INFINITE
GROUP, INC.

    


    2009 STOCK OPTION
PLAN

     

    1.           PURPOSES. The purposes of this Stock
Option Plan (the “Plan”) are to attract and retain the best qualified personnel
for positions of substantial responsibility, to provide additional incentive to
the Employees of the Company or its Subsidiaries, if any (as defined in Section
2 below), as well as other individuals who perform services for the Company or
its Subsidiaries, and to promote the success of the Company’s
business.

    


    Options granted hereunder may be either
“incentive stock options” as defined in Section 422A of the Internal Revenue
Code, or “non-qualified stock options,” at the discretion of the Board and as
reflected in the terms of the written instrument evidencing an
Option.

    


    
      	
               
      

            	
              2.

            	
              DEFINITIONS.  As used
      herein, the following definitions shall
apply:

            


    

    


    (a)           “Board”
shall mean the Committee, if one has been appointed, or the Board of Directors
of the Company, if no Committee is appointed.

    


    (b)           “Common
Stock” shall mean the Common Stock of the Company, par value $.001 per
share.

    


    (c)           “Company”
shall mean Infinite Group, Inc., a Delaware corporation.

    


    (d)           “Committee”
shall mean the Committee appointed by the Board of Directors in accordance with
paragraph (a) of Section 4 of the Plan, if one is appointed.

    


    (e)           “Continuous
Status as an Employee” shall mean the absence of any interruption or termination
of service as an Employee.  Continuous Status as an Employee shall not
be considered interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Board.

    


    (f)           “Employee”
shall mean any person, including officers and directors, employed by the Company
or any Parent or Subsidiary of the Company.  The payment of a
director’s fee by the Company shall not be sufficient to constitute “employment”
by the Company.

    


    (g)           “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

    


    (h)           “Incentive
Stock Option” shall mean a stock option intended to qualify as an incentive
stock option within the meaning of Section 422A of the Internal Revenue Code of
1986, as amended.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (i)           “Non-qualified
Stock Option” shall mean a stock option not intended to qualify as an Incentive
Stock Option.

    


    
      (j)         
 “Option”
shall mean a stock option granted pursuant to the Plan.

    

    


    (k)           “Optioned
Stock” shall mean the Common Stock subject to an Option.

    


    (l)           “Optionee”
shall mean an Employee or other person who receives an Option.

    


    (m)           “Parent”
shall mean a “parent corporation”, whether now or hereafter existing, as defined
in Section 425(e) of the Internal Revenue Code of 1986, as amended.

    


    (n)           “Securities
Act” shall mean the Securities Act of 1933, as amended.

    


    (o)           “SEC”
shall mean the Securities and Exchange Commission.

    


    (p)           “Share”
shall mean a share of Common Stock, as adjusted in accordance with Section 11 of
the Plan.

    


    (q)           “Subsidiary”
shall mean a “subsidiary corporation”, whether now or hereafter existing, as
defined in Section 425(f) of the Internal Revenue Code of 1986, as
amended.

    


    
      	
               
      

            	
              3.

            	
              STOCK.

            


    

    


    Subject
to the provisions of Section 11 of the Plan, the maximum aggregate number of
shares which may be optioned and sold under the Plan is four million (4,000,000)
shares of authorized, but unissued, or reacquired $.001 par value Common
Stock.  If an Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, shall become
available for further grant under the Plan.

    


    
      	
               
      

            	
              4.

            	
              ADMINISTRATION.

            


    

    


    (a)           Procedure. The
Company’s Board of Directors may appoint a Committee to administer the
Plan.  The Committee shall consist of not less than two members of the
Board of Directors who shall administer the Plan on behalf of the Board of
Directors, subject to such terms and conditions as the Board of Directors may
prescribe.  Once appointed, the Committee shall continue to serve
until otherwise directed by the Board of Directors.  From time to time
the Board of Directors may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause), and appoint
new members in substitution therefore, fill vacancies however caused, or remove
all members of the Committee and thereafter directly administer the
Plan.


    
      
         


      

      
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    If a
majority of the Board of Directors is eligible to be granted Options or has been
eligible at any time within the preceding year, a Committee must be appointed to
administer the Plan.  The Committee must consist of not less than two
members of the Board of Directors, all of whom are “non-employee directors” as
defined in Rule 16b-3 of the General Rules and Regulations promulgated under the
Exchange Act.

    


    (b)      Powers of the
Board.  Subject to the provisions of the Plan, the Board shall
have the authority, in its discretion: (i) to grant Incentive Stock Options, in
accordance with Section 422A of the Internal Revenue Code of 1986, as amended,
or to grant Non-Qualified Stock Options; (ii) to determine, upon review of
relevant information and in accordance with Section 8(a) of the Plan, the fair
market value of the Common Stock; (iii) to determine the exercise price per
share of Options to be granted, which exercise price shall be determined in
accordance with Section 8(a) of the Plan; (iv) to determine the persons to whom,
and the time or times at which, Options shall be granted and the number of
shares to be represented by each Option; (v) to interpret the Plan; (vi) to
prescribe, amend and rescind rules and regulations relating to the Plan; (vii)
to determine the terms and provisions of each Option granted (which need not be
identical) and, with the consent of the holder thereof, modify or amend each
Option; (viii) to accelerate or defer (with the consent of the Optionee) the
exercise date of any Option; (ix) to authorize any person to execute on behalf
of the Company any instrument required to effectuate the grant of an Option
previously granted by the Board; and (x) to make all other determinations deemed
necessary or advisable for the administration of the Plan.

    


    (c)      Effect of the Board’s
Decision.  All decisions, determinations and interpretations of
the Board shall be final and binding on all Optionees and any other holders of
any Options granted under the Plan.

    


    5.         
  ELIGIBILITY.  Incentive Stock
Options may be granted only to Employees.  Nonqualified Stock Options
may be granted to Employees as well as directors (subject to the limitations set
forth in Section 4), independent contractors and agents, as determined by the
Board.  Any person who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option or Options.

    


    No Incentive Stock Option may be
granted to an Employee if, as the result of such grant, the aggregate fair
market value (determined at the time each Option was granted) of the Shares with
respect to which such Incentive Stock Options are exercisable for the first time
by such Employee during any calendar year (under all such plans of the Company
and any Parent and Subsidiary) shall exceed One Hundred Thousand Dollars
($100,000).


    
      
         


      

      
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    The Plan shall not confer upon any
Optionee any right with respect to continuation of employment by the Company,
nor shall it interfere in any way with his right or the Company’s right to
terminate his employment at any time.

    


    6.        
    TERM OF
PLAN. The Plan
shall become effective upon the earlier to occur of (i) its adoption by the
Board of Directors, or (ii) its approval by vote of a majority of the
outstanding shares of the Company entitled to vote on the adoption of the
Plan.  The Plan shall continue in effect for a period of ten (10)
years from the effective date of the Plan, unless sooner terminated pursuant to
Section 13 of the Plan.

    


    7.        
    TERM OF
OPTION. The term
of each Option shall be ten (10) years from the date of the grant thereof, or
such shorter term as may be provided in the instrument evidencing the
Option.  However, in the case of an Incentive Stock Option granted to
an Employee who, immediately before the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant thereof or
such shorter time as may be provided in the instrument evidencing the
Option.

    


    
      	
               
      

            	
              8.

            	
              EXERCISE PRICE AND
      CONSIDERATION.

            


    

    


    (a)           The
per Share exercise price for the Shares to be issued pursuant to the exercise of
an Option shall be such price as is determined by the Board, but shall be
subject to the following:

    


    (i)  In the case of an
Incentive Stock Option

    


    (A)  granted to an Employee
who, immediately before the grant of such Incentive Stock Option, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share exercise price
shall be no less than 110% of the fair market value per Share on the date of the
grant; or, as the case may be

    


    (B)   granted
to an Employee not subject to the provisions of Section 8(a)(i)(A), the per
Share exercise price shall be no less than one hundred percent (100%) of the
fair market value per Share on the date of the grant.

    


    (ii)  In the case of a
Non-qualified Stock Option, the per Share exercise price shall be no less than
one hundred percent (100%) of the fair market value per Share on the date of the
grant.

    


    (b)           The
fair market value shall be determined by the Board in its discretion; provided,
however, that where there is a public market for the Common Stock, the fair
market value per Share shall be the mean of the bid and asked prices or, if
applicable, the closing price of the Common Stock on the date of the grant, as
reported by the National Association of Securities Dealers Automated Quotation
(NASDAQ) System or, in the event the Common Stock is listed on a stock exchange,
the fair market value per Share shall be the closing price on the exchange on
the date of the grant of the Option, as reported in the Wall Street
Journal.


    
      
         


      

      
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    (c)           The
consideration to be paid for the Shares to be issued upon the exercise of an
Option or in payment of any withholding taxes thereon, including the method of
payment, shall be determined by the Board and may consist entirely of (i) cash,
check or promissory note; (ii) other Shares of Common Stock owned by the
Employee that has a fair market value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised; (iii) an assignment by the Employee of the net proceeds to be
received from a registered broker upon the sale of the Shares or the proceeds of
a loan from such broker in such amount; or (iv) any combination of such methods
of payment, or such other consideration and method of payment for the issuance
of Shares to the extent permitted under Delaware law and meeting rules and
regulations of the SEC to plans meeting the requirements of Section 16(b)(3) of
the Exchange Act.

    


    
      	
               
      

            	
              9.

            	
              EXERCISE OF
      OPTION.

            


    

    


    (a)           Procedure for Exercise;
Rights as a Stockholder.  Any Option granted hereunder shall be
exercisable at such times and subject to such conditions as may be determined by
the Board, including performance criteria with respect to the Company and/or the
Optionee, as shall be permissible under the terms of the Plan.

    


    An Option may not be exercised for a
fraction of a Share.

    


    An Option shall be deemed to be
exercised when written notice of such exercise has been given to the Company in
accordance with the terms of the instrument evidencing the Option by the person
entitled to exercise the Option and full payment for the Shares with respect to
which the Option is exercised has been received by the Company.  Full
payment may, as authorized by the Board, consist of any consideration and method
of payment allowable under Section 8(c)of the Plan; it being understood that the
Company shall take such action as may be reasonably required to permit use of an
approved payment method.  Until the issuance, which in no event will
be delayed more than thirty (3) days from the date of the exercise of the
Option, (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option.  No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the sock certificate is issued, except as provided in the
Plan.

    


    Exercise of an Option in any manner
shall result in a decrease in the number of Shares which thereafter may be
available, both for purposes of the Plan and for the sale under the Option, by
the number of Shares as to which the Option is exercised.


    
      
         


      

      
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    (b)           Termination of Status as an
Employee.  If an Employee ceases to serve as an Employee, he
may, but only within thirty (30) days (or such other period of time not
exceeding three (3) months as is determined by the Board) after the date he
ceases to be an Employee of the Company, exercise his Option to the extent that
he was entitled to exercise it as of the date of such termination.  To
the extent that he was not entitled to exercise the Option at the date of such
termination, or if he does not exercise such option (which he was entitled to
exercise) within the time period specified herein, the Option shall
terminate.  Notwithstanding the provisions of this Section 9(b), in
the event that the Employee’s employment is terminated “for cause,” as such term
is defined and interpreted by the courts of the State of New York, the
Employee’s right to exercise his Option shall expire on the date of his
termination.

    


    (c)           Notwithstanding
the provisions of Section 9(b) above, in the event an Employee is unable to
continue his employment with the Company as a result of his total and permanent
disability (as defined in Section 105(d)(4) of the Internal Revenue Code of
1986, as amended), he may, but only with three (3) months (or such other period
of time not exceeding twelve (12) months as is determined by the Board) from the
date of disability, exercise his Option to the extent he was entitled to
exercise it at the date of such disability.  To the extent that he was
not entitled to exercise the Option at the date of disability, or if he does not
exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate.

    


    (d)           Death of
Optionee.  In the event of the death of an
Optionee:

    


    (i)  during the term of the
Option who is at the time of his death an Employee of the Company and who shall
have been in Continuous Status as an Employee since the date of the grant of the
Option, the Option may be exercised, at any time within twelve (12) months
following the date of death, by the Optionee’s estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that would have accrued had the Optionee
continued living one (1) month after the date of death; or

    


    (ii)  within thirty (30) days
(or such other period of time not exceeding three (3) months as is determined by
the Board) after the termination Continuous Status as an Employee, the Option
may be exercised, at any time within three (3) months following the date of
death, by the Optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of termination.

    


    10.          NON-TRANSFERABILITY
OF OPTIONS. The
Option may not be sold, pledged, assigned, hypothecated or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the
Optionee.


    
      
         


      

      
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    11.          ADJUSTMENTS
UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to any required
action by the stockholders of the Company, the number of shares of Common Stock
covered by each outstanding Option, and the number of shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
Options have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split or the payment of a stock dividend with
respect to the Common Stock or any other increase or decrease in the number of
issued shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been “effected without receipt of
consideration.”  Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and
conclusive.  Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option.

    


    In the event of the proposed
dissolution or liquidation of the Company, or in the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, the Board of Directors of the Company
shall, as to outstanding Options, either (i) make appropriate provision for the
protection of any such outstanding Options by the substitution on an equitable
basis of appropriate stock of the Company or of the merged, consolidated or
otherwise reorganized corporation which will be issuable in respect to one share
of Common Stock of the Company; provided, only that the excess of the aggregate
fair market value of the shares subject to the Options immediately after such
substitution over the market price thereof is not more than the excess of the
aggregate fair market value of the shares subject to such Options immediately
before such substitution over the purchase price thereof, or (ii) upon written
notice to an Optionee, provide that all unexercised Options must be exercised
within a specified number of days of the date of such notice or they will be
terminated.  In any case, the Board of Directors may, in its
discretion, advance the lapse of any waiting or installment period and exercise
dates.

    


    12.          TIME FOR
GRANTING OPTIONS.  The date of grant
of an Option shall, for all purposes, be the date on which the Board makes the
determination granting such Option.  Notice of the determination shall
be given to each person to whom an Option is so granted within a reasonable time
after the date of such grant.

    


    13.          AMENDMENT AND TERMINATION OF
THE PLAN.

    


    (a)           The
Board may amend or terminate the Plan from time to time in such respects as the
Board may deem advisable; provided, however, that the following revisions or
amendments shall require the approval of the holders of a majority of the
outstanding shares of the Company entitled to vote:


    
      
         


      

      
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    (i)  any increase in the
number of Shares subject to the Plan, other than in connection with an
adjustment under Section 11 of the Plan;

    


    (ii)  any change in the
designation of the class of persons eligible to be granted Options;
or

    


    (iii)  any material increase
in the benefits accruing to participants under the Plan.

    


    (b)           Stockholder
Approval.  If any amendment requiring stockholder approval
under Section 13(a) of the Plan is made, such stockholder approval shall be
solicited as described in Section 17(a) of the Plan.

    


    (c)           Effect of Amendment or
Termination.  Any such amendment or termination of the Plan
shall not affect Options already granted and such Options shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Company.

    


    14.          CONDITIONS
UPON ISSUANCE OF SHARES.
Shares shall not be issued pursuant to the exercise of an Option unless
the exercise of such Option and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such
compliance.

    


    As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required by, or appropriate under, any of the aforementioned relevant provisions
of law.

    


    15.          RESERVATION
OF SHARES. The Company shall be
under no obligation to reserve shares of capital stock to fill
Options.  The grant of Options to Employees hereunder shall not be
construed to constitute the establishment of a trust of such shares and no
particular shares shall be identified as optioned and reserved for Employees
hereunder.  The Company shall be deemed to have complied with the
terms of the Plan if, at the time of issuance and delivery pursuant to the
exercise of an Option, it has a sufficient number of shares authorized and
unissued or in its treasury which may then be appropriated and issued for
purposes of the Plan, irrespective of the date when such shares were
authorized.

    


    16.          OPTION
AGREEMENT.
Options shall be evidenced by written option agreements in such form as the
Board shall approve.


    
      
         


      

      
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    17.          STOCKHOLDER
APPROVAL.
Continuation of the Plan shall be subject to approval by the stockholders of the
Company within twelve (12) months before or after the date the Plan is
adopted.  If such stockholder approval is obtained at a duly held
stockholders’ meeting, it may be obtained by the affirmative vote of the holders
of a majority of the outstanding shares of the Company present or represented
and entitled to vote thereon.  The approval of such stockholders of
the Company shall be (1) solicited substantially in accordance with Section
14(a) of the Exchange Act and the rules and regulations promulgated thereunder,
or (2) solicited after the Company has furnished in writing to the holders
entitled to vote substantially the same information concerning the Plan as that
which would be required by the rules and regulations in effect under Section
14(a) of the Exchange Act at the time such information is
furnished.

    


    18.          OTHER
PROVISIONS.  The Stock Option
Agreement authorized under the Plan shall contain such other provisions,
including without limitation restrictions upon the exercise of the Option, as
the Board of Directors of the Company shall deem advisable.  Any
Incentive Stock Option Agreement shall contain such limitations and restrictions
upon the exercise of the Incentive Stock Options as shall be necessary in order
that such Option will be an Incentive Stock Option as defined in Section 422A of
the Internal Revenue Code of 1986, as amended.

    


    19.          INDEMNFICATION
OF BOARD.  In addition to
such other rights of indemnification as they may have as directors or as members
of the Board, the members of the Board shall be indemnified by the Company
against the reasonable expenses, including attorneys fees actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Board member is liable for negligence or misconduct in the
performance of his duties, provided that within 60 days after the institution of
any such action, suit or proceeding a Board member shall, in writing, offer the
Company the opportunity, at its own expense, to handle and defend the
same.

    


    20.          OTHER
COMPENSATION PLANS.  The adoption of
the Plan shall not affect any other stock option or incentive or other
compensation plans in effect for the Company or any Subsidiary, nor shall the
Plan preclude the Company from establishing any other forms of incentive or
other compensation for employees and directors of the Company or any
Subsidiary.

    


    21.          SINGULAR,
PLURAL; GENDER.  Whenever used
herein, nouns in the singular shall include the plural, and masculine pronoun
shall include the feminine gender.


    
      
         


      

      
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    22.          HEADINGS,
ETC., NO PART OF PLAN.  Headings of
Articles and Sections hereof are inserted for convenience and reference; they
constitute no part of the Plan.

    


    Adopted
by the Board of Directors:  February 3, 2009


    
      
         


      

      
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