On May 24, 2012, Intelligent Systems entered into a Director Indemnification Agreement with Cherie M. Fuzzell. Ms. Fuzzell was elected to the Board of Directors of the company at the 2012 Annual Meeting of Shareholders. The Director Indemnification Agreement is the company's standard agreement that sets forth the terms and conditions for indemnification of and payment of certain expenses related to Ms. Fuzzell's service on the Board of Directors of the company.