INFINITE GROUP, INC. 2009 STOCK OPTION PLAN

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.

(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.

(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.

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.

(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.

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).

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.

(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.