<SEC-DOCUMENT>0000950123-11-029225.txt : 20110325
<SEC-HEADER>0000950123-11-029225.hdr.sgml : 20110325
<ACCEPTANCE-DATETIME>20110325162140
ACCESSION NUMBER:		0000950123-11-029225
CONFORMED SUBMISSION TYPE:	PRE 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20110526
FILED AS OF DATE:		20110325
DATE AS OF CHANGE:		20110325

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INTELLIGENT SYSTEMS CORP
		CENTRAL INDEX KEY:			0000320340
		STANDARD INDUSTRIAL CLASSIFICATION:	BOLTS, NUTS, SCREWS, RIVETS & WASHERS [3452]
		IRS NUMBER:				581964787
		STATE OF INCORPORATION:			GA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		PRE 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09330
		FILM NUMBER:		11712717

	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>PRE 14A
<SEQUENCE>1
<FILENAME>c14662pre14a.htm
<DESCRIPTION>PRE 14A
<TEXT>
<HTML>
<HEAD>
<TITLE>pre14a</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#C14662toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 14pt; margin-top: 6pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>SCHEDULE 14A</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 12pt">Proxy Statement Pursuant to Section&nbsp;14(a) of the Securities<BR>
Exchange Act of 1934 (Amendment No.&nbsp;&nbsp;&#95;&#95;&#95;)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Filed by the Registrant <FONT face="wingdings" size="2">&#254;</FONT><BR>
Filed by a Party other than the Registrant <FONT face="wingdings" size="2">&#111;</FONT>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box:

</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" valign="top">
<FONT face="wingdings" size="2">&#254;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Preliminary Proxy Statement</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD><B>Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-</B><B>6(e)(2)</B><B>)</B></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Definitive Proxy Statement</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Definitive Additional Materials</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Soliciting Material Pursuant to &#167;240.14a-12</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 6pt">&nbsp;</DIV>

<DIV align="center">
INTELLIGENT SYSTEMS CORPORATION</DIV>
<DIV align="center" style="font-size: 10pt"><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
(Name of Registrant as Specified In Its Charter)</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">&nbsp;</DIV>

<DIV align="center">
</DIV>
<DIV align="center" style="font-size: 10pt"><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Payment of Filing Fee (Check the appropriate box):

</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" valign="top">
<FONT face="wingdings" size="2">&#254;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>No fee required.</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.</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="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(1)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Title of each class of securities to which transaction applies:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></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">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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>Aggregate number of securities to which transaction applies:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></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">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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">(3)</TD>
<TD width="1%">&nbsp;</TD>
<TD>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):</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></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">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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">(4)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Proposed maximum aggregate value of transaction:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></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">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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">(5)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Total fee paid:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></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">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Fee paid previously with preliminary materials.</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>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.</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="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(1)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Amount Previously Paid:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></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">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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>Form, Schedule or Registration Statement No.:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></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">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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">(3)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Filing Party:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></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">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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">(4)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Date Filed:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></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">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt">
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<!-- TOC -->
<A name="C14662toc"><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="#C14662000">NOTICE OF ANNUAL MEETING OF SHAREHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662001">PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 26, 2011</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662002">VOTING</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662003">PROPOSAL 1 &#151; THE ELECTION OF ONE DIRECTOR</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662004">PROPOSAL 2 &#151; INCREASE MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUANCE TO INDIVIDUAL PARTICIPANTS UNDER THE INTELLIGENT SYSTEMS CORPORATION 2003 STOCK INCENTIVE PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662005">PROPOSAL 3 &#151; APPROVAL OF THE INTELLIGENT SYSTEMS CORPORATION 2011 NON-EMPLOYEE DIRECTORS&#146; STOCK OPTION PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662006">CODE OF ETHICS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662007">SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662008">INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662009">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662010">SHAREHOLDERS&#146; PROPOSALS FOR ANNUAL MEETING IN 2012</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662011">OTHER MATTERS WHICH MAY COME BEFORE THE MEETING</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662012">ADDITIONAL INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#C14662013">IMPORTANT NOTICE CONCERNING THE AVAILABLITY OF PROXY MATERIALS</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C14662toc">Table of Contents</A></H5><P>





<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><IMG src="c14662c1466200.gif" alt="(INTELLIGENT SYSTEMS LOGO)"><BR>
<B>4355 Shackleford Road<BR>
Norcross, Georgia 30093</B>
</DIV>

<!-- link1 "NOTICE OF ANNUAL MEETING OF SHAREHOLDERS" -->
<DIV align="left"><A NAME="C14662000"></A></DIV>

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>YOU ARE INVITED TO </B>attend the Annual Meeting of Shareholders of Intelligent Systems Corporation on
Thursday, May&nbsp;26, 2011 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: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The election of one director to the Board of Directors to serve until the 2014
Annual Meeting;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">A proposal to increase the maximum number of shares available for issuance to
individual participants under the Intelligent Systems Corporation 2003 Stock Incentive
Plan;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">A proposal to approve the Intelligent Systems Corporation 2011 Non-Employee
Directors&#146; Stock Option Plan; and</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Other matters that may properly come before the meeting or any adjournment
thereof.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Only shareholders of record at the close of business on Friday, April&nbsp;8, 2011 will receive notice
of and be entitled to vote at the meeting or any adjournment thereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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 2010 Annual Report to Shareholders is enclosed in the
same document as the Proxy Statement.
</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="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&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">By order of the Board of Directors,</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- 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>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><IMG src="c14662c1466201.gif" alt="-s- Bonnie L. Herron"></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">Bonnie L. Herron</FONT></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Secretary</I></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><I>April __, 2011</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><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">&nbsp;

<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="#C14662toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">


<!-- link1 "PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 26, 2011" -->
<DIV align="left"><A NAME="C14662001"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PROXY STATEMENT<BR>
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 26, 2011</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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 2011 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;26, 2011 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;15, 2011.
</DIV>
<!-- link1 "VOTING" -->
<DIV align="left"><A NAME="C14662002"></A></DIV>

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


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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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 April
8, 2011. On that date, we had outstanding and entitled to vote 8,958,025 shares of common stock
with each share entitled to one vote.
</DIV>

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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 your shares are
held by a broker, bank, custodian, nominee or other record holder of our common stock and you fail
to instruct such record holder how to vote your shares with respect to the director election, your
shares will not be counted as present in determining whether we have a quorum.
</DIV>

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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 each proposal to be voted upon on
the accompanying proxy card. <B>If no specific instructions are given with regard to a proposal to be
voted upon, then the shares represented by a signed proxy card will be voted &#147;FOR&#148; such proposal.</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="justify" style="font-size: 10pt; margin-top: 10pt">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="justify" style="font-size: 10pt; margin-top: 10pt">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: 10pt">
<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="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">giving written notice to the Secretary of the company at 4355 Shackleford Road, Norcross,
Georgia 30093, for shareholders of record, or</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">executing and delivering to the Secretary a later dated proxy, or</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">voting in person at the Annual Meeting.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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">&nbsp;

<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="#C14662toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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>

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


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

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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;28, 2011, 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="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Address</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Beneficially Owned</B>&nbsp;<SUP style="font-size: 85%; vertical-align: text-top">a,e </SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>of Class</B><SUP style="font-size: 85%; vertical-align: text-top"> a</SUP></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">J. Leland Strange <SUP style="font-size: 85%; vertical-align: text-top">b</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">4355 Shackleford Road<br></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,042,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">22.69</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Chairman of the Board, President, CEO</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Norcross, GA 30093</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"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&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:15px; text-indent:-15px">Wallace R. Weitz &#038; Company <SUP style="font-size: 85%; vertical-align: text-top">c</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1125 South 103rd St., Suite 600<br></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,270,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">25.34</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Omaha, NE 68124</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"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&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="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clifford N. Burnstein <SUP style="font-size: 85%; vertical-align: text-top">d</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">729 7<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Avenue</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">835,445</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9.33</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">New York, NY 10019</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"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&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">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James V. Napier, <I>Director</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&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="left" valign="top">&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="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John B. Peatman, <I>Director</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&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="left" valign="top">&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">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Parker H. Petit, <I>Director</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&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="left" valign="top">&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="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Francis A. Marks, <I>Vice President</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.16</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&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">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bonnie L. Herron<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,825</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.41</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Vice President, Chief Financial Officer
and Corporate Secretary</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&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"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&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="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All Directors and Executive Officers
as a Group (7 persons)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,679,239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">29.35</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">a.</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Except as otherwise noted, beneficial ownership is determined on the basis of 8,958,028
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 of
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.</DIV></TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">b.</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Includes 293,906 shares owned by Jane H. Strange, Mr.&nbsp;Strange&#146;s wife. Mr.&nbsp;Strange disclaims
any beneficial interest in the shares.</DIV></TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">c.</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Based on information set forth in a Schedule&nbsp;13G filed on January&nbsp;28, 2011, 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 2,270,000 shares of common stock, of
which Wallace R. Weitz and Company has the sole power to vote and to dispose.</DIV></TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">d.</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Based on information set forth in a Schedule&nbsp;13D filed on August&nbsp;3, 2009, in which Clifford
N. Burnstein, an individual, reported beneficial ownership of 835,445 shares of common stock,
of which Clifford N. Burnstein has the sole power to vote and to dispose.</DIV></TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">e.</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Includes 170,000 shares reserved for issuance to officers and directors pursuant to stock
options that were exercisable at February&nbsp;28, 2011 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 30,000 shares each
for shares underlying stock options exercisable at February&nbsp;28, 2011 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;28,
2011 or within sixty days of such date.</DIV></TD>
</TR>

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

<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="#C14662toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">




<!-- link1 "PROPOSAL 1 &#151; THE ELECTION OF ONE DIRECTOR" -->
<DIV align="left"><A NAME="C14662003"></A></DIV>

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


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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">At the Annual Meeting of Shareholders, shareholders will elect one director to the Board to serve a
three-year term until the 2014 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 directors up to the maximum
number of directors to be chosen at the meeting. 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="justify" style="font-size: 10pt; margin-top: 10pt">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 as substitute nominee, but in no event will the
proxy be voted for more than one nominee. The Board has no reason to believe that the nominee will
not serve if elected.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The Board has nominated the person named in the following table to serve as 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;28,
2011.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE &#147;FOR&#148; PROPOSAL 1 TO ELECT ONE NOMINEE
LISTED BELOW AS A DIRECTOR OF THE COMPANY.</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="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" 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="6"><B>Shares of Common Stock</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" 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="6"><B>Beneficially Owned</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Position / Principal Occupation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>(Percent of Class)</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="5" align="left"><B><I>Nominee for election to serve until the 2014 Annual Meeting</I></B></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"><!-- 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>&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: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">71</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director,  CEO of MiMedx Group</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <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">and President of The Petit Group</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"><!-- 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>&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="background: #cceeff">
    <TD colspan="5" align="left"><B><I>Incumbent director elected to serve until the 2013 Annual Meeting</I></B></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"><!-- 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>&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: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">76</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, Retired Professor of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <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">Electrical Engineering at</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: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">Georgia Institute of</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: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">Technology</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"><!-- 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>&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="background: #cceeff">
    <TD colspan="5" align="left"><B><I>Incumbent directors elected to serve until the 2012 Annual Meeting</I></B></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"><!-- 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>&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:15px; text-indent:-15px">James V. Napier <SUP style="font-size: 85%; vertical-align: text-top">1 &#038; 2</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">74</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, Retired,  former</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <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">Chairman of the Board of</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: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">Scientific Atlanta</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"><!-- 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>&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><DIV style="margin-left:15px; text-indent:-15px">J. Leland Strange</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">69</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, Chairman of the</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2,042,800</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">22.69</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <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">Board, President and Chief</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="background: #cceeff">
    <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">Executive Officer</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>
<!-- End Table Body --></TABLE>
</DIV>



<DIV style="margin-top: 10pt">
<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">*</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Less than one percent; share amount includes 30,000 shares pursuant to stock options
exercisable at February&nbsp;28, 2011 or within sixty days of such date.</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Audit Committee</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Compensation Committee</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Includes 293,906 shares owned by Jane H. Strange, Mr.&nbsp;Strange&#146;s wife. Mr.&nbsp;Strange
disclaims any beneficial interest in the shares. Also includes 45,000 options that were
exercisable at February&nbsp;28, 2011 or within 60&nbsp;days of such date.</DIV></TD>
</TR>

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

<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="#C14662toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

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


</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><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 his retirement in November&nbsp;2000. He serves as a director of
Vulcan Materials Company and Wabtec Corporation. Within the past five years, Mr.&nbsp;Napier has also
served as a director of McKesson Corporation, Engelhard Corporation and Personnel Group of America,
Inc. The Board considered Mr.&nbsp;Napier&#146;s extensive experience as an executive and member of the
board of directors of a wide variety of publicly traded companies, his experience as chair of the
audit committees of other public companies, and his familiarity with the company since 1982 in
determining that he should serve as a director of the company. The Board has determined that Mr.
Napier is an independent director under the applicable rules of the NYSE Amex.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><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 from 1964 until his retirement in 2009. The Board
considered Dr.&nbsp;Peatman&#146;s technology experience and familiarity with the company since 1979 in
determining that he should serve as a director of the company. The Board has determined that Dr.
Peatman is an independent director under the applicable rules of the NYSE Amex.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><I>Mr.&nbsp;Petit </I>has served as a director since 1996. Mr.&nbsp;Petit is the Chairman, President and CEO of
MiMedx Group, an integrated developer, manufacturer and marketer of bio-material based products.
Mr.&nbsp;Petit is also the President of The Petit Group, a private investment company. Mr.&nbsp;Petit served
as Chairman of the Board and Chief Executive Officer of Matria Healthcare, Inc., a comprehensive
disease management services company from 1996 to 2008. He also served as a director of Logility,
Inc. within the past five years. The Board considered Mr.&nbsp;Petit&#146;s extensive experience as a
successful entrepreneur and as an executive and member of the board of directors of several
publicly traded technology and healthcare companies, as well as his familiarity with the company
since 1996 in determining that he should serve as a director of the company. The Board has
determined that Mr.&nbsp;Petit is an independent director under the applicable rules of the NYSE Amex.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><I>Mr.&nbsp;Strange </I>has served as our President since 1983 and our Chief Executive Officer and Chairman of
the Board since 1985. The Board considered Mr.&nbsp;Strange&#146;s many years of experience as the company&#146;s
CEO, his familiarity with the industries and customers which our operating companies serve, and his
past experience on several boards of directors and audit and compensation committees of other
publicly traded companies in determining that he should serve as a director of the company.
</DIV>

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

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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 ten 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>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Three of the four directors and all of the members of the Audit Committee are independent, as such
term is defined in the listing standards of the NYSE Amex and the rules of the SEC. The Audit
Committee meets the composition requirements of NYSE Amex&#146;s listing standards for Small Business
Issuers (as defined by the rules of NYSE Amex).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Board Leadership Structure and Role in Risk Oversight</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The Chief Executive Officer serves as Chairman of the Board of Directors of the company. Given the
small size and limited geographic and industry scope of the company&#146;s operations, the company
believes that the leadership structure of the board, consisting of four directors of which three
are independent, is appropriate. There is no lead independent director because there has been no
need for such a role based on the continuity resulting from the long tenure of the members of the
directors and the small size of the board. Given the character, size and limited scope of the
company&#146;s operations and the stability and long tenure of its workforce and management team, there
is limited exposure to external risks other than general business, product and market risks. The
company has limited, if any, exposure related to financial instruments, environmental issues, off
balance sheet entities and such external risks. The Audit Committee, consisting of three
independent directors, provides risk oversight as part of the company&#146;s internal controls process
and regularly reviews reports from management, external auditors and consultants on risk analysis
and tests of the design and effectiveness of the company&#146;s internal controls. The Board considered
and has determined that risks arising from its compensation
policies and practices are not reasonably likely to have a material adverse effect on the company.
This determination was based on the limited nature of the company&#146;s compensation program.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

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

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always"><A HREF="#C14662toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The Board met four times during the year ended December&nbsp;31, 2010 and acted by unanimous consent on
one occasion. The Board has established an audit committee, a compensation committee, and a plan
committee, but has no nominating committee. The Audit Committee of the Board met four times during
2010. During 2010, the Audit Committee consisted of Messrs.&nbsp;Peatman, Petit, and Napier (chair).
In 2010, the Audit Committee appointed the company&#146;s independent auditor, met with the independent
auditor to review its report on the 2009 audit and the 2010 quarterly reviews, and carried out a
number of other responsibilities, as outlined in the Audit Committee Charter.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">All members of the Audit Committee currently meet the applicable independence and qualifications
standards of the NYSE Amex. The Board has determined that Mr.&nbsp;Petit and Mr.&nbsp;Napier are financial
experts as defined by the rules of the SEC, and are financially sophisticated as defined in the
listing standards of NYSE Amex. The Board 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 publicly-traded
companies. 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 the chairman of publicly
traded companies.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The Board has a Compensation Committee consisting of the three independent directors, Messrs.
Napier, Petit and Peatman. The Compensation Committee met once in 2010 to review and approve
management compensation. 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="justify" style="font-size: 10pt; margin-top: 10pt">The Plan Committee, which did not meet in 2010, 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="justify" style="font-size: 10pt; margin-top: 10pt">In 2010, the directors attended all of the meetings of the Board of Directors and Committees of the
Board on which they serve, except that Mr.&nbsp;Petit missed one meeting of the Board and Audit
Committee.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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>

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The following information is provided about our non-director executive officers as of March&nbsp;31,
2011.
</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="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Position / Principal Occupation</B></TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<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>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">J. William Goodhew, III</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">73</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bonnie L. Herron</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">63</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, Chief Financial Officer and Secretary</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Francis A. Marks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">77</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><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="justify" style="font-size: 10pt; margin-top: 10pt"><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>
<P align="center" style="font-size: 10pt">&nbsp;

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C14662toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

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

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><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="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" 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="2">Other Annual</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" 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="2">Salary</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Bonus</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Total</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name and Principal Position</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Year</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">$</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<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">2010</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">3,675</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">278,675</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">President &#038; Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">258,077</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">1,428</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">259,505</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&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:15px; text-indent:-15px">Francis A. Marks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,500</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">199,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Vice President</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">136,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,971</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">170,125</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&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><DIV style="margin-left:15px; text-indent:-15px">Bonnie L. Herron</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</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">20,000</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">177,325</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Vice President, Chief Financial Officer &#038; Secretary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">145,461</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">805</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">146,266</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>



<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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 2010, Ms.
Herron was awarded a bonus of $20,000 in recognition of her contribution to the company in a number
of areas at the corporate and subsidiary levels. In 2010, Mr.&nbsp;Marks participated in a bonus plan
at our ChemFree subsidiary for which he serves as its president. Based on the subsidiary&#146;s
achievement of revenue, earnings and new revenue program goals for 2010, Mr.&nbsp;Marks was awarded a
bonus of $49,500, which was paid in the first quarter of 2011. During the two years ended December
31, 2010, the company did not make any stock awards or option awards to executives and did not
reprice any previously issued stock options. All Other Annual 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>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Outstanding Equity Awards at Fiscal Year End</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="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center" colspan="9" style="border-bottom: 1px solid #000000"><B><I>Option Awards</I></B></TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Number of Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Number of Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Underlying Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Underlying Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Options (#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Options (#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Exercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Unexercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Option Exercise Price</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Option Expiration Date</TD>
</TR>


<TR>
<TD>&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">J. Leland Strange</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">45,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">- 0 -</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1.51</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">03/04/2013</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Francis A. Marks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">- 0 -</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">- 0 -</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">NA</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">NA</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bonnie L. Herron</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">35,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">- 0 -</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1.51</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">03/04/2013</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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, 2010. The company does not have any Stock Award Plans.
</DIV>

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

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C14662toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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="justify" style="font-size: 10pt; margin-top: 10pt">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>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Securities Authorized for Issuance Under Equity Compensation Plans</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The following table gives information as of December&nbsp;31, 2010 about the company&#146;s common stock that
may be issued under the Non-Employee Directors&#146; Stock Option Plan (which expired in 2010) and the
2003 Stock Incentive Plan, which is proposed to be amended (see Proposal 2 below).
</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="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" 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 nowrap align="center" colspan="2">(c) Number of securities</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" 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 nowrap align="center" colspan="2">remaining available for future</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(a) Number of securities to be</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(b) Weighted-average</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">issuance under equity</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">issued upon exercise of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">exercise price of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">compensation plans</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">outstanding options, warrants</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">outstanding options,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(excluding securities</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Plan category</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">and rights</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">warrants and rights</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">reflected in column (a))</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation
plans approved by
security
holders<SUP style="font-size: 85%; vertical-align: text-top">1</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">370,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation
plans not approved by
security
holders<SUP style="font-size: 85%; vertical-align: text-top">2</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">370,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">1.</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Information pertains to the 2003 Stock Incentive Plan.</DIV></TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">2.</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Information pertains to the Non-Employee Directors&#146; Stock Option Plan adopted in 2000.</DIV></TD>
</TR>

</TABLE>


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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The table below sets forth all compensation paid to non-executive directors in the year ended
December&nbsp;31, 2010. The company does not have a stock award plan or non-equity incentive plan for
directors. The company has a Non-Employee Directors&#146; Stock Option Plan which has expired and is
proposed to be replaced by a 2011 Non-Employee Directors&#146; Stock Option Plan. See Proposal 2 below.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><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="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Fees Earned or</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">All Other</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Paid in Cash</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Option Awards<SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Total</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">$</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<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">1,760</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">17,760</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <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">1,760</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">17,760</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Parker H. Petit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,760</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">15,760</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">1.</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">In 2010, 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 Directors&#146; Stock Option Plan. The amount
reported is the aggregate grant date fair value computed in accordance with FASB ASC Topic
718. At December&nbsp;31, 2010, each non-executive director has an aggregate of 36,000 stock
options outstanding, of which 30,000 are fully vested and exercisable.</DIV></TD>
</TR>

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

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

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<H5 align="left" style="page-break-before:always"><A HREF="#C14662toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">





<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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 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 2010.
At December&nbsp;31, 2010 and 2009, we have accrued $150,000 for future payments under the Outside
Directors&#146; Retirement Plan. Effective March&nbsp;1, 2011, the company terminated the Outside
Directors&#146; Retirement Plan and provided that the current outside directors would receive the
retirement benefits to which they were entitled under the plan before it was terminated. Effective
August&nbsp;22, 2000, the company adopted a Non-Employee Directors&#146; Stock Option Plan which provided 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 were granted
at fair market value on the date of grant. In 2010, each director received a grant of 4,000
options on May&nbsp;27, 2010, the date of the Annual Meeting of Shareholders. The Non-Employee
Directors&#146; Stock Option Plan has expired. The Board of Directors has adopted, subject to
shareholder approval, a new plan, the terms of which are identical in all material respects to the
old plan. See &#147;Proposal 3 &#151; Approval of the Intelligent Systems Corporation 2011 Non-Employee
Directors&#146; Stock Option Plan&#148; below.
</DIV>

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">In March&nbsp;2004, the Board of Directors amended the company&#146;s Audit Committee Charter. The Audit
Committee Charter, which is reviewed annually, includes organization and membership requirements, a
statement of policy and the Committee&#146;s authority and responsibilities.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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 2010
and through March&nbsp;15, 2011, among its other activities, the Audit Committee:
</DIV>

<DIV style="margin-top: 10pt">
<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="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">engaged the independent auditors and established their compensation;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">reviewed and discussed with management and the independent auditors the audited financial
statements of the company as of December&nbsp;31, 2009 and 2010 and for the years then ended;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">discussed with the independent auditors their reviews of the quarterly unaudited financial
statements of the company for fiscal 2010;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">discussed with the independent auditors the matters required to be discussed by PCAOB
standards (SAS No.&#146;s 61, 89 and 90); and</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">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.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Based upon the reviews and discussions summarized above, the Audit Committee recommended to the
Board (and the Board has approved) that the audited financial statements be included in the Annual
Report on Form 10-K for the year ended December&nbsp;31, 2010 for filing with the Securities and
Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 50%"><u>AUDIT COMMITTEE</u><BR>
James V. Napier (Chair)<BR>
Parker H. Petit<BR>
John B. Peatman

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

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

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The Board has not appointed a standing nominating committee or adopted a formal nominating
committee charter because the Board 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 NYSE 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="justify" style="font-size: 10pt; margin-top: 10pt">The Board 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 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. The company does not have a specific policy with respect to
diversity in identifying nominees 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, background and experience 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 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 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 2012 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 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>

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Security holders wishing to communicate with members of the Board 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 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 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 2010 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 "PROPOSAL 2 &#151; INCREASE MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUANCE TO INDIVIDUAL PARTICIPANTS UNDER THE INTELLIGENT SYSTEMS CORPORATION 2003 STOCK INCENTIVE PLAN" -->
<DIV align="left"><A NAME="C14662004"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PROPOSAL 2 &#151; INCREASE MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUANCE TO INDIVIDUAL<BR>
PARTICIPANTS UNDER THE INTELLIGENT SYSTEMS CORPORATION 2003 STOCK INCENTIVE PLAN</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">In March&nbsp;2003, the Board adopted the Intelligent Systems Corporation 2003 Stock Incentive Plan (the
&#147;2003 Incentive Plan&#148;). As originally adopted, the 2003 Incentive Plan provided that the maximum
number of shares of common stock issuable to any one participant under the 2003 Incentive Plan
could not exceed 15% of the number of shares reserved for issuance thereunder. Originally, 450,000
shares were so reserved, so issuances to any one participant are limited to a total of 67,500
shares. During the first eight years of the term of the 2003 Incentive Plan, options covering the
maximum number of shares per individual were granted to each of J. Leland Strange, Chairman of the
Board, President, and Chief Executive Officer, and Bonnie L. Herron, Vice President, Chief
Financial Officer, and Secretary. Of these options, 80,000 were issued in 2003 and 55,000 on March
1, 2011. See &#147;Executive Officers &#151; <I>Outstanding Equity Awards at Fiscal Year End</I>&#148; above for
information regarding the 2003 grants. The grants in March&nbsp;2011 consisted of options covering
22,500 shares to Mr.&nbsp;Strange and 32,500 shares to Ms.&nbsp;Herron exercisable at $1.72 per share with a
ten-year term. The Compensation Committee (the &#147;Committee&#148;) believes that the ability to issue
additional options from time to time to members of senior management constitutes an important part
of the company&#146;s compensation arrangement. Accordingly, on March&nbsp;1, 2011, the Committee approved
an amendment to the 2003 Incentive Plan to increase the maximum number of shares issuable
thereunder to any one participant during the term of the 2003 Incentive Plan from 15% (67,500
shares) to 25% (112,500) and directed that such amendment be submitted to shareholders for
approval.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

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

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The rules of NYSE Amex require that this proposal be approved by the holders of a majority of the
vote cast on this proposal. Because a vote to abstain would be a vote cast, an abstention would
have the same effect as a vote AGAINST. However, because a broker non-vote does not result in a
vote cast, a broker non-vote would 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 FOR approval of this proposal.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Summary of the Plan</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The following summary of the material provisions of the 2003 Incentive Plan is qualified, in its
entirely, by reference to the full text of the plan (which is attached as Exhibit&nbsp;10.2 to the
company&#146;s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March&nbsp;30,
2004) and the text of the First Amendment to the plan, which is attached hereto as Appendix&nbsp;A.
</DIV>

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Awards granted under the 2003 Incentive Plan may be in the form of incentive stock options,
nonqualified stock options, restricted stock awards, stock appreciation rights, and other
stock-based awards.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Eligibility</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">All employees of the company, its subsidiaries, and affiliates, as well as non-employee directors
and key consultants and advisors of the company or its subsidiaries or affiliates are eligible to
be granted awards under the 2003 Incentive Plan. The Committee selects the persons to receive
awards under the 2003 Incentive Plan. Approximately 234 employees and three non-employee directors
are eligible to participate in the 2003 Incentive Plan. To date, grants have only been made to
members of senior management and corporate-level employees. The company cannot presently determine
the number of key consultants, advisors, or non-employee directors that may be eligible to
participate in the future.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Administration</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The Committee administers the 2003 Incentive Plan. The Committee determines the amount, type, and
terms of any awards granted under the 2003 Incentive Plan, within limitations specified therein,
which will be set forth in an award agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Shares Reserved</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Up to 450,000 shares of common stock are authorized for issuance under the 2003 Incentive Plan,
subject to adjustments for stock splits, dividends, and other dilution events. At present, options
covering 160,000 shares are outstanding. Shares of common stock underlying options, stock
appreciation rights, or other stock-based awards that have expired or have been cashed out,
exercised, or terminated without any payment being made in the form of common stock will be
available for reissuance under the 2003 Incentive Plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Stock-Based Awards</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The 2003 Incentive Plan permits the company to grant incentive stock options, which qualify for
special tax treatment, and nonqualified stock options, as well as restricted stock awards, stock
appreciation rights, and other stock-based awards. Stock appreciation rights may be granted either
singly or in combination with underlying stock options. The exercise price for incentive stock
options cannot be less than the fair market value of a share of common stock on the date of grant,
as determined under the 2003 Incentive Plan. Further, an incentive stock option must comply with
all of the other requirements of the Internal Revenue Code and the 2003 Incentive Plan with respect
to incentive stock options.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Restricted Stock</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Under the 2003 Incentive Plan, the company may award shares of restricted common stock. Each award
agreement will set forth conditions that must be satisfied before the restricted stock vests and
becomes transferable. For example, restricted stock awards may be forfeited to the extent that the
award did not vest before the recipient&#146;s employment terminated. Except as specified in the
2003 Incentive Plan and at the time of grant, holders of restricted stock will have voting rights
and the right to receive dividends on such stock.
</DIV>
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</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Effect of Change in Control</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The 2003 Incentive Plan provides that in certain circumstances, a &#147;change in control&#148; (as defined
in the 2003 Incentive Plan) may be deemed to occur. In the event of a change in control, all stock
options and stock appreciation rights will become immediately exercisable, the restrictions
applicable to outstanding restricted stock and other stock-based awards will immediately lapse, and
(unless otherwise determined by the Committee at or after the grant of the award) the value of
outstanding stock options, stock appreciation rights, restricted stock, and other stock-based
awards will be cashed out on the basis of the maximum price paid for any shares of stock acquired
as part of the change in control.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Amendment and Termination</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The 2003 Incentive Plan may be terminated by the Board at any time, and it may be amended by the
Committee or the Board, in each case without shareholder approval, unless shareholder approval
would be required under applicable law or stock exchange rules to effect such amendment. Except as
set forth in an award agreement, no termination or amendment of the 2003 Incentive Plan may
materially and adversely affect any outstanding awards without the recipient&#146;s consent.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Non-Transferability of Awards</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Except as permitted by an award agreement, awards shall not be transferable or assignable other
than by will or the laws of descent and distribution, and shall be exercisable during the lifetime
of the recipient only by him or her.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Federal Income Tax Consequences</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The following is a brief summary of the U.S. Federal income tax consequences generally associated
with awards under the 2003 Incentive Plan. The following summary is for general information only,
and interested parties should consult their own advisors as to specific tax consequences applicable
to them, including the application and effect of foreign, state and local tax laws. This summary
does not address the tax consequences of the receipt or exercise of any award by a person who is
not an employee of the company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Nonqualified Stock Options</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Nonqualified stock options granted under the 2003 Incentive Plan will not be taxable to an employee
on the date of grant but generally will result in taxation when exercised. At that time, the
employee will recognize ordinary income in an amount equal to the excess of the fair market value
of the stock acquired upon exercise over the option price paid for the stock. The company will be
entitled to a corresponding deduction when the employee must recognize the income and in the amount
of the income recognized.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Incentive Stock Options</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">An employee will not recognize income upon the grant of an incentive stock option. An employee
also generally will not recognize income upon exercise of an incentive stock option provided that
he had been an employee of the company or its subsidiaries at all times from the date of grant of
the incentive stock option until three months before exercise of the incentive stock option (or one
year, in the case of an exercise after becoming disabled). The amount by which the fair market
value of the stock at exercise exceeds the exercise price, however, is an adjustment in computing
the employee&#146;s alternative minimum tax in the year of exercise. If the employee holds the shares
of common stock acquired upon exercise of an incentive stock option at least until the first
anniversary of the date of exercise or, if later, the second anniversary of the date of grant of
the incentive stock option, upon disposition of the shares the employee will have long-term capital
gain equal to the excess of the amount realized upon the disposition over the amount paid for the
shares. If the employee holds the shares for this period, the company will not be entitled to a
deduction with respect to the incentive stock option.
</DIV>
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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">If an employee disposes of shares acquired upon exercise of an incentive stock option before the
expiration of the holding period described above, the employee is considered to have engaged in a
&#147;disqualifying disposition,&#148; as a consequence of which the employee will generally recognize
ordinary income in the year of the disqualifying disposition equal to the excess, if any, of the
lesser of the amount realized upon disposition of the shares and the fair market value of the
shares on the date of exercise over the exercise price paid for the shares. If the amount realized
upon disposition is greater than the fair market value of the shares on the date of exercise, the
difference will be taxable to the employee as capital gain. The company will be entitled to a
deduction in the year of the disqualifying disposition in an amount equal to the amount of ordinary
income recognized as a result of the disqualifying disposition.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Stock Appreciation Rights</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The grant of a stock appreciation right does not result in taxable income to an employee. Instead,
upon exercise, the employee recognizes ordinary income equal to the amount of cash or the fair
market value of any shares of common stock the employee receives. The company will be entitled to
a corresponding deduction.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Restricted Stock</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The recognition of income for federal tax purposes relating to an award of restricted stock depends
on the restrictions imposed on the shares. Generally, taxation occurs in the first taxable year in
which the shares cease to be subject to a substantial risk of forfeiture. When the restrictions
lapse, the employee will recognize taxable income equal to the excess of the fair market value of
the stock at that time over the amount, if any, paid for the stock. The employee may, however,
make an election to include in income when the shares are first transferred to him an amount equal
to the excess of the fair market value of the stock at that time over the amount, if any, paid for
the stock. The company is generally entitled to a deduction corresponding to the employee&#146;s income
inclusion.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Other Stock-Based Awards</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Any cash payments or the fair market value of any common stock or other property an employee
receives in connection with other stock-based awards will be taxable as ordinary income to the
employee in the year received. The company will generally be entitled to a corresponding
deduction.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; APPROVAL OF THE AMENDMENT TO INCREASE THE MAXIMUM
NUMBER OF SHARES AVAILABLE FOR ISSUANCE TO INDIVIDUAL PARTICIPANTS UNDER THE 2003 STOCK INCENTIVE
PLAN.</B>
</DIV>
<!-- link1 "PROPOSAL 3 &#151; APPROVAL OF THE INTELLIGENT SYSTEMS CORPORATION 2011 NON-EMPLOYEE DIRECTORS&#146; STOCK OPTION PLAN" -->
<DIV align="left"><A NAME="C14662005"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PROPOSAL 3 &#151; APPROVAL OF THE INTELLIGENT SYSTEMS CORPORATION<BR>
2011 NON-EMPLOYEE DIRECTORS&#146; STOCK OPTION PLAN</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>2011 Directors&#146; Plan and Vote Required</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">In August&nbsp;2010, the company&#146;s Non-Employee Directors&#146; Stock Option Plan, which had a ten-year term,
expired. The Board believes that it is in the best interest of the company and its shareholders to
provide those directors who are not employees of the company with additional incentives to promote
the success of the company, to increase their proprietary interest in the company, and to encourage
them to remain on the Board. Accordingly, the Board has adopted the 2011 Non-Employee Directors&#146;
Stock Option Plan (the &#147;2011 Directors&#146; Plan&#148;) and directed that it be submitted to the
shareholders for approval. The rules of NYSE Amex require that this proposal be approved by the
holders of a majority of the votes cast on this proposal. Because a vote to abstain on this
proposal would be a vote cast, an abstention would have the same effect as a vote AGAINST the
proposal. However, because a broker non-vote does not result in a vote cast, a broker non-vote
would have no effect on the outcome of the vote.
</DIV>
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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Summary of the Plan</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The following summary of the 2011 Directors&#146; Plan is qualified in its entirety by reference to the
text of the plan which is attached as Appendix&nbsp;B to this proxy statement. The terms of the 2011
Directors&#146; Plan are identical in all material respects to the expired plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Participants and Awards</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The participants in the plan will be those directors who are not employees of the company or any of
its subsidiaries. At present, J. Leland Strange is the only director employed by the company.
Each non-employee director initially elected to the Board after the date of adoption of the 2011
Directors&#146; Plan will receive an option to purchase 5,000 shares of common stock. Directors in
office at the time of adoption of the 2011 Directors&#146; Plan will not receive this award. In
addition, annually each non-employee director in office immediately following the annual meeting of
shareholders will receive an option to purchase 4,000 shares of common stock. No other options may
be granted under the 2011 Directors&#146; Plan. The number of shares subject to options granted under
the 2011 Directors&#146; Plan will be adjusted proportionately to reflect any stock split, stock
dividend, or share combination of the common stock or any recapitalization of the company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Options</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The exercise price of options granted under the 2011 Directors&#146; Plan will equal the fair market
value on the date of grant of the shares subject to the option. Fair market value means the
closing sales price of the common stock on the principal exchange on which the shares are then
traded or, in the absence thereof, the mean of the last reported bid and asked quotations.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The options will become exercisable with respect to one half of the shares covered thereby on the
first anniversary of the date of grant and one half on the second anniversary. If a non-employee
director becomes an employee or ceases to be a director, all options not then exercisable shall
terminate; however, all options then exercisable shall remain so for the remainder of their term.
Upon a change in control of the company (as defined in the 2011 Directors&#146; Plan), all options not
yet exercisable shall accelerate and become immediately exercisable.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The term of each option shall be established by the Board at the time of grant, but shall not
exceed ten years.<BR>
An option is not transferable except by will or the laws of descent and distribution; however, an
option held by a director who becomes permanently disabled may be exercised by the director&#146;s
personal representative to the extent exercisable at the time of disability.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Exercise of Options</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Payment in full for the shares being acquired upon exercise of an option must be made at the time
of exercise. In lieu of cash, a director may pay the exercise price by cancelling options that
represent a value equal to the exercise price of the options being exercised.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Maximum Number of Shares</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">No more than 200,000 shares of common stock may be issued pursuant to the 2011 Directors&#146; Plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Amendment</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The 2011 Directors&#146; Plan may be amended by the Board; provided, however, that any material
amendment must be approved by the shareholders prior to becoming effective.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Term</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The 2011 Directors&#146; Plan will become effective upon approval of the shareholders and, unless
terminated earlier by the Board, will expire ten years thereafter.
</DIV>
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</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Federal Income Tax Consequences</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">All options granted under the 2011 Directors&#146; Plan will be nonqualified options. Under present
Federal tax laws, there will be no Federal income tax consequences to either the company or the
director upon the grant of an option under the 2011 Directors&#146; Plan. The director will realize
ordinary income upon the exercise of the option in an amount equal to the excess of the fair market
value at the time of exercise of the common stock acquired over the option price, and the company
will receive a corresponding deduction. The gain or loss, if any, realized by the director upon a
subsequent disposition of such common stock will constitute short- or long-term capital gain or
loss, depending on the director&#146;s holding period.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; APPROVAL OF THE 2011 NON-EMPLOYEE DIRECTORS&#146; STOCK
OPTION PLAN.</B>
</DIV>
<!-- link1 "CODE OF ETHICS" -->
<DIV align="left"><A NAME="C14662006"></A></DIV>

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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="C14662007"></A></DIV>

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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, 2010, 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.
</DIV>
<!-- link1 "INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS" -->
<DIV align="left"><A NAME="C14662008"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Habif, Arogeti, &#038; Wynne, LLP (&#147;HAW&#148;) acted as our independent registered public accounting firm for
the fiscal years ended December&nbsp;31, 2009 and 2010. We expect that representatives of HAW 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 year-end audit for the fiscal year 2011 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 HAW for services during 2009 and 2010:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><B>Audit Fees </B>&#151; We were billed aggregate fees of $132,920 and $143,000 for review and audit
services by HAW in the year ended December&nbsp;31, 2009 and 2010, respectively.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><B>Audit-Related Fees </B>&#151; 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, 2009, we were billed
$29,000 for such services. We did not incur fees for any such services in 2010.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><B>Fees for Tax Services </B>&#151; We did not incur any fees for tax services by our independent auditors
during the two years ended December&nbsp;31, 2010.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><B>All Other Fees </B>&#151; We did not incur any fees for other services by our independent auditors
during the two years ended December&nbsp;31, 2010.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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, 2010.
</DIV>
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</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">
<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" -->
<DIV align="left"><A NAME="C14662009"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">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 ended December&nbsp;31, 2009 and 2010, we paid $465,000 in rent to ISC Properties, LLC, which
is considered market rate.
</DIV>
<!-- link1 "SHAREHOLDERS&#146; PROPOSALS FOR ANNUAL MEETING IN 2012" -->
<DIV align="left"><A NAME="C14662010"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>SHAREHOLDERS&#146; PROPOSALS FOR ANNUAL MEETING IN 2012</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Shareholders who wish to submit a proposal for inclusion in our proxy statement for the 2012 Annual
Meeting of Shareholders must submit such proposals so that they are received by the company no
later than December&nbsp;17, 2011. 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 2012 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;17, 2011. 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;17, 2011.
</DIV>
<!-- link1 "OTHER MATTERS WHICH MAY COME BEFORE THE MEETING" -->
<DIV align="left"><A NAME="C14662011"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>OTHER MATTERS WHICH MAY COME BEFORE THE MEETING</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The Board 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>
<!-- link1 "ADDITIONAL INFORMATION" -->
<DIV align="left"><A NAME="C14662012"></A></DIV>

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


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Any record or beneficial owner of our common stock as of April&nbsp;8, 2011 may request a copy of our
Annual Report on </B><B>Form 10-K</B><B> filed with the Securities and Exchange Commission for the fiscal year
ended December&nbsp;31, 2010, including financial statements and schedules. Shareholders may also view
and download a free copy of our Annual Report on </B><B>Form 10-K</B><B> from our web site at</B>
<U><B>www.intelsys.com</B></U><B>. Any request for the </B><B>Form 10-K</B><B> should be in writing addressed to: Bonnie
L. Herron, Intelligent Systems Corporation, 4355 Shackleford Road, Norcross, Georgia 30093. We
will provide copies of any exhibits to the </B><B>Form 10-K</B><B> upon request and upon the payment of our
reasonable expenses in furnishing such exhibits.</B>
</DIV>
<!-- link1 "IMPORTANT NOTICE CONCERNING THE AVAILABLITY OF PROXY MATERIALS" -->
<DIV align="left"><A NAME="C14662013"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>IMPORTANT NOTICE CONCERNING THE AVAILABLITY OF PROXY MATERIALS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>This Proxy Statement and our Annual Report to Shareholders are available at</B>
<u>https://materials.proxyvote.com/45816D</u>
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Appendix&nbsp;A</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>FIRST AMENDMENT TO INTELLIGENT SYSTEMS CORPORATION<BR>
2003 STOCK INCENTIVE PLAN</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Intelligent Systems Corporation 2003 Stock Incentive Plan is hereby amended by replacing
the first sentence of Article&nbsp;V(b) with the following sentence:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">&#147;The total number of shares of Restricted Stock and other shares of
Common Stock subject to or underlying Stock Options, SARs and Other
Stock-Based Awards awarded to any participant during the term of this
Plan shall not exceed 25% of the shares of Common Stock originally
reserved for distribution pursuant to the Plan.&#148;
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Appendix&nbsp;B</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>2011 INTELLIGENT SYSTEMS CORPORATION NON-EMPLOYEE DIRECTORS&#146; STOCK OPTION PLAN</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.&nbsp;<B>Purpose</B>. The purpose of the Intelligent Systems Corporation 2011 Non-Employee Directors&#146;
Stock Option Plan (the &#147;Plan&#148;) is to advance the interests of Intelligent Systems Corporation (the
&#147;Company&#148;), a Georgia corporation, and its shareholders by providing members of the Company&#146;s Board
of Directors (the &#147;Board&#148;) who are not employees of the Company or any of its subsidiaries with
additional incentives to promote the success of the Company, to increase their proprietary interest
in the success of the Company, and to encourage them to remain on its Board.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.&nbsp;<B>Administration</B>. This Plan shall be administered by the Board or a committee appointed by
it for the purpose of administering the Plan (the Board or such committee, as the case may be, in
such administrative capacity being hereinafter referred to as the &#147;Administrator&#148;). The
Administrator shall have all the powers vested in it by the terms of the Plan, which include the
authority (within the limitations described herein) to prescribe the form of the agreements
embodying the awards of the non-qualified stock options (the &#147;Options&#148;). The Administrator,
subject to the provisions of the Plan, shall grant Options under the Plan and shall have the power
to construe the Plan, to determine all questions arising hereunder, and to adopt and amend such
rules and regulations for the administration of the Plan as it may deem desirable. Any decision of
the Administrator in the administration of the Plan, as described herein, shall be final and
conclusive. The Administrator may act only by a majority of its members in office, except that the
members of the Administrator may authorize any one or more of their number or the Secretary or any
other executive officer of the Company to execute and deliver documents on behalf of the
Administrator.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.&nbsp;<B>Participation</B>. Each member of the Board of the Company who is not an employee of the
Company or any of its subsidiaries (a &#147;Non-Employee Director&#148;) shall receive Options in accordance
with Paragraph&nbsp;5 below. As used herein, the term &#147;subsidiary&#148; means any corporation at least 50%
of whose outstanding voting stock is owned, directly or indirectly, by the Company.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">4. <B>Awards Under the Plan</B>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;Type of Awards. Awards under the Plan shall include only Options, which are rights to
purchase shares of the common stock of the Company having a par value of $.01 per share (the
&#147;Shares&#148;). All Options are subject to the terms, conditions, and restrictions specified in this
Plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Maximum Number of Shares That May be Issued. No more than 200,000 Shares, subject to
adjustment as provided in Paragraph&nbsp;6 below, may be issued under the Plan pursuant to the exercise
of Options.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;Rights with Respect to Shares. A Non-Employee Director to whom an Option is granted (and
any person succeeding to such a Non-Employee Director&#146;s rights pursuant to the Plan) shall have no
rights as a shareholder with respect to any Shares issuable pursuant to any such Option until the
date of the issuance of a stock certificate to him for such Shares. Except as provided in
Paragraph&nbsp;6 below, no adjustment shall be made for dividends, distributions, or other rights
(whether ordinary or extraordinary, and whether in cash, securities, or other property) for which
the record date is prior to the date such stock certificate is issued.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.&nbsp;<B>Non-qualified Stock Options</B>. All Options shall be non-qualified. Each Option shall be
evidenced by an agreement in such form as the Board shall prescribe from time to time in accordance
with the Plan and shall be subject to the following terms and conditions:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;The Option exercise price shall be the fair market value of the Shares subject to such
Option on the date the Option is granted. The fair market value per Share on any date shall mean
the closing sales price, regular way, or in the absence thereof, the mean of the last reported bid
and asked quotations, on the date of grant.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Any Non-Employee Director initially elected to the Board subsequent to the adoption of the
Plan shall receive an Option for 5,000 Shares upon his election to the Board. Beginning on the
date of the adoption of this Plan, on the date of the Annual Meeting of Shareholders each year
thereafter during the life of this Plan, each Non-Employee Director then serving, shall receive an
Option for
4,000 Shares. Such Options shall be subject to the terms, conditions and restrictions
specified in this Plan.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;An Option shall not be transferable by the optionee other than by will or the laws of
descent and distribution, or pursuant to a qualified domestic relations order as defined by the
Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security
Act of 1974, as amended.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;All Options shall have a term not to exceed ten (10)&nbsp;years and shall become cumulatively
exercisable as to 50&nbsp;percent of the shares covered thereby on each of the first and second
anniversaries of the date of grant, so that on and after the second anniversary the Option shall be
exercisable (to the extent not theretofore exercised) as to all of the Shares covered thereby. If
an Option becomes exercisable on any such anniversary as to other than a whole number of Shares,
such number shall be rounded down to the nearest whole number.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;An Option shall not be exercisable unless payment in full is made for the Shares being
acquired thereunder at the time of exercise, such payment to be made in United States Dollars by
cash or check. It is expressly acknowledged, however, that to the extent permitted by Section&nbsp;16
of the Securities Exchange Act of 1934 (&#147;Section&nbsp;16&#148;) &#147;Cashless&#148; exercises are permitted under this
Plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(f)&nbsp;Subject to Subparagraph 5(g) with respect to a Change of Control (as hereinafter defined),
if a participant ceases to be a Non-Employee Director, the Non-Employee Director shall continue to
have the right to exercise any Options for Shares that were exercisable at the time the
Non-Employee Director ceased being a Non-Employee Director. All Options that were not exercisable
at the time the Non-Employee Director ceased being a Non-Employee Director, shall be cancelled and
of no further force or effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(g)&nbsp;Notwithstanding any other contrary provision of this Plan, any outstanding Option which
has not by its terms expired shall become exercisable in full in the event of a Change in Control.
For purposes of this paragraph (g), a Change in Control shall mean:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 4%">(i)&nbsp;The accumulation by an unrelated person of beneficial ownership of more than 25% of
the Company&#146;s stock; or
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 4%">(ii)&nbsp;The sale, or agreement to sell, all or substantially all of the Company&#146;s assets
to an unrelated person, in a merger or otherwise; or
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 4%">(iii)&nbsp;A change in control within the meaning of the SEC rules (control means &#147;the
possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a person, whether through ownership of voting securities, by
contract, or otherwise&#148;).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.&nbsp;<B>Capital Adjustments</B>. The number and price of Shares covered by each Option and the total
number of Shares that may be optioned and sold under the Plan shall be proportionately adjusted to
reflect any stock dividend, stock split, or share combination of the common stock or any
recapitalization of the Company. In the event of any merger, consolidation, reorganization,
liquidation, or dissolution of the Company, or any exchange of Shares involving the common stock,
any Option granted under the Plan shall automatically be deemed to pertain to the securities and
other property to which a holder of the number of Shares covered by the Option would have been
entitled to receive in connection with any such event. The Administrator shall have the sole
discretion to make all interpretations and determinations required under this paragraph to the
extent it deems equitable and appropriate.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company, during the term of the Options granted hereunder, shall at all times reserve and
keep available, and will seek to obtain from any regulatory body having jurisdiction, any requisite
authority in order to issue and sell such number of Shares of common stock as shall be sufficient
to satisfy the requirements of the Options granted under the Plan. If, in the opinion of its
counsel, the issuance or sale of any Shares of its stock hereunder shall not be lawful for any
reason, including the inability of the Company to obtain from any regulatory body having
jurisdiction authority deemed by such counsel to be necessary to such issuance or sale, the Company
shall not be obligated to issue or sell any such Shares.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.&nbsp;<B>Death or Total Disability</B>. If any person to whom an Option has been granted shall die or
become totally disabled while holding an Option that has not been fully exercised, his executors,
administrators, heirs, personal representatives, or distributees,
as the case may be, may, at any time until the expiration of the term of the Option, exercise
the Option to the extent it was exercisable at the date of such participant&#146;s death or total
disability. All Options that were not exercisable at the date of such participant&#146;s death or total
disability shall be cancelled and of no further force and effect.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">8.&nbsp;<B>Indemnification. </B>Each person who is or shall have been a member of the Board shall be
indemnified and held harmless by the Company against and from any and all loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be or become involved by reason of any
action taken or failure to act under the Plan and against and from any and all amounts paid by him
in settlement thereof (with the Company&#146;s written approval) or paid by him in satisfaction of a
judgment in any such action, suit, or proceeding, except a judgment in favor of the Company based
upon a finding of his lack of good faith; subject, however, to the condition that upon the
institution of any claim, action, suit, or proceeding against him, he shall in writing give the
Company an opportunity, at its expense, to handle and defend the same before he undertakes to
handle and defend it on such person&#146;s own behalf. The foregoing right of indemnification shall not
be exclusive of any other right to which such person may be entitled as a matter of law or
otherwise, or any power that the Company may have to indemnify him or hold him harmless. Each
member of the Board and each officer and employee of the Company shall be fully justified in
relying or acting in good faith upon any information furnished in connection with the
administration of the Plan by any appropriate person or persons other than himself. In no event
shall any person who is or shall have been a member of the Board or an officer or employee of the
Company be held liable for any determination made or other action taken or any omission to act in
reliance upon any such information as referred to in the preceding sentence, or for any action
(including the furnishing of information) taken or any omission to act, when any such
determination, action, or omission is made in good faith.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">9. <B>Miscellaneous Provisions</B>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;No Non-Employee Director or other person shall have any claim or right to be granted an
Option under the Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving a Non-Employee Director any right to be retained in the service of the Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;A participant&#146;s rights and interests under the Plan may not be assigned or transferred in
whole or in part either directly or by operation of law or otherwise (except in the event of a
participant&#146;s death, by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order), including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy, or in any other manner, and no such right or interest of any
participant in the Plan shall be subject to any obligation or liability of such participant.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;No Shares shall be issued hereunder unless counsel for the Company shall be satisfied that
such issuance will be in compliance with applicable federal, state, and other securities laws.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;The Shares issued hereunder may not be sold except in full compliance with Section&nbsp;16 and
all other applicable federal, state and other securities laws. In particular, but without limiting
the foregoing, no Shares received pursuant to an exercise of an Option may be sold within 6&nbsp;months
of a purchase that is subject to the liability provisions of Section&nbsp;16.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;It shall be a condition to the obligation of the Company to issue Shares upon exercise of
an Option that the participant (or any beneficiary or person entitled to act under paragraph 7
above) pay to the Company, upon its demand, such amount as may be requested by the Company for the
purpose of satisfying any liability to withhold federal, state, local, or foreign income or other
taxes. If the amount requested is not paid, the Company may refuse to issue Shares.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(f)&nbsp;The expenses of administration of the Plan shall be borne by the Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(g)&nbsp;The Plan shall be unfunded. The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to ensure the issuance of Shares upon
exercise of any Option under the Plan and issuance of Shares upon exercise of Options shall be
subordinate to the claims of the Company&#146;s general creditors.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(h)&nbsp;By accepting any Option or other benefit under the Plan, each participant and each person
claiming under or through him shall be conclusively deemed to have indicated his acceptance and
ratification of, and consent to, any action taken under the Plan by the Company or the
Administrator.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(i)&nbsp;The appropriate officers of the Company shall cause to be filed any reports, returns, or
other information regarding Options hereunder or any Shares issued pursuant hereto as may be
required by the Securities Exchange Act of 1934, as amended, the Securities Act of 1933, as
amended, or any other applicable statute, rule, or regulation (excluding reports pursuant to
Section&nbsp;16, which shall be the sole responsibility of a Non-Employee Director who receives or
exercises an Option).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">10.&nbsp;<B>Amendment</B>. The Plan may be amended at any time and from time to time by the Board as the
Board shall deem advisable; provided, however, that any amendment that is required by the rules of
any exchange on which the Shares are listed to be approved by the shareholders of the Company must
be so approved before it becomes effective. No amendment of the Plan shall materially and
adversely affect any right of any participant with respect to any Option theretofore granted
without such participant&#146;s written consent.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">11.&nbsp;<B>Termination</B>. This Plan shall terminate upon the earlier of the following dates or events
to occur:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">(a)&nbsp;upon the adoption of a resolution of the Board terminating the Plan; or
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">(b)&nbsp;ten years from the date the Plan is initially approved and adopted by the Board.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">No termination of the Plan shall materially and adversely affect any of the rights or obligations
of any person, without his or her consent, under any Option theretofore granted under the Plan.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

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


<DIV align="Center" style="font-size: 24pt; margin-top: 10pt"><B>INTELLIGENT SYSTEMS CORPORATION</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><B>May&nbsp;26, 2011</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><U><B>NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL</B></U><FONT style="font-variant: SMALL-CAPS"><B>:</B></FONT><BR>
<FONT style="font-variant: SMALL-CAPS">T</FONT>he Notice of Meeting, Proxy Statement, Proxy Card<BR>
are available at http://materials.proxyvote.com/45816d

</DIV>

<DIV align="Center" style="font-size: 14pt; margin-top: 10pt"><B>Please date, sign and mail<BR>
your proxy card in the<BR>
envelope provided as soon<BR>
as possible.</B>

</DIV>

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

</DIV>

<DIV style="width: 100%; border: 1px solid black; padding: 3px;">



<DIV align="justify" style="font-size: 8pt; margin-top: 3pt"><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; THE ELECTION OF THE NOMINEE, &#147;FOR&#148; THE APPROVAL
OF THE AMENDMENT TO INCREASE THE MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUANCE TO INDIVIDUAL
PARTICIPANTS UNDER THE 2003 STOCK INCENTIVE PLAN AND &#147;FOR&#148; APPROVAL OF THE 2011
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN. 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">&#120;</FONT></B>
</DIV>
</DIV>


<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">1.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Election of One Director:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV align="justify">This proxy will be voted as directed. If no instructions are specified, the proxy will be voted &#147;FOR&#148; Proposals 1, 2 and 3.</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">For the nominee - </FONT>Parker H. Petit</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">Withhold authority for the nominee</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">2.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV align="justify">Approval of amendment to increase the maximum number of
shares available for issuance to
individual participants under the 2003 Stock Incentive Plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">For </FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">Against</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">Abstain</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">3.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Approval of 2011 Non-Employee Directors&#146; Stock Option Plan</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">For </FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">Against</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">Abstain</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><DIV align="justify">To change the address on your account, please check the box at right and indicate your new
address in the space above. Please note that changes to the registered name(s) on the account
may not be submitted via this method. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#111;</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Signature of Stockholder
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature of Stockholder
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 8pt; margin-top: 10pt">Note: 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 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>


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

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



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C14662toc">Table of Contents</A></H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 12pt; margin-top: 60%"><B>INTELLIGENT SYSTEMS CORPORATION</b></div>

<DIV align="center" style="font-size: 10pt; margin-top: 0pt"><b>
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">The undersigned, a stockholder 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.&nbsp;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&nbsp;26, 2011 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&nbsp;8, 2011 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: 10pt; margin-top: 10pt"><B>(To be Signed on Reverse Side)</B>
</DIV>
<DIV align="right">

<DIV style="width: 18%; border: 1px solid black; padding: 5px; margin-right: 8%">



<DIV align="center" style="font-size: 8pt; margin-top: 1pt"><B>&nbsp;SEE REVERSE&nbsp;<BR>
SIDE&nbsp;
</B>
</DIV>

</DIV>
</div>


<DIV align="right" style="font-size: 10pt; margin-top: 10pt">14475
</DIV>



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

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



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