EXHIBIT 10.26


    
      

    


    EXHIBIT
      10.26

    
On
      February 15, 2007, the Compensation Committee of the Board of Directors of
      Interactive Intelligence, Inc. (the “Company”) took the following
      actions:

    


    
      	·  	
              Approved
                2007 Executive
                Officer Compensation

            


    

    
      	·  	
              Approved
                Amendments to Certain Stock Option
                Agreements

            


    

    
      	·  	
              Approved revised
                Board of Director Compensation

            


    

    


    2007
      Executive Officer Compensation

     

    
      
        The
          Compensation Committee of the Board of Directors of the Company approved
          compensation arrangements, for the period beginning January 1, 2007, for
          the
          Company’s Executive Officers. The Compensation Committee also approved stock
          option arrangements beginning January 1, 2007, for each of the Company’s
          Executive Officers. Certain of these executive officers are classified
          as Named
          Executive Officers, as defined in Item 402(a)(3) of Regulation S-K of the
          Exchange Act. The Company’s Named Executive Officers are: 

        


        
          	
                  Name

                	
                  Title/Position

                
	
                  Donald
                    E. Brown, M.D.

                	
                  Chairman
                    of the Board of Directors, President and Chief Executive Officer
                    

                  (Principal
                    Executive Officer)

                   

                
	
                  Stephen
                    R. Head

                	
                  Chief
                    Financial Officer, Vice President of Finance and Administration,
                    

                  Secretary
                    and Treasurer, (Principal Financial Officer and Principal Accounting
                    Officer)

                   

                
	
                  Gary
                    R. Blough

                	
                  Executive
                    Vice President of Worldwide Sales

                   

                
	
                  Jeremiah
                    J. Fleming

                	
                  Vice
                    President of Business Development

                   

                
	
                  Joseph
                    A. Staples

                	
                  Senior
                    Vice President of Worldwide
                    Marketing

                


        

         

        
          The
            information regarding the annual base salaries, performance bonuses and
            stock
            options for the Company’s Named Executive Officers, appearing in the Company’s
            Current Report on Form 8-K filed February 22, 2007, is incorporated herein
            by
            reference. The Compensation Committee also approved annual base salaries,
            performance bonuses and stock options for 2007 for Pamela J. Hynes and
            Melinda
            W. Marshall, current executive officers who are not designated as Named
            Executive Officers.

        

         

      

    

    
      Amendments
        to Stock Option Agreements

      


          The
        Board of
        Directors and the Compensation Committee also adopted a form of each of an
        Incentive Stock Option Agreement and a Nonqualified Stock Option Agreement
        to be
        used for grants of incentive stock options and nonqualified stock options,
        respectively, under the 2006 Equity Incentive Plan. The information required
        by
        this item appearing in the Company’s Current Report on Form 8-K filed February
        22, 2007 is incorporated herein by reference. The copy of the Form of Incentive
        Stock Option Agreement Under 2006 Equity Incentive Plan filed as Exhibit
        10.35
        to the Company’s Current Report on Form 8-K filed February 22, 2007, is
        incorporated herein by reference and constitutes a part of this report. In
        addition, the copy of the Form of Nonqualified Stock Option Agreement Under
        2006
        Equity Incentive Plan filed as Exhibit 10.36 to the Company’s Current Report on
        Form 8-K filed February 22, 2007, is incorporated herein by reference and
        constitutes a part of this report. 

       

      2007
        Board of Director Compensation

    

    


        The
      Compensation Committee of the Board of Directors of the Company approved
      compensation arrangements, for the period beginning January 1, 2007, for the
      Company’s non-employee Board of Director members. Each member will receive an
      annual retainer, paid quarterly, of $25,000. For each meeting of the Board
      of
      Directors and any meeting of the Audit Committee, Compensation and Stock Option
      Committee and Nominating and Corporate Governance Committee (the “Committees”),
      members will be paid $1,500 if the meeting is attended in person and $750 if
      the
      meeting is attended by teleconference.

     

    
      The
        Audit
        Committee Chairman will receive an annual retainer, paid quarterly, of $15,000
        and the Chairman of the Compensation and Stock Option Committee and the
        Nominating and Corporate Governance Committee will each receive an annual
        retainer, paid quarterly, of $5,000.

      

        A
          stock
          option award will be granted to each Board of Director member every year
          at the
          Annual Meeting of Shareholders. The option to purchase 8,000 shares of
          the
          Company’s stock will vest in four equal annual installments and the exercise
          price of the option will be the closing price on the previous business
          day. Any
          new member of the Board of Directors will receive an option to purchase
          20,000
          shares of the Company’s stock that will vest in four equal annual installments
          and will be granted on the day of appointment of the member at an exercise
          price
          equal to the previous business day closing price.