EXHIBIT 10.4

[appliedlogo.gif] 9586 I-25 Frontage Road, Suite 200
Longmont, Colorado 80504
USA T: 303.774.3200
F: 303.678.9275
www.appliedfilms.com

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Date

«FirstName» «LastName»
«Company»
«Address1»
«Address2»
«City», «State»
«Country» «PostalCode»

        Re:     Applied Films Corporation — Nonqualified Stock Option

        The Board of Directors (the “Board”) of Applied Films Corporation (the
“Company”), or the committee (the “Administrator”) designated by the Board for
the purpose of administering the Applied Films Corporation Long-Term Incentive
Plan dated as of October 22, 2003, as amended (the “Plan”), hereby grants to
you, as Grantee, a stock option (the “Option”), pursuant to the Plan. A copy of
the Plan is available on request from the Company. Each capitalized term used in
this Agreement, which is not defined herein, has the meaning indicated for such
term in the Plan.

        1.        Stock Option. The Option entitles you (or other person as
permitted under Section 3 of this Agreement) to purchase up to «SharesWritten»
(«SharesNumber») shares of the Company’s Common Stock, no par value (the “Option
Shares”), subject to the terms and conditions of the Plan and this Agreement, at
an option price per share of $ (the “Option Price”), as a voluntary benefit in
respect of which no legal claim exists in the future. The Option is intended to
be a nonqualified stock option.

        2.        Additional Terms. The Option is also subject to the following
provisions:

        (a)        Exercisability. The Option may be exercised and Option Shares
may be purchased at any time and from time to time after the first anniversary
of the date of this Agreement, subject to the terms of the Plan and the vesting
schedule set forth in Section 2(b) below. The Option Price for the respective
Option Shares shall be paid in full at the time of the exercise. Payment in full
or in part may be made in cash, by check or in the form of Common Stock owned by
you (and for which you have good title free and clear of any liens and
encumbrances and, with respect to any shares of Common Stock acquired upon the
exercise of any stock option from the Company, has been held by you for a period
of at least six (6) consecutive months), or by reduction in the number of shares
issuable upon which exercise, based in each case on the Fair Market Value of the
Common Stock on the last trading day preceding payment, as determined by the
Administrator. The Option Shares acquired under this Agreement are hereinafter
referred to as the “Exercise Shares.”

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        (b)        Vesting Schedule. Twenty-five percent (25%) of the shares
subject to this Option shall vest and be exercisable on the first anniversary of
this Agreement. An additional twenty-five percent (25%) of the shares subject to
this Option shall vest and be exercisable on the same date of each year
thereafter, until all shares subject to this Option have vested, provided
Grantee continues to be employed by the Company or any Subsidiary.
Notwithstanding the foregoing vesting schedule, the Option shall be fully vested
and exercisable with respect to all of the Option Shares upon the
Administrator’s determination that a successor entity or its parent or
subsidiary has refused to assume or substitute an equivalent option in the event
of a Change in Control of the Company.

          Time on leave of absence or periods of temporary suspension of
employment greater than 90 consecutive days will not be counted as part of any
vesting period. Reasons for such temporary suspension of employment or leaves of
absence include, but are not limited to, maternity leave, parental leave,
military service or any other reason which may cause temporary suspension of
employment of greater than 90 days. The Stock Option Plan is not a part of
remuneration to be continued during such periods.

        (c)        Procedure for Exercise. Subject to the terms and conditions
of this Agreement, the Option may be exercised with respect to vested Option
Shares at any time and from time to time after the first anniversary of the date
of execution of this Agreement and prior to its termination by delivering
written notice to the Chief Financial Officer of the Company at its corporate
headquarters at the address above specifying the number of shares to be
purchased and including payment of the respective Option Price multiplied by the
number of Option Shares purchased.

        3.        Transferability of Option. Except for transfers to Permitted
Transferees which comply with Section 6.4(3) of the Plan. this Option shall not
be transferable by Grantee other than by will or the laws of descent and
distribution and may be exercised during the lifetime of Grantee only by
Grantee. Except as provided above, this Option shall not be transferred,
assigned, pledged, or hypothecated in any way, shall not be assignable by
operation of law, and shall not be subject to execution, levy, attachment, or
similar process. Any attempted transfer, assignment, pledge, hypothecation or
other disposition of this Option contrary to the terms hereof, and any
execution, levy, attachment or similar process upon the Option, shall be null
and void and without effect.

        4.        Transferability of Exercise Shares. No Exercise Shares may be
transferred except in full compliance with applicable federal and state
securities laws.

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        5.        Conformity with Plan. The Option is intended to conform in all
respects with, and is subject to all applicable provisions of, the Plan, which
is incorporated herein by reference. Inconsistencies between this Agreement and
the Plan shall be resolved in accordance with the terms of the Plan. By
executing and returning the enclosed copy of this Agreement, Grantee
acknowledges receipt of the Plan and agrees to be bound by all of the terms of
the Plan.

        6.        Employment. Notwithstanding any contrary oral representations
or promises made to Grantee prior to or after the date hereof, Grantee and the
Company acknowledge Grantee’s employment with the Company, and/or with any
Subsidiary or business unit of the Company, is and will continue to be subject
to the willingness of each to continue such employment, and nothing herein
confers any right or obligation on Grantee to continue in the employ of the
Company, or shall affect in any way Grantee’s right or the right of the Company
to terminate Grantee’s employment at any time, for any reason, with or without
cause. Further, the Grantee acknowledges that the grant of Options under the
Plan does not create an employment relationship with the Company and also
acknowledges that termination of Grantee’s employment with that business unit or
Subsidiary is also considered to be termination of employment for the purposes
of the Plan.

        7.        Adjustment. The Administrator shall make appropriate and
proportionate adjustments to the terms of the Option to reflect any stock
dividend, stock split, combination or exchange of shares, merger, consolidation
or other change in the capitalization of the Company which the Administrator
determines to be similar, in its substantive effect upon the Plan or the Option,
to any of the changes expressly indicated in this sentence, as provided in
Section 13.1 of the Plan. In the event of any such adjustments, any and all new,
substituted or additional securities or other property to which Grantee is
entitled by reason of the Option shall be immediately subject to the Option and
be included in the word “Option Shares” for all purposes of the Option with the
same force and effect as the Option Shares presently subject to the Option.
After each such event, the number of Option Shares and/or the respective Option
Price shall be appropriately adjusted.

        8.        Expiration. Subject to the terms of the Plan, the Option shall
expire at 5:00 p.m., United States mountain time, on the tenth anniversary of
the date hereof.

        9.        Tax Withholding. The exercise of this Option is subject to the
satisfaction of withholding tax or other withholding liabilities, if any, under
applicable law in connection with such exercise or the delivery or purchase of
Exercise Shares. The exercise of this Option shall not be effective unless
applicable withholding, if required, shall have been effected or obtained in a
manner acceptable to the Administrator in accordance with the Plan and Grantee
authorizes the Company to effect the required withholding in the manner
determined by the Company.

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        10.        Postponement of Delivery of Shares and Representations. The
Company, in its discretion, may postpone the issuance and/or delivery of Option
Shares upon any exercise of this Option until completion of any stock exchange
listing, or registration, or other qualification of such shares under any
applicable law, rule or regulation as the Company may consider appropriate, and
may require any person exercising this Option to make such representations and
furnish such information as it may consider appropriate. In such event, no
Option Shares shall be issued to such holder unless and until the Company is
satisfied with the accuracy of any such representations.

        11.        Rights as Stockholder. Grantee shall have no rights as a
stockholder with respect to any Option Shares until Grantee becomes the holder
of record of such shares.

        12.        Further Actions. The parties agree to execute such further
instruments and to take such further actions as may reasonably be required to
carry out the intent of this Agreement.

        13.        Notice. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or
upon deposit in the United States Post Office, by registered or certified mail
with postage and fees prepaid, addressed to the other party hereto at the
address set forth in this Agreement or at such other address as the receiving
party may designate by 10 days advance written notice to the sending party.
Grantees who are employed by a Company business unit or Subsidiary located
outside the United States will be considered to have met the advance notice
requirement by depositing such written notice in the legal postal system of
their home country or an established international package delivery service,
registered or certified with postage/shipping fees prepaid, in time to meet the
10 day advance notice requirement.

        14.        Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the successors and assigns of the Company and,
subject to the restrictions on transfer set forth herein, be binding upon
Grantee’s heirs, executors, administrators, successors and permitted assigns and
inure to the benefit of Grantee’s heirs, executors, administrators, successors
and permitted assigns.

        15.        Governing Law; Jurisdiction; Venue. This Agreement and all
documents contemplated hereby, and all remedies in connection therewith and all
questions or transactions relating thereto, shall be governed, construed,
interpreted and enforced in accordance with the domestic laws of the state of
Colorado, USA, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Colorado or any other jurisdiction)
that would cause the application of the laws of any other jurisdiction. All
claims arising from or in connection with any aspect of the Plan or this
Agreement are subject to the jurisdiction of the laws of the State of Colorado,
USA, and shall be adjudicated in the proper applicable state or federal court
located in Colorado, USA. The parties specifically consent and submit to the
jurisdiction and venue of such state or federal court.

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        16.        Entire Agreement. This Agreement constitutes the entire
understanding between the Grantee and the Company with respect to the Option
Shares, and supersedes all other agreements, whether written or oral, with
respect thereto.

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        Please execute the extra copy of this Agreement in the space below and
return it to the Secretary of the Company to confirm your understanding and
acceptance of the agreements contained in this letter.

Very truly yours,

APPLIED FILMS CORPORATION

By:
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Its
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        The undersigned hereby acknowledges having read this Agreement and the
Plan and hereby agrees to be bound by all provisions set forth herein and in the
Plan.

GRANTEE:

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(Signature)

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(Please print name)

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(Address)

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Record of Exercise
  Date Number of Shares Price Per Share Shares Subject to
Option After Exercise