EXHIBIT 10.7
                                                                    ------------

                        Innovative Micro Technology, Inc.

                       FORM OF RESTRICTED STOCK AGREEMENT
                       ----------------------------------

                                    under the
                            2001 Stock Incentive Plan


         1. Terms of Purchase.  On this 13th day of May, 2002  Innovative  Micro
Technology  (the "Company")  sells to (the "Holder"),  pursuant to the Company's
2001  Stock  Incentive  Plan (the  "Plan"),  and  holder  hereby  purchases,  an
aggregate of _________  shares (the  "Shares") of the  Company's  Class A Common
Stock, $.0001 par value, at a purchase price of $.0001 per share (the "Per Share
Purchase  Price") (for aggregate  consideration  of $_________) on the terms and
conditions set forth herein and in the Plan, a copy of which is attached to this
Agreement and which is incorporated herein by reference.  Capitalized terms used
but not defined in this Restricted Stock Agreement but defined in the Plan shall
have the same definitions as in the Plan.

         2.  Company Right of Repurchase.

                           (a) Of the Shares, ________ Shares,  representing 50%
                  of the aggregate number of Shares purchased  hereunder,  shall
                  vest and become "Vested  Shares" on the date one year from the
                  Plan of  Reorganization  Effective  date of November  16, 2002
                  (the  "Initial  Vesting  Date") and the balance shall vest and
                  become Vested  Shares one year from the Initial  Vesting Date;
                  provided, however, that none of the Shares shall become Vested
                  Shares until the later of the applicable date set forth in the
                  preceding clause and the date the Vesting Conditions have been
                  satisfied  or  waived by the  Company.  For  purposes  of this
                  paragraph,  "Vesting  Conditions"  means  the  listing  of the
                  Company's  Common  Stock on a national  stock  exchange or the
                  quotation of the Company's Common Stock on the Nasdaq National
                  Market or Nasdaq SmallCap  Market,  with a public float in any
                  case of at least $20  million.  All Shares  other than  Vested
                  Shares  shall be  "Unvested  Shares."  In the event the Holder
                  ceases  to  serve  as an  employee  of  the  Company,  whether
                  voluntarily  or  involuntarily,   for  any  reason  (including
                  disability  or death),  the  Company may within 180 days after
                  the date of such  termination  exercise its repurchase  option
                  under this  Section 2 to purchase all or any portion of shares
                  that were Unvested Shares on the date of such termination at a
                  per share price equal to the Per Share Purchase Price.



                           (b) In the event the Company exercises its repurchase
                  option as set forth  herein,  the  Company  shall  give to the



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                  Holder a written  notice  specifying  the  number of  Unvested
                  Shares it is electing to repurchase,  the price  thereof,  and
                  the time for a closing hereunder,  which closing shall be held
                  at the Company's  principal  office and shall occur no earlier
                  than 10 days and no later  than 20 days  after  the date  such
                  notice is  given.  Upon the date of any such  notice  from the
                  Company,  the  interest of the Holder in the  Unvested  Shares
                  shall automatically  terminate,  except for the Holder's right
                  to receive payment from the Company for such Unvested Shares.

                           (c) If the Company  exercises its  repurchase  option
                  hereunder,  the Holder  shall at the closing  duly endorse for
                  transfer the  certificate(s)  representing the Unvested Shares
                  to be sold to the Company,  and the Company  shall  deliver to
                  the Holder the purchase price for such Unvested Shares.

                           (d) The Holder agrees to deliver and deposit with the
                  Secretary of the Company,  or such other person as  designated
                  by the  Company,  as escrow  agent,  a stock  assignment  duly
                  endorsed  (with  date and  number  of shares  blank)  with the
                  certificate  or  certificates  evidencing the Shares until the
                  first to occur of (i) such shares  becoming  Vested Shares and
                  (ii) the Company's  failure to exercise its repurchase  option
                  within the period specified in this Section 2.

         3. Restrictions on Transfer.

                           (a) No Unvested Shares shall be sold,  transferred by
                  gift,  pledged,  hypothecated,  or  otherwise  transferred  or
                  disposed  of by the Holder,  and such Stock  shall  constitute
                  "Restricted  Stock" until fully Vested hereunder.  Any attempt
                  to transfer Stock in violation of this Section 3 shall be null
                  and void and shall be disregarded by the Company.

                           (b) The  sale of the  Shares  hereunder  has not been
                  registered  under the Securities Act. The Company shall make a
                  notation  regarding the  restrictions on transfer of the Stock
                  in  its   stockbooks,   and  shares  of  the  Stock  shall  be
                  transferred  on the books of the Company  only if fully vested
                  and transferred or sold pursuant to an effective  registration
                  statement  under the  Securities  Act of 1933, as amended (the
                  "1933 Act") covering such shares, or pursuant to an opinion of
                  counsel  delivered by the Holder that such  transfer is exempt
                  from registration.

                           (c)  Until  fully  vested  and  sold  pursuant  to an
                  effective  registration statement under the Securities Act, or
                  pursuant to an available exemption to registration, the shares
                  of the Stock  shall bear any legends  required  by  applicable

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                  securities  or corporate  laws,  in addition to the  following
                  legend:

         THE SHARES  REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS
         OF THAT CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY
         AND THE NAMED  STOCKHOLDER.  THE SHARES REPRESENTED BY THIS CERTIFICATE
         MAY BE TRANSFERRED  ONLY IN ACCORDANCE WITH SUCH  AGREEMENT,  A COPY OF
         WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.


         4. Restricted Stock Agreement not a Service Contract. This agreement is
not an employment  or service  contract,  and nothing  herein shall be deemed to
create in any way  whatsoever  any  obligation  on your part to  continue in the
employ of the  Company or an  Affiliate,  or of the Company or an  Affiliate  to
continue  your  employment.  In addition,  nothing in herein shall  obligate the
Company or an Affiliate,  their  respective  shareholders,  Boards of Directors,
Officers or  Employees  to continue  any  relationship  that you might have as a
Director or Consultant for the Company or an Affiliate.

         5.  Withholding  of Taxes.  The Holder shall provide the Company with a
copy of any timely  election  made  pursuant  to Section  83(b) of the  Internal
Revenue  Code or  similar  provision  of  state  law  (collectively,  an  "83(b)
Election"),  a form of which  election is attached  hereto as Exhibit A . If the
Holder  makes a timely 83(b)  Election,  the Holder  shall  immediately  pay the
Company the amount necessary to satisfy any applicable federal, state, and local
income and employment tax withholding requirements.  If the Holder does not make
a timely 83(b) Election,  Holder shall, either at the time that the restrictions
lapse under this Agreement or at the time  withholding is otherwise  required by
any  applicable  law,  pay the  Company  the amount  necessary  to  satisfy  any
applicable  federal,  state,  and local income and  employment  tax  withholding
requirements.  If, upon written request by the Company,  the Holder fails to pay
the Company such amount in a timely manner,  the Company shall have the right to
deduct  such  amount  from any sum(s) due the Holder  from the Company and shall
also have the  right to sell a  sufficient  number  of  shares of the  Shares to
satisfy  such  tax  obligation.  The  Holder  acknowledges  that it is  Holder's
responsibility  to consult with Holder's own tax advisor as to the  consequences
and  timing  of an  83(b)  election.  Any  adverse  consequences  to the  Holder
resulting  from making or failing to make such  election  shall be the  Holder's
sole responsibility.

         6.   Equitable   Relief  and  Consent  to   Jurisdiction.   The  Holder
specifically acknowledges and agrees that in the event of a breach or threatened
breach of the provisions of this Agreement,  including the attempted transfer of
the Shares by the Holder, monetary damages may not be adequate to compensate the

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Company, and, therefore,  in the event of such a breach or threatened breach, in
addition to any right to damages,  the  Company  shall be entitled to  equitable
relief in any court  having  competent  jurisdiction.  Nothing  herein  shall be
construed as prohibiting the Company from pursuing any other remedies  available
to it for any such breach or threatened breach.

         7. Notices.  Any notices  provided for in your option or the Plan shall
be given in writing and shall be deemed  effectively  given upon  receipt or, in
the case of notices delivered by the Company to you, five (5) days after deposit
in the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.

         8.  Execution.  By the purchase of the Shares,  the Holder  agrees that
such Holder is subject in all respects to the foregoing terms and conditions and
to the Plan.  This Agreement shall be binding on and inure to the benefit of the
executor,  administrator,  legatees, heirs, legal representatives and assigns of
the Holder and the successors and permitted assigns of the Company.

         In  witness  whereof,   the  parties  hereto  have  entered  into  this
Restricted Stock Agreement on the date first above written.


                  COMPANY:                  INNOVATIVE MICRO TECHNOLOGY, INC.


                                            By_________________________________


                                            Its_________________________________


                  HOLDER:


                                            _________________________________
                                                     Signature
                                            _________________________________
                                                     Name

         By his or her  signature  below,  the spouse of the Holder agrees to be
bound by all of the terms and conditions of the foregoing Agreement.

                  HOLDER'S SPOUSE:



                                            _________________________________
                                                     Signature
                                            _________________________________
                                                     Name


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