APPLIED FILMS CORP
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<TITLE>Applied Films Corporation Form 8-K Exhibit 10.1</TITLE>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exhibit 10.1  </FONT></H1>



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<TD ALIGN=left WIDTH=50%> <IMG SRC="appliedlogo.gif">  </TD>
<TD ALIGN=left WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9586 I-25 Frontage Road, Suite 200
<BR>Longmont,  Colorado 80504<BR>USA</FONT></TD>
<TD ALIGN=right WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>T: 303.774.3200<BR>F: 303.678.9275
<BR>www.appliedfilms.com</FONT></TD>
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<TD colspan=3><hr size=1 color=black></TD></TR>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&laquo;Name&raquo;<BR>&laquo;Address&raquo;<BR>&laquo;City&raquo;,
&laquo;State&raquo; &laquo;Zip&raquo; </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Re: &nbsp;&nbsp;&nbsp;
Applied Films
Corporation-Incentive Stock Option  </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors (the &#147;Board&#148;) of Applied Films Corporation (the
&#147;Company&#148;), or the committee (the &#147;Administrator&#148;) designated by the
Board for the purpose of administering the Applied Films Corporation Stock Option Plan
dated as of April 29, 1997, as amended (the &#147;Plan&#148;), hereby grants to you, as
Grantee, a stock option (the &#147;Option&#148;), pursuant to the Plan, a copy of which is
attached. Certain capitalized terms used in this Agreement, which are not defined herein,
have the meanings indicated for such terms in the Plan. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Stock Option</U></B><U></U>.&nbsp;&nbsp;The Option entitles you (or other
          person as permitted under Section 3 of this Agreement) to purchase up to
          <U>&laquo;SharesWritten&raquo; (&laquo;Shares&raquo;)</U> shares of the
          Company&#146;s Common Stock, no par value (the &#147;Option Shares&#148;),
          subject to the terms and conditions of the Plan and this Agreement, at an option
          price per share of <U>$(&#147;Price&#148;)</U>. The Option is intended to be an
          Incentive Stock Option. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Additional Terms</U></B><U></U>.&nbsp;&nbsp;The Option is also subject to
          the following provisions: </FONT></P>

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               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <B><U>Exercisability</U></B><U></U>.&nbsp;&nbsp;The Option may be exercised and
               Option Shares may be purchased at any time and from time to time after the
               execution of this Agreement, subject to 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 in cash or by check at the time of the
               delivery of Option Shares. The Option Shares acquired under this Agreement are
               hereinafter referred to as the &#147;Exercise Shares.&#148; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               </B> <B><U>Vesting Schedule</U></B><U></U>.&nbsp;&nbsp;Twenty-five percent
               (25%) of the shares subject to this Option shall vest and be exercisable on
               <U>(one year from date of grant)</U>. An additional twenty-five percent (25%) of
               the shares subject to this Option shall vest and be exercisable on <U>(date)</U>
               of each year thereafter, provided Grantee continues to be employed by the
               Company. Notwithstanding the foregoing vesting schedule, the Option shall be
               fully vested and exercisable with respect to all of the Option Shares upon (i)
               the date of death of Grantee, (ii) the physical disability of Grantee or (iii)
               the termination by the Company of Grantee&#146;s employment with the Company
               without good cause. &#147;Good cause&#148; for termination of employment exists
               if the Grantee (a) commits any felony or act of fraud, misappropriation,
               material misrepresentation or embezzlement, (b) engages in conduct or activities
               materially damaging to the business or reputation of the Company or (c)
               inappropriately fails to show up for work for a significant period of time or
               refuses to perform duties or tasks reasonably assigned by the President or the
               Board of Directors. </FONT></P></TD>
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               <BR>

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               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <B><U>Procedure for Exercise</U></B><U></U>.&nbsp;&nbsp;Subject to conditions of
               this Agreement, the Option may be exercised at any time and from time to time
               prior to its termination by delivering written notice to the Company as required
               by the Plan and written acknowledgment of the opportunity to ask questions of
               the Company&#146;s management regarding all provided financial and other
               information, together with payment of the respective Option Price multiplied by
               the number of Option Shares purchased. </FONT></P></TD>
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               <BR>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Transferability of Option</U></B><U></U>.&nbsp;&nbsp;Except as authorized
          by the Administrator, 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. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Page 1 of 3 </FONT></P>


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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Conformity with Plan</U></B><U></U>.&nbsp;&nbsp;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. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Employment</U></B><U></U>.&nbsp;&nbsp;Notwithstanding any contrary oral
          representations or promises made to Grantee prior to or after the date hereof,
          Grantee and the Company acknowledge Grantee&#146;s employment with 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 shall affect in any way Grantee&#146;s
          right or the right of the Company to terminate Grantee&#146;s employment at any
          time, for any reason, with or without cause. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          </B> <B><U>Adjustment</U></B><U></U>.&nbsp;&nbsp;The Board 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
          Board 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 6(g) 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 &#147;Option Shares&#148; 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. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Expiration</U></B><U></U>.&nbsp;&nbsp;Subject to the terms of the Plan,
          the Option shall expire at 5:00 p.m., eastern standard time, on the tenth
          anniversary of the date hereof (the &#147;Expiration Date&#148;). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Tax Withholding</U></B><U></U>.&nbsp;&nbsp;The exercise of this Option is
          subject to the satisfaction of withholding tax or other withholding liabilities,
          if any, under federal, state and local laws 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 the following manner or in any other manner acceptable
          to the Administrator in accordance with the Plan. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Postponement of Delivery of Shares and
          Representations</U></B><U></U>.&nbsp;&nbsp;The Company, in its discretion, may
          postpone the issuance and/or delivery of Shares upon any exercise of this Option
          until completion of such stock exchange listing, or registration, or other
          qualification of such shares under any state and/or federal law, rule or
          regulation as the Company may consider appropriate, and may require any person
          exercising this Option to make such representations, including a representation
          that it is his or her intention to acquire Shares for investment and not with a
          view to distribution thereof, and furnish such information as it may consider
          appropriate in connection with the issuance or delivery of the Shares in
          compliance with applicable laws, rules and regulations. In such event, no Shares
          shall be issued to such holder unless and until the Company is satisfied with
          the accuracy of any such representations. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Further Actions</U></B><U></U>.&nbsp;&nbsp;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. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Notice</U></B><U></U>.&nbsp;&nbsp;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 such party may designate by 10 days advance written notice to the
          other party. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Successors and Assigns</U></B><U></U>.&nbsp;&nbsp;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&#146;s heirs, executors, administrators, successors and
          permitted assigns and inure to the benefit of Grantee&#146;s heirs, executors,
          administrators, successors and permitted assigns. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Governing Law</U></B><U></U>.&nbsp;&nbsp;This Agreement and all documents
          contemplated hereby, and all remedies in connection therewith and all questions
          or transactions relating thereto, shall be construed in accordance with and
          governed by the laws of the state of Colorado. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Entire Agreement</U></B><U></U>.&nbsp;&nbsp;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 to such Shares. </FONT></P>

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     <P ALIGN=CENTER>* * *</P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </FONT></P>



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<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Very truly yours,<BR>APPLIED FILMS CORPORATION<BR><BR>
<BR>By:<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Its President and CEO<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </FONT></P>


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<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GRANTEE:<BR><BR>
<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
(Signature)<BR><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
(Please print name)<BR><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
(Address)<BR><BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Social Security Number</FONT></TD>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Page 3 of 3 </FONT></P>


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