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**Exhibit 10.1**

**FORM OFINCENTIVE STOCK OPTION AGREEMENT**

**IBISTECHNOLOGY CORPORATION**

AGREEMENT made as of the   thday of            20   ,between Ibis Technology Corporation (the “Company”), a Massachusettscorporation having a principal place of business in Danvers, Massachusetts, and                          of                   ,                       ,an employee of the Company (the “Employee”).

WHEREAS, the Companydesires to grant to the Employee an Option to purchase shares of its commonstock, $.008 par value per share (the “Shares”), under and for the purposes setforth in the Company’s 2007 Employee, Director and Consultant Equity Plan (the “Plan”);

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

WHEREAS, the Company andthe Employee each intend that the Option granted herein qualify as an ISO.

NOW, THEREFORE, inconsideration of the mutual covenants hereinafter set forth and for other goodand valuable consideration, the parties hereto agree as follows:

1.             GRANT OF OPTION.

The Company hereby grantsto the Employee the right and option to purchase all or any part of anaggregate of                 (        ) Shares, on the terms andconditions and subject to all the limitations set forth herein and in the Plan,which is incorporated herein by reference. The Employee acknowledges receipt of a copy of the Plan.

2.             PURCHASE PRICE.

The purchase price of theShares covered by the Option shall be                  ($      ) per Share, subject to adjustment, asprovided in the Plan, in the event of a stock split, reverse stock split orother events affecting the holders of Shares. Payment shall be made in accordance with Section 8(b) and Section 9 ofthe Plan.

3.             EXERCISABILITYOF OPTION.

Subjectto the terms and conditions set forth in this Agreement and the Plan, theOption granted hereby shall become exercisable as follows:
| On the first anniversary of  the date of this Agreement  |   | up to one-fourth Shares         |
|----------------------------------------------------------|--------|---------------------------------|
| On the second  anniversary of the date of this Agreement |   | an additional one-fourth Shares |
| On the third  anniversary of the date of this Agreement  |   | an additional one-fourth Shares |
| On the fourth  anniversary of the date of this Agreement |   | an additional one-fourth Shares |

 

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The foregoing rights arecumulative and are subject to the other terms and conditions of this Agreementand the Plan.

4.                                       TERMOF OPTION.

The Option shallterminate ten (10) years from the date of this Agreement or, if the Employeeowns as of the date hereof more than 10% of the total combined voting power ofall classes of capital stock of the Company or an Affiliate, five (5) yearsfrom the date of this Agreement, but shall be subject to earlier termination asprovided herein or in the Plan.

If the Employee ceases tobe an employee of the Company or of an Affiliate (for any reason other than thedeath or Disability of the Employee or termination of the Employee’s employmentfor “Cause” (as defined below)), the Option may be exercised, if it has notpreviously terminated, within three (3) months after the date the Employeeceases to be an employee of the Company or an Affiliate, or within theoriginally prescribed term of the Option, whichever is earlier, but may not be exercisedthereafter.  In such event, the Optionshall be exercisable only to the extent that the Option has become exercisableand is in effect at the date of such cessation of employment.

Notwithstanding theforegoing, in the event of the Employee’s Disability or death within three (3)months after the termination of employment, the Employee or the Employee’sSurvivors may exercise the Option within one (1) year after the date of theEmployee’s termination of employment, but in no event after the date of expirationof the term of the Option.

In the event the Employee’semployment is terminated by the Employee’s employer for Cause, the Employee’sright to exercise any unexercised portion of this Option shall cease as of suchtermination, and this Option shall thereupon terminate.  Notwithstanding anything herein to thecontrary, if subsequent to the Employee’s termination as an employee, but priorto the exercise of the Option, the Board of Directors of the Company determinesthat, either prior or subsequent to the Employee’s termination, the Employeeengaged in conduct which would constitute Cause, then the Employee shallimmediately cease to have any right to exercise the Option and this Optionshall thereupon terminate.

In the event of theDisability of the Employee, as determined in accordance with the Plan, theOption shall be exercisable within one (1) year after the Employee’stermination of employment or, if earlier, within the term originally prescribedby the Option.  In such event, the Optionshall be exercisable:

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(a)                                  tothe extent exercisable but not exercised as of the date of Disability; and

(b)                                 inthe event rights to exercise the Option accrue periodically, to the extent of apro rata portion of any additional rights to exercise the Option as would haveaccrued had the Employee not become Disabled prior to the end of the accrualperiod which next ends following the date of Disability.  The proration shall be based upon the numberof days during the accrual period prior to the date of Disability.

In the event of the deathof the Employee while an employee of the Company or of an Affiliate, the Optionshall be exercisable by the Employee’s Survivors within one (1) year after thedate of death of the Employee or, if earlier, within the originally prescribedterm of the Option.  In such event, theOption shall be exercisable:

(x)                                   tothe extent exercisable but not exercised as of the date of death; and

(y)                                 inthe event rights to exercise the Option accrue periodically, to the extent of apro rata portion of any additional rights to exercise the Option as would haveaccrued had the Employee not died prior to the end of the accrual period whichnext ends following the date of death. The proration shall be based upon the number of days during the accrual periodprior to the Employee’s death.

For purposes of thisAgreement, “Cause” shall include (and is not limited to) dishonesty withrespect to the Company or any Affiliate, insubordination, substantialmalfeasance or non-feasance of duty, unauthorized disclosure of confidentialinformation, and conduct     substantially prejudicial to the business of the Company or anyAffiliate.  Any definition in anagreement between the Employee and the Company or an Affiliate, which containsa conflicting definition of “Cause” for termination and which is in effect atthe time of such termination, shall supersede the definition in this Plan withrespect to such Employee.

5.                                       METHODOF EXERCISING OPTION.

Subject to the terms andconditions of this Agreement, the Option may be exercised by written notice tothe Company at its principal executive office, in substantially the form of Exhibit Aattached hereto.  Such notice shall statethe number of Shares with respect to which the Option is being exercised andshall be signed by the person exercising the Option.  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, without limitation,state securities or “blue sky” laws). The certificate or certificates for the Shares as to which the Optionshall have been so exercised shall be registered in the name of the person orpersons so exercising the Option (or, if the Option shall be exercised by theEmployee and if the Employee shall so request in the notice exercising theOption, shall be registered in the name of the Employee and another personjointly, with right of survivorship) and shall be delivered as provided aboveto or upon the written order of the person or persons exercising theOption.  In the event the Option shall beexercised, pursuant to Section 4 hereof, by any person or persons 

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other than the Employee,such notice shall be accompanied by appropriate proof of the right of suchperson or persons to exercise the Option. All Shares that shall be purchased upon the exercise of the Option asprovided herein shall be fully paid and nonassessable.

6.                                       PARTIALEXERCISE.

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

7.                                       NON-ASSIGNABILITY.

The Option shall not betransferable by the Employee otherwise than by will or by the laws of descentand distribution.  The Option shall beexercisable, during the Employee’s lifetime, only by the Employee (or, in theevent of legal incapacity or incompetency, by the Employee’s guardian orrepresentative) and shall not be assigned, pledged or hypothecated in any way(whether by operation of law or otherwise) and shall not be subject toexecution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or otherdisposition of the Option or of any rights granted hereunder contrary to theprovisions of this Section 7, or the levy of any attachment or similar processupon the Option shall be null and void.

8.                                       NORIGHTS AS STOCKHOLDER UNTIL EXERCISE.

The Employee shall haveno rights as a stockholder with respect to Shares subject to this Agreementuntil registration of the Shares in the Company’s share register in the name ofthe Employee.  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 of such registration.

9.                                       CAPITALCHANGES AND BUSINESS SUCCESSIONS.

The Plan containsprovisions covering the treatment of Options in a number of contingencies suchas stock splits and mergers.  Provisionsin the Plan for adjustment with respect to stock subject to Options and therelated provisions with respect to successors to the business of the Companyare hereby made applicable hereunder and are incorporated herein by reference.

10.                                 TAXES.

The Employee acknowledgesthat any income or other taxes due from him or her with respect to this Optionor the Shares issuable pursuant to this Option shall be the Employee’sresponsibility.

In the event of aDisqualifying Disposition (as defined in Section 15 below) or if the Option isconverted into a Non-Qualified Option and such Non-Qualified Option isexercised, the Company may withhold from the Employee’s remuneration, if any,the appropriate amount of 

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federal, state and localwithholding taxes attributable to such amount that is considered compensationincludable in such person’s gross income. At the Company’s discretion, the amount required to be withheld may bewithheld in cash from such remuneration, or in kind from the Shares otherwisedeliverable to the Employee on exercise of the Option.  The Employee further agrees that, if theCompany does not withhold an amount from the Employee’s remuneration sufficientto satisfy the Company’s income tax withholding obligation, the Employee willreimburse the Company on demand, in cash, for the amount under-withheld.

11.                                 PURCHASEFOR INVESTMENT.

Unless the offering andsale of the Shares to be issued upon the particular exercise of the Optionshall have been effectively registered under the Securities Act of 1933, as nowin force or hereafter amended (the “1933 Act”), the Company shall be under noobligation to issue the Shares covered by such exercise unless and until thefollowing conditions have been fulfilled:

(a)                                  Theperson(s) who exercise the Option shall warrant to the Company, at the time ofsuch exercise, that such person(s) are acquiring such Shares for their ownrespective accounts, for investment, and not with a view to, or for sale inconnection with, the distribution of any such Shares, in which event theperson(s) acquiring such Shares shall be bound by the provisions of thefollowing legend which shall be endorsed upon the certificate(s) evidencing theShares 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)                                 Ifthe Company so requires, the Company shall have received an opinion of itscounsel that the Shares may be issued upon such particular exercise incompliance with the 1933 Act without registration thereunder.  Without limiting the generality of theforegoing, the Company may delay issuance of the Shares until completion of anyaction or obtaining of any consent, which the Company deems necessary under anyapplicable law (including without limitation state securities or “blue sky”laws).

12.                                 NOOBLIGATION TO EMPLOY.

The Company is not by thePlan or this Option obligated to continue the Employee as an employee of theCompany.

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13.                                 OPTIONIS INTENDED TO BE AN ISO.

The parties each intendthat the Option be an ISO so that the Employee (or the Employee’s Survivors)may qualify for the favorable tax treatment provided to holders of Options thatmeet the standards of Section 422 of the Code. Any provision of this Agreement or the Plan which conflicts with theCode so that this Option would not be deemed an ISO is null and void and anyambiguities shall be resolved so that the Option qualifies as an ISO.  Nonetheless, if the Option is determined notto be an ISO, the Employee understands that neither the Company nor anyAffiliate is responsible to compensate him or her or otherwise make up for thetreatment of the Option as a Non-qualified Option and not as an ISO.  The Employee should consult with the Employee’sown tax advisors regarding the tax effects of the Option and the requirementsnecessary to obtain favorable tax treatment under Section 422 of the Code,including, but not limited to, holding period requirements.

14.                                 NOTICETO COMPANY OF DISQUALIFYING DISPOSITION.

The Employee agrees tonotify the Company in writing immediately after the Employee makes aDisqualifying Disposition of any of the Shares acquired pursuant to theexercise of the Option.  A DisqualifyingDisposition is defined in Section 424(c) of the Code and includes anydisposition (including any sale) of such Shares before the later of (a) twoyears after the date the Employee was granted the Option or (b) one year afterthe date the Employee acquired Shares by exercising the Option, except asotherwise provided in Section 424(c) of the Code.  If the Employee has died before the Sharesare sold, these holding period requirements do not apply and no DisqualifyingDisposition can occur thereafter.

15.                                 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:

If to the Company:

Ibis Technology Corporation32 Cherry Hill DriveDanvers, MA  01923Attn:  President

If to the Employee:

or to such other addressor addresses 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 by registeredor certified mail.

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16.                                 GOVERNINGLAW.

This Agreement shall beconstrued and enforced in accordance with the law of the Commonwealth ofMassachusetts**,** without giving effect to theconflict of law principles thereof.

17.                                 BENEFITOF AGREEMENT.

Subject to the provisionsof the Plan and the other provisions hereof, this Agreement shall be for thebenefit of and shall be binding upon the heirs, executors, administrators,successors and assigns of the parties hereto.

18.                                 ENTIREAGREEMENT.

This Agreement, togetherwith the Plan, embodies the entire agreement and understanding between theparties hereto with respect to the subject matter hereof and supersedes allprior oral or written agreements and understandings relating to the subjectmatter hereof.  No statement,representation, warranty, covenant or agreement not expressly set forth in thisAgreement shall affect or be used to interpret, change or restrict, the expressterms and provisions of this Agreement, provided, however, in any event, thisAgreement shall be subject to and governed by the Plan.

19.                                 MODIFICATIONSAND AMENDMENTS.

The terms and provisionsof this Agreement may be modified or amended as provided in the Plan.

20.                                 WAIVERSAND CONSENTS.

Except as provided in thePlan, the terms and provisions of this Agreement may be waived, or consent forthe departure therefrom granted, only by written document executed by the partyentitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed tobe or shall constitute a waiver or consent with respect to any other terms orprovisions of this Agreement, whether or not similar.  Each such waiver or consent shall beeffective only in the specific instance and for the purpose for which it wasgiven, and shall not constitute a continuing waiver or consent.

21.                                 HOLDINGPERIOD APPLICABLE TO PERSONS SUBJECT TO SECTION 16 OF THE SECURITIES EXCHANGEACT OF 1934

If the Employee to whomthe Option has been granted pursuant to this Agreement is subject to Section 16of the 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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INWITNESS WHEREOF, the Company has caused this Agreement to be executed by itsduly authorized officer, and the Employee has hereunto set his or her hand, allas of the day and year first above written.
|        |   | IBIS TECHNOLOGY CORPORATION |
|--------|--------|-----------------------------|
|   |   |                        |
|   | By:    |                        |
|   |   | William J. Schmidt          |
|   |   | Chief Financial Officer     |
|   |   |                        |
|   |   | Employee                    |   |
|   |   |                        |

 

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