Document:

exv10w1

 

Exhibit 10.1

EMAK WORLDWIDE, INC.

RESALE RESTRICTION AGREEMENT

This RESALE RESTRICTION AGREEMENT (the “Agreement”) with respect to certain stock option
award agreements (the “Option Agreements”) issued under the EMAK Worldwide, Inc. [2000
Stock Option Plan] [Non-Employee Director Stock Option Plan](the “Plan”) is made by and
between EMAK Worldwide, Inc., a Delaware corporation (the “Company”), and 
 (the “Holder”).

WHEREAS, the Holder has been granted one or more options (the “Options”) to acquire shares
of common stock of the Company (the “Shares”) in such quantities and at the exercise prices
set forth in this Agreement pursuant to the Option Agreements;

WHEREAS, the Option is fully vested and exercisable by reason of an action of the Company’s Board
of Directors effective December 15, 2005; and

WHEREAS, the Company and the Holder wish to impose certain resale restrictions on the Shares
subject to the Options as provided herein on the terms and conditions contained herein.

NOW, THEREFORE, it is agreed as follows:

	1.	 	The Holder acknowledges that he or she has reviewed this Agreement in full.
	 
	2.	 	The Holder agrees not to sell, contract to sell, grant any option to purchase, transfer the
economic risk of ownership in, make any short sale of, pledge or otherwise transfer or dispose
of any Shares (or any interest in any Shares) until the Shares have been released from the
foregoing resale restrictions (hereinafter referred to as the “Resale Restrictions”).
	 
	3.	 	The Holder agrees that the following Shares shall be subject to the Resale Restrictions:
	 
	4.	 	The Resale Restrictions shall lapse in accordance with the following schedule with respect to
each grant referenced in paragraph 3 above:
	 
	5.	 	Notwithstanding the foregoing, in the event the Holder’s employment or service with the
Company is terminated for any reason, 100% of the Shares subject to the Option shall become
free from the Resale Restrictions.
	 
	6.	 	This Agreement shall be effective as of December 15, 2005.

 

 

	7.	 	The Holder represents and warrants that he or she has full power to enter into this
Agreement.
	 
	8.	 	This Agreement, the Option Agreement and the Plan constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their entirety all prior
understandings and agreements of the Company and the Holder with respect to the subject matter
hereof, and may not be modified except by means of a writing signed by the Company and the
Holder. This Agreement is to be construed in accordance with and governed by the internal laws
of the State of Delaware without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the State of
Delaware to the rights and duties of the parties. Nothing in this Agreement (except as
expressly provided herein) is intended to confer any rights or remedies on any persons other
than the parties. Should any provision of this Agreement be determined to be illegal or
unenforceable, such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain enforceable.
	 
	9.	 	This Agreement shall be binding upon the Company and the Holder as well as the successors and
assigns (if any) of the Company and the Holder.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered on
the date set forth beside such party’s signature.

	 	 	 	 	 
	Dated: ______________, 2005	 	EMAK Worldwide, Inc.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Dated: ______________, 2005

	 	Holderexv10w6

 

Exhibit 10.6

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) by and between Integrated Electrical Services,
Inc., a Delaware Corporation (“IES”) and Robert B. Callahan (“Executive”) is hereby entered into
effective as of this 1st day of June, 2005.

RECITALS

     Whereas, the parties to the Original 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 IES in a confidential relationship wherein
Executive, in the course of his employment with IES, has and will continue to become familiar with
and aware of information as to IES’s 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 IES. This information
is a trade secret and constitutes the valuable goodwill of IES.

     Therefore, in consideration of the mutual promises, terms, covenants and conditions set forth
herein and the performance of each, the Agreement in its entirety as follows:

AGREEMENTS

     1. Employment and Duties.

     (a) IES hereby employs Executive as Senior Vice President of Human Resources. As such,
Executive shall have responsibilities, duties and authority reasonably accorded to, expected
of and consistent with Executive’s position. Executive hereby accepts this employment upon
the terms and conditions herein and agrees to devote substantially all of his time,
attention and efforts to promote and further the business and interests of IES and its
affiliates.

     (b) Executive shall faithfully adhere to, execute and fulfill all lawful policies
established by IES.

     (c) Executive shall not, during the term of his employment hereunder, engage in any
other business activity pursued for gain, profit or other pecuniary advantage if such
activity interferes in any material respect with Executive’s duties and responsibilities
hereunder. The foregoing limitations shall not be construed as prohibiting Executive from
making personal investments in such form or manner as will neither require his services in
the operation or affairs of the companies or enterprises in which such investments are made
nor violate the terms of paragraph 3 hereof.

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     2. Compensation. For all services rendered by Executive, IES shall compensate
Executive as follows:

     (a) Base Salary. The base salary payable to Executive during the term shall be
$14,600.00 monthly ($175,000 on an annualized basis), payable in accordance with IES’
payroll procedures for officers, but not less frequently than monthly. Such base salary may
be increased from time to time, at the discretion of the Board of Directors of IES (the “IES
Board”), in light of the Executive’s position, responsibilities and performance.

     (b) Executive Perquisites, Benefits and Other Compensation. Executive shall be
entitled to receive additional benefits and compensation from IES in such form and to such
extent as specified below:

     (i) Reimbursement for all business travel and other out-of-pocket expenses
(including those costs to maintain any professional certifications held or obtained
by Executive) reasonably incurred by Executive in the performance of his duties
pursuant to this Agreement and in accordance with IES’ policy for executives of IES.
All such expenses shall be appropriately documented in reasonable detail by
Executive upon submission of any request for reimbursement, and in a format and
manner consistent with IES’ expense reporting policy.

     (ii) Executive shall, subject to the satisfaction of any general eligibility
criteria, be eligible to participate in all compensation and

     (iii) Provided Executive is the Senior Vice President, Human Resources of IES,
he may receive an incentive payment equal to a percentage of his annualized base, as
set forth in paragraph 2(a) above, developed based on mutually agreeable goals,
objectives and incremental performance of the business unit for which Executive is
directly responsible, all subject to approval of the Compensation Committee of the
Board of Directors. The actual payout of any incentive payment is typically made in
December of each year.

     (iv) IES shall provide Executive with such other perquisites as may be deemed
appropriate for Executive by the IES Board.

     3. Non-Competition Agreement.

     (a) Executive recognizes that IES’ willingness to enter into this Agreement is based in
material part on Executive’s agreement to the provisions of this paragraph 3 and that
Executive’s breach of the provisions of this paragraph 3 could materially damage IES.
Subject to the further provisions of this Agreement, Executive will not, during the term of
his employment with IES, and for a period of two years immediately following the termination
of such for any reason whatsoever, either for Cause or in the event the Executive terminates
his employment without Good Reason, 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:

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     (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, information technology principally related to the electrical
contracting or cabling industry, and related services 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) call upon any person who is, at that time, an employee of an IES Company
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 year prior to that time, a customer of an IES Company within the
Territory for the purpose of soliciting or selling electrical contracting,
information technology principally related to the electrical contracting or cabling
industry, and related products or services in direct competition with the IES
Companies within the Territory;

     (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 IES to any person,
firm, partnership, corporation or business for any reason or purpose whatsoever
except to the extent that IES 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 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
IES consents to such acquisition.

     (b) Because of the difficulty of measuring economic losses to IES as a result of a
breach of the foregoing covenant, and because of the immediate and irreparable damage that
could be caused to IES for which they would have no other adequate remedy, Executive agrees
that foregoing covenant may be enforced by IES, in the event of breach by him, by
injunctions and restraining orders. Executive further agrees to waive any requirement for
IES’ securing or posting of any bond in connection with such remedies.

     (c) It is agreed by the parties that the foregoing covenants in this paragraph 3 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

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the IES Companies; but it is also the intent of 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 3, and in any event such new
business, activities or location are not in violation of this paragraph 3 or of Executive’s
obligations under this paragraph 3, if any, Executive shall not be chargeable with a
violation of this paragraph 3 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 3 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 which the
court deems reasonable, and the Agreement shall thereby be reformed.

     (f) All of the covenants in this paragraph 3 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 IES, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by IES of such covenants. It is
specifically agreed that the period of two years (subject to the further provisions of this
Agreement) following termination of employment stated at the beginning of this paragraph 3,
during which the agreements and covenants of Executive made in this paragraph 3 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 3.

     (g) IES and the Executive hereby agree that this covenant is a material and substantial
part of this transaction.

     4. Term; Termination; Rights on Termination. The term of this Agreement shall begin
on the Effective Date and continue for three years (the “Initial Term”) and, unless

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terminated sooner as herein provided, shall continue on a year-to-year basis on the same terms and
conditions contained herein in effect as of the time of renewal (the “Extended Term”). This
Agreement and Executive’s employment may be terminated in any one of the following ways:

     (a) Notice of Non-Renewal. This Agreement may be terminated by the Company by serving
notice of intent not to continue the agreement no later than ninety (90) days prior to the
expiration of the Initial or Extended Term. Notwithstanding the foregoing, in the event a
change of control (as defined in Paragraph 9) occurs during either the Initial Term or the
Extended Term, this Agreement may not be terminated by the Company for a period of two (2)
years following such change in control.

     (b) Death. The death of Executive shall immediately terminate this Agreement with no
severance compensation due to Executive’s estate.

     (c) Disability. If, as a result of incapacity due to physical or mental illness or
injury, Executive shall have been absent from his full-time duties hereunder for four
consecutive months, then 30 days after receiving written notice (which notice may occur
before or after the end of such four-month period, but which shall not be effective earlier
than the last day of such four-month period), IES may terminate Executive’s employment
hereunder, provided that Executive is unable to resume his full-time duties at the
conclusion of such notice period. Also, Executive may terminate his employment hereunder if
his health should become impaired to an extent that makes the continued performance of his
duties hereunder hazardous to his physical or mental health, provided that Executive shall
have furnished IES with a written statement from a doctor reasonably acceptable to IES to
such effect and provided, further, that, at IES’ request made within 30 days of the date of
such written statement, Executive shall submit to an examination by a doctor selected by IES
who is reasonably acceptable to Executive or Executive’s doctor and such second doctor shall
have concurred in the conclusion of Executive’s doctor. In the event this Agreement is
terminated as a result of Executive’s disability, Executive shall receive from IES, in a
lump sum payment due within 10 days of the effective date of termination, six months of base
salary at the rate then in effect.

     (d) Cause. The Company may terminate this Agreement and Executive’s employment 10 days
after written notice to Executive for “Cause”, which shall be: (1) Executive’s willful,
material and irreparable breach of this Agreement (which remains uncured 5 days after
delivery of written notice); (2) Executive’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 Executive’s material duties and responsibilities
hereunder; (3) Executive’s dishonesty or fraud with respect to the business, reputation or
affairs of the Company or IES which materially and adversely affects the Company or IES
(monetarily or otherwise); (4) Executive’s conviction of a felony crime or crime involving
moral turpitude; (5) Executive’s drug or alcohol abuse; or (6) Executive’s violation of
Company policy (which remains uncured or continues 5 days after delivery of written notice).
In the event of a termination for Cause, Executive shall have no right to any severance
compensation.

     (e) Without Cause. Executive may, without Good Reason (as hereinafter defined)
terminate this Agreement and Executive’s employment, effective 30 days after

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written notice is provided to the Company. Executive may be terminated without Cause by the
Company during either the Initial Term or Extended Term. Should Executive be terminated by
the Company without Cause or should Executive terminate with Good Reason during the Initial
Term or Extended Term, Executive shall receive from the Company, in a lump sum payment due
on the effective date of termination, the base salary at the rate then in effect for
whatever time period is remaining under the Initial Term or the Extended Term, as
applicable, or for one year, whichever amount is greater. Further, any termination without
Cause by the Company or by Executive for Good Reason shall operate to eliminate the period
set forth in paragraph 3(a) and during which the terms of paragraph 3 apply. If Executive
resigns or otherwise terminates his employment without Good Reason, rather than the Company
terminating his employment pursuant to this paragraph 4(d), Executive shall receive no
severance compensation.

     (f) Good Reason. Executive shall have “Good Reason” to terminate his employment
hereunder upon the occurrence of any of the following events, unless such event is agreed to
in writing by Executive: (a) Executive is demoted by means of a material reduction in
authority, responsibilities or duties to a position of less stature or importance within the
Company than the position described in Section 1 hereof; (b) Executive’s annual base salary
as then in effect is reduced; or (c) the relocation of the Company’s principal executive
offices to a location outside the greater Houston, Texas area.

     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 IES or any IES Companies or their representatives, vendors or
customers which pertain to the business of IES or any IES Companies shall be and remain the
property of 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 IES or
the IES Company which is collected by Executive shall be delivered promptly to IES without request
by it upon termination of Executive’s employment.

     6. Inventions. Executive shall disclose promptly to IES 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 IES and which Executive conceives as a result of his
employment by IES. Executive hereby assigns and agrees to assign all his interests therein to IES
or its nominee. Whenever requested to do so by IES, Executive shall execute any and all
applications, assignments or other instruments that IES shall deem necessary to apply for and
obtain Letters Patent of the United States or any foreign country or to otherwise protect IES’
interest therein.

     7. Trade Secrets. Executive agrees that he will not, during or after the term of this
Agreement, disclose the specific terms of IES’ relationships or agreements with their respective
significant vendors or customers or any other significant and material trade secret of IES, whether
in existence or proposed, to any person, firm, partnership, corporation or business for any reason
or purpose whatsoever.

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     8. Confidentiality.

     (a) Executive acknowledges and agrees that all Confidential Information (as defined
below) of IES is confidential and a valuable, special and unique asset of IES that gives IES
an advantage over its actual and potential, current and future competitors. Executive
further acknowledges and agrees that Executive owes IES 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 IES’ Confidential Information would
irreparably injure IES.

     (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 IES, 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 IES 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 IES’ premises, without
the prior written consent of the President of IES, 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 IES for any reason, and upon
request of IES at any other time, Executive shall promptly surrender and deliver to IES 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 IES 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 IES (whether or not owned or developed by
IES 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 IES; all information that IES has marked as confidential
or has otherwise described to Executive (either in writing or orally) as confidential; all
nonpublic information concerning IES’ 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 Company business records and plans; all Company personnel files; all financial
information of or concerning IES; all information relating to operating system software,
application software, software and system methodology, hardware platforms, technical
information, inventions, computer programs

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and listings, source codes, object codes, copyrights and other intellectual property; all
technical specifications; any proprietary information belonging to IES; all computer
hardware or software manual; all training or instruction manuals; and all data and all
computer system passwords and user codes.

     9. Change in Control.

     (a) Executive understands and acknowledges that the Company may be merged or
consolidated with or into another entity and that such entity shall automatically succeed to
the rights and obligations of the Company hereunder or that the Company may undergo a Change
in Control (as defined below). In the event a Change in Control is initiated or occurs
during the Initial Term or Extended Term, then the provisions of this paragraph 9 shall be
applicable.

     (b) In the event of a Change in Control wherein the Company and Executive have not
received written notice at least ten business days prior to the date of the event giving
rise to the Change in Control from the successor to all or a substantial portion of the
Company’s business and/or assets that such successor is willing as of the closing to assume
and agree to perform the Company’s obligations under this Agreement in the same manner and
to the same extent that the Company is hereby required to perform, then Executive may, at
Executive’s sole discretion, elect to terminate Executive’s employment on such Change in
Control by providing written notice to the Company prior to the closing of the transaction
giving rise to the Change in Control. In such case, Executive shall receive from Company,
in a lump sum payment due on the effective date of termination the base salary at the rate
then in effect for two years, one year’s bonus payment with all goals deemed met in full,
and two years’ coverage under the Company’s medical benefit plan on a tax neutral basis.

     (c) If, on or within six months following the effective date of a Change in Control the
Company terminates Executive’s employment other than for Cause or Executive terminates his
employment for Good Reason, or if Executive’s employment with the Company is terminated by
the Company within thirty days before the effective date of a Change in Control and it is
reasonably demonstrated that such termination (i) was at the request of a third party that
has taken steps reasonably calculated to effect a Change in Control, or (ii) otherwise arose
in connection with or anticipation of a Change in Control, then Executive shall receive from
Company, in a lump sum payment due on the effective date of termination the base salary at
the rate then in effect for two years, one year’s bonus payment with all goals met in full,
and two years’ coverage under the Company’s medical benefit plan on a tax neutral basis.

     (d) A “Change in Control” shall be deemed to have occurred if:

     (i) any person, entity or group (as such terms are used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”), other than
the IES Companies or an employee benefit plan of the IES Companies, acquires,
directly or indirectly, the beneficial ownership (as defined in Section 13(d) of the
Act) of any voting security of the Company and immediately after such acquisition
such person is, directly or indirectly, the

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     beneficial owner of voting securities representing 20% or more of the total
voting power of all of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors;

     (ii) upon the first purchase of the Company’s common stock pursuant to a tender
or exchange offer (other than a tender or exchange offer made by the Company);

     (iii) the stockholders of the Company shall approve a merger, consolidation,
recapitalization or reorganization of the Company, or a reverse stock split of
outstanding voting securities, or consummation of any such transaction if
stockholder approval is not obtained, other than any such transaction which would
result in at least 75% of the total voting power represented by the voting
securities of the surviving entity outstanding immediately after such transaction
being beneficially owned by the holders of all of the outstanding voting securities
of the Company immediately prior to the transactions with the voting power of each
such continuing holder relative to other such continuing holders not substantially
altered in the transaction;

     (iv) the stockholders of the Company shall approve a plan of complete
liquidation or dissolution of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets; or

     (v) if, at any time during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof, unless the election or nomination for the
election by the Company’s stockholders of each new director was approved by a vote
of at least two-thirds of the directors then still in office who were directors at
the beginning of the period.

     (e) Notwithstanding anything in this Agreement to the contrary, a termination pursuant
to paragraph 9(b), (c), or (d) shall operate to automatically waive in full the
non-competition restrictions imposed on Executive pursuant to paragraph 3(a).

     (f)
If it shall be finally determined that any payment made or benefit provided to Executive in connection with a Change in Control of the Company, whether or not made or
provided pursuant to this Agreement, is subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended, or any successor thereto, the Company shall
pay Executive an amount of cash (the “Additional Amount”) such that the net amount received
by Executive after paying all applicable taxes on such Additional Amount shall be equal to
the amount that Executive would have received if Section 4999 were not applicable.

     10. Indemnification. In the event Executive is made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by the Company against Executive), by reason of the fact that
he is or was performing services under this Agreement, then the Company shall indemnify Executive
against all expenses (including attorneys’ fees), judgments, fines and amounts paid in

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settlement, as actually and reasonably incurred by Executive in connection therewith. In the
event that both Executive and the Company are made a party to the same third-party action,
complaint, suit or proceeding, the Company agrees to engage competent legal representation, and
Executive agrees to use the same representation, provided that if counsel selected by the Company
shall have a conflict of interest that prevents such counsel from representing Executive, Executive
may engage separate counsel and the Company shall pay all reasonable attorneys’ fees and reasonable
expenses of such separate counsel. Further, while Executive is expected at all times to use his
best efforts to faithfully discharge his duties under this Agreement, Executive cannot be held
liable to the Company for errors or omissions made in good faith where Executive has not exhibited
gross, willful and wanton negligence and misconduct nor performed criminal and fraudulent acts
which materially damage the business of the Company.

     11. Outplacement Services. Should Executive be terminated Without Cause or resign
with Good Reason, he shall be entitled to outplacement services commensurate with Executive’s
position for a period of one year or until he obtains comparable employment, whichever is less.

     12. No Prior Agreements. Executive hereby represents and warrants to IES that the
execution of this Agreement by Executive and his employment by IES and the performance of his
duties hereunder will not violate or be a breach of any agreement with a former employer, client or
any other person or entity. Further, Executive agrees to indemnify IES for any claim, including,
but not limited to, reasonable attorneys’ fees and expenses of investigation, by any such third
party that such third party may now have or may hereafter come to have against IES based upon or
arising out of any non-competition agreement, invention or secrecy agreement between Executive and
such third party which was in existence as of the date of this Agreement.

     13. Assignment; Binding Effect. Executive understands that he has been selected for
employment by IES on the basis of his personal qualifications, experience and skills. Executive
agrees, therefore, that he cannot assign all or any portion of his performance under this
Agreement. Subject to the preceding two sentences and the express provisions of paragraph 11
above, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the
parties hereto and their respective heirs, legal representatives, successors and assigns.

     14. 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 IES and its
affiliates in a form of such release reasonably acceptable to IES.

     15. Complete Agreement. Executive has no oral representations, understandings or
agreements with IES, 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 IES, 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 an officer of IES who must be duly authorized by IES’ Board
of Directors 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

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the foregoing, either party’s failure to insist on strict compliance with this Agreement shall not
be deemed a waiver thereof.

     16. Notice. Whenever any notice is required hereunder, it shall be given in writing
addressed as follows:

	 	 	 
	To IES:

	 	Law Department
	 

	 	Integrated Electrical Services, Inc.
	 

	 	1800 West Loop South, Suite 500
	 

	 	Houston, Texas 77027
	 
	 	 
	To Executive:

	 	Robert B. Callahan
	 

	 	3122 Bentgrass Drive
	 

	 	Katy, Texas 77450

Notice shall be deemed given and effective on the earlier of three 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 16.

     17. 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.

     18. Dispute Resolutions. Except with respect to injunctive relief as provided in
paragraph 3(b), neither party shall institute a proceeding in any court nor administrative agency
to resolve a dispute between the parties before that party has sought to resolve the dispute
through direct negotiation with the other party. If the dispute is not resolved within two weeks
after a demand for direct negotiation, the parties shall attempt to resolve the dispute through
mediation. If the parties do not promptly agree on a mediator, the parties shall request the
Association of Attorney Mediators in Harris County, Texas to appoint a mediator certified by the
Supreme Court of Texas. If the mediator is unable to facilitate a settlement of the dispute within
a reasonable period of time, as determined by the mediator, the mediator shall issue a written
statement to the parties to that effect and any unresolved dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators in Houston, Texas, in accordance with the rules of the American
Arbitration Association then in effect. A decision by a majority of the arbitration panel shall be
final and binding. Judgment may be entered on the arbitrators’ award in any court having
jurisdiction. The costs and expenses, including reasonable attorneys’ fees, of the prevailing
party in any dispute arising under this Agreement will be promptly paid by the other party.

     19. 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.

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     20. 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.

	 	 	 	 	 
	 	INTEGRATED ELECTRICAL SERVICES, INC. 

 	 
	 	By:  	/s/ Curtlon L. Warnock	 
	 	Name:  	Curtlon L. Warnock 	 
	 	Title:  	SVP, General Counsel & Secretary 	 
	 
	 
	 

	 	 	 	 	 
	 	EXECUTIVE

	 
	 	/s/
Robert B. Callahan	 
	 	Robert B. Callahan 	 
	 	 	 
	 	 	 
	 	 	 
	 

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