INTEGRATED ELECTRICAL SERVICES INC
FORM OF EMPLOYMENT AGREEMENT - H. RODDY ALLEN
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>h98584exv10w1.txt
<DESCRIPTION>FORM OF EMPLOYMENT AGREEMENT - H. RODDY ALLEN
<TEXT>
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                                                                    EXHIBIT 10.1


                              EMPLOYMENT AGREEMENT


         This Employment Agreement (the "Agreement") by and between H.R. Allen,
Inc. (the "Company"), a South Carolina corporation and a wholly owned subsidiary
of Integrated Electrical Services, Inc., a Delaware corporation ("IES"), and
H.R. Allen ("Executive") is hereby entered into effective as of this 22nd day of
May, 1998 (the "Effective Date").

                                    RECITALS

         The following statements are true and correct:

         As of the Effective Date, the Company, IES and the other subsidiaries
of IES (collectively, the "IES Companies") are engaged primarily in the
providing of electrical contracting services.

         Executive is employed hereunder by the Company in a confidential
relationship wherein Executive, in the course of his employment with the
Company, has and will continue to become familiar with and aware of information
as to the Company's and IES' customers and specific manner of doing business,
including the processes, techniques and trade secrets utilized by the Company
and 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.

         Therefore, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and the performance of each, it is hereby agreed
as follows:

                                   AGREEMENTS

         1. Employment and Duties.

                  (a) The Company hereby employs Executive as President of the
         Company. As such, Executive shall have responsibilities, duties and
         authority reasonably accorded to, expected of and consistent with
         Executive's position as President of the Company and will report
         directly to the Chief Operating Officer-Commercial of IES. Executive
         hereby accepts this employment upon the terms and conditions herein
         contained and, subject to paragraph 1(c), agrees to devote
         substantially all of his time, attention and efforts to promote and
         further the business and interests of the Company and its affiliates.

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

                  (c) Except as set forth on Schedule 1(c) hereto, Executive
         shall not, during the term of his employment hereunder, engage in any
         other business activity pursued for



<PAGE>

         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.

                  (d) Executive shall be entitled to vacation in accordance with
         the policies of the Company.

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

                  (a) Base Salary. The base salary payable to Executive during
         the term shall be $150,000.00 per year, payable in accordance with the
         Company's 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 the Company 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 the
                  Company's policy for executives of the Company. 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 the
                  Company's expense reporting policy.

                           (ii) Executive shall, subject to the satisfaction of
                  any general eligible criteria, be eligible to participate in
                  all compensation and benefit plans and programs as are
                  maintained from time to time for executives of the Company.

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



<PAGE>

         3. Non-Competition Agreement.

                  (a) Executive recognizes that the Company's 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
         the Company. Subject to the further provisions of this Agreement,
         Executive will not, during the term of his employment with the Company,
         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:

                           (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 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
                  products or services in direct competition with the IES
                  Companies within the Territory; or

                           (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.

                           (v) disclose customers, whether in existence or
                  proposed, of the Company to any person, firm, partnership,
                  corporation or business for any reason or purpose whatsoever
                  except to the extent that the 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 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.



<PAGE>

                  (b) Because of the difficulty of measuring economic losses to
         the Company and IES as a result of a breach of the foregoing covenant,
         and because of the immediate and irreparable damage that could be
         caused to the Company and IES for which they would have no other
         adequate remedy, Executive agrees that foregoing covenant may be
         enforced by the Company, in the event of breach by him, by injunctions
         and restraining orders. Executive further agrees to waive any
         requirement for the Company's 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 the IES Companies;
         but it is also the intent of the Company 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 therefor,
         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.



<PAGE>

                  (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 the Company or IES, 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 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) The Company and the Stockholders 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 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 followings ways:

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

                  (b) 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), the Company 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 the Company with a
         written statement from a doctor reasonably acceptable to the Company to
         such effect and provided, further, that, at the Company's request made
         within 30 days of the date of such written statement, Executive shall
         submit to an examination by a doctor selected by the Company 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 the Company, in a
         lump sum payment due within 10 days of the effective date of
         termination, the base salary at the rate then in effect (i) during the
         Initial Term, for whatever time period, if any, is remaining under the
         Initial Term, provided that such period shall not be less than one
         year, and (ii) during the Extended Term, equivalent to one year of base
         salary.



<PAGE>

                  (c) 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.

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

                  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 Charleston, South Carolina area or the Company's
         requiring Executive to relocate anywhere other than the Company's
         principal executive offices.

         If termination of Executive's employment arises out of the Company's
failure to pay Executive on a timely basis the amounts to which he is entitled
under this Agreement or as a result of any other breach of this Agreement by the
Company, as determined by a court of competent jurisdiction or pursuant to the
provisions of paragraph 18 below, the Company shall pay all amounts and damages
to which Executive may be entitled as a result of such breach, including
interest thereon and all reasonable legal fees and expenses and other costs
incurred by



<PAGE>

Executive to enforce his rights hereunder. Further, none of the provisions of
paragraph 3 shall apply in the event this Agreement is terminated as a result of
a breach by the Company.

         Upon termination of this Agreement for any reason provided above, in
addition to the above payments, if any, Executive shall be entitled to receive
all compensation earned and all benefits and reimbursements due through the
effective date of termination, paid to Executive in a lump sum on the effective
date. All other rights and obligations of the Company and Executive under this
Agreement shall cease as of the effective date of termination, except that the
Executive's obligations under paragraphs 3, 5, 6, 7, and 8 herein shall survive
such termination in accordance with their terms.

         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 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 Company and which
Executive conceives as a result of his employment by the Company. Executive
hereby assigns and agrees to assign all his interests therein to the Company or
its nominee. Whenever requested to do so by the Company, Executive shall execute
any and all applications, assignments or other instruments that the Company
shall deem necessary to apply for and obtain Letters Patent of the United States
or any foreign country or to otherwise protect the 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 or IES'
relationships or agreements with their respective significant vendors or
customers or any other significant and material trade secret of the Company or
IES, whether in existence or proposed, to any person, firm, partnership,
corporation or business for any reason or purpose whatsoever.



<PAGE>

         8. Confidentiality.

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

                  (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 Company, 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 Company 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 Company's
         premises, without the prior written consent of the President of the
         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
         Company for any reason, and upon request of the Company at any other
         time, Executive shall promptly surrender and deliver to the 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 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 Company (whether or not owned or developed by the 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 Company; all information that the Company has marked as
         confidential or has otherwise described to Executive (either in writing
         or orally) as confidential; all nonpublic information concerning the
         Company's 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



<PAGE>

         financial information of or concerning the Company; 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 Company;
         all computer hardware or software manual; all training or instruction
         manuals; and all data and all computer system passwords and user codes.

         9. No Prior Agreements. Executive hereby represents and warrants to the
Company that the execution of this Agreement by Executive and his employment by
the Company 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 the Company 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 the Company 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.

         10. Assignment; Binding Effect. Executive understands that he has been
selected for employment by the Company 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
12 below, 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.

         11. 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 Company and its affiliates in a
form of such release reasonably acceptable to the Company.

         12. Complete Agreement. 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 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.



<PAGE>

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

         To the Company:            H.R. Allen, Inc.
                                    Attn:  H.R. Allen
                                    2675 Rourk Street
                                    Charleston, SC 29405

         with a copy to:            Law Department
                                    Integrated Electrical Services, Inc.
                                    515 Post Oak Blvd., suite 450
                                    Houston, TX  77027

To Executive:                       H.R. Allen
                                    6 Bristol Circle
                                    Charleston, SC 29407

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 13.

         14. 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.

         15. Dispute Resolutions. Except with respect to injunctive relief as
provided in paragraph 3(b), neither party shall institute a proceeding in any
court or 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. The arbitrators shall have the authority to order back-pay, severance
compensation, vesting of options (or cash compensation in lieu of vesting of
options), reimbursement of costs, including those incurred to enforce this
Agreement, and interest thereon in the event the arbitrators determine that
Executive was terminated without disability or Cause, as defined in paragraphs
4(b) and 4(c), respectively, or that the Company has otherwise



<PAGE>

materially breached this Agreement. 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.

         16. 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.

         17. 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.


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       EXECUTIVE


                                       -----------------------------------------



<PAGE>

                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT


         This First Amendment (the "Amendment") to that certain Employment
Agreement (the "Agreement") by and between H. R. Allen, Inc. (the "Company"), a
South Carolina corporation and a wholly owned subsidiary of Integrated
Electrical Services, Inc., a Delaware corporation ("IES"), and H. R. Allen
("Executive") entered into effective as of May 22, 1998, is hereby entered into
this 11th day of March, 2002.

                                    RECITALS:

         WHEREAS, BY THE AGREEMENT THE COMPANY AND EXECUTIVE PREVIOUSLY ENTERED
INTO AN EMPLOYMENT AGREEMENT; AND

         WHEREAS, the parties to the Agreement deem it desirable to amend the
Agreement to provide additional provisions, amend existing provisions and
include IES as a party to the Agreement;

         NOW, THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein and the performance of each of them,
the Agreement is hereby amended as follows:

                  1. Paragraph 2. Compensation, shall be amended by deleting the
         base salary amount described in (a) and inserting the amount of
         $380,000 in its stead.

                  2. The last paragraph of paragraph 4. Term, Termination;
         Rights on Termination, shall be amended to read as follows:

                     "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 IES' principal executive offices to a location
                  outside the greater Houston, Texas area or the Company's
                  requiring Executive to work anywhere other than IES' principal
                  executive offices or the greater Charleston, South Carolina
                  area."

                  3. A new paragraph 18. Change in Control, shall be added that
         reads:

                     "For purposes of this paragraph 18, the term "the Company"
                  shall mean IES. If, on or within two years following the
                  effective date of a Change in Control (as defined below), the



<PAGE>

                  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 three months 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, in lieu of any other payments
                  pursuant to this Agreement, (i) the equivalent of three years'
                  base salary at the rate then in effect, plus three times
                  annual bonus at the then current percentage applicable to
                  Executive determined at 100% payout, and (ii) three years'
                  coverage under the Company's medical benefit plan on a
                  tax-neutral basis.

                           (a) 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
                           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



<PAGE>

                           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.

                           (b) Notwithstanding anything in this Agreement to the
                  contrary, a termination pursuant to this paragraph shall
                  operate to automatically waive in full the noncompetition
                  restrictions imposed on Executive pursuant to paragraph 3(a).

                           (c) 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."

                  4. All other terms and conditions shall remain in full force
         and effect.



<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective for all purposes as of the date set forth above.

                                                   H. R. ALLEN, INC.


                                       By:
                                          --------------------------------------


                                       INTEGRATED ELECTRICAL SERVICES, INC.

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


                                                       EXECUTIVE


                                       -----------------------------------------
                                       H. R. Allen

</TEXT>
</DOCUMENT>
