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**Exhibit 10.3**

**FORM OFDIRECTOR STOCK OPTION AGREEMENT**

**IBIS TECHNOLOGY CORPORATION**

AGREEMENT made as of the     th day of               20  , between Ibis Technology Corporation (the “Company”), aMassachusetts corporation, and                            , a director of the Company (the “Participant”).

WHEREAS, the Company desires togrant to the Participant an Option to purchase shares of its common stock,$.008 par value (the “Shares”), under and for the purposes of the 2007Employee, Director and Consultant Stock Option Plan of the Company (the “Plan”);and

WHEREAS, the Company and theParticipant understand and agree that any terms used and not defined hereinhave the same meanings as in the Plan;

NOW, THEREFORE, in considerationof the mutual covenants hereinafter set forth and for other good and valuableconsideration, the parties hereto agree as follows:

1.             GRANT OF OPTION.

The Company hereby grants to theParticipant the right and option to purchase all or any part of an aggregate of                          (           ) Shares(the “Option”), on the terms and conditions and subject to all the limitationsset forth herein and in the Plan, which is incorporated herein byreference.  The Participant acknowledgesreceipt of a copy of the Plan.  The Optionis not intended to qualify as an incentive stock option under Section 422 ofthe Internal Revenue Code of 1986, as amended (the “Code”).  The Participant should consult with theParticipant’s own tax advisors regarding the tax effects of the exercise of theOption and the purchase and subsequent sale of the Shares purchased uponexercise.

2.             PURCHASE PRICE.

The purchase price of the Sharescovered by the Option shall be               ($       ),per Share, subject to adjustment, as provided in the Plan, in the event of astock split, reverse stock split or other events affecting the holders ofShares.  Payment shall be made inaccordance with Section 8(b) and Section 9 of the Plan.

3.             EXERCISE OF OPTION.

If the Participant has continuedto serve as a director of the Company and subject to the terms and conditionsset forth in this Agreement and the Plan, the Option granted hereby shallbecome exercisable in full immediately prior to the Company’s annual meeting ofits stockholders 

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in 20   .  The foregoing rights are cumulative and aresubject to the other terms and conditions of this Agreement and the Plan.

4.             TERM OF OPTION.

The Option shall terminate ten(10) years from the date of this Agreement, but shall be subject to earliertermination as provided herein or in the Plan.

If the Participant ceases to bea director of the Company (for any reason other than the death or Disability ofthe Participant or termination by the Company for “Cause” (as defined below)),the Option may be exercised, if it has not previously terminated, within three(3) months after the date the Participant ceases to be a director of theCompany or within the originally prescribed term of the Option, whichever isearlier, but may not be exercised thereafter. In such event, the Option shall be exercisable only to the extent thatthe Option has become exercisable and is in effect at the date of suchcessation of directorship.

Notwithstanding the foregoing,in the event of the Participant’s death within three (3) months after the terminationof directorship, the Participant’s legal representatives and/or any person orpersons who acquired the Participant’s rights to the Option by will or by thelaws of descent and distribution may exercise the Option within one (1) yearafter the date of the Participant’s death, but in no event after the date ofexpiration of the term of the Option.

In the event the Participant’sdirectorship is terminated by the Company for Cause, the Participant’s right toexercise any unexercised portion of this Option shall cease forthwith, and thisOption shall thereupon terminate. Notwithstanding anything herein to the contrary, if subsequent to theParticipant’s termination as a director but prior to the exercise of theOption, the Board of Directors of the Company determines that, either prior orsubsequent to the Participant’s termination, the Participant engaged in conductwhich would constitute Cause, then the Participant shall forthwith cease tohave any right to exercise the Option and this Option shall thereuponterminate.

In the event of the Disabilityof the Participant, as determined in accordance with the Plan, the Option shallbe exercisable within one (1) year after the date of such Disability or, ifearlier, the term originally prescribed by the Option.  In such event, the Option shall beexercisable to the extent exercisable but not exercised as of the date ofDisability.

In the event of the death of theParticipant while a director of the Company, the Option shall be exercisable bythe Participant’s Survivors.  In suchevent, the Option must be exercised, if at all, within one (1) year after thedate of death of the Participant or, if earlier, within the originallyprescribed term of the Option.  In suchevent, the Option shall be exercisable to the extent exercisable but notexercised as of the date of death.

For purposes of this Agreement, “Cause”shall include (and is not limited to) dishonesty with respect to the Company orany Affiliate, insubordination, substantial malfeasance or non-feasance ofduty, unauthorized disclosure of confidential information, and conduct 

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substantially prejudicial to thebusiness of the Company or any Affiliate. Any definition in an agreement between the Participant and the Companyor an Affiliate, which contains a conflicting definition of “Cause” fortermination and which is in effect at the time of such termination, shallsupersede the definition in this Plan with respect to such Participant.

5.             METHOD OF EXERCISING OPTION.

Subject to the terms andconditions of this Agreement, the Option may be exercised by written notice tothe Company, at the principal executive office of the Company.  Such notice shall state the election toexercise the Option and the number of Shares in respect of which it is beingexercised, shall be signed by the person or persons so exercising the Option,and shall be in substantially the form attached hereto.  Payment of the purchase price for such Sharesshall be made in accordance with Section 8(b) and Section 9 of the Plan.  The Company shall deliver a certificate orcertificates representing such Shares as soon as practicable after the noticeshall be received, provided, however, that the Company may delay issuance ofsuch Shares until completion of any action or obtaining of any consent, whichthe Company deems necessary under any applicable law (including, withoutlimitation, state securities or “blue sky” laws).  The certificate or certificates for theShares as to which the Option shall have been so exercised shall be registeredin the name of the person or persons so exercising the Option (or, if theOption shall be exercised by Participant and if Participant shall so request inthe notice exercising the Option, shall be registered in the name of theParticipant and another person jointly, with right of survivorship) and shallbe delivered as provided above to or upon the written order of the person orpersons exercising the Option.  In theevent the Option shall be exercised, pursuant to Section 4 hereof, by anyperson or persons other than the Participant, such notice shall be accompaniedby appropriate proof of the right of such person or persons to exercise theOption.  All Shares that shall bepurchased upon the exercise of the Option as provided herein shall be fullypaid and nonassessable.

6.             PARTIAL EXERCISE.

Exercise of this Option to theextent above stated may be made in part at any time and from time to timewithin the above limits, except that no fractional share shall be issuedpursuant to this Option.

7.             NON-ASSIGNABILITY.

The Option shall not betransferable by the Participant otherwise than by will or by the laws ofdescent and distribution or pursuant to a qualified domestic relations order asdefined by the Code or Title I of the Employee Retirement Income Security Actor the rules thereunder.  Except asprovided in the previous section, the Option shall be exercisable, during theParticipant’s lifetime, only by the Participant and shall not be assigned,pledged or hypothecated in any way (whether by operation of law or otherwise)and shall not be subject to execution, attachment or similar process.  Any attempted transfer, assignment, pledge,hypothecation or other disposition of the Option or of any rights grantedhereunder contrary to the provisions of this Section 7, or the levy of anyattachment or similar process upon the Option or such rights, shall be null andvoid.

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8.             NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

The Participant shall have norights as a stockholder with respect to Shares subject to this Agreement untila stock certificate therefor has been issued to the Participant and is fullypaid for.  Except as is expresslyprovided in the Plan with respect to certain changes in the capitalization ofthe Company, no adjustment shall be made for dividends or similar rights forwhich the record date is prior to the date such stock certificate is issued.

9.             CAPITAL CHANGES AND BUSINESS SUCCESSIONS.

The Plan contains provisionscovering the treatment of Options in a number of contingencies such as stocksplits and mergers.  Provisions in thePlan for adjustment with respect to stock subject to Options and the relatedprovisions with respect to successors to the business of the Company are herebymade applicable hereunder and are incorporated herein by reference.

10.           TAXES AND WITHHOLDING.

The Participant acknowledgesthat upon exercise of the Option the Participant will be deemed to have taxableincome measured by the difference between the then fair market value of theShares received upon exercise and the price paid for such Shares pursuant tothis Agreement (the “Taxable Income”). The Participant acknowledges that any income or other taxes due from himor her with respect to this Option or the Shares issuable pursuant to thisOption shall be the Participant’s responsibility.

If the Company in its discretiondetermines that it is obligated to withhold income or other taxes with respectto the exercise of the Option, the Participant hereby agrees that the Companymay withhold from the Participant’s remuneration, if any, the appropriateamount of federal, state and local withholding attributable to such amount thatis considered compensation includable in such person’s gross income.  At the Company’s discretion, the amountrequired to be withheld may be withheld in cash from such remuneration, or inkind from the common stock otherwise deliverable to the Participant on exerciseof the Option, provided, however, that with respect to persons subject toSection 16 of the Securities Exchange Act of 1934 (the “1934 Act”), any suchwithholding arrangement shall be in compliance with any applicable provisionsof Rule 16b-3 promulgated under Section 16 of the 1934 Act.  The Participant further agrees that, if theCompany does not withhold an amount from the Participant’s remunerationsufficient to satisfy the Company’s income tax withholding obligation, theParticipant will reimburse the Company on demand, in cash, for the amountunderwithheld.

11.           PURCHASE FOR INVESTMENT.

Unless the offering and sale ofthe Shares to be issued upon the particular exercise of the Option shall havebeen effectively registered under the Securities Act of 1933, as now in forceor hereafter amended (the “1933 Act”), the Company shall be under no obligationto issue the Shares covered by such exercise unless and until the followingconditions have been fulfilled:

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(a)                                The person(s) who exercise the Option shallwarrant to the Company, at the time of such exercise, that such person(s) areacquiring such Shares for their own respective accounts, for investment, andnot with a view to, or for sale in connection with, the distribution of anysuch Shares, in which event the person(s) acquiring such Shares shall be boundby the provisions of the following legend which shall be endorsed upon thecertificate(s) evidencing their Option Shares issued pursuant to such exercise:

“The shares represented by this certificate have been taken forinvestment and they may not be sold or otherwise transferred by any person,including a pledgee, unless (1) either (a) a Registration Statement withrespect to such shares shall be effective under the Securities Act of 1933, asamended, or (b) the Company shall have received an opinion of counselsatisfactory to it that an exemption from registration under such Act is thenavailable, and (2) there shall have been compliance with all applicable statesecurities laws”; and

(b)                                 If the Company so requires, the Company shallhave received an opinion of its counsel that the Shares may be issued upon suchparticular exercise in compliance with the Act without registrationthereunder.  Without limiting thegenerality of the foregoing, the Company may delay issuance of the Shares untilcompletion of any action or obtaining of any consent, which the Company deemsnecessary under any applicable law (including without limitation statesecurities or “blue sky” laws).

12.           NO RIGHT OR OBLIGATION TO CONTINUE SERVICE AS ADIRECTOR.

The Company is not by the Planor this Agreement obligated to continue the Participant as a member of theBoard of Directors, nor is the Participant prevented from terminating theParticipant’s status as a member of the Board of Directors.

13.           NOTICES.

Any notices required orpermitted by the terms of this Agreement or the Plan shall be given byrecognized courier service, facsimile, registered or certified mail, returnreceipt requested, addressed as follows:

| To the Company:     |   | Ibis Technology Corporation   |
|---------------------|--------|-------------------------------|
|                |   | 32 Cherry Hill  Drive         |
|                |   | Danvers,  Massachusetts 01923 |
|                |   |                          |
| To the Participant: |   |                          |

 

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or to such other address oraddresses of which notice in the same manner has previously been given.  Any such notice shall be deemed to have beengiven upon the earlier of receipt, one business day following delivery to arecognized courier service or three business days following mailing byregistered or certified mail.

14.           GOVERNING LAW.

This Agreement shall beconstrued and enforced in accordance with the law of the Commonwealth ofMassachusetts.

15.           BENEFIT OF AGREEMENT.

Subject to the provisions of thePlan and the other provisions hereof, this Agreement shall be for the benefitof and shall be binding upon the heirs, executors, administrators, successorsand assigns of the parties hereto.

16.           ENTIRE AGREEMENT.

This Agreement, together withthe Plan, embodies the entire agreement and understanding between the partieshereto with respect to the subject matter hereof and supersedes all prior oralor written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty,covenant or agreement not expressly set forth in this Agreement shall affect orbe used to interpret, change or restrict, the express terms and provisions ofthis Agreement, provided, however, in any event, this Agreement shall besubject to and governed by the Plan.

17.           MODIFICATIONS AND AMENDMENTS.

The terms and provisions of thisAgreement may be modified or amended as provided in the Plan.

18.           WAIVERS AND CONSENTS.

The terms and provisions of thisAgreement may be waived, or consent for the departure therefrom granted, onlyby written document executed by the party entitled to the benefits of suchterms or provisions.  No such waiver orconsent shall be deemed to be or shall constitute a waiver or consent withrespect to any other terms or provisions of this Agreement, whether or notsimilar.  Each such waiver or consentshall be effective only in the specific instance and for the purpose for whichit was given, and shall not constitute a continuing waiver or consent.

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19.                                 HOLDING PERIOD APPLICABLE TO PERSONS SUBJECT TOSECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934.

If the Participant to whom theOption has been granted pursuant to this Agreement is subject to Section 16 ofthe 1934 Act, Section 16 requires that, in some circumstances, at least six (6)months must elapse from the date of grant of the Option to the date ofdisposition of the Shares.

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IN WITNESS WHEREOF, the Companyhas caused this Agreement to be executed by its duly authorized officer and theParticipant has hereunto set his or her hand, all as of the day and year firstabove written.
|        |   | Ibis Technology Corporation   |
|--------|--------|-------------------------------|
|   |   |                          |
|   | By:    |                          |
|   |   | Charles M. McKenna, President |
|   |   |                          |
|   |   |                          |
|   |   | Director                      |

 

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