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<SEC-DOCUMENT>0000950144-08-002757.txt : 20080411
<SEC-HEADER>0000950144-08-002757.hdr.sgml : 20080411
<ACCEPTANCE-DATETIME>20080411091130
ACCESSION NUMBER:		0000950144-08-002757
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20080529
FILED AS OF DATE:		20080411
DATE AS OF CHANGE:		20080411
EFFECTIVENESS DATE:		20080411

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INTELLIGENT SYSTEMS CORP
		CENTRAL INDEX KEY:			0000320340
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				581964787
		STATE OF INCORPORATION:			GA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09330
		FILM NUMBER:		08751335

	BUSINESS ADDRESS:	
		STREET 1:		4355 SHACKLEFORD RD
		CITY:			NORCROSS
		STATE:			GA
		ZIP:			30093
		BUSINESS PHONE:		4043812900

	MAIL ADDRESS:	
		STREET 1:		4355 SHACKLEFORD ROAD
		CITY:			NORCROSS
		STATE:			GA
		ZIP:			30093
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>g12687def14a.htm
<DESCRIPTION>INTELLIGENT SYSTEMS CORPORATION
<TEXT>
<HTML>
<HEAD>
<TITLE>INTELLIGENT SYSTEMS CORPORATION</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV align="center">
<B><FONT size="2">UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">SCHEDULE 14A</FONT></B>

<P align="center">
<FONT size="2">Proxy Statement Pursuant to Section 14(a) of
the Securities</FONT>

<DIV align="center">
<FONT size="2">Exchange Act of 1934 (Amendment No.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;)</FONT>
</DIV>

<P align="left">
<FONT size="2">Filed by the Registrant&nbsp;
<FONT face="wingdings">x</FONT>
</FONT>

<P align="left">
<FONT size="2">Filed by a Party other than the Registrant&nbsp;
<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left"><FONT size="2">
Check the appropriate box:
</font>





<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD align="left" valign="top">

<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Preliminary
Proxy Statement</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2"><FONT face="wingdings">&nbsp;</FONT>&nbsp;
        </FONT></DIV>
        </TD>
</TR>


<TR>
        <TD colspan="3" align="left" valign="top">

<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;<B>Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</B></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2"><FONT face="wingdings">&nbsp;</FONT>&nbsp;
        </FONT></DIV>
        </TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <FONT size="2"><FONT face="wingdings">x</FONT>&nbsp;&nbsp;Definitive
        Proxy Statement
        </FONT></TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Definitive
        Additional Materials
        </FONT></TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Soliciting
        Material Pursuant to &#167;240.14a-12
        </FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><font size="2">Intelligent Systems Corp.&nbsp;</FONT>


<DIV align="center">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="center">
<FONT size="2">(Name of Registrant as Specified In Its Charter)
</FONT>
</DIV>

<P align="center">


<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="center">
<FONT size="2">(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
</FONT>
</DIV>

<P align="left">
<FONT size="2">Payment of Filing Fee (Check the appropriate box):
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="4%"></TD>
        <TD width="96%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2"><FONT face="wingdings">x</FONT></FONT></TD>
        <TD align="left">
        <FONT size="2">No fee required.
        </FONT></TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT></FONT></TD>
        <TD align="left">
        <FONT size="2">Fee computed on table below per Exchange Act
        Rules&nbsp;14a-6(i)(4) and 0-11.
        </FONT></TD>
</TR>
</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</FONT></TD>
        <TD align="left">
        <FONT size="2">Title of each class of securities to which
        transaction applies:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</FONT></TD>
        <TD align="left">
        <FONT size="2">Aggregate number of securities to which
        transaction applies:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</FONT></TD>
        <TD align="left">
        <FONT size="2">Per unit price or other underlying value of
        transaction computed pursuant to Exchange Act Rule&nbsp;0-11
        (set forth the amount on which the filing fee is calculated and
        state how it was determined):
        </FONT></TD>
</TR>

</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>


<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)</FONT></TD>
        <TD align="left">
        <FONT size="2">Proposed maximum aggregate value of transaction:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)</FONT></TD>
        <TD align="left">
        <FONT size="2">Total fee paid:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="4%"></TD>
        <TD width="96%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT></FONT></TD>
        <TD align="left">
        <FONT size="2">Fee paid previously with preliminary materials.
        </FONT></TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT></FONT></TD>
        <TD align="left">
        <FONT size="2">Check box if any part of the fee is offset as
        provided by Exchange Act Rule&nbsp; 0-11(a)(2) and identify the
        filing for which the offsetting fee was paid previously.
        Identify the previous filing by registration statement number,
        or the Form or Schedule and the date of its filing.
        </FONT></TD>
</TR>
</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</FONT></TD>
        <TD align="left">
        <FONT size="2">Amount Previously Paid:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</FONT></TD>
        <TD align="left">
        <FONT size="2">Form, Schedule or Registration Statement No.:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</FONT></TD>
        <TD align="left">
        <FONT size="2">Filing Party:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)</FONT></TD>
        <TD align="left">
        <FONT size="2">Date Filed:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">NOTICE OF ANNUAL MEETING OF SHAREHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">VOTING</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">General</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">Quorum</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">Proxies</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">Dissenters&#146; Rights of Appraisal</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">Security Ownership of Certain Beneficial Owners and Management</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">PROPOSAL 1 &#151; THE ELECTION OF ONE DIRECTOR</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">Nominee</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">Meetings and Committees of the Board of Directors</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">Compensation Committee Interlocks and Insider Participation</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">Executive Officers</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">Executive Compensation</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">Summary Compensation Table</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">Outstanding Equity Awards at Fiscal Year End</A></TD></TR>
<TR><TD colspan="9"><A HREF="#015">Option Awards</A></TD></TR>
<TR><TD colspan="9"><A HREF="#016">Director Compensation</A></TD></TR>
<TR><TD colspan="9"><A HREF="#017">Audit Committee Report</A></TD></TR>
<TR><TD colspan="9"><A HREF="#018">Nominations Process</A></TD></TR>
<TR><TD colspan="9"><A HREF="#019">Communication Between Security Holders and the Board of Directors</A></TD></TR>
<TR><TD colspan="9"><A HREF="#020">CODE OF ETHICS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#021">SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#022">INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#023">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#024">SHAREHOLDERS&#146; PROPOSALS FOR ANNUAL MEETING IN 2009</A></TD></TR>
<TR><TD colspan="9"><A HREF="#025">OTHER MATTERS WHICH MAY COME BEFORE THE MEETING</A></TD></TR>
<TR><TD colspan="9"><A HREF="#026">ADDITIONAL INFORMATION</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="g12687g1268700.gif" alt="(INTELLIGENT SYSTEMS LOGO)">
</DIV>

<DIV align="center" style="font-size: 10pt"><B>4355 Shackleford Road</B>
<BR>
<B>Norcross, Georgia 30093</B></DIV>

<!-- link1 "NOTICE OF ANNUAL MEETING OF SHAREHOLDERS" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>NOTICE OF ANNUAL MEETING OF SHAREHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>YOU ARE INVITED TO </B>attend the Annual Meeting of Shareholders of Intelligent Systems Corporation on
Thursday, May&nbsp;29, 2008 at 4:00 p.m., local time, at our corporate offices located at 4355
Shackleford Road, Norcross, Georgia 30093. At the Annual Meeting, shareholders will consider and
vote on:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The election of one director to the Board of Directors to serve until the 2011
Annual Meeting; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Other matters that may properly come before the meeting or any adjournment thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Only shareholders of record at the close of business on Friday, April&nbsp;4, 2008 will receive notice
of and be entitled to vote at the meeting or any adjournment thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A Proxy Statement and a proxy solicited by the Board of Directors are enclosed with this mailing.
To ensure a quorum for the meeting and that your vote may be recorded, please sign, date and return
the proxy promptly in the enclosed business reply envelope. If you attend the meeting, you may
revoke your proxy and vote in person. Our 2007 Annual Report to Shareholders is enclosed in the
same document as the Proxy Statement.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">By order of the Board of Directors,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><IMG src="g12687g1268701.gif" alt="-s- Bonnie L. Herron">
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><FONT style="font-variant: SMALL-CAPS">Bonnie L. Herron</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><I>Secretary</I>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>April&nbsp;11, 2008</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Please complete and return the enclosed proxy promptly so that your vote may be recorded.</B>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROXY STATEMENT<BR>
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 29, 2008</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are sending this Proxy Statement to the shareholders of Intelligent Systems Corporation (the
&#147;company&#148;) in connection with the solicitation of proxies by the Board of Directors to be voted at
the 2008 Annual Meeting of Shareholders (the &#147;Annual Meeting&#148;) of Intelligent Systems Corporation
and any adjournment thereof. The Annual Meeting will be held on May&nbsp;29, 2008 at our corporate
offices located at 4355 Shackleford Road, Norcross, Georgia 30093 at 4:00 p.m. local time. We
expect to first mail this Proxy Statement and the accompanying proxy to shareholders on or about
April&nbsp;14, 2008.
</DIV>

<!-- link1 "VOTING" -->
<DIV align="left"><A NAME="001"></A></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>VOTING</B>
</DIV>

<!-- link1 "General" -->
<DIV align="left"><A NAME="002"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The securities that can be voted at the Annual Meeting consist of common stock of Intelligent
Systems Corporation, $.01 par value per share. Each share entitles its owner to one vote on each
matter submitted to the shareholders. There are no cumulative voting rights. The record of
shareholders entitled to vote at the Annual Meeting was taken as of the close of business on
Friday, April&nbsp;4, 2008. On that date, we had outstanding and entitled to vote 4,478,971 shares of
common stock with each share entitled to one vote.
</DIV>

<!-- link1 "Quorum" -->
<DIV align="left"><A NAME="003"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Quorum</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A majority of the outstanding shares of our common stock must be present, in person or by proxy, to
constitute a quorum at the Annual Meeting. We will treat shares that are withheld or abstain from
voting as present at the Annual Meeting for purposes of determining a quorum. If a broker, bank,
custodian, nominee or other record holder of our common stock indicates on a proxy that it does not
have discretionary authority to vote certain shares on a particular matter, the shares held by that
record holder (referred to as &#147;broker non-votes&#148;) will also be counted as present in determining
whether we have a quorum.
</DIV>

<!-- link1 "Proxies" -->
<DIV align="left"><A NAME="004"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Proxies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At the Annual Meeting, the persons named as proxies will vote all properly executed proxy cards
delivered in connection with this solicitation and not revoked in accordance with the directions
given. Shareholders should specify their choices with regard to the proposal to be voted upon on
the accompanying proxy card. <B>If no specific instructions are given with regard to the matter to be
voted upon, then the shares represented by a signed proxy card will be voted &#147;FOR&#148; the election of
the director nominee. </B>If any other matters properly come before the Annual Meeting, the persons
named as proxies will vote upon such matters according to their judgment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Some of our shareholders hold their shares through a broker, bank, custodian or other nominee,
rather than directly in their own name. This is commonly referred to as holding shares in &#147;street
name.&#148; If you hold shares in street name, these proxy materials are being forwarded to you by your
broker, bank, custodian or other nominee, which is considered, with respect to such shares, to be
the shareholder of record. As the beneficial owner of shares held in street name, you have the
right to direct the nominee how such shares should be voted. You also have the right to attend the
Annual Meeting. However, since you are not the shareholder of record, you must first obtain a
signed proxy from the shareholder of record giving you the right to vote the shares at the Annual
Meeting. Your broker, bank, custodian or other nominee has enclosed or provided you a voting
instruction card for you to use in directing the nominee how to vote your shares or obtain a proxy
from the nominee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You may revoke your proxy card in connection with this solicitation at any time prior to voting at
the Annual Meeting by:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>giving written notice to the Secretary of the company at 4355 Shackleford Road, Norcross,
Georgia 30093, for shareholders of record, or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>executing and delivering to the Secretary a later dated proxy, or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>voting in person at the Annual Meeting.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You cannot revoke your proxy or voting instructions as to any matter upon which, prior to such
revocation, a vote has been cast in accordance with the authority conferred by such proxy or voting
instructions.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 2 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will pay all expenses incurred in connection with the solicitation of proxies. Such costs
include charges by brokers, fiduciaries and custodians for forwarding proxy materials to beneficial
owners of stock held in their names. We may solicit proxies by mail, telephone and personal
contact by directors, officers, and employees of the company without additional compensation.
</DIV>

<!-- link1 "Dissenters&#146; Rights of Appraisal" -->
<DIV align="left"><A NAME="005"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Dissenters&#146; Rights of Appraisal</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are no dissenter&#146;s rights of appraisal with respect to the matter being acted upon at the
Annual Meeting.
</DIV>

<!-- link1 "Security Ownership of Certain Beneficial Owners and Management" -->
<DIV align="left"><A NAME="006"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Security Ownership of Certain Beneficial Owners and Management</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table contains information concerning the only persons who are known to us to be
beneficial owners of more than 5&nbsp;percent of our common stock as of February&nbsp;29, 2008, and the
ownership of our common stock as of that date by each director, each executive officer named in the
Summary Compensation Table and by all directors and officers as a group. There are no arrangements
which may result in change of control of the company.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>Shares</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>Percent</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Beneficial Owner</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Address</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>Beneficially Owned</B><SUP style="font-size: 85%; vertical-align: text-top">a, d</SUP></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>of Class</B><SUP style="font-size: 85%; vertical-align: text-top">a</SUP></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px; background: #cceeff">
    <TD colspan="1" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="1" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">J. Leland Strange<I><BR></I></DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">4355 Shackleford Road</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">772,794</TD>
    <TD nowrap valign="top"><SUP style="font-size: 85%; vertical-align: text-top">b</SUP></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17.1</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><I>Chairman of the Board, President, CEO</I></DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Norcross, GA  30093</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Wallace R. Weitz &#038; Company <SUP style="font-size: 85%; vertical-align: text-top">c</SUP></DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1125 South 103rd St., Suite 600</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">883,999</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19.7</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Omaha, NE  68124</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">James V. Napier, <I>Director</I></DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">26,280</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">John B. Peatman, <I>Director</I></DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">36,327</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Parker H. Petit, <I>Director</I></DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">36,100</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Francis A. Marks, <I>Vice President</I></DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">107,400</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.4</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Bonnie L. Herron<I><BR></I></DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">83,825</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.9</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Vice President, Chief Financial Officer
and Corporate Secretary</I></DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All Directors and Executive Officers
as a Group (7 persons)</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,154,972</TD>
    <TD nowrap valign="top"><SUP style="font-size: 85%; vertical-align: text-top">d</SUP></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">24.8</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">a.</TD>
    <TD>&nbsp;</TD>
    <TD>Except as otherwise noted, beneficial ownership is determined on the basis of 4,478,971
shares of common stock issued and outstanding plus securities deemed outstanding pursuant to
Rule&nbsp;13d-3(d)(1) of the Securities Exchange Act of 1934, as amended. Pursuant to the rules on
the Securities and Exchange Commission (the &#147;SEC&#148;), a person is deemed to beneficially own
shares of the company&#146;s common stock if that person has or shares &#147;voting power&#148;, which
includes the power to vote or to direct the voting of a security, or &#147;investment power&#148;, which
includes the power to dispose of or to direct the disposition of a security. An asterisk
indicates beneficial ownership of less than 1&nbsp;percent.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">b.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 96,953 shares owned by Jane H. Strange, Mr.&nbsp;Strange&#146;s wife. Mr.&nbsp;Strange disclaims
any beneficial interest in the shares.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">c.</TD>
    <TD>&nbsp;</TD>
    <TD>Based on information set forth in a Schedule&nbsp;13G filed on January&nbsp;18, 2007, in which Wallace
R. Weitz and Company, an investment adviser registered under Section&nbsp;203 of the Investment
Advisers Act of 1940, reported beneficial ownership of 883,999 shares of common stock, of
which Wallace R. Weitz and Company has the sole power to vote and to dispose.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">d.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 175,000 shares reserved for issuance to officers and directors pursuant to stock
options that were exercisable at February&nbsp;29, 2008 or within sixty days of such date which are
deemed beneficially owned by such person pursuant to Rule&nbsp;13d-3(d)(1) of the Exchange Act.
The amounts reported above for Messrs.&nbsp;Napier, Peatman and Petit include 25,000 shares each
for shares underlying stock options exercisable at February&nbsp;29, 2008 or within sixty days of
such date. The amounts reported above for Mr.&nbsp;Strange and Ms.&nbsp;Herron include 45,000 and
35,000 shares, respectively, for shares underlying stock options exercisable at February&nbsp;29,
2008 or within sixty days of such date.</TD>
</TR>

</TABLE>


<!-- link1 "PROPOSAL 1 &#151; THE ELECTION OF ONE DIRECTOR" -->
<DIV align="left"><A NAME="007"></A></DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROPOSAL 1 &#151; THE ELECTION OF ONE DIRECTOR</B>
</DIV>

<!-- link1 "Nominee" -->
<DIV align="left"><A NAME="008"></A></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Nominee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At the Annual Meeting of Shareholders, shareholders will elect one director to the Board of
Directors to serve a three-year term until the 2011 Annual Meeting of Shareholders. The other
directors&#146; terms expire at the Annual Meeting of Shareholders listed in the following table for
each category of directors, or upon their earlier death, resignation or removal from office.
Directors are elected by a plurality of the shares present and voting at the meeting. A
&#147;plurality&#148; means that the individuals who receive the largest
number of votes cast are elected as director up to the maximum number of directors to be chosen at
the meeting.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 3 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Therefore, shares that are withheld or abstain from voting and broker non-votes will
have no effect on the outcome of the vote. Unless contrary instructions are given, the persons
named as proxies will vote the shares represented by a signed proxy card &#147;FOR&#148; the nominee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If the nominee withdraws for any reason or is not able to serve as a director, the proxy will be
voted for another person designated by the Board of Directors as substitute nominee, but in no
event will the proxy be voted for more than one nominee. The Board of Directors has no reason to
believe that the nominee will not serve if elected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors has nominated the person named in the following table to serve as a director
of the company. The nominee is currently a director of the company. The nominee and other
directors gave us the following information concerning their current age, other directorships,
positions with the company, principal employment and shares of our common stock beneficially owned
as of February&nbsp;29, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors recommends that shareholders vote &#147;FOR&#148; the proposal to elect one nominee
listed below as director of the company.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares of Common Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Beneficially Owned</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Position / Principal Occupation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(Percent of Class)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="5" align="left"><B><I>Nominee for election to serve until the 2011 Annual Meeting</I></B></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign=top><DIV style="margin-left:15px; text-indent:-15px">Parker H. Petit <SUP style="font-size: 85%; vertical-align: text-top">1 &#038; 2</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">68</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="margin-left:15px; text-indent:-15px">Director, Chairman, President and Chief Executive Officer of Matria Healthcare, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">36,327</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="5" align="center"><B>Incumbent directors elected to serve until the 2010
Annual Meeting</B><BR></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign=top nowrap><DIV style="margin-left:15px; text-indent:-15px">John B. Peatman <SUP style="font-size: 85%; vertical-align: text-top">1 &#038; 2</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">73</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="margin-left:15px; text-indent:-15px">Director, Professor of Electrical Engineering at Georgia Institute of  Technology</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">26,280</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>Incumbent directors elected to serve until the 2009
Annual Meeting</B><BR></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign=top><DIV style="margin-left:15px; text-indent:-15px">James V. Napier <SUP style="font-size: 85%; vertical-align: text-top">2</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">71</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="margin-left:15px; text-indent:-15px">Director, Retired,  former  Chairman of the Board of  Scientific Atlanta, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">36,100</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign=top><DIV style="margin-left:15px; text-indent:-15px">J. Leland Strange</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">66</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="margin-left:15px; text-indent:-15px">Director, Chairman of the Board, President and Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">772,794</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17.1</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Less than one percent; share amount includes 25,000 shares pursuant to stock options
exercisable at February&nbsp;29, 2008 or within sixty days of such date.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">1.</TD>
    <TD>&nbsp;</TD>
    <TD>Audit Committee</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">2.</TD>
    <TD>&nbsp;</TD>
    <TD>Compensation Committee</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Mr.&nbsp;Napier </I>has served as a director since 1982. Mr.&nbsp;Napier served as Chairman of the Board of
Scientific-Atlanta, Inc., a firm involved in cable television electronics and satellite-based
communication networks, from 1993 until November&nbsp;2000. He serves as a director of McKesson
Corporation, Vulcan Materials Company, and Wabtec Corporation. The Board of Directors has
determined that Mr.&nbsp;Napier is an independent director under applicable rules of the American Stock
Exchange (the &#147;AMEX &#147;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Dr.&nbsp;Peatman </I>has served as a director since 1979 and has been a Professor of Electrical Engineering
at the Georgia Institute of Technology since 1964. The Board of Directors has determined that Dr.
Peatman is an independent director under applicable rules of the AMEX.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Mr.&nbsp;Petit </I>has served as a director since 1996. Mr.&nbsp;Petit has served as Chairman of the Board and a
director of Matria Healthcare, Inc., a comprehensive disease management services company listed on
the NASDAQ National Market, since March&nbsp;1996 and he has served as President and CEO of Matria since
October&nbsp;2000. Mr.&nbsp;Petit was founder and Chairman of the Board of Directors of Healthdyne, Inc.,
Matria&#146;s predecessor, from 1970 to 1996. He also serves as a director of Logility, Inc. The Board
of Directors has determined that Mr.&nbsp;Petit is an independent director under applicable rules of the
AMEX.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Mr.&nbsp;Strange </I>has served as our President since 1983 and our Chief Executive Officer and Chairman of
the Board of Directors since 1985.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 4 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are no family relationships among any of the company&#146;s directors and executive officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There have been no events under any bankruptcy act, no criminal proceedings and no judgments or
injunctions material to an evaluation of the ability and integrity of any director, executive
officer or control person of the company during the past five years. There are no proceedings to
which any director, officer, affiliate, any owner of record or beneficially of more than 5&nbsp;percent
of our common stock, or any security holder of the company is an adverse party to the company or
has a material interest adverse to the company.
</DIV>

<!-- link1 "Meetings and Committees of the Board of Directors" -->
<DIV align="left"><A NAME="009"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Meetings and Committees of the Board of Directors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors met four times during the year ended December&nbsp;31, 2007 and acted by
unanimous consent on one occasion. The Board of Directors has established an audit committee, a
compensation committee, and a plan committee, but has no nominating committee. The Audit Committee
of the Board of Directors met four times during 2007 and acted by unanimous consent twice. During
2007, the Audit Committee consisted of Messrs.&nbsp;Peatman and Petit and Mr.&nbsp;Napier was appointed to
the Audit Committee on March&nbsp;11, 2008. In 2007, the Audit Committee appointed the company&#146;s
independent auditor, met with the independent auditor to review its report on the 2006 audit and
the 2007 quarterly reviews, and carried out a number of other responsibilities, as outlined in the
Audit Committee Charter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each of the members of the Audit Committee is independent, as such term is defined in the listing
standards of the AMEX and the rules of the SEC, and the Audit Committee meets the composition
requirements of AMEX&#146;s listing standards for Small Business Issuers (as defined by the rules of
AMEX). The Board of Directors has determined that at least one member of the Audit Committee, Mr.
Petit, is a financial expert as defined by the rules of the SEC, and is financially sophisticated
as defined in the listing standards of AMEX. The Board of Directors based this determination, in
part, on Mr.&nbsp;Petit&#146;s experience in actively supervising senior financial and accounting personnel
and in overseeing the preparation of financial statements as the Chief Executive Officer and
Chairman of a publicly-traded company. In addition, Mr.&nbsp;Napier&#146;s experience includes serving on
the audit committees of several large publicly traded companies as well as serving in executive
positions and as chairman of publicly traded companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board has a Compensation Committee consisting of the three independent directors, Messrs.
Napier, Petit and Peatman. The Compensation Committee did not meet during 2007 but met in early
2008 to review and approve management compensation and 2007 bonus amounts. The Compensation
Committee reviews, makes recommendations and approves the appropriate compensation level for the
officers of the company and any changes in the company&#146;s various benefit plans covering executive
officers or directors. The Compensation Committee does not have a charter. In performing its
work, the Compensation Committee has not relied on compensation consultants. From time to time,
the Compensation Committee has sought input from publicly available data compiled by executive
officers of the company relating to compensation paid to executive officers and directors in
similar size, publicly traded companies in the same geographic area as the company is located. The
Compensation Committee has also solicited input from the CEO with respect to compensation of
non-CEO executive officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Plan Committee, which did not meet in 2007, is responsible for administering the 2003 Stock
Incentive Plan including selecting individuals who will receive stock option grants and determining
the timing, pricing and amounts of the options granted. The Plan Committee has the same members as
the Compensation Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All directors attended all of the meetings of the Board and the Committees of the Board on which
they serve.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The company does not currently have a standing nominating committee. Please see &#147;Nominations
Process&#148; below for information regarding the company&#146;s policies and procedures for director
nominations.
</DIV>

<!-- link1 "Compensation Committee Interlocks and Insider Participation" -->
<DIV align="left"><A NAME="010"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Compensation Committee Interlocks and Insider Participation</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Messrs.&nbsp;Napier, Petit and Peatman served as members of the Compensation Committee and the Plan
Committee in 2007. None of these individuals is a present or former officer or employee of the
company. None of these individuals has engaged in any transactions required to be disclosed under
Item&nbsp;404 of Regulation&nbsp;S-K. None of the company&#146;s executive officers serves as a member of the
board of directors or compensation committee of any entity that has one or more executive officers
serving as a member of the company&#146;s Board of Directors or Compensation Committee in 2007.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 5 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<!-- link1 "Executive Officers" -->
<DIV align="left"><A NAME="011"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Executive Officers</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following information is provided about our non-director executive officers as of March&nbsp;31,
2008.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Position / Principal Occupation</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="7" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD valign="top" nowrap><DIV style="margin-left:0px; text-indent:-0px" >J. William Goodhew, III
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">70</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bonnie L. Herron
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">60</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, Chief Financial Officer and Secretary</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Francis A. Marks
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">74</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Mr.&nbsp;Goodhew </I>joined the company in 1997 as Vice President. He was President of Peachtree Software,
Inc. from 1985 through 1996. He is former Chairman of the Board of Navision Software A/S.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Mr.&nbsp;Marks </I>joined the company in May&nbsp;1982 as Vice President of Product Line Programs after 26&nbsp;years
with IBM Corporation in a variety of managerial and executive positions. He was appointed Vice
President in 1983 and also serves as President of ChemFree Corporation, one of our wholly owned
subsidiaries, to which he devotes substantially all of his attention.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Ms.&nbsp;Herron </I>joined the company in 1982 as Director of Planning at one of our subsidiaries and
subsequently at the corporate level. She was elected Corporate Secretary in 1987, Vice President
in 1990, and Chief Financial Officer in 1999.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors elects the executive officers to serve until they are removed, replaced or
resign.
</DIV>

<!-- link1 "Executive Compensation" -->
<DIV align="left"><A NAME="012"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Executive Compensation</I></B>
</DIV>

<!-- link1 "Summary Compensation Table" -->
<DIV align="left"><A NAME="013"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt"><B>Summary Compensation Table</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other Annual</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">Year</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Salary</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Bonus</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">Name and Principle Position</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px; background: #cceeff">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">J. Leland Strange<BR></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">275,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">278,375</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">President &#038; Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">275,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">344,125</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Francis A. Marks<BR></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">142,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">147,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">291,651</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Vice President</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">130,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">142,950</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD nowrap><DIV style="margin-left:0px; text-indent:-0px">Bonnie L. Herron
<BR>
Vice President, Chief Financial Officer &#038; Secretary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">155,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">157,325</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">155,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">197,325</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table above sets forth information regarding compensation awarded to, earned by or paid to the
company&#146;s CEO and the company&#146;s two most highly compensated executive officers other than the CEO
(the &#147;named executive officers&#148;). None of the named executive officers has an employment agreement
with the company and the company does not have any corporate non-equity incentive plans or
nonqualified deferred compensation plans. From time to time, officers may be awarded bonuses to
recognize achievement of corporate or subsidiary goals or other accomplishments. In 2007, Mr.
Marks participated in a bonus plan at our ChemFree subsidiary for which he serves as the president
and chief executive officer. Based on the subsidiary&#146;s achievement of revenue and earnings
substantially in excess of its goals for 2007, Mr.&nbsp;Marks was awarded a bonus of $147,208, to be
paid during 2008. During the two years ended December&nbsp;31, 2007, the company did not make any stock
awards or option awards and did not reprice any previously issued stock options. All Other
Compensation shown above includes matching contributions by the company to the respective accounts
of the executive officers pursuant to the terms of our Tax-Deferred Savings and Protection Plan
(the &#147;401(k) Plan&#148;). Such amounts are fully vested. It is our policy to provide executives with
the same benefits provided to all other employees with respect to medical, dental, life insurance
and 401(k) plans.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 6 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<!-- link1 "Outstanding Equity Awards at Fiscal Year End" -->
<DIV align="left"><A NAME="014"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Outstanding Equity Awards at Fiscal Year End</I></B>
</DIV>

<!-- link1 "Option Awards" -->
<DIV align="left"><A NAME="015"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>Option Awards</I></B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Underlying Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Underlying Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options (#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Exercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unexercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Option Exercise Price</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Option Expiration Date</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">J. Leland Strange</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/4/2013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Francis A. Marks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">NA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">NA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bonnie L. Herron</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/4/2013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All stock options shown above were issued on March&nbsp;3, 2003 and vested in one third increments on
the first, second and third anniversaries of the grant date. There were no options granted to
officers in the two years ended December&nbsp;31, 2007. The company does not have any Stock Award Plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The company does not have any plans for executive officers that provide for the payment of
retirement benefits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Effective January&nbsp;1, 1992, the company adopted the Change in Control Plan for Officers so that if
control of the company changes in the future, management would be free to act on behalf of the
company and its shareholders without undue concern for the possible loss of future compensation. A
&#147;change in control&#148; means either: (i)&nbsp;the accumulation by an unrelated person of beneficial
ownership of more than 25&nbsp;percent of the company&#146;s common stock, (ii)&nbsp;the sale of all or
substantially all of the company&#146;s assets to an unrelated person, in a merger or otherwise, or
(iii)&nbsp;a change of control within the meaning of any rules promulgated by the Securities and
Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the Change in Control Plan, if the employment of an officer of the company terminates for any
reason within 12&nbsp;months after a change in control, the officer would receive a lump sum cash
payment in an amount equal to twice the total of (i)&nbsp;such officer&#146;s base annual salary at the time
of termination, (ii)&nbsp;the cash value of annual benefits, and (iii)&nbsp;such officer&#146;s bonus for the most
recent year, if any. Additionally, upon a change in control, all options shall vest and the
exercise period for all options becomes the longer of (i)&nbsp;one year after the date of termination or
(ii)&nbsp;the exercise period specified in the officer&#146;s option agreement. The right to such benefits
would lapse one year after the occurrence of the last change in control event to occur if there
were no actual termination during that period. The named executive officers have been designated
by the Board as participants in the Change in Control Plan. No amounts have been accrued or paid
to any executive officer pursuant to the Change in Control Plan and there is no arrangement
presently that would result in a change in control.
</DIV>

<!-- link1 "Director Compensation" -->
<DIV align="left"><A NAME="016"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Director Compensation</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The table below sets forth all compensation paid to non-executive directors in the year ended
December&nbsp;31, 2007. The company does not have a stock award plan or non-equity incentive plan for
directors. The company has a Non-Employee Director Stock Option Plan (described below).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Director Compensation</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Fees Earned or</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">All Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Paid in Cash</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Option Awards (1.)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James V. Napier</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,280</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John B. Peatman</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,280</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Parker H. Petit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,280</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1.&nbsp;In 2007, each director was awarded 4,000 stock options at fair market value on the date of grant
pursuant to the terms of the Non-Employee Director Stock Option Plan. The amount reported is the
non-cash amount recognized for financial statement reporting in accordance with FAS 123R. At
December&nbsp;31, 2007, each non-executive director has an aggregate of 29,000 stock options
outstanding, of which 25,000 are fully vested and exercisable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All non-employee directors have the same compensation plan. Non-employee directors earn $8,000 per
year plus a fee of $2,000 per meeting of the Board of Directors. There is no additional
compensation for serving on a committee of the Board of Directors. Total
cash compensation is capped at $16,000 annually. Effective January&nbsp;1, 1992, the company adopted
the Outside Directors&#146; Retirement
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 7 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Plan which provides for each non-employee director, upon
resignation from the Board after reaching the age of 65, to receive a lump sum cash payment equal
to $5,000 for each full year of service as a director of the company (and its predecessors and
successors) up to $50,000. No amounts were paid to any director with respect to the Outside
Directors&#146; Retirement Plan in 2007. At December&nbsp;31, 2007, we have accrued $150,000 for future
payments under the Outside Directors&#146; Retirement Plan. Effective August&nbsp;22, 2000, the company
adopted the Non-Employee Director Stock Option Plan which provides for an initial grant to each
director of 5,000 options to purchase common stock of the company and annual grants of 4,000
options on the date of each subsequent Annual Meeting. Options are granted at fair market value on
the date of grant. In 2007, each director received a grant of 4,000 options on May&nbsp;24, 2007, the
date of the Annual Meeting of Shareholders.
</DIV>

<!-- link1 "Audit Committee Report" -->
<DIV align="left"><A NAME="017"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Audit Committee Report</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In March&nbsp;2004, the Board of Directors amended the company&#146;s Audit Committee Charter. The Audit
Committee Charter includes organization and membership requirements, a statement of policy and the
Committee&#146;s authority and responsibilities. All members of the Audit Committee currently meet the
independence and qualification standards set forth in the AMEX listing standards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management is responsible for our company&#146;s internal controls and the financial reporting process.
The independent auditors are responsible for performing an independent audit of the company&#146;s
consolidated financial statements in accordance with auditing standards of the Public Company
Accounting Oversight Board (United States) (&#147;PCAOB&#148;) and for issuing a report thereon. As outlined
in more detail in the Audit Committee Charter, the Audit Committee&#146;s responsibility is generally to
approve all services provided by and compensation paid to the independent auditors; review the
adequacy of the company&#146;s internal and disclosure controls and risk management practices; review
and monitor the annual audit of the financial statements including the financial statements
produced and notes thereto; review SEC filings containing the company&#146;s financial statements;
regularly meet with the independent auditors and management in separate sessions; and authorize
investigations into any matter within the scope of their responsibilities. During fiscal year 2007
and through March&nbsp;31, 2008, among its other activities, the Audit Committee:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>engaged the independent auditors and established their compensation;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reviewed and discussed with management and the independent auditors the audited financial
statements of the company as of December&nbsp;31, 2006 and 2007 and for the years then ended;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>discussed with the independent auditors their reviews of the quarterly unaudited financial
statements of the company for fiscal 2007;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>discussed with the independent auditors the matters required to be discussed by PCAOB
standards (SAS No.&#146;s 61, 89 and 90); and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>received from the independent auditors the written disclosures and written affirmation of
their independence required by Independence Standards Board Standard No.&nbsp;1 and discussed with
the auditors the firm&#146;s independence.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based upon the reviews and discussions summarized above, the Audit Committee recommended to the
Board of Directors (and the Board of Directors has approved) that the audited financial statements
be included in the Annual Report on Form 10-KSB for the year ended December&nbsp;31, 2007 for filing
with the Securities and Exchange Commission.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>AUDIT COMMITTEE</U></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Parker H. Petit (Chair)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">John B. Peatman</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">James V. Napier</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<!-- link1 "Nominations Process" -->
<DIV align="left"><A NAME="018"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Nominations Process</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors has not appointed a standing nominating committee or adopted a formal
nominating committee charter because the Board of Directors has determined that due to the size,
make-up, independence, long tenure and low turnover of the current Board of Directors, there would
be limited benefit to the company or its shareholders to do so. Currently, James V. Napier, Parker
H. Petit and John B. Peatman, all of whom meet the applicable AMEX independence requirements,
participate in the consideration of director nominees. Messrs.&nbsp;Napier, Petit and Peatman also
nominate the officers of the company for election by the Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors has not previously formed a policy with respect to consideration of
candidates nominated by shareholders since there have been no such nominations. However, it is the
Board&#146;s intent to consider any security holder nominees that may be
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 8 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">properly and timely put forth
in the future. The Board has not identified any specific, minimum qualifications or skills that it
believes must be met by a nominee for director. It is the intent of the Board to review from time
to time the appropriate size of the Board and the appropriate skills and characteristics of
directors in the context of the current make-up of the Board and the requirements and needs of the
company at a given time. Given the current composition, stability and size of the Board of
Directors and the company and the fact that the director nominee is standing for re-election, the
Board has not considered other candidates for election at the upcoming Annual Meeting of
Shareholders. There is one vacancy on the Board of Directors at the present time due to the
retirement of a director in 2003. The Board has not presently named a nominee for the vacant seat
because it has decided that the size of the Board is appropriate at the present time, but it may do
so in the future. Security holders wishing to nominate a candidate for consideration at the Annual
Meeting of Shareholders in 2009 should submit the nominee&#146;s name, affiliation and other pertinent
information along with a statement as to why such person should be considered for nomination. Such
nominations should be addressed to the Board of Directors in care of the Secretary of the company
and be received no later than 120&nbsp;days before the date of the Annual Meeting of Shareholders. The
Board will evaluate any such nominees in a manner similar to that for all director nominees.
</DIV>

<!-- link1 "Communication Between Security Holders and the Board of Directors" -->
<DIV align="left"><A NAME="019"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Communication Between Security Holders and the Board of Directors</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Security holders wishing to communicate with members of the Board of Directors should send a letter
to the Secretary of the company with instructions as to which director(s) is to receive the
communication. The Secretary will forward the written communication to each member of the Board of
Directors identified by the security holder or, if no individual director is identified, to all
members of the Board of Directors. The company has not in the past required members of the Board
of Directors to attend each Annual Meeting of Shareholders because the formal meetings have been
attended by very few shareholders, and have generally been very brief and procedural in nature.
One of the company&#146;s directors attended the 2007 Annual Meeting of Shareholders. The board will
continue to monitor shareholder interest and attendance at future meetings and reevaluate this
policy as appropriate.
</DIV>

<!-- link1 "CODE OF ETHICS" -->
<DIV align="left"><A NAME="020"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CODE OF ETHICS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The company has adopted a Code of Ethics that applies to all directors, officers, and employees.
The Code of Ethics is posted on our website at <U>www.intelsys.com</U>. The company discloses on its
website, within the time required by the rules of the SEC, any waivers of, or amendments to, the
Code of Ethics for the benefit of an executive officer.
</DIV>

<!-- link1 "SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE" -->
<DIV align="left"><A NAME="021"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Section&nbsp;16(a) of the Securities Exchange Act of 1934, as amended, and regulations of the Securities
and Exchange Commission thereunder require our executive officers and directors and persons who own
more than ten percent of our common stock, as well as certain affiliates of these persons, to file
initial reports of ownership of our common stock and changes in such ownership with the Securities
and Exchange Commission. The Securities and Exchange Commission also requires executive officers,
directors and persons owning more than ten percent of our common stock to furnish us with copies of
all Section 16(a) forms they file. Based solely on our review of the copies of such forms received
by us, we believe that, during the fiscal year ended December&nbsp;31, 2007, the executive officers,
directors, and persons owning more than ten percent of our common stock and affiliates of these
persons have complied with all applicable filing requirements in a timely manner, except that our
three independent directors, Mr.&nbsp;Petit, Mr.&nbsp;Napier and Mr.&nbsp;Peatman, did not file a report on Form&nbsp;4
related to the grant of stock options on May&nbsp;24, 2007 in a timely manner, due to an oversight by
the company. Such reports on Form&nbsp;4 were filed by each director on December&nbsp;4, 2007.
</DIV>

<!-- link1 "INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS" -->
<DIV align="left"><A NAME="022"></A></DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Tauber &#038; Balser, P.C., Atlanta, Georgia, acted as our independent registered public accounting firm
for the fiscal years ended December&nbsp;31, 2007 and 2006. We expect that representatives of Tauber &#038;
Balser, PC will be present at the Annual Meeting. They will have the opportunity to make a
statement if they desire to do so and to respond to appropriate questions. The Audit Committee has
not yet selected auditors for the current fiscal year ending December&nbsp;31, 2008 because historically
this decision is made in the second half of the year. The following is a summary of fees and
expenses billed to the company by Tauber &#038; Balser, P.C., for services rendered during the fiscal
years ended December&nbsp;31, 2006 and 2007:
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 9 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Audit Fees </I></B><I>- </I>We were billed aggregate fees of $169,971 for reviews and audit services by
Tauber &#038; Balser, PC in the year ended December&nbsp;31, 2007, of which $0 was unpaid at
December&nbsp;31, 2007. We were billed aggregate fees of $132,428 for reviews and audit
services by Tauber &#038; Balser, P.C., in the year ended December&nbsp;31, 2006.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Audit-Related Fees </I></B><I>- </I>These fees consist of fees billed for assurance and related services that
are reasonably related to the performance of the audit or review of our Financial
Statements and are not reported under &#147;Audit Fees&#148;. In the year ended December&nbsp;31, 2007,
we were billed $15,220 for such fees. There were no such fees billed in the year ended
December&nbsp;31, 2006.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Fees for Tax Services </I></B><I>- </I>We did not incur any fees for tax services by our independent
auditors during the two years ended December&nbsp;31, 2007.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>All Other Fees </I></B><I>- </I>Tauber &#038; Balser, P.C., billed us $10,925 for other services related to
reviewing certain transactions involving the company during the year ended December&nbsp;31,
2006. There were no billings in this category in the year ended December&nbsp;31, 2007.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">It is the policy of the Audit Committee to approve in advance, either verbally or in writing, all
audit services and permitted non-audit services provided to the company by the independent
accountants. All such services were pre-approved by the Audit Committee in the two years ended
December&nbsp;31, 2007.
</DIV>


<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" -->
<DIV align="left"><A NAME="023"></A></DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The lease on our headquarters and primary facility at 4355 Shackleford Road, Norcross, Georgia is
held by ISC Properties, LLC, an entity controlled by our Chairman and Chief Executive Officer, J.
Leland Strange. Mr.&nbsp;Strange holds a 100% ownership interest in ISC Properties, LLC. In each of
the years ending December&nbsp;31, 2007 and 2006, we paid $459,000 in rent to ISC Properties, LLC.
</DIV>

<!-- link1 "SHAREHOLDERS&#146; PROPOSALS FOR ANNUAL MEETING IN 2009" -->
<DIV align="left"><A NAME="024"></A></DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SHAREHOLDERS&#146; PROPOSALS FOR ANNUAL MEETING IN 2009</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Shareholders who wish to submit a proposal for inclusion in our proxy statement for the 2009 Annual
Meeting of Shareholders must submit such proposals so that they are received by the company no
later than December&nbsp;13, 2008. Such proposals must comply with Exchange Act Rule&nbsp;14a-8 and all
other applicable proxy rules and requirements contained in our bylaws relating to shareholder
proposals to be included in our proxy materials. Shareholders intending to present proposals at
the Annual Meeting of Shareholders in 2009 but who do not wish to submit the proposal for inclusion
in our proxy statement pursuant to Rule&nbsp;14a-8 should submit these proposals to the Secretary of the
company by certified mail, return receipt requested, at our offices in Norcross, Georgia on or
before December&nbsp;13, 2008. Our bylaws contain an advance notice provision that states that, among
other things, in order for business to be brought properly before an annual meeting of shareholders
by a shareholder, the shareholder must have given timely notice of the business in writing to the
Secretary of the company. To be timely under the Bylaws, a shareholder&#146;s notice must be received
at our principal offices by December&nbsp;13, 2008.
</DIV>

<!-- link1 "OTHER MATTERS WHICH MAY COME BEFORE THE MEETING" -->
<DIV align="left"><A NAME="025"></A></DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>OTHER MATTERS WHICH MAY COME BEFORE THE MEETING</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors is not aware of any matter other than those stated above that are to be
brought before the meeting. However, if any other matter should be presented for consideration and
voting, the persons named in the enclosed form of proxy intend to vote the proxy in accordance with
their judgment of what is in the best interest of the company.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 10 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<!-- link1 "ADDITIONAL INFORMATION" -->
<DIV align="left"><A NAME="026"></A></DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ADDITIONAL INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Any record or beneficial owner of our common stock as of April&nbsp;4, 2008 may request a copy of our
Annual Report on </B><B>Form 10-KSB</B><B> filed with the Securities and Exchange Commission for the fiscal year
ended December&nbsp;31, 2007, including financial statements and schedules. Shareholders may also view
and download a copy of our Annual Report on </B><B>Form 10-KSB</B><B> from our web site at</B>
<U><B>www.intelsys.com</B></U><B>. Any request for the </B><B>Form 10-KSB</B><B> should be in writing addressed to:
Bonnie L. Herron, Intelligent Systems Corporation, 4355 Shackleford Road, Norcross, Georgia 30093.
If the person requesting the </B><B>Form 10-KSB</B><B> is not a shareholder of record on April&nbsp;4, 2008, the
person must state that he or she is a beneficial owner of our common stock on that date. We will
provide copies of any exhibits to the </B><B>Form 10-KSB</B><B> upon request and upon the payment of our
reasonable expenses in furnishing such exhibits.</B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->- 11 -<!-- /Folio -->
</DIV>



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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>ANNUAL MEETING OF STOCKHOLDERS OF</B>
</DIV>


<DIV align="center" style="font-size: 24pt; margin-top: 18pt"><B>INTELLIGENT SYSTEMS CORPORATION</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>May&nbsp;29, 2008</B>
</DIV>


<DIV align="center" style="font-size: 18pt; margin-top: 80pt">Please date, sign and mail<BR>
your proxy card in the<BR>
envelope provided as soon<BR>
as possible.
</DIV>

<DIV align="center" style="font-size: 8pt; margin-top: 40pt"><FONT face="Wingdings" style="font-size: 10pt">&#234;</FONT>
Please detach along perforated line and mail in the envelope provided.
<FONT face="Wingdings" style="font-size: 10pt">&#234;</FONT>
</DIV>



<DIV align="center">
<TABLE style="font-size: 10pt; margin-top: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%"></TD>
    <TD width="5%"></TD>
    <TD width="47%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top"> <FONT face="Wingdings">&#110;&nbsp;</FONT> 10000000000000000000 9</TD>
    <TD>&nbsp;</TD>
    <TD><div style="margin-left: 50px; text-indent: -0px">052908</div></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV style="border-top: 1px solid #000000"></DIV>

<DIV align="center" style="font-size: 7pt; margin-top: 5pt"><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; THE ELECTION OF ONE DIRECTOR.<br>
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
<FONT face="Wingdings">&#253;</FONT></B></DIV>

<DIV style="border-top: 1px solid #000000"></DIV>




<DIV style="position: relative; float: left; width: 48%; border-right: 1px solid #000000">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 8pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Election of One Director:</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR style="font-size: 1pt" valign="bottom">
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&nbsp;</TD>
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</DIV></TD>
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    <TD>&nbsp;</TD>
    <TD align="left" valign="middle">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>&nbsp;</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="middle">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>&nbsp;</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="middle">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>&nbsp;</B>
</DIV></TD>
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    <TD>&nbsp;</TD>
    <TD align="left" valign="middle">&nbsp;</TD>
</TR>



<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left" style="border-bottom: 1px solid #000000"><div align="justify">To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.</div></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD align="left" valign="middle" style="border-bottom: 1px solid #000000"><FONT face="Wingdings" style="font-size: 17pt">&#111;</FONT></TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


</DIV>
<DIV style="position: relative; float: right; width: 50%">
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 0pt">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
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    <TD width="3%">&nbsp;</TD>
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    <TD width="8%">&nbsp;</TD>
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<!-- End Table Head -->
<!-- Begin Table Body -->



<!-- Begin Table Head -->

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<!-- End Table Head -->
<!-- Begin Table Body -->



<TR>
<TD  colspan="13" valign="top" align="justify"><DIV align="justify" style="margin-right:2%; text-indent:-0px"><b>This proxy will be voted as directed. If no instructions are specific, the proxy will be voted &#147;FOR&#148; Proposal 1.</b>
</DIV></TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
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<TD>&nbsp;</TD>
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</TR>



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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
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    <TD>&nbsp;</TD>
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<TD>&nbsp;</TD>
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</TR>

<TR>
<TD  colspan="13" valign="top" align="left"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>

</TABLE>
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<BR clear="all">
<DIV align="center">
<TABLE style="font-size: 6pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 2pt">
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<!-- Begin Table Body -->
<TR valign="bottom">
    <TD nowrap valign="bottom">Signature of Stockholder</TD>
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<DIV style="width: 100%; border: 1px solid black; padding: 5px;">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
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<DIV style="width: 100%; border: 1px solid black; padding: 5px;">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
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<DIV style="width: 100%; border: 1px solid black; padding: 5px;">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
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<DIV style="width: 100%; border: 1px solid black; padding: 5px;">&nbsp;</DIV></TD>
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<TR valign="top">
    <TD valign="bottom"><FONT face="Wingdings" style="font-size: 14pt">&#110;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Note:</B></TD>
    <TD>&nbsp;</TD>
    <TD><DIV ALIGN="JUSTIFY">Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.</DIV></TD>
    <TD valign="bottom"><FONT face="Wingdings" style="font-size: 14pt">&#110;</FONT></TD>
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<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="Center" style="font-size: 12pt; margin-top:400pt">&nbsp;</div>

<DIV align="left" style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 6pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="80%"></TD>
    <TD width="16%"></TD>
</TR>

<TR valign="top">
    <TD valign="bottom"><FONT face="Wingdings" style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
      <TD valign="bottom"><FONT face="Webdings" style="font-size: 12pt">&#127;</font></TD>
    <TD>&nbsp;<FONT face="Wingdings" style="font-size: 14pt">&#110;</FONT></TD>

</TR>

</TABLE>
</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 76pt"><B>INTELLIGENT SYSTEMS CORPORATION</B>
</DIV>


<DIV align="Center" style="font-size: 12pt; margin-top: 6pt"><B>PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
</B>

</DIV>


<DIV align="justify" style="font-size: 12pt; margin-top: 6pt; margin-left: 2%; margin-right: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned, a shareholder of common stock, $.01 par value (the &#147;Common Stock&#148;) of Intelligent Systems Corporation, a Georgia corporation (the &#147;Company&#148;) hereby
appoints J. Leland Strange and Bonnie L. Herron, and each of them with full power of substitution, proxies to vote at the Annual Meeting of Stockholders of the Company to be held on May 29, 2008 at 4:00 p.m., local time,
 and at any adjournment or adjournments thereof, hereby revoking any proxies heretofore given, to vote all shares of Common Stock of the Company held or owned by the undersigned as of the record date, April 4, 2008 as directed on the reverse, and in their discretion, upon such other matters as may come before the meeting.
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 18pt"></DIV>
<DIV align="left" style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 6pt; background: transparent; color: #000000">
<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
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<TR valign="top">
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD align="center" style="font-size: 12pt"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(To be Signed on the Reverse Side)</b></TD>
    <TD align="center" valign="bottom" style="font size:9pt; border:1px solid #000000"><b>SEE REVERSE SIDE</b></TD>
    <TD>&nbsp;<FONT face="Wingdings" style="font-size: 14pt"></FONT></TD>

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<TR valign="top">
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    <TD>&nbsp;</TD>
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    <TD align="right" valign="bottom" style="font size:10pt">14475&nbsp;&nbsp;</TD>
    <TD>&nbsp;<FONT face="Wingdings" style="font-size: 14pt">&#110;</FONT></TD>

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