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Change of Control and Retention Agreement

CHANGE OF CONTROL AND RETENTION AGREEMENT

This Change of Control and Retention Agreement (the Agreement) is made and entered into as of March 13, 2006, by and between Interactive Intelligence, Inc., an Indiana corporation (the Company), and {Executive Name} (the Executive).

WHEREAS, the Executive is a key employee of the Company who possesses valuable proprietary knowledge of the Company, its business and operations and the markets in which the Company competes; and

WHEREAS, the Company draws upon the knowledge, experience, expertise and advice of the Executive to manage its business for the benefit of the Companys shareholders; and

WHEREAS, the Company recognizes that, if a Change of Control were to occur, the resulting uncertainty regarding the consequences of such an event could adversely affect the performance of, and the Companys ability to attract and retain, its key employees, including the Executive; and

WHEREAS, the Company believes that the existence of this Agreement will serve as an incentive to the Executive to remain in the employ of the Company, and would enhance the Companys ability to call on and rely upon the Executive if a Change of Control were to occur; and

WHEREAS, the Company and the Executive desire to enter into this Agreement to encourage the Executive to continue to devote the Executives full attention and dedication to the success of the Company, and to provide specified compensation and benefits to the Executive in the event of a Termination Upon Change of Control pursuant to the terms of this Agreement.

NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

The purpose of this Agreement is to provide specified compensation and benefits to the Executive in the event of his Termination Upon Change of Control. Subject to the terms of any applicable written employment agreement between Company and the Executive, either the Executive or Company may terminate the Executives employment at any time for any reason.

2.	TERMINATION UPON CHANGE OF CONTROL

2.1 Prior Obligations. In the event of the Executives Termination Upon Change of Control, the Executive shall be entitled to the benefits described in this Section 2.1.

2.1.1 Accrued Salary and Vacation. All salary and accrued vacation earned through the date of the Executives Termination Upon Change of Control shall be paid to Executive within thirty (30) days after the date on which the Executive's employment terminates (the Termination Date).

2.1.2 Accrued Bonus Payment. The Executive shall receive a lump sum payment of any bonus amounts (a) attributable to any of the Companys completed fiscal periods for which a bonus was earned but is unpaid on the Termination Date, and (b) attributable to any uncompleted fiscal period for which a potential bonus award exists, to the extent that any such bonus was earned and is unpaid on the Executives Termination Upon Change of Control, in each case within thirty (30) days after the Termination Date. For purposes of this Section 2.1.2, the amount of bonus "earned" for an uncompleted fiscal period shall be based on the level of performance achieved as of the Termination Date.

2.1.3 Expense Reimbursement. Within ten (10) days following submission to the Company of proper expense reports by the Executive, the Company shall reimburse the Executive for all expenses incurred by the Executive in connection with the business of the Company prior to the Termination Date, consistent with the Companys expense reimbursement policy in effect at the time each such expense was incurred.

2.2 Additional Cash Severance Benefits. In the event of the Executives Termination Upon Change of Control, the Executive shall be entitled to receive from the Company an amount equal to: (a) if the Termination Date is prior to or on the effective date of the Change of Control, the Executive's Base Salary; or (b) if the Termination Date is after the effective date of the Change of Control, Executive's Base Salary, multiplied by a fraction, the numerator of which is that number of days equal to (i) 365 minus (ii) the number of days between the effective date of the Change of Control and the Termination Date, and the denominator of which is 365. Subject to the following two sentences, the amount set forth in this Section 2.2 shall be paid in cash in a single lump sum payment within thirty (30) days following the Termination Date or, if later, the effective date of the Change of Control. The payment described in this Section 2.2 may not be made before the expiration of the Revocation Period described in Section 5.3, and it will not be made in the event the Executive revokes the General Release described in Section 5.3 within the Revocation Period. If the Executive is a "specified employee" as defined in Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the "Code"), the payment described in this Section 2.2 will not be made before the date that is six months after the Termination Date (or, if earlier, the date of the Executive's death).