Related Party Transactions and Outside Related Director Information

Integrated Electrical Services, Inc. (IESC)

12/21/2005 Proxy Information

The Company believes that the terms of each of the following transactions are reasonable and no less favorable than the terms of similar arrangements with unrelated third parties.

Ace/Putzel Electric, Inc., which was a wholly-owned subsidiary of the Company for a portion of fiscal year 2005, leased office and warehouse space from Mr. Robert Stalvey and his brother. The aggregate rentals paid by Ace under the lease for fiscal year 2005 were $41,852.

Mr. C. Byron Snyder is general partner of the 1996 Snyder Family Partnership Ltd., a Delaware limited partnership. The partnership owns a majority interest in Comercial America Insurance Company, a commercial insurance company that sub-leases office space from the Company at the CompanyŐs corporate offices. The lease provides for lease payments in the aggregate amount of $5,000 per month. The lease may be cancelled by either party upon thirty days notice. Mr. Beynon is also a director of Comercial America Insurance Company.

Mr. Herbert R. AllenŐs son and Mr. Robert StalveyŐs brother were both employed by subsidiaries of the Company in fiscal year 2005, and each of them received compensation from the Company in excess of $60,000 during fiscal year 2005.