Document:

ex10_37.htm

    
      

    

     

    EXHIBIT
      10.37

    
       

      INTERACTIVE
        INTELLIGENCE, INC.

       

      NON-EMPLOYEE
        DIRECTOR STOCK OPTION AGREEMENT

       

      UNDER
        2006 EQUITY INCENTIVE PLAN

       

        This
        Agreement (“Agreement”), effective as of the ____ day of ______________, 20__
        (“Grant Date”), is by and between Interactive Intelligence, Inc. (“Company”) and
        _____________ (“Grantee”).

       

        The
        Grantee now serves the Company as a Non-Employee Director, and in recognition
        of
        the Grantee’s valued services, the Company, through the Committee, desires to
        provide an opportunity for the Grantee to increase his or her stock ownership
        in
        the Company pursuant to the provisions of the Interactive Intelligence, Inc.
        2006 Equity Incentive Plan (the “Plan”).

       

        In
        consideration of the terms and conditions of this Agreement and the Plan,
        the
        terms of which are incorporated as a part of this Agreement, the parties
        agree
        as follows:

       

      1.  Grant
        of Option.  As of the date indicated above, the Company hereby
        grants to the Grantee the right and option (“Option”) to purchase all or any
        part of an aggregate of ______________ Shares.

       

      2.  Non-Qualified
        Status.  This Option is a nonqualified stock option and is not
        intended to qualify as an incentive stock option under Code Section
        422.

       

      3.  Exercise
        Price.  The Exercise Price of each Share covered by this Option is
        $__________ per Share.

       

      4.  Vesting
        of Option.  Subject to the terms of the Plan and this Agreement,
        including paragraph 5 and 8 below, this Option shall become exercisable as
        to
        _________ [insert fraction, such as 1/4] of the Shares
        on a cumulative basis, on each of the __________________ [insert
        anniversary dates, such as first, second, third and fourth]
        anniversaries of the Grant Date (time-based vesting (graded));

       

      5.  Term
        of Option.  This Option expires at the close of business on
        __________ ___, 20___ (not to exceed ten years from the Grant Date), unless
        it
        expires earlier pursuant to the following rules:

       

      (a)  Upon
        termination of the Grantee’s employment or service for Cause, this Option will
        terminate immediately and the Grantee will (if the Committee, in its sole
        discretion, exercises its rights under this section within ten (10) days
        of the
        termination) repay to the Company within ten (10) days of the Committee’s
        written demand the amount of any gain the Grantee had realized upon any exercise
        within the 90-day period prior to the termination of this Option;

       

      (b)  Upon
        termination of the Grantee’s employment or service due to death or Disability,
        the Grantee or the Grantee’s beneficiary, as the case may be, may exercise this
        Option to the extent the Grantee was entitled to exercise this Option on
        the
        date of termination, but only within the one (1)-year period immediately
        following the Grantee’s termination due to death or Disability, and in no event
        after the date this Option expires in accordance with its terms;
        and

       

      (c)  Upon
        termination by the Company of the Grantee’s employment or service without Cause,
        or upon termination of employment or service by the Grantee for a reason
        other
        than death or Disability, or upon the Grantee’s Retirement, the Grantee may
        exercise this Option to the extent that the Grantee was entitled to exercise
        this Option at the date of termination, but only within the one (1) month
        period
        immediately following the Grantee’s termination, and in no event after the date
        this Option expires in accordance with its terms.

       

      6.  Exercise.  The
        Grantee may exercise this Option, to the extent vested, by delivering a written
        notice to the Company, specifying the number of Shares for which he or she
        is
        exercising the Option, and specifying the method of payment for the Exercise
        Price. The Grantee may pay the Exercise Price by any of the following
        means:

       

      (a)  in
        cash
        or its equivalent;

       

      (b)  by
        tendering (either actually or constructively by attestation) Shares having
        an
        aggregate Fair Market Value at the time of exercise equal to the Exercise
        Price
        that the Grantee has held for at least __________ (___) months;

       

      (c)  Cashless
        Exercise; or

       

      (d)  by
        a
        combination of any of the permitted methods of payment in subparagraphs (a),
        (b), and (c) above.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.  Non-Assignability.  Except
        as provided in the Plan or this Agreement, this Option is not assignable
        or
        transferable by the Grantee otherwise than by will or by the laws of descent
        and
        distribution and is exercisable, during the Grantee’s lifetime, only by the
        Grantee or his or her guardian or legal representative.

       

      8.  Change
        in Control.  If the Grantee is serving as a Non-Employee Director
        upon the occurrence of a Change in Control, and the Grantee's service is
        terminated, for whatever reason, in connection therewith, this Option will
        vest
        on a pro rata monthly basis, including full credit for partial months elapsed;
        provided,however, that for purposes of determining the vested
        portion of this Option, the Grantee shall be credited with one additional
        month
        of service for each month of service completed by the Grantee, up to a maximum
        of 24 additional months of service credit.

       

      9.  Withholding.
        Prior to the delivery of any Shares pursuant to this Option, the Company
        has
        the right and power to deduct or withhold, or require the Grantee to remit
        to
        the Company, an amount sufficient to satisfy all applicable tax withholding
        requirements. The Company may permit or require the Grantee to satisfy all
        or
        part of the tax withholding obligations in connection with this Option by
        (a)
        having the Company withhold otherwise deliverable Shares, or (b) delivering
        to
        the Company Shares already owned for a period of at least six (6) months
        (or
        such longer or shorter period as may be required to avoid a charge to earnings
        for financial accounting purposes), in each case having a value equal to
        the
        amount to be withheld, which shall not exceed the amount determined by the
        applicable minimum statutory tax withholding rate (or such other rate as
        will
        not result in a negative accounting impact). For these purposes, the value
        of
        the Shares to be withheld or delivered will be equal to the Fair Market Value
        as
        of the date that the taxes are required to be withheld.

       

      10.  Notices.  All
        notices and other communications required or permitted under this Agreement
        shall be written and delivered personally or sent by registered or certified
        first-class mail, postage prepaid and return receipt required, addressed
        as
        follows: if to the Company, to the Company’s executive offices in Indianapolis,
        Indiana, and if to the Grantee or his or her successor, to the address last
        furnished by the Grantee to the Company. Notwithstanding the foregoing, though,
        the Company may authorize notice by any other means it deems desirable or
        efficient at a given time, such as notice by facsimile or electronic
        mail.

       

      11.  No
        Service Rights.  Neither the Plan nor this Agreement confers upon
        the Grantee any right to continue in the service of the Company or interferes
        in
        any way with the right of the Company to terminate the Grantee’s service at any
        time.

       

      12.  Defined
        Terms.  All of the defined terms, or terms that begin with capital
        letters and have a special meaning for purposes of this Agreement, have the
        meaning ascribed to them in this Agreement. All defined terms to which this
        Agreement does not ascribe a meaning have the meaning ascribed to them in
        the
        Plan.

       

      13.  Plan
        Controlling.  The terms and conditions set forth in this Agreement
        are subject in all respects to the terms and conditions of the Plan, which
        are
        controlling. All determinations and interpretations of the Committee are
        binding
        and conclusive upon the Grantee and his or her legal representatives. The
        Grantee agrees to be bound by the terms and provisions of the Plan.

       

      

       

      [SIGNATURES
        APPEAR ON THE FOLLOWING PAGE]

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Company and the
        Grantee have executed this Agreement as of the date first above
        written.

      

      
        	
                 

              
	[GRANTEE
                SIGNATURE] 
	 
	
                Print
                  Name:

              	 
	
                 

              
	 
	INTERACTIVE
                INTELLIGENCE, INC.
	 
	
                By:

              	 
	 	 
	
                Print
                  Name:

              	 
	 	 
	
                Title:ex10_38.htm

    
      

    

     

    EXHIBIT
      10.38

     

    
      INTERACTIVE
        INTELLIGENCE, INC.

      

      NON-EMPLOYEE
        DIRECTOR CHANGE OF CONTROL AGREEMENT

      

      THIS
        NON-EMPLOYEE DIRECTOR CHANGE OF
        CONTROL AGREEMENT (“Agreement”) is effective as of _______ __, 2007, by and
        between ______ (the “Director”) and Interactive Intelligence, Inc., an Indiana
        corporation (the “Corporation”).

       

      Recitals

       

      A.  The
        board
        of directors of the Corporation has determined that it is in the best interests
        of the Corporation and its stockholders to assure that the Corporation will
        have
        the continued dedication and objectivity of the Director, notwithstanding
        the
        possibility, threat or occurrence of a Change of Control (as defined below)
        of
        the Corporation.

       

      B.  In
        order
        to accomplish the foregoing objective, the board of directors has directed
        the
        Corporation, upon execution of this Agreement by the Director, to amend the
        terms of all outstanding stock option awards as of the date hereof granted
        to
        the Director under the Corporation's Outside Directors Stock Option Plan
        (the
        "Directors Plan") and the 2006 Equity Incentive Plan (the "2006 Plan" and
        together with the Directors Plan, the "Plans") to the extent set forth
        below.

       

      C.  Capitalized
        terms used in the Agreement and not defined herein have the respective meanings
        ascribed to them in the 2006 Plan.

       

      In
        consideration of the mutual
        covenants herein contained, and in consideration of the continuing association
        of the Director with the Corporation, the parties agree as follows:

      

      1.  Acceleration
        of Option Vesting.  If the Director's service on the board of
        directors is terminated, for whatever reason, pursuant to a transaction
        resulting in a Change in Control of the Corporation, any and all outstanding
        stock option awards granted under the Plans will vest on a pro rata monthly
        basis, including full credit for partial months elapsed;
provided,however, that for purposes of determining the vested
        portion of the stock option awards, the Director shall be credited with one
        additional month of service for each month of service completed by the Director,
        up to a maximum of twenty-four (24) additional months of service
        credit.

       

      The
        following examples illustrate the
        effect of this grant of additional service credit:

      

      Example
        1:  As of the effective date of a Change in Control, the
        Director, who is then still serving as a director, has actually completed
        6 full
        months of service as a member of the Board of Directors. For purposes of
        determining the vested portion of his outstanding stock option awards under
        the
        Plans, the Director will be deemed to have completed an additional 6 months
        of
        service (1 for each of the 6 full months he has actually completed), for
        a total
        of 12 months of service.

      

      Example
        2:   As of the effective date of a Change in Control, the
        Director, who is then still serving as a director, has actually completed
        18 1⁄2
months of service as a member of the Board of Directors.  For purposes
        of determining the vested portion of his outstanding stock option awards
        under
        the Plans, the Director will be deemed to have completed 19 months of service
        and will be credited with an additional 19 months of service, for a total
        of 38
        months of service.  For clarity, 12 of the 38 months would have
        already vested on the first anniversary date of the option award and, therefore,
        26 months of vesting would be accelerated upon the Change in
        Control.

      

      Example
        3:  As of the effective date of a Change in Control, the
        Director, who is then still serving as a director, has actually completed
        36
        full months of service as a member of the Board of Directors.  For
        purposes of determining the vested portion of his outstanding stock option
        awards under the Plans, the Director will be deemed to have completed an
        additional 24 months of service, for a total of 60 months.  Although
        he has actually completed 36 full months of service, the Director is credited
        with 24 additional months, which is the maximum number of additional months
        of
        service that can be credited under this Agreement.

      

      2.  Term. The
        terms of this Agreement shall terminate upon the earlier of (i) the date
        that
        all obligations of the parties hereunder have been satisfied or (ii) on the
        date, prior to a Change in Control, the Director is no longer a member of
        the
        board of directors of the Corporation.

       

      3.  Successors.

       

      (a)  Corporation’s
        Successors.  Any successor to the Corporation (whether direct or
        indirect and whether by purchase, lease, merger, consolidation, liquidation
        or
        otherwise) to all or substantially all of the Corporation’s business and/or
        assets shall assume the obligations under this Agreement and agree expressly
        to
        perform the obligations under this Agreement in the same manner and to the
        same
        extent as the Corporation would be required to perform such obligations in
        the
        absence of a succession.  For all purposes under this Agreement, the
        term “Corporation” shall include any successor to the Corporation’s business
        and/or assets which executes and delivers the assumption agreement described
        in
        this subsection (a) or which becomes bound by the terms of this Agreement
        by
        operation of law.

       

      (b)  Director’s
        Successors.  Without the written consent of the Corporation, the
        Director shall not assign or transfer this Agreement or any right or obligation
        under this Agreement to any other person  or entity.  The
        terms of this Agreement and all rights of the Director hereunder shall inure
        to
        the benefit of, and be enforceable by, the Director’s personal or legal
        representatives, executors, administrators, successors, heirs, distributees,
        devisees and legatees.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4.  Federal
        Excise Tax.

       

      (a)  Avoidance
        of Excise Tax.  If the option acceleration provided for in this
        Agreement would be subject to the excise tax or denial of deduction imposed
        by
        Sections 280G and 4999 of the Code (an “Excess Parachute Payment”), then the
        Director's benefits under this Agreement shall be reduced, or portions of
        the
        then unvested options shall not vest as provided herein, in order to avoid
        any
        Excess Parachute Payment.

       

      (b)  Calculation
        by Independent Public Accountants.  Unless the Corportion and the
        Director otherwise agree in writing, any calculation of the amount of any
        Excess
        Parachute Payments shall be made in writing by the Corporation's independent
        public accountants (the “Accountants”), whose determination, absent manifest
        error, shall be conclusive and binding upon the Director and the
        Corporation.  For purposes of making such calculation, the Accountants
        may rely on reasonable, good faith interpretations concerning the application
        of
        Sections 280G and 4999 of the Code.  The Corporation and the Director
        shall furnish to the Accountants such information and documents as the
        Accountants may reasonably request in order to make the required
        calculation.  The Corporation shall bear all fees and expenses the
        Accountants may charge in connection with such calculation.

       

      5.  Arbitration.

       

      (a)  Disputes
        Subject to Arbitration.  To the extent permitted by law, any claim,
        dispute or controversy arising out of this Agreement, the interpretation,
        validity or enforceability of this Agreement or the alleged breach hereof
        shall
        be submitted by the parties to binding arbitration by a sole arbitrator under
        the rules of the American Arbitration Association.  Judgment may be
        entered on the award of the arbitrator in any court having
        jurisdiction.

       

      (b)  Costs
        of
        Arbitration.  All costs of arbitration, including reasonable attorneys
        fees of the Director, will be borne by the Corporation, except that, if the
        Director initiates arbitration and the arbitrator finds the Director's claims
        to
        be frivolous, the Director shall be responsible for his own costs and attorneys
        fees.

       

      (c)  Site
        of
        Arbitration.  The site of the arbitration proceeding shall be in
        Indianapolis, Indiana.

       

      (d)  Acknowledgment.  THE
        DIRECTOR HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
        ARBITRATION.  THE DIRECTOR UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
        THE DIRECTOR AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, OR RELATING TO,
        OR IN
        CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
        PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT
        THIS
        ARBITRATION CLAUSE CONSTITUTES A WAIVER OF THE DIRECTOR’S RIGHT TO A JURY TRIAL
        AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF
        THIS
        AGREEMENT.

       

      6.  Notice.  Notices
        and all other communications contemplated by this Agreement shall be in writing
        and shall be deemed to have been duly given when personally delivered or
        when
        mailed by U.S. registered or certified mail, return receipt requested and
        postage prepaid.  In the case of the Director, mailed notices shall be
        addressed to him/her at the home address that was most recently communicated
        to
        the Corporation in writing.  In the case of the Corporation, mailed
        notices shall be addressed to its corporate headquarters, and all notices
        shall
        be directed to the attention of its Secretary.

       

      7.  Miscellaneous
        Provisions.

       

      (a)  Amendment
        and Waiver.  No provision of this Agreement shall be modified,
        amended, waived or discharged unless the modification, amendment, waiver
        or
        discharge is agreed to in writing and signed by the Director and by an
        authorized officer of the Corporation (other than the Director).  No
        waiver by either party of any breach of, or of compliance with, any condition
        or
        provision of this Agreement by the other party shall be considered a waiver
        of
        any other condition or provision or of the same condition or provision at
        another time.

       

      (b)  Integration.  This
        Agreement, the Plans and any outstanding option award agreements referenced
        in
        this Agreement represent the entire agreement and understanding between the
        parties as to the subject matter of this Agreement and supersede all prior
        or
        contemporaneous agreements, whether written or oral, with respect to this
        Agreement, the Plans and such option award agreements.

       

      (c)  Choice
        of
        Law.  The validity, interpretation, construction and performance of
        this Agreement shall be governed by the laws of the State of Indiana, without
        regard to where the Director has his residence or principal office or where
        he
        performs his duties hereunder.

       

      (d)  Severability.  The
        invalidity or unenforceability of any provision or provisions of this Agreement
        shall not affect the validity or enforceability of any other provision hereof,
        which shall remain in full force and effect.

       

      (e)  Amendment
        of Award Agreements.  The Corporation and the Director agree that the
        provisions of this Agreement shall supersede any conflicting provisions of
        any
        stock option award agreement of the Director, and the Corporation and the
        Director agree to execute such further documents as may be necessary to amend
        any such agreement.  All other terms of the Director's stock option
        award agreement shall remain in full force and effect.

       

      (f)  Director
        Service.  Nothing in this Agreement is intended to or shall modify the
        nature of the Director's service as a member of the board of directors of
        the
        Corporation.  This Agreement should not be construed as giving the
        Director any right to be retained as a director of the Corporation.

       

      (g)  Headings.  The
        headings of sections herein are included solely for convenience of reference
        and
        shall not control the meaning or interpretation of any provisions of this
        Agreement.

       

      (h)  Counterparts.  This
        Agreement may be executed in counterparts, each of which shall be deemed
        an
        original, but all of which together will constitute one and the same
        instrument

      
         

        
          
            

          

        

         

      

      

       

      IN
        WITNESS WHEREOF, each of the parties
        has executed this Agreement, in the case of the Corporation by its duly
        authorized officer, as of the day and year first above written.

      

      
        	 INTERACTIVE
                INTELLIGENCE,
                INC.  	 DIRECTOR	 
	 	 	 	 	 
	
                By

              	 	 	 	
                 

              	 
	
                Name

              	 	 	 	
                Name 

              	 
	
                Title

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