INTRUSION INC

The following table sets forth certain summary information regarding total compensation earned by our named executive officers for the fiscal years indicated, each of whom has served during the last two fiscal years and in all capacities in which they served the Company and our subsidiary.

2025 SUMMARY COMPENSATION TABLE (1)

Elements of Compensation

Base Salary

The salaries of the executive officers, including the CEO, are determined annually by the Compensation Committee with reference to the following without specific weighting:

The Compensation Committee believes that other companies likely compete with us for executive talent and that we must offer salaries within a competitive market range to attract and retain talented executives. However, the Compensation Committee manages salaries for the executive group as a whole in a conservative fashion in order to place more emphasis on incentive compensation.

Bonus

To reinforce the attainment of corporate objectives, the Compensation Committee believes that a substantial portion of the potential annual compensation of each executive officer should be in the form of short-term, variable incentive pay. The incentive cash bonus program for executives is established annually by the Compensation Committee based upon our achievement of sales and/or earnings targets established at the beginning of the fiscal year. The incentive plan for executives requires a threshold level of financial performance before any incentives are awarded. Once the threshold objective for sales and/or earnings for a fiscal year is reached, specific formulas are in place to calculate the actual incentive payment for each executive for such year.

Bonuses Awarded

In fiscal years 2025 and 2024, we did not achieve our targeted sales and/or earnings goals and did not reach our threshold level of sales and/or earnings for bonuses. Per the employee incentive plan, we did not award full-time, non-commissioned employees a bonus. This included our current executive officers.

Stock Option and Equity Incentive Programs

The goal of our short- and long-term equity-based incentive awards is to align the interests of executive officers with our stockholders. The Compensation Committee determines the value allocated to equity-based incentives according to each executive’s position, individual performance, contributions to achievement of corporate objectives and related factors, and grants equity awards to create a meaningful opportunity for stock ownership. The Board approves short- and long-term incentives in the form of cash, stock option grants, restricted stock issuances, and performance stock unit awards when performance meets or exceeds expectations.

We have three stock-based compensation plans—the 2023 Employee Stock Purchase Plan (the “ESPP”), the 2021 Omnibus Plan (the “2021 Plan”) and the 2015 Stock Incentive Plan (the “2015 Plan”). We grant stock from the 2021 Plan.

ESPP. The ESPP provides for the issuance of up to 1.0 million shares of common stock to participating eligible employees and allows eligible employees to purchase shares of common stock at a 15% discount from the fair market value of the stock as determined on specific dates at six-month intervals. The offering periods under the ESPP commence on the first day of January and July of each year.

2021 Plan. The 2021 Plan is administered by the Compensation Committee of the Board and permits the grant of cash and equity-based awards, which may be awarded in the form of stock options, stock appreciation rights, restricted stock awards, performance awards, other stock-based awards, and other cash-based awards. The aggregate number of shares of common stock that may be issued or used for reference purposes or with respect to which awards may be granted under the 2021 Plan shall not exceed 2.5 million shares and is subject to any increase or decrease, which shares may be either authorized and unissued common stock or common stock held in or acquired for the treasury of the Company or both.

2015 Plan. Grants can no longer be made from the 2015 Plan. The 2015 Plan will remain active until all outstanding options have been exercised, forfeited, expired, or cancelled. Equity Awards Granted We grant equity awards to our executive officers and key employees in order to retain their services and increase their performance potential to help attain our long-term goals. However, there has been no set formula for the granting of awards to individual executives or employees.

In 2025, we issued 591,719 shares of restricted stock and 15,000 stock option awards to our employees, contractors, officers, or members of our Board. In 2024, we issued 253,620 shares of restricted stock to employees and members of our Board. In 2024, we issued no stock awards to our named executives. While stock options have historically been awarded at the first of each quarter the board can make awards at any time however, the Board has a policy of making no awards during any period in which the Company is in possession of material non-public information. In instances where the Company is in possession of material, non-public information awards are abated until such time as the information is made public and a reasonable period of time has expired after the disclosure. During the relevant reporting period, no awards of options were granted to a named executive officer within a period starting four business days before and ending one business day after the filing of the issuer’s Form 10-Q or Form 10-K, or the filing or furnishing of a current report on Form 8-K that discloses material nonpublic information. Timing of Awards Equity awards for executive officers and other key employees are typically granted annually in conjunction with the review of the individual’s performance. This review typically takes place in the first quarter of the fiscal year. Grants to newly hired employees are typically effective on the first day of a quarter following the employee’s first day of employment, after approval by the Committee. The exercise price of all stock options is set at the then current day’s closing price of our common stock. Stock Ownership Guidelines We do not have any standard stock ownership guidelines. However, all executives are encouraged to retain stock options and other shares that they directly own. Perquisites We limit the perquisites that are made available to executive officers. We do not have a pension program for executives or employees. The perquisites provided in fiscal year 2025 are as follows. All employees who participated in our 401(k) plan may receive up to 1% of their annual salary in matching funds. All of the named executive officers who participated in the 401(k) plan received matching funds. The health and life insurance plans are the same for all employees. In general, all employees and dependents base health premiums are paid 80% by us and 20% by the employees. All employees are also provided with life insurance for up to $50,000. This policy is the same for all employees, including executive officers.

Employment Agreements Neither we nor our subsidiary have any employment agreements with any of our named executive officers other than the described Executive Employment Agreement with Mr. Scott. Scott Employment Agreement We entered into an Executive Employment Agreement with Mr. Scott on November 11, 2021, which provides for the following: a $425,000 annual cash salary; a one-time restricted stock award equivalent to $75,000 of common stock based on the closing price as of November 11, 2021; the ability to earn up to two times his annual salary (in cash or a combination of cash and stock option awards) under the terms of our existing executive incentive based bonus plan; the ability to participate in our long-term incentive plan; as well as other reasonable and customary benefits provided by the Company. In addition, the Employment Agreement requires that the Board nominate Mr. Scott for election as a director at the Annual Meeting. Long-term Incentive Plan No long-term incentives were awarded in 2025 or 2024.

Outstanding Equity Awards at the End of Fiscal Year 2025

2025 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

The following table sets forth information with respect to the options outstanding by our named executive officers held at fiscal year-end 2025.

DIRECTOR COMPENSATION

Overview of Compensation and Procedures

Similar to the setting of executive compensation, the Compensation Committee reviews the level of compensation of non-employee directors on an annual basis. We have historically used data from a number of different sources to determine the compensation for non-employee directors. Some examples of the data used include publicly available data describing director compensation in peer companies and survey data collected by us.

We compensate non-employee members of the Board through a mixture of cash and equity-based compensation. Each non-employee director currently receives an annual cash retainer fee of $37,500. In addition, our Chairman receives an annual fee of $40,000 for his service; the Audit Committee Chair receives an additional annual fee of $18,000 and the Nominating and Governance Committee Chair receives an additional $7,500 for their service. Each non-employee director is also reimbursed for all reasonable expenses incurred in attending such meetings. Directors who are also full-time employees receive no additional compensation for serving as directors. During 2025, Mr. Scott, our President and CEO, served on our Board with no additional compensation.

We provide each non-employee director with restricted stock awards of common stock at the Annual Meeting in an amount equal to $70,000 determined by the closing price of our common stock on the day of such award. These awards vest on the one-year anniversary of the award.

2025 DIRECTOR COMPENSATION