto.

5

 

(c) Services Rendered. At the sole discretion of the Committee, Shares may be awarded under the
Plan in consideration of services rendered to the Company or a Subsidiary prior to or after the
Award.

(d) Net Exercise At the discretion of the participant, payment of all or any portion of the
purchase price under any Award subject to the Plan and any applicable withholding requirements may
be made by reducing the number of Shares otherwise deliverable pursuant to the Award by the number
of such Shares having a Fair Market Value equal to the purchase price and any applicable
withholding requirement. Notwithstanding the foregoing, the participant shall not be permitted to
pay any portion of the purchase price (or withholding) in such manner if such action would cause
the Company or any Subsidiary to recognize an additional compensation expense with respect to the
applicable Award for financial reporting purposes unless the Committee consents thereto.

(e) Exercise/Sale. Payment may be made in whole or in part by the delivery (on a form prescribed
by the Company) of an irrevocable direction (i) to a securities broker approved by the Company to
sell Shares and to deliver all or part of the sales proceeds to the Company, or (ii) to pledge
Shares to a securities broker or lender approved by the Company as security for a loan, and to
deliver all or part of the loan proceeds to the Company, in each case in payment of all or part of
the purchase price and any withholding requirements.

(f) Exercise of Discretion. Should the Committee exercise its discretion to permit the participant
to pay the purchase price or any applicable withholding requirement under an Award in whole or in
part in accordance with subsections (b) through (e) through above, it shall not be bound to permit
such alternative method of payment for the remainder of any such Award or with respect to any other
Award or participant under the Plan.

SECTION 9. TERMINATION OF SERVICE.

(a) Termination of Service (except for Cause). Except as otherwise provided in the applicable
Award Agreement or under any employment agreement between the participant and the Company or any
Subsidiary executed after the Chapter 11 Plan Effective Date, in the event a participant’s Service
terminates for any reason other than for Cause, then:

	 	(i)	 	Any Options to the extent vested as of the date of such termination shall
expire on the earliest of: (i) the expiration of their term, (ii) twelve (12) months
following such termination as a result of death or Disability, and (iii) three (3)
months following such termination for any other reason. Any Options to the extent
unvested as of the date of such termination shall immediately expire and lapse upon
such termination.
	 
	 	(ii)	 	Any unvested Stock Awards on the date of such termination shall immediately
expire and lapse upon such termination; provided, however,
that if the vesting of any such Award is conditioned upon satisfying 

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	 	 	 	performance conditions and the participant has satisfied such conditions except that the
participant is not in Service on the payment date due to the termination of the
participant’s Service on account of the participant’s death or Disability, such
Award shall be payable to the participant or, if applicable, the participant’s
Eligible Representative at the regularly scheduled payment date.

(b) Termination of Service (for Cause). Except as otherwise provided in the applicable Award
Agreement, in the event a participant’s Service is terminated for Cause or Cause exists on the date
a participant’s Service terminates, then:

	 	(i)	 	All of the participant’s Options on the date of such termination (whether
vested or unvested and including any exercised Options for which Shares have not been
delivered to the participant) shall be cancelled and forfeited immediately on the date
of such termination, and the Company shall return to the participant the price (if
any) paid for such undelivered Shares. Should a participant die or have a Disability
at a time when Cause exists but prior to the date the participant’s Service is
terminated for Cause, all of the participant’s Options on the date of such termination
(whether vested or unvested and including any exercised Options for which Shares have
not been delivered to the participant) shall be cancelled and forfeited immediately as
of the date of the participant’s death of Disability and the Company shall return to
the participant or Eligible Representative, as applicable, the price (if any) paid for
such undelivered Shares.
	 
	 	(ii)	 	Any unvested Stock Awards on the date of such termination shall immediately
expire and lapse upon such termination.

(c) Leave of Absence. For purposes of this Section 9, Service shall be deemed to continue while a
participant is on a bona fide leave of absence, if such leave is approved by the Company in writing
or if continued crediting of service for this purpose is expressly required by the terms of such
leave or by applicable law (as determined by the Committee).

SECTION 10. ADJUSTMENT OF SHARES.

(a) General. If there shall be a Recapitalization, an adjustment shall be made to each outstanding
Award such that each such Award shall thereafter be exercisable or payable, as the case may be, in
such securities, cash and/or other property as would have been received in respect of Shares
subject to (or referenced by) such Award had such Award been exercised and/or settled in full
immediately prior to such Recapitalization and such an adjustment shall be made successively each
time any such change shall occur. In addition, in the event of any Recapitalization, to prevent
dilution or enlargement of participants’ rights under the Plan, the Committee shall, and will have
the authority to adjust, in a fair and equitable manner, the number and kind of Shares that
may be issued under the Plan, the number and kind of Shares subject to outstanding Awards, and the

7

 

purchase price applicable to outstanding Awards. Should the vesting of any Award be conditioned
upon the Company’s attainment of performance conditions, the Committee may make such adjustments to
such terms and conditions of such Awards and the criteria therein to recognize unusual and
nonrecurring events affecting the Company or in response to changes in applicable laws, regulations
or accounting principles.

(b) Mergers and Consolidations. In the event that the Company is a party to a merger or
consolidation, outstanding Awards shall be subject to the agreement of merger or consolidation.
Such agreement, without the participants’ consent, may provide for:

	 	(i)	 	The continuation or assumption of such outstanding Awards under the Plan by
the Company (if it is the surviving corporation) or by the surviving corporation or
its parent;
	 
	 	(ii)	 	The substitution by the surviving corporation or its parent of stock awards
with substantially the same terms for such outstanding Awards;
	 
	 	(iii)	 	The acceleration of the vesting of or right to exercise such outstanding
Awards immediately prior to or as of the date of the merger or consolidation, and the
expiration of such outstanding Awards to the extent not timely exercised or purchased
by the date of the merger or consolidation or other date thereafter designated by the
Committee; or
	 
	 	(iv)	 	The cancellation of all or any portion of such outstanding Awards by a cash
payment of the excess, if any, of the fair market value of the Shares subject to such
outstanding Awards or portion thereof being canceled over the purchase price with
respect to such Awards or portion thereof being canceled.

SECTION 11. GENERAL TERMS.

(a) Nontransferability of Awards. No Award (other than vested Awards of Shares, which are subject
to Section 11(b) of the Plan) may be transferred, assigned, pledged or hypothecated by any
participant during the participant’s lifetime, whether by operation of law or otherwise, or be made
subject to execution, attachment or similar process, except by beneficiary designation, will or the
laws of descent and distribution. Subject to the limitations contained in this Section 11(a), an
Option or other right to acquire Shares under the Plan, may be exercised during the lifetime of the
participant only by the participant or by the participant’s Eligible Representative. Such Option
or other right shall not be transferable and shall be exercisable only by the participant to whom
such right was granted, except in the case of a transfer by the participant with the prior written
consent of the Committee in its sole discretion.

(b) Restrictions on Transfer of Shares. Any Shares issued under the Plan shall be subject to such
vesting and special forfeiture conditions, repurchase rights, rights of
first offer and other transfer restrictions as the Committee may determine. Such restrictions

8

 

shall be set forth in the applicable Award Agreement, and shall apply in addition to any
restrictions that may apply to holders of Shares generally.

(c) Securities Law Requirements. Notwithstanding anything contained in the Plan or any Award
Agreement, in the event that the disposition of Shares acquired pursuant to the Plan is not covered
by a then current registration statement under the Securities Act, and is not otherwise exempt from
such registration, such Shares shall be restricted against transfer to the extent required by the
Securities Act or other rules and regulations promulgated thereunder. The Committee may require
any individual receiving Shares pursuant to an Award granted under the Plan, as a condition
precedent to receipt of such Shares, to represent and warrant to the Company in writing that the
Shares acquired by such individual are acquired without a view to any distribution thereof and will
not be sold or transferred other than pursuant to an effective registration thereof under the
Securities Act or pursuant to an exemption applicable under the Securities Act or the rules and
regulations promulgated thereunder. The certificates evidencing any of such Shares shall have an
appropriate legend placed thereon to reflect their status as restricted securities as aforesaid.

(d) Withholding Requirements. As a condition to the receipt or purchase of Shares pursuant to an
Award, a participant shall make such arrangements as the Committee may require for the satisfaction
of any federal, state, local or foreign withholding obligations that may arise in connection with
such receipt or purchase. The participant shall also make such arrangements as the Committee may
require for the satisfaction of any federal, state, local or foreign withholding obligations that
may arise in connection with the disposition of Shares acquired pursuant to an Award.

(e) No Retention Rights. Nothing in the Plan or in any Award granted under the Plan shall confer
upon a participant any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary
employing or retaining the participant) or of the participant, which rights are hereby expressly
reserved by each, to terminate his or her Service at any time and for any reason, with or without
Cause.

(f) Unfunded Plan. Participants shall have no right, title or interest whatsoever in or to any
investments which the Company may make to aid it in meeting its obligations under the Plan.
Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, nor a fiduciary relationship between the Company and any
participant, beneficiary, legal representative or any other person. To the extent that any person
acquires a right to receive payments from the Company under the Plan, such right shall be no
greater than the rights of an unsecured general creditor of the Company. All payments to be made
hereunder shall be paid from the general funds of the Company and no special or separate fund shall
be established and no segregation of assets shall be made to assure payment of such amounts. The
Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as
amended.

9

 

SECTION 12. DURATION AND AMENDMENTS.

(a) Term of the Plan. The Plan, as set forth herein, shall become effective on the Chapter 11 Plan
Effective Date. The Plan shall terminate automatically on the day preceding the tenth anniversary
of such date unless earlier terminated pursuant to Section 12(b) below.

(b) Right to Amend or Terminate the Plan. The Committee may amend, suspend or terminate the Plan
at any time and for any reason; provided, however, that any amendment of the Plan (except as
provided in Section 10 of the Plan) which increases the maximum number of Shares issuable to any
person or available for issuance under the Plan in the aggregate, changes the legal entity
authorized to make Awards under this Plan from the Company (or its successor) to any other legal
entity or materially changes the class of persons who are eligible for the grant of Award, shall be
subject to the approval of the Company’s stockholders. Stockholder approval shall not be required
for any other amendment of the Plan.

(c) Effect of Amendment or Termination. Except as otherwise expressly provided under the Plan, any
amendment of the Plan shall not adversely affect in any material respect any participant’s rights
under any Award previously made or granted under the Plan without the participant’s consent. No
Shares shall be issued or sold under the Plan after the termination thereof, except pursuant to an
Award granted prior to such termination. Except as otherwise expressly provided under the Plan,
the termination of the Plan shall not adversely affect in any material respect any participant’s
rights under any Award outstanding on the termination date.

(d) Modification, Extension and Assumption of Awards. Within the limitations of the Plan, the
Committee may modify, extend or assume outstanding Awards or may provide for the cancellation of
outstanding Awards in return for the grant of new Awards for the same or a different number of
Shares and at the same or a different price. The foregoing notwithstanding, no modification of an
Awards shall, without the consent of the participant, materially impair the participant’s rights or
increase the participant’s obligations under such Award or impair the economic value of any such
Award.

SECTION 13. DEFINITIONS.

(a) “Award” shall mean the grant of an Option or Stock Award to a participant under the Plan.

(b) “Award Agreement” shall mean any written agreement, contract or other instrument or document
evidencing an Award, including through electronic medium.

(c) “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time
to time.

(d) “Cause” shall mean (i) participant’s willful, material and irreparable breach of his/her terms
of employment as provided in an employment agreement or otherwise (which

10

 

remains uncured 5 days after delivery of written notice); (ii) participant’s gross
negligence in the performance or intentional nonperformance (in either case continuing for 10 days
after receipt of written notice of need to cure) of any of participant’s material duties and
responsibilities to the Company or any Subsidiary; (iii) participant’s dishonesty or fraud with
respect to the business, reputation or affairs of the Company or any Subsidiary which materially
and adversely affects the Company or any Subsidiary (monetarily or otherwise); (iv) participant’s
conviction of a felony crime or crime involving moral turpitude; (v) participant’s drug or alcohol
abuse that materially affects participant’s Service or results in a material violation of Company
or Subsidiary policy; or (vi) participant’s material violation of Company or Subsidiary policy,
such policy having been made available to participant by the Company or Subsidiary (which remains
uncured or continues 5 days after delivery of written notice).

(e) “Change in Control” shall mean the first to occur of any of the following events:

	 	(i)	 	Any person or any persons acting together which would constitute a
“group” for purposes of Section 13(d) of the Exchange Act (other than the
Principal Stockholders, Company or any Subsidiary) shall “beneficially own”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, at least
fifty percent (50%) of the ordinary voting power of all classes of capital stock of
the Company entitled to vote generally in the election of the Board of Directors;
	 
	 	(ii)	 	Either (A) “current directors”, as defined below, shall cease for any
reason to constitute at least a majority of the members of the Board of Directors (for
these purposes, a “current director” means, as of the date of determination, any
person who (1) was a member of the Board of Directors on the date of the Chapter 11
Plan Effective Date or (2) was nominated for election or elected to the Board of
Directors with the affirmative vote of a majority of the current directors who were
members of the Board of Directors at the time of such nomination or election), or (B)
at any meeting of the stockholders of the Company called for the purpose of electing
directors, a majority of the persons nominated by the Board of Directors for election
as directors shall fail to be elected; or
	 
	 	(iii)	 	The consummation of a sale, lease, exchange or other disposition (in one
transaction or a series of transactions) of all or substantially all of the assets of
the Company.

A transaction shall not constitute a Change in Control if its sole purpose is to change the state
of the Company’s incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company’s securities immediately before such
transaction.

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(f) “Chapter 11 Plan Effective Date” shall mean the date that the Company’s Joint Plan of
Reorganization under Chapter 11 of the United States Bankruptcy Code, which has been confirmed by
the United States Bankruptcy Court, becomes effective.

(g) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated thereunder.

(h) “Committee” shall mean a Compensation Committee of the Board of Directors, as described in
Section 2(a) of the Plan.

(i) “Company” shall mean Integrated Electrical Services, Inc., a Delaware corporation, and its
successors and assigns.

(j) “Consultant” shall mean a person who performs bona fide services for the Company or a
Subsidiary as a consultant or advisor, excluding Employees and Directors.

(k) “Director” shall mean a member of the Board of Directors or the board of directors of a
Subsidiary who is not an Employee.

(l) “Disability” shall mean with respect to a participant, (i) “disability” as defined in any
employment agreement between the participant and the Company (or, if applicable, the Subsidiary
employing the participant) or (ii) if the participant is not a party to an employment agreement or
“disability” is not defined therein, the participant’s inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment, as
determined by the Committee in its sole discretion, unless another meaning is specifically provided
in the participant’s Award Agreement.

(m) “Eligible Representative” for a participant shall mean such participant’s personal
representative or such other person as is empowered under the deceased participant’s will or the
then applicable laws of descent and distribution to represent the participant under the Plan.

(n) “Employee” shall mean any individual who is a common-law employee of the Company or a
Subsidiary.

(o) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(p) “Fair Market Value” of a Share as of a given date shall be:

	 	(i)	 	If the Shares are listed on any established stock exchange or a national
market system, including, without limitation, The New York Stock Exchange, The Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair
Market Value shall be the closing sales price for a share of such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for the
date of grant (or if
not traded on such date, last market trading day prior to such date), 

12

 

	 	 	 	as reported in The Wall Street Journal or such other source as the Committee deems reliable;

	 	(ii)	 	If the Shares are regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean between the
high bid and low asked prices for a Share for the date of grant (or if not traded on
such date, last market trading day prior to such date); or
	 
	 	(iii)	 	In the absence of an established market for the Shares, the Fair Market
Value thereof shall be determined in good faith by the Committee, in accordance with
the principles set forth in Section 409A of the Code. Such determination shall be
conclusive and binding on all persons.

(q) “Option” shall mean a stock option not described in Section 422(b) of the Code granted pursuant
to Section 6 the Plan entitling the holder to acquire Shares upon exercise.

(r) “Plan” shall mean this Integrated Electrical Services, Inc. 2006 Equity Incentive Plan, as may
be amended from time to time.

(s) “Principal Stockholders” shall mean Fidelity Management & Research Co., Southpoint Capital
Advisors LP, Tontine Capital Partners L.P. and their affiliates.

(t) “Recapitalization” shall mean an event or series of events affecting the capital structure of
the Company such as a stock split, reverse stock split, stock dividend, distribution,
recapitalization, combination or reclassification of the Company’s securities.

(u) “Restricted Stock” shall mean Shares granted pursuant to Section 7 of the Plan which are
subject to restrictions on transfer or forfeiture.

(v) “Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

(w) “Service” shall mean service as an Employee, Director or Consultant.

(x) “Share” shall mean one share of common stock of the Company, with a par value of [$0.01 per
share], as adjusted in accordance with Section 10 of the Plan.

(y) “Stock Award” shall mean the grant or sale of Shares pursuant to Section 7 of the Plan.

(z) “Subsidiary” shall mean any corporation or other entity (other than the Company) in an unbroken
chain of corporations or other entities beginning with the Company, if each of the corporations or
other entities other than the last one in the unbroken chain owns stock or equity interests
possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock or equity interests in one of the other
corporations or

13

 

other entities in such chain. A corporation or other entity that attains the
status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary
commencing as of such date.

SECTION 14. MISCELLANEOUS.

(a) Choice of Law. The Plan shall be governed by, and construed in accordance with, the laws of
the State of Delaware, as such laws are applied to contracts entered into and performed in such
State.

(b) Execution. To record the adoption of the Plan by the Board of Directors, the Company has
caused its authorized officer to execute the same.

	 	 	 	 	 
	 	INTEGRATED ELECTRICAL SERVICES, INC.

 	 
	 	By:  	 /s/
Curt L. Warnock	 
	 	 	Curt L. Warnock 	 
	 	 	Senior Vice President, General Counsel and Corporate
Secretary 	 

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