Document:

Exhibit 10.1

FORM OF

INCENTIVE STOCK OPTION AGREEMENT

IBIS
TECHNOLOGY CORPORATION

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

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

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

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

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

1.             GRANT OF OPTION.

The Company hereby grants
to the Employee the right and option to purchase all or any part of an
aggregate of                 
(        ) Shares, on the terms and
conditions 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 the
Shares covered by the Option shall be                  
($      ) per Share, subject to adjustment, as
provided in the Plan, in the event of a stock split, reverse stock split or
other events affecting the holders of Shares. 
Payment shall be made in accordance with Section 8(b) and Section 9 of
the Plan.

3.             EXERCISABILITY
OF OPTION.

Subject
to the terms and conditions set forth in this Agreement and the Plan, the
Option 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 are
cumulative and are subject 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 or, if the Employee
owns as of the date hereof more than 10% of the total combined voting power of
all classes of capital stock of the Company or an Affiliate, five (5) years
from the date of this Agreement, but shall be subject to earlier termination as
provided herein or in the Plan.

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

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

In the event the Employee’s
employment is terminated by the Employee’s employer for Cause, the Employee’s
right to exercise any unexercised portion of this Option shall cease as of such
termination, and this Option shall thereupon terminate.  Notwithstanding anything herein to the
contrary, if subsequent to the Employee’s termination as an employee, but prior
to the exercise of the Option, the Board of Directors of the Company determines
that, either prior or subsequent to the Employee’s termination, the Employee
engaged in conduct which would constitute Cause, then the Employee shall
immediately cease to have any right to exercise the Option and this Option
shall thereupon terminate.

In the event of the
Disability of the Employee, as determined in accordance with the Plan, the
Option shall be exercisable within one (1) year after the Employee’s
termination of employment or, if earlier, within the term originally prescribed
by the Option.  In such event, the Option
shall be exercisable:

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

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

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

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

(y)                                 in
the event rights to exercise the Option accrue periodically, to the extent of a
pro rata portion of any additional rights to exercise the Option as would have
accrued had the Employee not died prior to the end of the accrual period which
next ends following the date of death. 
The proration shall be based upon the number of days during the accrual period
prior to the Employee’s death.

For purposes of this
Agreement, “Cause” shall include (and is not limited to) dishonesty with
respect to the Company or any Affiliate, insubordination, substantial
malfeasance or non-feasance of duty, unauthorized disclosure of confidential
information, and conduct     
substantially prejudicial to the business of the Company or any
Affiliate.  Any definition in an
agreement between the Employee and the Company or an Affiliate, which contains
a conflicting definition of “Cause” for termination and which is in effect at
the time of such termination, shall supersede the definition in this Plan with
respect to such Employee.

5.                                       METHOD
OF EXERCISING OPTION.

Subject to the terms and
conditions of this Agreement, the Option may be exercised by written notice to
the Company at its principal executive office, in substantially the form of Exhibit A
attached hereto.  Such notice shall state
the number of Shares with respect to which the Option is being exercised and
shall be signed by the person exercising the Option.  Payment of the purchase price for such Shares
shall be made in accordance with Section 8(b) and Section 9 of the Plan.  The Company shall deliver a certificate or
certificates representing such Shares as soon as practicable after the notice
shall be received, provided, however, that the Company may delay issuance of
such Shares until completion of any action or obtaining of any consent, which
the 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 Option
shall have been so exercised shall be registered in the name of the person or
persons so exercising the Option (or, if the Option shall be exercised by the
Employee and if the Employee shall so request in the notice exercising the
Option, shall be registered in the name of the Employee and another person
jointly, with right of survivorship) and shall be delivered as provided above
to or upon the written order of the person or persons exercising the
Option.  In the event the Option shall be
exercised, 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 such
person or persons to exercise the Option. 
All Shares that shall be purchased upon the exercise of the Option as
provided herein shall be fully paid and nonassessable.

6.                                       PARTIAL
EXERCISE.

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

7.                                       NON-ASSIGNABILITY.

The Option shall not be
transferable by the Employee otherwise than by will or by the laws of descent
and distribution.  The Option shall be
exercisable, during the Employee’s lifetime, only by the Employee (or, in the
event of legal incapacity or incompetency, by the Employee’s guardian or
representative) 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 granted hereunder contrary to the
provisions of this Section 7, or the levy of any attachment or similar process
upon the Option shall be null and void.

8.                                       NO
RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

The Employee shall have
no rights as a stockholder with respect to Shares subject to this Agreement
until registration of the Shares in the Company’s share register in the name of
the Employee.  Except as is expressly
provided in the Plan with respect to certain changes in the capitalization of
the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to the date of such registration.

9.                                       CAPITAL
CHANGES AND BUSINESS SUCCESSIONS.

The Plan contains
provisions covering the treatment of Options in a number of contingencies such
as stock splits and mergers.  Provisions
in the Plan for adjustment with respect to stock subject to Options and the
related provisions with respect to successors to the business of the Company
are hereby made applicable hereunder and are incorporated herein by reference.

10.                                 TAXES.

The Employee acknowledges
that any income or other taxes due from him or her with respect to this Option
or the Shares issuable pursuant to this Option shall be the Employee’s
responsibility.

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

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federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person’s gross income. 
At the Company’s discretion, the amount required to be withheld may be
withheld in cash from such remuneration, or in kind from the Shares otherwise
deliverable to the Employee on exercise of the Option.  The Employee further agrees that, if the
Company does not withhold an amount from the Employee’s remuneration sufficient
to satisfy the Company’s income tax withholding obligation, the Employee will
reimburse the Company on demand, in cash, for the amount under-withheld.

11.                                 PURCHASE
FOR INVESTMENT.

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

(a)                                  The
person(s) who exercise the Option shall warrant to the Company, at the time of
such exercise, that such person(s) are acquiring such Shares for their own
respective accounts, for investment, and not with a view to, or for sale in
connection with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of the
following legend which shall be endorsed upon the certificate(s) evidencing the
Shares issued pursuant to such exercise:

“The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any person,
including a pledgee, unless (1) either (a) a Registration Statement with
respect to such shares shall be effective under the Securities Act of 1933, as
amended, or (b) the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under such Act is then
available, and (2) there shall have been compliance with all applicable state
securities laws;” and

(b)                                 If
the Company so requires, the Company shall have received an opinion of its
counsel that the Shares may be issued upon such particular exercise in
compliance with the 1933 Act without registration thereunder.  Without limiting the generality of the
foregoing, the Company may delay issuance of the Shares until completion of any
action or obtaining of any consent, which the Company deems necessary under any
applicable law (including without limitation state securities or “blue sky”
laws).

12.                                 NO
OBLIGATION TO EMPLOY.

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

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13.                                 OPTION
IS INTENDED TO BE AN ISO.

The parties each intend
that 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 that
meet the standards of Section 422 of the Code. 
Any provision of this Agreement or the Plan which conflicts with the
Code so that this Option would not be deemed an ISO is null and void and any
ambiguities shall be resolved so that the Option qualifies as an ISO.  Nonetheless, if the Option is determined not
to be an ISO, the Employee understands that neither the Company nor any
Affiliate is responsible to compensate him or her or otherwise make up for the
treatment of the Option as a Non-qualified Option and not as an ISO.  The Employee should consult with the Employee’s
own tax advisors regarding the tax effects of the Option and the requirements
necessary to obtain favorable tax treatment under Section 422 of the Code,
including, but not limited to, holding period requirements.

14.                                 NOTICE
TO COMPANY OF DISQUALIFYING DISPOSITION.

The Employee agrees to
notify the Company in writing immediately after the Employee makes a
Disqualifying Disposition of any of the Shares acquired pursuant to the
exercise of the Option.  A Disqualifying
Disposition is defined in Section 424(c) of the Code and includes any
disposition (including any sale) of such Shares before the later of (a) two
years after the date the Employee was granted the Option or (b) one year after
the date the Employee acquired Shares by exercising the Option, except as
otherwise provided in Section 424(c) of the Code.  If the Employee has died before the Shares
are sold, these holding period requirements do not apply and no Disqualifying
Disposition can occur thereafter.

15.                                 NOTICES.

Any notices required or
permitted by the terms of this Agreement or the Plan shall be given by
recognized courier service, facsimile, registered or certified mail, return
receipt requested, addressed as follows:

If to the Company:

Ibis Technology Corporation

32 Cherry Hill Drive

Danvers, MA  01923

Attn:  President

If to the Employee:

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

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16.                                 GOVERNING
LAW.

This Agreement shall be
construed and enforced in accordance with the law of the Commonwealth of
Massachusetts, without giving effect to the
conflict of law principles thereof.

17.                                 BENEFIT
OF AGREEMENT.

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

18.                                 ENTIRE
AGREEMENT.

This Agreement, together
with the Plan, embodies the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior oral or 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 or be used to interpret, change or restrict, the express
terms and provisions of this Agreement, provided, however, in any event, this
Agreement shall be subject to and governed by the Plan.

19.                                 MODIFICATIONS
AND AMENDMENTS.

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

20.                                 WAIVERS
AND CONSENTS.

Except as provided in the
Plan, the terms and provisions of this Agreement may be waived, or consent for
the departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to
be or shall constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.

21.                                 HOLDING
PERIOD APPLICABLE TO PERSONS SUBJECT TO SECTION 16 OF THE SECURITIES EXCHANGE
ACT OF 1934

If the Employee to whom
the Option has been granted pursuant to this Agreement is subject to Section 16
of 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 of
disposition of the Shares.

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IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Employee has hereunto set his or her hand, all
as of the day and year first above written.

	
  

  	
   

  	
  IBIS TECHNOLOGY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  William J. Schmidt

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee

  	
   

  
	
   

  	
   

  	
   

  

 

 8Exhibit
10.2

AGREEMENT

This Agreement is entered
into as of the      th day of August, 2007 by and
between Ibis Technology Corporation, a Massachusetts corporation (the “Company”) and Charles M. McKenna (the “Executive”).

WHEREAS the
Executive desires to enter into this Agreement to provide him with certain
financial protection in the event that his employment terminates for certain
reasons in connection with or within a period of time after a change of control of the Company; and

WHEREAS the
Board of Directors of the Company has determined that it is in the best
interests of the Company to enter into this Agreement.

NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Executive agree as follows:

1.             DEFINITIONS.

(a)           Cause. 
As used herein, “Cause” shall mean a termination for one or more of the
following reasons, as determined by a majority vote of the Board:  (i) Executive’s continuing failure to
render services to the Company in accordance with his assigned duties and such
failure of performance continues for a period of more than 120 days after
notice thereof has been provided to the Executive by the Board; (ii) the
Executive’s willful misconduct or gross negligence; (iii) the Executive is
convicted of a felony, either in connection with the performance of his
obligations to the Company or which conviction materially adversely affects his
ability to perform such obligations, or materially adversely affects the
business activities, reputation, goodwill or image of the Company;
(iv) willful disloyalty, deliberate dishonesty, breach of fiduciary duty;
(v) the commission by the Executive of an act of fraud, embezzlement or
deliberate disregard of the rules or policies of the Company which results in
significant loss, damage or injury to the Company; (vi) the Executive’s
willful unauthorized disclosure of any trade secret or confidential information
of the Company; or (vii) Executive’s willful commission of an act which
constitutes unfair competition with the Company or which induces any employee
or customer of the Company to break a contract with the Company.

In making any
determination under this Section 1(a), the Board shall act fairly and in utmost
good faith and shall give the Executive an opportunity to appear and be heard
at a meeting of the Board or any committee thereof and present evidence on his
behalf.  For purposes of this Section, no
act, or failure to act, by the Executive shall be considered “willful” unless
done, or admitted to be done, by the Executive in bad faith and without
reasonable belief that such action or omission was in the best interest of the
Company.

(b)           Change Of Control.  As used herein, a “Change of Control” shall
be deemed to have occurred if (i) there is a sale or transfer of all or substantially all of the assets of the
Company in one or a series of transactions; (ii) any “person,” as such
term is used in Section 13(d) of the Securities Exchange Act of 1934, as
amended (or any successor provision) (the “Exchange Act”), together with all “affiliates”
and “associates” (as such terms are defined in Rule 12b-2 under the Exchange
Act or any successor provision) of such person, shall become the 

 

“beneficial
owner” or “beneficial owners” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act or any successor provision), directly or indirectly, of securities
of the Company representing in the aggregate thirty percent (30%) or more of
either (1) the then outstanding shares of common stock of the Company or
(2) the combined voting power of all then outstanding securities of the
Company having the right under ordinary circumstances to vote in an election of
the Board of Directors of the Company (hereafter referred to as an “Acquisition”);
PROVIDED, that, notwithstanding the foregoing, an Acquisition shall not be
deemed to have occurred for purposes of this clause (ii) solely as the result
of an acquisition of securities by the Company which, by reducing the number of
shares of common stock or other voting securities outstanding, increases
(x) the proportionate number of shares of common stock beneficially owned
by any person to thirty percent (30%) or more of the common stock then
outstanding or (y) the proportionate voting power represented by the
voting securities beneficially owned by any person to thirty percent (30%) or
more of the combined voting power of all then outstanding voting securities; or
(iii) there is a merger or consolidation between the Company and an entity
other than a subsidiary of the Company in which the Company is not the
continuing or surviving corporation and pursuant to which the holders of the
Company’s voting stock immediately prior to such merger or consolidation would
not be the holders immediately after such merger or consolidation of at least
50% of the voting stock of the continuing or surviving corporation.

(c)           Good Reason.  As
used herein, a “Good Reason” shall mean a material change in the Executive’s authority, functions, duties or
responsibilities as President and Chief Executive Officer of the Company
(including, without limitation, material changes in the control or managerial
structure of the Company) which would cause his position with the Company to
become of less dignity, responsibility, importance or scope than his position
on the date hereof or as of any subsequent date prior to the Change of Control,
a reduction in the Executive’s salary or a material reduction in benefits from
the amount of salary paid or the value of the benefits available on the date
hereof or as of any subsequent date prior to the Change of Control, a transfer
of the principal location of the place of performance of the Executive’s duties
from the Danvers, Massachusetts area without the Executive’s consent, or the
failure of the Board of Directors of the Company to elect the Executive as
President and Chief Executive Officer of the Company at any time such elections
are made, or removal from such office of the Company, PROVIDED that such
material change is not in connection with a termination of the Executive’s
employment for Cause, and, PROVIDED, FURTHER, that any notice of termination by
the Executive for Good Reason shall be given by him within ninety (90) days of
when he becomes aware of such change, of such failure or removal.

2.             SEVERANCE COMPENSATION.  In the event that at or near the time of, in
connection with, or within a period of two (2) years after, a Change of
Control, the Executive’s employment with the Company is terminated either
(i) by the Company other than for Cause or (ii) by the Executive for
a Good Reason, then the Company, within ten (10) days of the applicable
termination date, shall pay to the Executive, in addition to any amounts due to
Executive for services rendered prior to the termination date, a lump sum
amount equal to two (2) times the Executive’s highest Annual Salary during the
preceding three year period, including the year of such termination.  Annual Salary shall mean Executive’s annual
base salary and bonus, excluding reimbursements and amounts attributable to stock
options and other non-cash compensation.

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3.             CONTINUATION OF BENEFITS.  In the event that at the time of, in
connection with, or within a period of (2) two years after a Change in Control,
the Executive’s employment with the Company is terminated either (i) by
the Company other than for Cause
or (ii) by the Executive for a Good Reason, then the Company shall arrange
to provide the Executive with life, disability, group dental and health
insurance benefits substantially similar to those the Executive was receiving,
immediately prior to the termination, until the earlier of (a) two (2)
years following his termination date, or (b) the date upon which he
becomes eligible for such coverage offered by a subsequent employer.  Executive’s termination date shall be the
date of any qualifying event under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) and the COBRA coverage that may be
available to Executive, if any, shall be offset by any period of coverage
provided hereunder.

3A.          SPECIFIED EMPLOYEE.  Notwithstanding the provisions of
Sections 2 and 3, if the Executive is a “specified employee” within the
meaning of Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as
amended (the “Code”), then payment of the amount described in Section 2(a)
shall be made on the date which is six (6) months after the applicable
termination date or, if earlier, the date of death of the Executive, and the
benefit described in Section 3 shall commence on the date which is six (6)
months after the applicable termination date and, subject to the other
provisions of Section 3, continue until thirty (30) months after the applicable
termination date.

4.             NO DUPLICATION OF
COMPENSATION OR BENEFITS. 
The Executive’s severance compensation and benefits set forth in
Sections 2 and 3 above shall replace, and be provided in lieu of, any severance compensation and benefits that
may be provided to Executive; under any other agreement PROVIDED, that this
prohibition against duplication shall not be construed to otherwise limit
Executive’s rights as to payments or benefits provided under any pension plan
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended), deferred compensation, stock, stock option or similar plan
sponsored by the Company.

5.             ENFORCEABILITY; REDUCTION.

(a)           If any provision of this
Agreement shall be deemed invalid or unenforceable as written, this Agreement
shall be construed, to the greatest extent possible, or modified, to the extent allowable by law, in a
manner which shall render it valid and enforceable and any limitation on the
scope or duration of any provision necessary to make it valid and enforceable
shall be deemed to be a part thereof.  No
invalidity or unenforceability of any provision contained herein shall affect
any other portion of this Agreement.

(b)           Notwithstanding anything
provided herein, if the Executive is a “disqualified individual” (as defined in
Section 280G of the Code, and
the severance compensation and continuation of benefits provided for in
Sections 2 and 3 hereof (collectively “Severance Compensation”) together with
any other payments which the Executive has the right to receive from the
Company (or its affiliates and subsidiaries), would constitute a “parachute
payment” (as defined in Section 280G(b)(2) of the Code), the Severance
Compensation shall be reduced.  The
reduction shall be in an amount so that the present value of the total amount
received by the Executive from the Company (or its affiliates and subsidiaries)
will be one dollar ($1.00) less than three (3) times the Executive’s Base
Amount (as defined in Section 280G of the Code) so 

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that no portion of the
amounts received by the Executive shall be subject to the excise tax imposed by
Section 4999 of the Code (excise tax).

The determination as to
whether any reduction in Severance Compensation is necessary and the amount of
any such reduction shall be made by the Company’s independent public accountants (the “Accounting
Firm”) which shall provide detailed supporting calculations both to the Company
and to the Executive within fifteen (15) business days of the Executive’s
termination date.  Any such determination
by the Accounting Firm shall be conclusive and binding upon the Executive and
the Company.  The Executive shall determine
which part of the Severance Compensation shall be eliminated or reduced
consistent with the requirements of this Section 5 and shall notify the
Company promptly in writing; PROVIDED, that if the Executive does not make such
determination within ten (10) business days of the receipt of the calculations
made by the Accounting Firm, the Company shall determine which part of the
Severance Compensation shall be eliminated or reduced consistent with the
requirements of this Section 5 and shall notify the Executive promptly in
writing of such election.

If through error or
otherwise the Executive should receive payments under this Agreement, together
with other payments the Executive has the right to receive from the Company (or its
affiliates and subsidiaries), in excess of one dollar ($1.00) less than three
times his Base Amount, the Executive shall immediately repay the excess to the
Company upon notification that an overpayment has been made.

6.             MITIGATION.  The Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, nor
shall the amount of any payment provided for herein be reduced by any
compensation earned by the Executive as the result of employment by another
employer or by retirement benefits after the termination date or otherwise.

7.             NOTICES.  All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party’s address set forth
below or to such other address as a party may designate by notice hereunder,
and shall be either (i) delivered by hand, (ii) made by telex,
telecopy or facsimile transmission, (iii) sent by overnight courier, or
(iv) sent by registered or certified mail, return receipt requested,
postage prepaid.

If to the Company:

Ibis Technology Corporation

32 Cherry Hill Drive

Danvers, MA 01923

Attn:  Board of Directors

If to
the Executive:

Charles M. McKenna, Ph.D.

55 Herrick Road

Boxford, MA  01921

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All notices, requests,
consents and other communications hereunder shall be deemed to have been given
either (i) if by hand, at the time of the delivery thereof to the receiving party at the address
of such party set forth above, (ii) if made by telex, telecopy or
facsimile transmission, at the time that receipt thereof has been acknowledged
by electronic confirmation or otherwise, (iii) if sent by overnight
courier, on the next business day following the day such notice is delivered to
the courier service, or (iv) if sent by registered or certified mail, on
the 5th business day following the day such mailing is made.

8.             ENTIRE AGREEMENT.  The Previous Agreement is hereby restated and
amended in its entirety with this Agreement. 
This Agreement embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all prior oral or
written agreements and understandings relating to the subject matter
hereof.  No statement, representation,
warranty, covenant or agreement of any kind not expressly set forth in this
Agreement shall affect, or be used to interpret, change or restrict, the
express terms and provisions of this Agreement.

9.             MODIFICATIONS AND AMENDMENTS.  The terms and provisions of this Agreement
may be modified or amended only by written agreement executed by all parties
hereto.

10.           WAIVERS AND CONSENTS.  The terms and provisions of this Agreement
may be waived, or consent for the departure therefrom granted, only by written
document executed by the party
entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to
be or shall constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.

11.           ASSIGNMENT.  The rights and obligations under this
Agreement may not be assigned by either party hereto without the prior written
consent of the other party.

12.           BENEFIT.  All statements, representations, warranties,
covenants and agreements in this Agreement shall be binding on the parties
hereto and shall inure to the
benefit of the respective successors and permitted assigns of each party
hereto.  Nothing in this Agreement shall
be construed to create any rights or obligations except among the parties
hereto, and no person or entity shall be regarded as a third-party beneficiary
of this Agreement.

13.           GOVERNING LAW.  This Agreement and the rights and obligations
of the parties hereunder shall be construed in accordance with and governed by
the law of the Commonwealth of
Massachusetts, without giving effect to the conflict of law principles thereof.

14.           JURISDICTION AND SERVICE
OF PROCESS.  Any legal
action or proceeding with respect to this Agreement may be brought in the
courts of the Commonwealth of Massachusetts
or of the United States of America for the District of Massachusetts.  By execution and delivery of this Agreement,
each of the parties hereto accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts.  Each of the parties hereto irrevocably
consents to the service of process of any of the 

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aforementioned courts in any
such action or proceeding by the mailing of copies thereof by certified mail,
postage prepaid, to the party at its address set forth in Section 7
hereof.

15.           NO WAIVER OF RIGHTS,
POWERS AND REMEDIES.  No
failure or delay by a party hereto in exercising any right, power or remedy
under this Agreement, and no course
of dealing between the parties hereto, shall operate as a waiver of any such
right, power or remedy of the party.  No
single or partial exercise of any right, power or remedy under this Agreement
by a party hereto, nor any abandonment or discontinuance of steps to enforce
any such right, power or remedy, shall preclude such party from any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder.  The election of any remedy by
a party hereto shall not constitute a waiver of the right of such party to
pursue other available remedies.  No
notice to or demand on a party not expressly required under this Agreement
shall entitle the party receiving such notice or demand to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
the rights of the party giving such notice or demand to any other or further
action in any circumstances without such notice or demand.

16.           COUNTERPARTS.  This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

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IN WITNESS WHEREOF,
the parties have executed this Agreement as of the day and year first above written.

	
  

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  IBIS TECHNOLOGY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  CHARLES M. MCKENNA

  

 

 7

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