IBIS TECHNOLOGY CORP, DEF 14A, 2000-03-29

IBIS TECHNOLOGY CORP
DEF 14A, 2000-03-29
SEMICONDUCTORS & RELATED DEVICES

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<PAGE>
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
</TABLE>

IBIS TECHNOLOGY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------

/ / Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by
/ / Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.

(1) Amount Previously Paid:
------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]

April 3, 2000

Dear Stockholder,

You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Ibis Technology Corporation (the "Company") to be held at 10:00 a.m. (local
time) on Thursday, May 4, 2000 at the offices of the Company, 32 Cherry Hill
Drive, Danvers, Massachusetts 01923.

At the Annual Meeting, two persons will be elected to the Board of
Directors. The Company will also ask the stockholders to approve the adoption of
the Company's 2000 Employee Stock Purchase Plan and the reservation of 300,000
shares of Common Stock for issuance under this plan, ratify the selection of
KPMG LLP as the Company's independent public accountants for the fiscal year
ending December 31, 2000 and to approve an amendment to the Company's Articles
of Organization to increase the number of authorized shares of Common Stock. The
Board of Directors recommends A VOTE FOR these proposals.

We hope you will be able to attend the Annual Meeting. Whether you plan to
attend the Annual Meeting or not, it is important that your shares are
represented. Therefore, you are urged promptly to complete, sign, date and
return the enclosed proxy card in accordance with the instructions set forth on
the card. This will ensure your proper representation at the Annual Meeting.

Sincerely,
/s/ Martin J. Reid

MARTIN J. REID
President and Chief Executive Officer

YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY PROMPTLY.
<PAGE>
IBIS TECHNOLOGY CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 2000

To the Stockholders of Ibis Technology Corporation:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Ibis Technology
Corporation, a Massachusetts corporation (the "Company"), will be held on
Thursday, May 4, 2000 at the offices of the Company, 32 Cherry Hill Drive,
Danvers, Massachusetts 01923 at 10:00 a.m. (local time) for the following
purposes:

1. To elect two members to the Board of Directors to serve for a term ending in
2003 and until their successors are duly elected and qualified.

2. To consider and act upon a proposal to approve the adoption of the Company's
2000 Employee Stock Purchase Plan and the reservation of 300,000 shares of
Common Stock for issuance under this plan.

3. To consider and act upon a proposal to ratify the appointment of KPMG LLP as
the Company's independent public accountants for the fiscal year ending
December 31, 2000.

4. To consider and act upon a proposal to approve an amendment to the Company's
Articles of Organization to increase the number of authorized shares of
Common Stock from 20,000,000 shares to 50,000,000 shares.

5. To transact such other business as may be properly brought before the Annual
Meeting and any adjournments thereof.

The Board of Directors has fixed the close of business on March 10, 2000 as
the record date for the determination of Stockholders entitled to notice of and
to vote at the Annual Meeting and at any adjournments thereof.

All Stockholders are cordially invited to attend the Annual Meeting. Whether
you plan to attend the Annual Meeting or not, you are requested to complete,
sign, date and return the enclosed proxy card as soon as possible in accordance
with the instructions on the proxy card. A pre-addressed, postage prepaid return
envelope is enclosed for your convenience.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Debra L. Nelson
----------------------------------------

Debra L. Nelson
Clerk

April 3, 2000
<PAGE>
IBIS TECHNOLOGY CORPORATION
32 CHERRY HILL DRIVE
DANVERS, MA 01923
978-777-4247
------------------------

PROXY STATEMENT
------------------------

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Ibis Technology Corporation (the "Company"), a
Massachusetts corporation, of proxies, in the accompanying form, to be used at
the Annual Meeting of Stockholders to be held at the offices of the Company, 32
Cherry Hill Drive, Danvers, Massachusetts 01923 on Thursday, May 4, 2000 at
10:00 a.m. (local time), and any adjournments thereof (the "Meeting").

This Proxy Statement and the accompanying proxy are being mailed on or about
April 3, 2000 to all Stockholders entitled to notice of and to vote at the
Meeting.

Where the Stockholder specifies a choice on the proxy as to how his or her
shares are to be voted on a particular matter, the shares will be voted
accordingly. If no choice is specified, the shares will be voted FOR the
election of the two nominees for director named herein, FOR the adoption of the
Company's 2000 Employee Stock Purchase Plan (the "Purchase Plan") and the
reservation of 300,000 shares of Common Stock for issuance under the Purchase
Plan, FOR the ratification of the appointment of KPMG LLP as the Company's
independent public accountants for the fiscal year ending December 31, 2000, and
FOR the approval of an amendment to the Company's Articles of Organization to
increase the number of authorized shares of Common Stock from 20,000,000 to
50,000,000. Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Company a
written notice of revocation or a duly executed proxy bearing a later date. Any
Stockholder who has executed a proxy but is present at the Meeting, and who
wishes to vote in person, may do so by revoking his or her proxy as described in
the preceding sentence. Shares represented by valid proxies in the form
enclosed, received in time for use at the Meeting and not revoked at or prior to
the Meeting, will be voted at the Meeting. The presence, in person or by proxy,
of the holders of a majority of the outstanding shares of the Company's common
stock, par value $.008 per share ("Common Stock"), is necessary to constitute a
quorum at the Meeting.

The affirmative vote of a plurality of the shares voted affirmatively or
negatively at the Meeting is required for the election of Directors. The
affirmative vote of a majority of the outstanding shares entitled to vote at the
Meeting is required to approve the amendment to the Articles of Organization to
increase the number of authorized shares of Common Stock. With respect to all
other matters to be acted upon at the Meeting, the affirmative vote of a
majority of the total number of shares voted either for or against the proposal
at the Meeting is required to approve a proposal.

With respect to the tabulation of votes on the proposal to amend the
Company's Articles of Organization to increase the number of authorized shares
of Common Stock, abstentions and broker non-votes count as votes against the
proposal. With respect to the tabulation of votes on all other matters,
abstentions and broker non-votes have no effect on the vote.

The close of business on March 10, 2000 has been fixed as the record date
for determining the Stockholders entitled to notice of and to vote at the
Meeting. As of the close of business on March 10, 2000, the Company had
8,259,477 shares of Common Stock outstanding and entitled to vote. Holders of
Common Stock are entitled to one vote per share on all matters to be voted on by
Stockholders.
<PAGE>
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company. In
addition, the Company will reimburse brokerage firms and other persons
representing beneficial owners of Common Stock of the Company for their expenses
in forwarding proxy material to such beneficial owners. Solicitation of proxies
by mail may be supplemented by telephone, telegram, telex and personal
solicitation by the directors, officers or employees of the Company. No
additional compensation will be paid for such solicitation. The Company has
retained D. F. King & Co., Inc. to assist in the solicitation of proxies at a
cost of approximately $4,000 plus reimbursement of expenses.

The Annual Report to Stockholders for the fiscal year ended December 31,
1999 is being mailed to the Stockholders with this Proxy Statement, but does not
constitute a part hereof.

SHARE OWNERSHIP

The following table sets forth certain information as of February 29, 2000
concerning the ownership of Common Stock by (i) each Stockholder known by the
Company to be the beneficial owner of more than 5% of its outstanding shares of
Common Stock, (ii) each current member of the Board of Directors, (iii) each
executive officer named in the Summary Compensation Table on p. 9 hereof, and
(iv) all current directors and executive officers as a group.

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY OWNED (1)
----------------------
NAME AND ADDRESS** NUMBER PERCENT
- ------------------ ---------- ---------
<S> <C> <C>
Gilder Gagnon Howe & Co., LLC (2)........................... 1,213,395 14.74%
1775 Broadway, 26(th) Floor
New York, New York 10019
Robert M. Sussman (3)....................................... 550,400 6.69%
c/o Bentley Capital Management
520 Madison Avenue, 41(st) Floor
New York, New York 10022
Martin J. Reid (4).......................................... 75,000 *
Bernhard F. Cordts, III, Ph.D. (5).......................... 43,971 *
Angelo V. Alioto............................................ 39,483 *
Debra L. Nelson, C.P.A. (6)................................. 32,283 *
Julian G. Blake, Ph.D. (7).................................. 27,916 *
Robert P. Dolan (8)......................................... 25,309 *
Robert L. Gable (9)......................................... 12,500 *
Donald F. McGuinness (10)................................... 10,750 *
Peter H. Rose, Ph.D.(11).................................... 8,750 *
Geoffrey Ryding, Ph.D. (12)................................. 8,240 *
Dimitri Antoniadis, Ph.D. (13).............................. 5,250 *
Leslie B. Lewis (14)........................................ 3,750 *
Lamberto Raffaelli.......................................... -- *
Executive Officers and Directors as a group................. 293,202 3.49%
(13 Persons) (15)
</TABLE>

- ------------------------

* Represents beneficial ownership of less than 1% of the outstanding Common
Stock.

2
<PAGE>
** Addresses are given for beneficial owners of more than 5% of the outstanding
Common Stock only.

(1) The number of shares of Common Stock issued and outstanding on February 29,
2000 was 8,232,179. The calculation of percentage ownership for each listed
beneficial owner is based upon the number of shares of Common Stock issued
and outstanding at February 29, 2000, plus shares of Common Stock subject to
options held by such person or group at February 29, 2000 and exercisable
within 60 days thereafter. The Company believes that all the persons and
entities named in the Table have the sole voting and investment power with
respect to all the shares as beneficially owned by them, except as noted
below.

(2) This information, except the percentage beneficially owned, is as of
January 31, 2000 and is based solely on a Schedule 13G (Amendment No. 3)
filed on February 10, 2000 with the Securities and Exchange Commission by
Walter Weadock, a member of Gilder Gagnon & Howe. Certain members and/or
employees of Gilder Gagnon & Howe claim shared dispositive power with
respect to these shares.

(3) This information, except the percentage beneficially owned, is as of
September 9, 1999 and is based solely on a Schedule 13G (Amendment No. 1)
filed on September 21, 1999 with the Securities and Exchange Commission by
Robert M. Sussman. Mr. Sussman claims shared voting and dispositive power
with respect to 290,300 of these shares and sole voting and dispositive
power with respect to the remaining 260,100 shares.

(4) Includes 73,500 shares of Common Stock that may be acquired upon the
exercise of options within 60 days of February 29, 2000.

(5) Includes 1,250 shares of Common Stock that may be acquired upon the exercise
of options within 60 days of February 29, 2000.

(6) Includes 28,083 shares of Common Stock that may be acquired upon the
exercise of options within 60 days of February 29, 2000.

(7) Includes 27,916 shares of Common Stock that may be acquired upon the
exercise of options within 60 days of February 29, 2000.

(8) Includes 4,172 shares of Common Stock that may be acquired upon the exercise
of options within 60 days of February 29, 2000.

(9) Consists of 7,500 shares of Common Stock that may be acquired upon the
exercise of options within 60 days of February 29, 2000.

(10) Includes 10,750 shares of Common Stock that may be acquired upon the
exercise of options within 60 days of February 29, 2000.

(11) Consists of 8,750 shares of Common Stock that may be acquired upon the
exercise of options within 60 days of February 29, 2000.

(12) Consists of 1,250 shares of Common Stock that may be acquired upon the
exercise of options within 60 days of February 29, 2000.

(13) Consists of 5,250 shares of Common Stock that may be acquired upon the
exercise of options within 60 days of February 29, 2000.

3
<PAGE>
(14) Consists of 3,750 shares of Common Stock that may be acquired upon the
exercise of options within 60 days of February 29, 2000.

(15) See footnotes 4 through 14 above. Also includes 172,171 shares of Common
Stock held directly by other executive officers of the Company and shares of
Common Stock that may be acquired upon the exercise of options within
60 days of February 29, 2000 held by such executive officers.

4
<PAGE>
MANAGEMENT

DIRECTORS

The Company's Restated Articles of Organization and Restated By-Laws provide
for the Company's business to be managed by or under the direction of the Board
of Directors. Under the Company's Restated Articles of Organization and Restated
By-Laws, the number of directors is fixed from time to time by the Board of
Directors. The Board of Directors currently consists of eight members,
classified into three classes as follows: Geoffrey Ryding and Leslie B. Lewis
constitute a class with a term which expires at the upcoming Meeting (the
"Class III directors"), Dimitri Antoniadis, Robert L. Gable and Martin J. Reid
constitute a class with a term ending in 2001 (the "Class I directors"), Peter
H. Rose, Donald F. McGuinness and Lamberto Raffaelli constitute a class with a
term ending in 2002 (the "Class II directors"). At each annual meeting of
stockholders, directors are elected for a full term of three years to succeed
those directors whose terms are expiring.

On February 24, 2000, the Board of Directors voted to nominate Geoffrey
Ryding and Leslie B. Lewis for election at the Meeting for a term of three years
to serve until the 2003 Annual Meeting of Stockholders, and until their
respective successors have been elected and qualified. Dimitri Antoniadis,
Robert L. Gable and Martin J. Reid (Class I directors), and Peter H. Rose,
Donald F. McGuinness and Lamberto Raffaelli (Class II directors) will serve
until the Annual Meeting of Stockholders to be held in 2001 and 2002,
respectively, and until their respective successors have been elected and
qualified.

The names of the Company's current directors and certain information about
them are set forth below:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------------- -------- ---------------------------------------------
<S> <C> <C>
Martin J. Reid......................... 58 President, Chief Executive Officer and
Director
Dimitri Antoniadis, Ph.D............... 53 Director
Robert L. Gable (2).................... 69 Director
Leslie B. Lewis (2).................... 59 Director
Donald F. McGuinness (1)............... 67 Director
Lamberto Raffaelli (1)................. 49 Director
Peter H. Rose, Ph.D. (2)............... 75 Director
Geoffrey Ryding, Ph.D (1).............. 58 Director
</TABLE>

- ------------------------

(1) Member of the Audit Committee

(2) Member of the Compensation Committee

The following is a brief summary of the background of each director of the
Company:

MARTIN J. REID joined Ibis in December 1997 as President and Chief Executive
Officer and as a director. From 1991 to 1996, Mr. Reid was President and Chief
Executive Officer of Alpha Industries, a publicly-held manufacturer of a broad
range of Gallium Arsenide products and silicon integrated circuits for the
semiconductor industry. He served as a director of Alpha Industries from 1985 to
January 1998, of Secure Technology from 1997 to August 1998 and of Asahi America
from 1997 to November 1999, which merged with Asahi Organic Chemical in
December 1999.

5
<PAGE>
DIMITRI ANTONIADIS, PH.D. was appointed to the Board of Directors in 1996.
He is a Professor of Electrical Engineering at Massachusetts Institute of
Technology (MIT) and has been a member of the faculty since 1978.

ROBERT L. GABLE was appointed to the Board of Directors in 1997. He has been
a director and advisor (November 1998--October 1999), Chairman
(June 1990--July 1998) and Chief Executive Officer (June 1990--October 1997) of
Unitrode Corporation, a publicly held company which was acquired by Texas
Instruments in October 1999. Mr. Gable is also a director of New England
Business Service, Inc. and Evercel, Inc., each of which is a publicly-held
company.

LESLIE B. LEWIS was appointed to the Board of Directors in 1998. Since 1985,
he has been President of Asahi America, Inc., which merged with Asahi Organic
Chemical in December 1999. He has been Chief Executive Officer of Asahi since
1989 and Chairman since 1996. He is also Chairman of Quail Piping
Products, Inc.

DONALD F. MCGUINNESS was appointed to the Board of Directors in 1996. He has
been the Chairman (November 1988--present) President and Chief Executive Officer
(November 1988 to February 1999) of White Electronic Designs, Inc., a
publicly-held company which was acquired by Bowmar Instrument Corporation in
October 1998. He is also a director of Cabletron Systems, Inc., a publicly-held
company.

LAMBERTO RAFFAELLI was appointed to the Board of Directors in 1998. Since
1994, he has been President and Chief Executive Officer of Arcom, Inc. which was
acquired by Quandrant-Vectron a division of Dover Corporation International in
September 1999.

PETER H. ROSE, PH.D. has served as director of the Company since 1988. He
has been Vice President of Research at Orion Equipment, Inc. since 1998. In
July 1993, Dr. Rose founded and became Chairman of Krytek Corporation, a
manufacturer of aerosol cleaning equipment for the semiconductor industry which
merged with Beta Gamma, LLC in September 1999. He is a director of Ion Implant
Services, Orion Equipment, Inc., Epion Corporation and Niton Corporation.

GEOFFREY RYDING, PH.D. joined Ibis in May 1992 as President and Chief
Operating Officer and as a director. In December 1993, he was elected as Chief
Executive Officer of the Company. He resigned as President and Chief Executive
Officer effective December 1, 1997. He has been a director of Orion
Equipment, Inc. since August 1997 and President of Orion since January 1998.

COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS

MEETING ATTENDANCE. During the fiscal year ended December 31, 1999, there
were five meetings of the Board of Directors. No director attended fewer than
75% of the total number of meetings of the Board and of committees of the Board
on which he served during fiscal 1999.

AUDIT COMMITTEE. The Audit Committee has three members and currently
consists of Lamberto Raffaelli, Donald F. McGuinness and Geoffrey Ryding.
Mr. McGuinness and Dr. Ryding were appointed to the Audit Committee in
February 2000. For fiscal 1999, the Audit Committee consisted of Richard
Hodgson, Dimitri Antoniadis and Lamberto Raffaelli. The Audit Committee met once
in 1999. The Audit Committee reviews the engagement of the Company's independent
accountants, reviews annual financial statements, considers matters relating to
accounting policy and internal controls and reviews the scope of annual audits.

6
<PAGE>
COMPENSATION COMMITTEE. The Compensation Committee has three members and
currently consists of Peter H. Rose, Robert L. Gable and Leslie B. Lewis.
Mr. Lewis was appointed to the Compensation Committee in February 2000. For
fiscal 1999, the Compensation Committee consisted of Donald F. McGuinness,
Robert L. Gable and Peter H. Rose. The Compensation Committee met once during
fiscal 1999 and acted by unanimous written consent pursuant to Massachusetts
law. The Compensation Committee reviews, approves and makes recommendations on
the Company's compensation policies, practices and procedures to ensure that
legal and fiduciary responsibilities of the Board of Directors are carried out
and that such policies, practices and procedures contribute to the success of
the Company; and further, administers stock and employee benefit plans,
including the Company's 1988 Stock Option Plan, the 1993 Employee, Director and
Consultant Stock Option Plan (the "1993 Plan") and the 1997 Employee, Director
and Consultant Stock Option Plan (the "1997 Plan").

NOMINATING COMMITTEE. The Company does not have a standing Nominating
Committee.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. During 1999,
the Compensation Committee had three members, Peter H. Rose, Donald McGuinness
and Robert L. Gable. No executive officer or employee of the Company is a member
of the Compensation Committee.

PRICING COMMITTEE. The Pricing Committee was formed in August 1999 to
establish the offering price per share to be sold in the Company's public
offering of 1,000,000 shares of its Common Stock, the amount of the discounts
and/or commissions granted to the Underwriter of the offering, and the number of
shares of Common Stock to be sold by the Company in the offering. All members of
the Pricing Committee, consisting of Martin J. Reid and Robert L. Gable,
participated in one meeting.

COMPENSATION OF DIRECTORS

Pursuant to the Company's 1993 Plan and 1997 Plan, each non-employee
director of the Company then serving as a director is automatically granted
non-qualified stock options to purchase 1,250 shares of Common Stock following
each Annual Meeting of Stockholders of the Company, and any new non-employee
directors will be automatically granted non-qualified stock options to purchase
1,250 shares of Common Stock upon election to the Board. These options vest in
full immediately prior to the annual meeting following the date the options are
granted and have an exercise price equal to the fair market value of the Common
Stock on the date of grant. Non-employee directors of the Company have been
automatically granted the following options under the 1993 and 1997 Plans as of
December 31, 1999:

<TABLE>
<CAPTION>
AGGREGATE WEIGHTED AVERAGE
DIRECTOR OPTION GRANTS EXERCISE PRICE
- ------------------------------------------------ ------------- ----------------
<S> <C> <C>
Peter H. Rose, Ph.D............................. 7,500(1) $10.28
Dimitri Antoniadis, Ph.D........................ 5,000(1) $12.00
Donald F. McGuinness............................ 5,000(1) $12.00
Robert L. Gable................................. 3,750(1) $15.08
Leslie B. Lewis................................. 2,500(1) $16.81
Lamberto Raffaelli.............................. 2,500(1) $16.81
</TABLE>

- ------------------------

(1) All options have vested with the exception of an option for 1,250 shares
granted prior to the Company's 1999 Annual Meeting. Such option was granted
at an exercise price of $23.19 per share and vests in full immediately prior
to the Annual Meeting.

7
<PAGE>
In addition, Dr. Antoniadis and Messrs. McGuinness, Gable, Lewis and
Raffaelli were each granted an option to purchase 7,500 shares upon their
election to the Board of Directors in July 1996, July 1996, July 1997,
November 1998 and November 1998, respectively, at exercise prices of $6.50,
$6.50, $9.75, $10.44 and $10.44, respectively. Each of these options vest in
three equal annual installments commencing one year from the date of grant.

The Company pays each non-employee director (Dr. Rose, Dr. Antoniadis,
Mr. McGuinness, Mr. Gable, Dr. Ryding, Mr. Lewis and Mr. Raffaelli) $1,000 for
each meeting of the Board of Directors and committees of the Board that each of
them attends and reimburses each of them for their expenses incurred in
attending such meetings. In 1999, the aggregate amount of compensation and
reimbursement for such expenses paid to all of these directors was approximately
$43,000.

EXECUTIVE OFFICERS

The names of, and certain information regarding, executive officers of the
Company who are not also directors, are set forth below. Except for the Chief
Executive Officer, who has an employment agreement with the Company, all
executive officers serve at the pleasure of the Board of Directors.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------ -------- --------------------------------------------
<S> <C> <C>
Debra L. Nelson, C.P.A........ 36 Chief Financial Officer, Treasurer and Clerk
Angelo V. Alioto.............. 53 Vice President of Sales and Marketing
Julian G. Blake, Ph.D......... 55 Vice President of Engineering
Bernhard F. Cordts III, 48 Vice President of Wafer Technology
Ph.D........................
Robert P. Dolan............... 40 Vice President of Wafer Manufacturing
</TABLE>

DEBRA L. NELSON returned to Ibis in February 1998 as Chief Financial
Officer, Treasurer and Clerk. From November 1996 to January 1998 Ms. Nelson was
Chief Financial Officer of Rockport Trade Systems, Inc. Ms. Nelson originally
joined Ibis in January 1990 and became the Controller in May 1992 and its
Treasurer and Clerk in December 1993.

ANGELO V. ALIOTO joined the Company in 1990 as a Regional Sales Manager,
became Worldwide Sales Manager in 1991 and was elected as Vice President of
Sales in December 1993 and Vice President of Marketing in January 1996.

JULIAN G. BLAKE, PH.D. joined the Company in 1998 as Director of Technology.
In February 1999, he was appointed Vice President of Engineering. From 1983 to
1998, Dr. Blake was Technical Director at the Flat Panel Division and Chief
Scientist at the Semiconductor Equipment Operations of Eaton Corporation, a
publicly-held manufacturer of highly engineered products that serve industrial,
vehicle, construction, commercial and semiconductor markets.

BERNHARD F. CORDTS, III, PH.D. joined the Company in 1988 as Process
Development Manager. In January 1997, he was appointed Vice President of Wafer
Technology.

ROBERT P. DOLAN, joined the Company in 1988 as Production Manager. In
January 1997, he was appointed Vice President of Wafer Manufacturing.

8
<PAGE>
EXECUTIVE COMPENSATION

The following table summarizes the compensation paid to or earned by the
following individuals for services rendered to the Company in all capacities
during the Company's last three fiscal years: (i) the Chief Executive Officer of
the Company (the "CEO") as of December 31, 1999, and (ii) the four most highly
compensated executive officers of the Company (other than the CEO) as of
December 31, 1999 whose salary and bonus earned during fiscal 1999 exceeded
$100,000 (all of these current and former officers are referred to herein
collectively as the "Named Executive Officers"):

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------- ------------
SECURITIES
NAME AND FISCAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
- ---------------------------------------- -------- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Martin J. Reid (1)...................... 1999 $192,500 $31,800 50,000 $520(4)
President and Chief Executive Officer 1998 $175,000 -- -- $900(4)
1997 $20,200 -- 140,000 --
Debra L. Nelson (2)..................... 1999 $105,200 $13,900 19,000 $ 60(4)
Chief Financial Officer, Treasurer 1998 $88,500 -- 50,000 $ 85(4)
and Clerk

Angelo V. Alioto........................ 1999 $129,700 $17,100 23,000 $220(4)
Vice President Marketing 1998 $119,200 -- 25,000 $420(4)
and Sales 1997 $104,000 -- 10,000 $288(4)

Julian G. Blake, Ph.D. (3).............. 1999 $136,800 $18,100 25,000 $240(4)
Vice President Engineering 1998 $95,000 -- 40,000 $275(4)

Bernhard F. Cordts, III, Ph.D........... 1999 $104,300 $10,300 5,000 $100(4)
Vice President Wafer Technology 1998 $97,900 -- 10,000 $167(4)
1997 $92,000 -- 10,000 $271(4)
</TABLE>

- ------------------------

(1) Mr. Reid was appointed President and Chief Executive Officer effective
December 1, 1997.

(2) Ms. Nelson was appointed Chief Financial Officer, Treasurer and Clerk
effective February 2, 1998.

(3) Dr. Blake was appointed Vice President of Engineering effective February 4,
1999.

(4) All Other Compensation consists of the dollar value of premiums paid by the
Company with respect to term life insurance for the benefit of each Named
Executive Officer in the amount of $100,000.

OPTION GRANTS

The following table sets forth certain information regarding each stock
option granted to a Named Executive Officer during fiscal 1999.

9
<PAGE>
OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
-------------------------------------------------------- VALUE AT ASSUMED
% OF ANNUAL RATES OF
NUMBER OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (3)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SHARE)(2) DATE 5% 10%
- ---- ------------- ------------ ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Martin J. Reid.................... 50,000 22.86% $11.75 2/4/09 $370,125 $934,125
Debra L. Nelson................... 19,000 8.69% $11.75 2/4/09 $140,648 $354,968
Angelo V. Alioto.................. 23,000 10.51% $11.75 2/4/09 $170,258 $429,698
Julian G. Blake, Ph.D............. 25,000 11.43% $11.75 2/4/09 $185,063 $467,063
Bernhard F. Cordts, III, Ph.D..... 5,000 2.29% $18.00 4/15/09 $ 56,700 $143,100
</TABLE>

- ------------------------

(1) Messrs. Reid and Alioto, Dr. Blake and Ms. Nelson's options were granted
pursuant to the 1997 Plan and Dr. Cordts options were granted pursuant to
the 1993 Plan. All options are incentive stock options which vest in four
equal annual installments commencing one year from the date of grant. All
options granted to the Named Executive Officers terminate ten years after
the grant date, subject to earlier termination in accordance with the 1993
and 1997 Plans and the applicable option agreement. In the event of a change
in control of the Company (as defined in the 1993 and 1997 Plans), all
outstanding unvested options, including those options included in this
table, will become immediately vested, unless a provision is made for the
continuation of such options pursuant to the applicable provisions of the
1993 and 1997 Plans.

(2) Under the terms of the 1993 Plan, the exercise price of incentive stock
options may be no less than (a) the average of the closing prices of the
Common Stock for the ten consecutive trading days immediately preceding the
grant date or (b) the closing price of the Common Stock for the trading day
immediately preceding the grant date. Under the 1997 Plan, the exercise
price of both incentive and non-qualified stock options may be no less than
the closing price of the Common Stock for the trading day immediately
preceding the grant date.

(3) Amounts represent hypothetical gains that could be achieved for the options
if exercised at the end of the option term. Those gains are based on assumed
rates of stock price appreciation of 5% and 10% compounded annually from the
date the respective options were granted to their expiration dates. Actual
gains, if any, on stock options, exercises and Common Stock holdings are
dependent on future performance of the Common Stock.

OPTION EXERCISES AND FISCAL YEAR-END VALUES

The following table provides information regarding the exercises of options
by each of the Named Executive Officers during fiscal 1999. In addition, the
table includes the number of shares covered by both exercisable and
unexercisable stock options as of December 31, 1999 and the value of
"in-the-money" options as of that date. An option is "in-the-money" if the per
share fair market value of the underlying stock exceeds the option exercise
price per share.

10
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF THE UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED AT FISCAL YEAR-END AT FISCAL YEAR-END($)(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Martin J. Reid................. 29,000 $1,063,625 76,000 85,000 $3,059,000 $3,302,500
Debra L. Nelson................ 10,000 $ 386,313 6,666 52,334 $ 278,305 $2,111,310
Angelo V. Alioto............... 43,999 $1,188,653 -- 43,001 $ -- $1,712,418
Julian G. Blake, Ph.D.......... 5,000 $ 198,063 8,333 51,667 $ 324,987 $1,986,888
Bernhard F. Cordts, III,
Ph.D......................... 42,999 $1,109,606 -- 15,001 $ -- $ 581,918
</TABLE>

- ------------------------

(1) The value of unexercised in-the-money options at December 31, 1999 is based
on the difference between the fair market value for the Company's Common
Stock of $49.625 (the closing sale price per share of the Company's Common
Stock as reported on the Nasdaq National Market on December 31, 1999) and
the per share option exercise price, multiplied by the number of shares of
Common Stock underlying such options.

EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS

The Company has an employment agreement with Martin J. Reid. This agreement
provides that Mr. Reid is to serve as President and Chief Executive Officer of
the Company until November 2000 at an annual base salary of $175,000. In
February 1999, his annual salary was increased to $195,000. The agreement also
provides that Mr. Reid will be paid an annual bonus of up to 30% of his annual
base salary if his performance and the Company's performance satisfy certain
predetermined goals mutually agreed upon by Mr. Reid and the Board of Directors
at the beginning of each one year period. See "Report of Compensation Committee
on Executive Compensation--Annual Incentive Bonuses." In the event that
Mr. Reid's employment is terminated by the Company without cause or in certain
other circumstances, Mr. Reid will be paid at his then annual base salary rate
for a period of 12 months following the date of such termination and he will be
entitled to be paid for the cost of 12 months of health benefits. Mr. Reid may
terminate his employment at any time, but will forfeit certain benefits if he
does not provide the Company with at least 60 days prior written notice.

In September 1999, the Company entered Change of Control Agreements with
Martin J. Reid and Debra L. Nelson. In the event that Mr. Reid's or
Ms. Nelson's employment is terminated in connection with a Change of Control of
the Company, they will be paid a lump sum equal to (i) twice the highest annual
salary for the preceding three year period for Mr. Reid and (ii) the highest
annual salary for the preceding three year period for Ms. Nelson. Annual salary
includes base salary and bonus and excludes reimbursements and amounts
attributable to stock options and other non-cash compensation. Under the
agreements, each of Mr. Reid and Ms. Nelson will also be provided health
benefits for a period of time following termination or until the date they
become eligible for such coverage offered by a subsequent employer if earlier.
Mr. Reid is entitled to these benefits for two years and Ms. Nelson is entitled
to these benefits for one year. These severance compensation and benefits shall
replace, and be provided in lieu of any severance compensation and benefits that
may be provided under any other agreement.

All of the Company's employees are subject to certain confidentiality and
non-competition obligations. Each employee has also agreed that all inventions,
discoveries and developments which may be used

11
<PAGE>
in the Company's business and that are developed by such employee during his or
her employment with the Company are the Company's property and the employee will
assign his or her rights therein to the Company.

In the event of a change in control of the Company (as defined in the 1993
and 1997 Plans), all outstanding unvested options will become immediately
vested, unless provision is made for the continuation of such options pursuant
to the applicable provisions of the 1993 and 1997 Plans.

REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The Compensation Committee in 1999 consisted of Peter H. Rose, Donald
McGuinness and Robert L. Gable, all non-employee, independent members of the
Board of Directors. It is the responsibility of the Compensation Committee to
review, approve and make recommendations on the Company's compensation policies,
practices and procedures to ensure that legal and fiduciary responsibilities of
the Board of Directors are carried out and that such policies, practices and
procedures contribute to the success of the Company; and further to administer
stock and employee benefit plans.

BASE SALARY AND BENEFITS

The compensation philosophy of the Company is to maintain executive base
salary at a competitive level to enable the Company to attract and retain key
executive and employee talent needed to accomplish the Company's goals. In
determining appropriate base salary levels and other compensation elements, the
Compensation Committee considers the scope of responsibility, prior experience,
past accomplishments, and data obtained through participation in industry
surveys, as well as by monitoring developments in key industries such as the
semiconductor industry. Periodic adjustments in base salary relate to individual
performance against pre-established objectives and to competitive factors.
Executive officers are also entitled to participate in benefit plans generally
available to employees.

ANNUAL INCENTIVE BONUSES

The Company, along with each executive officer, establishes goals related
specifically to that officer's areas of responsibility. The Compensation
Committee of the Board, in its discretion, may award bonuses to executive
officers, and the Company pays bonuses based on each executive officer's
progress toward completing the established goals and financial performance goals
for the Company. In the case of Mr. Reid, bonus awards may be granted under this
broad management bonus arrangement which exceed the percentage set forth as
available under his employment agreement.

STOCK OPTIONS

The Compensation Committee believes that granting stock options on an
ongoing basis provides officers with a strong economic interest in maximizing
stock price appreciation over the longer term. The Company believes that the
practice of granting stock options is critical to retaining and recruiting the
key talent necessary at all employee levels to ensure the Company's continued
success. Options are granted to all permanent employees, and particularly to key
employees likely to contribute significantly to the Company. In determining the
size of an option grant to an executive officer, the Company considers not only
competitive factors, changes in responsibility and the executive officer's
achievement of pre-established goals, but also the number and term of options
previously granted to the officer. In

12
<PAGE>
addition, the Company usually makes a significant grant of options when an
executive officer joins the Company. The Compensation Committee determines the
size of option grants to executive officers.

CHIEF EXECUTIVE OFFICER'S COMPENSATION

Martin J. Reid was appointed to the position of President and Chief
Executive Officer effective December 1, 1997 under an employment agreement which
terminates on November 30, 2000. Mr. Reid was paid an annual base salary of
$195,000 during 1999 and his base pay is subject to increase from time to time
by action of the Board. The agreement also provides that Mr. Reid will be paid
an annual bonus of up to 30% of his annual base salary if his performance and
the Company's performance satisfy certain predetermined goals mutually agreed
upon by Mr. Reid and the Board of Directors at the beginning of each one year
period. See "--Annual Incentive Bonuses." In the event that Mr. Reid's
employment is terminated by the Company without cause or in certain other
circumstances, Mr. Reid will be paid at his then annual base salary rate for a
period of 12 months following the date of such termination and he will be
entitled to be paid for the cost of 12 months of health benefits. Mr. Reid may
terminate his employment at any time, but will forfeit certain benefits if he
does not provide the Company with at least 60 days prior written notice. On
December 1, 1997, Mr. Reid was granted options to purchase 140,000 shares of
common stock at fair market value on the date of grant. Of the 140,000 options
granted to Mr. Reid, 35,000 vested immediately and the remaining 105,000 vest in
three equal annual installments commencing one year from the grant date. In
addition, on February 4, 1999, Mr. Reid was granted options to purchase 50,000
shares of Common Stock at fair market value of the date of grant. The options
vest in four equal annual installments commencing one year from the grant date.

In September 1999, the Company entered into a Change of Control Agreement
with Mr. Reid. In the event that Mr. Reid's employment is terminated in
connection with a Change of Control of the Company, Mr. Reid will be paid twice
his highest annual salary during the preceding three year period. Annual salary
includes base salary and bonus and excludes reimbursements and amounts
attributable to stock options and other non-cash compensation. Under this
agreement, Mr. Reid will also be provided health benefits until the earlier of
two years following his termination or the date he becomes eligible for such
coverage offered by a subsequent employer. These severance compensation and
benefits shall replace, and be provided in lieu of any severance compensation
and benefits that may be provided under any other agreement.

Mr. Reid's salary and bonus structure is consistent with that received by
his counterparts in similar-sized companies in semiconductor--related industries
and other comparable companies.

THE COMPENSATION COMMITTEE:
Robert L. Gable
Donald F. McGuinness
Peter H. Rose

13
<PAGE>
PERFORMANCE GRAPH

The following graph compares the annual cumulative total stockholder return
(assuming reinvestment of dividends) from investing $100 on January 1, 1995 and
plotted at the end of each fiscal year thereafter, in each of (i) the Company's
Common Stock, (ii) the Nasdaq Stock Market, and (iii) the Media General
Financial Services SIC Code Index 3674--Semiconductors, Related Devices--which
consists of other companies in the semiconductor industry. It should be noted
that the Company has not paid any dividends on the Common Stock, and no
dividends are included in the representation of the Company's performance. The
stock price performance on the graph below is not necessarily indicative of
future price performance.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
DOLLARS
<S> <C> <C> <C>
IBIS TECHNOLOGY CORP. SIC CODE INDEX NASDAQ MARKET INDEX
1/1/95 $100.00 $100.00 $100.00
12/31/95 $430.30 $162.40 $129.71
12/31/96 $339.39 $261.45 $161.18
12/31/97 $375.76 $272.45 $197.16
12/31/98 $512.12 $410.21 $278.08
12/31/99 $2,406.06 $882.59 $490.46
</TABLE>

RELATIVE DOLLAR VALUES

<TABLE>
1/1/95 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Ibis Technology Corporation $100.00 $430.30 $339.39 $375.76 $512.12 $2406.06
SIC Code Index $100.00 $162.40 $261.45 $272.45 $410.21 $ 882.59
Nasdaq Market Index $100.00 $129.71 $161.18 $197.16 $278.08 $ 490.46
</TABLE>

14
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than 10% of the Company's
Common Stock, to file with the Securities and Exchange Commission (the "SEC")
initial reports of beneficial ownership and reports of changes in beneficial
ownership of the Common Stock and other equity securities of the Company.
Officers, directors and greater than 10% beneficial owners are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.

To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1999, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with.

CERTAIN TRANSACTIONS

In 1999, the Company was not a party to any transaction or business
relationship in which the amount involved exceeded $60,000 involving any of its
officers, directors or 5% stockholders.

15
<PAGE>
ELECTION OF DIRECTORS
(NOTICE ITEM 1)

Pursuant to the Company's Restated Articles of Organization and Restated
By-Laws, on February 24, 2000 the Board of Directors voted to (i) set the size
of the Board of Directors at eight and (ii) nominate Geoffrey Ryding and Leslie
B. Lewis (the Class III directors) for election at the Meeting for a term of
three years to serve until the 2003 Annual Meeting of Stockholders, and until
their respective successors have been elected and qualified. Dimitri Antoniadis,
Robert L. Gable and Martin J. Reid (the Class I directors) and Donald F.
McGuinness, Peter H. Rose and Lamberto Raffaelli (the Class II directors) will
serve until the Annual Meetings of Stockholders to be held in 2001 and 2002,
respectively, and until their respective successors have been elected and
qualified.

Unless authority to vote for any of the nominees named below is withheld,
the shares represented by the enclosed proxy will be voted FOR the election as
directors of such nominees. In the event that any nominee shall become unable or
unwilling to serve, the shares represented by the enclosed proxy will be voted
for the election of such other person as the Board of Directors may recommend in
his place. The Board has no reason to believe that any nominee will be unable or
unwilling to serve.

The affirmative vote of a plurality of the shares voted affirmatively or
negatively at the Meeting is required to elect each nominee as a director.

THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF GEOFFREY RYDING AND LESLIE
B. LEWIS AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR
THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.

16
<PAGE>
ADOPTION OF THE COMPANY'S 2000 EMPLOYEE STOCK
PURCHSE PLAN AND THE RESERVATION OF 300,000 SHARES
OF COMMON STOCK ISSUABLE UNDER THIS PLAN
(NOTICE ITEM 2)

GENERAL

On February 24, 2000, the Board of Directors adopted, subject to shareholder
approval, the Ibis Technology Corporation 2000 Employee Stock Purchase Plan (the
"Purchase Plan") pursuant to which a total of 300,000 shares of the Company's
Common Stock may be sold to eligible employees of the Company at a discount from
the market value of the shares. The Board of Directors adopted the Purchase Plan
because the Directors believe that it is desirable to offer employees an
inducement to acquire an ownership interest in the Company on a tax-favored
basis.

THE PURCHASE PLAN

All employees that work 20 hours or more per week, who have been
continuously employed by the Company for at least the three months immediately
prior to any offering period and who are not considered temporary employees are
eligible to participate in the Purchase Plan. Temporary employees are defined as
employees who are employed by the Company for a specified period of time, less
than six months. However, any employee who would own more than 5% of the voting
power of the Company's stock immediately after a grant under the Purchase Plan
is not eligible to participate and no participant may purchase more than $25,000
of Common Stock, based on the undiscounted value of the Common Stock at the
beginning of each offering period, in any one calendar year.

The Purchase Plan is implemented by a series of offering periods, with a new
offering period starting on June 1 and December 1 of each year (or such other
times as may be determined by the Board of Directors). If the Purchase Plan is
approved, the first offering period will begin on June 1, 2000. To participate
in the Purchase Plan, an eligible employee will authorize the Company to deduct
up to 15% of the employee's pay, not to exceed $21,250 per year, beginning on
the first day of each designated offering period. On the first day of each
offering period, each eligible employee who has elected to participate in the
Purchase Plan will be granted an option to purchase shares of the Company's
Common Stock. Unless a participating employee withdraws from the Purchase Plan
prior to the end of the offering period, on the last day of the offering period
the option will be automatically exercised for the purchase of a number of
shares of the Company's common stock determined by dividing the employees
contributions during the offering period by the lesser of (i) 85% of the fair
market value of the Common Stock on the first day of the offering period, or
(ii) 85% of the fair market value of the Common Stock on the last day of the
offering period. Under the Purchase Plan, the fair market value of a share of
Common Stock on a given date shall be determined by the Board of Directors based
on the closing sale price of the Common Stock for such date (or if the Common
Stock is not traded on such date, on the immediately preceding trading date), as
reported on the Nasdaq National Market.

A participant may, on one occasion only during an offering period, decrease
the amount of payroll deductions or may withdraw from participation in the
Purchase Plan at any time. If a participant withdraws from the Purchase Plan or
becomes ineligible to participate in the Purchase Plan, any accumulated employee
contributions are paid back to such participant.

The Board of Directors may amend or terminate the Purchase Plan at any time
and in any respect without shareholder approval unless shareholder approval of
the amendment in question is required under

17
<PAGE>
Massachusetts law, the Internal Revenue Code of 1986, as amended (the "Code"),
any applicable exemption from Section 16 of the Securities Exchange Act of 1934,
as amended, for which the Company intends transactions by executive officers or
directors of the Company to qualify, any national securities exchange or system
on which the Common Stock is then listed or reported, or under any other
applicable laws, rules, or regulations. The Purchase Plan will continue in
effect for a term of ten years, subject to the right of the Board of Directors
to terminate the Purchase Plan at any earlier time.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The Purchase Plan is intended to qualify as an "employee stock purchase
plan" within the meaning of Section 423 of the Code and, as a result,
participants will be afforded favorable tax treatment under Sections 421 and 423
of the Code. A participant in an offering under the Purchase Plan will not
recognize income subject to Federal income tax at the commencement of an
offering period or at the time shares are purchased. However, any discount from
the market price on the purchase date may be subject to employment taxes (FICA
and FUTA). No Federal income tax consequences result to the Company at the
commencement of an offering period under the Purchase Plan, upon the subsequent
purchases of Common Stock by participants, or upon the disposition of shares
acquired under the Purchase Plan other than with respect to a disqualifying
disposition (as described below). If no disposition of the shares purchased in
an offering period is made within two years from the commencement of such
offering period nor within one year from the date the shares are transferred to
the employee, then upon subsequent disposition of the shares, ordinary income
may be recognized by the participant, depending upon the purchase price formula
applicable to that offering, on up to fifteen percent (15%) of the market price
of the shares on such commencement date; any additional gain realized will be
capital gain. Any loss realized by an employee upon disposition of the shares
will constitute a capital loss.

If the shares are disposed of within either the two-year or one-year periods
mentioned above (a so-called disqualifying disposition), the participant will
recognize ordinary income at the time of such disposition in an amount equal to
the difference between the fair market value of the shares at the time such
shares were purchased and the purchase price of the shares, and the Company will
generally be entitled to a corresponding deduction from its income. Any
difference between such fair market value and the disposition price will be
treated as capital gain or loss to the participant and will not be deductible by
the Company.

As of February 29, 2000, a total of approximately 98 employees of the
Company, including all officers, are eligible to participate in the Purchase
Plan. However, it is not possible to determine how many employees will elect to
participate, the amount that participating employees will elect to contribute,
or the number of shares which may be purchased and the price thereof under the
Purchase Plan. Because purchases by all eligible employees is elective, the
benefits that would have been received by employees, or by any particular class
of employees, for the last fiscal year of the Company may not be determined. If
the Purchase Plan is not approved by shareholders, it will be null, void, and of
no force or effect.

The affirmative vote of a majority of the shares voted affirmatively or
negatively at the Meeting is required to adopt the Purchase Plan and reserve
300,000 shares of Common Stock for issuance under the Purchase Plan.

THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE ADOPTION OF THE COMPANY'S
2000 EMPLOYEE STOCK PURCHASE PLAN AND THE RESERVATION OF 300,000 SHARES OF
COMMON STOCK FOR ISSUANCE UNDER THIS PLAN.

18
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
(NOTICE ITEM 3)

The Board of Directors has appointed KPMG LLP, independent public
accountants, to audit the financial statements of the Company for the fiscal
year ending December 31, 2000. The Board proposes that the Stockholders ratify
this appointment. KPMG LLP audited the Company's financial statements for the
fiscal year ended December 31, 1999. The Company expects that representatives of
KPMG LLP will be present at the Meeting, with the opportunity to make a
statement if they so desire, and will be available to respond to appropriate
questions.

In the event that ratification of the appointment of KPMG LLP as the
independent public accountants for the Company is not obtained at the Meeting,
the Board of Directors will reconsider its appointment.

The affirmative vote of a majority of the shares voted affirmatively or
negatively at the Meeting is required to ratify the appointment of the
independent public accountants.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE THE RATIFICATION OF THE
APPOINTMENT OF KPMG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS, AND PROXIES SOLICITED
BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED
OTHERWISE ON THE PROXY.

19
<PAGE>
AMENDMENT OF THE COMPANY'S RESTATED ARTICLES OF ORGANIZATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
(NOTICE ITEM 4)

The Company's Restated Articles of Organization (the "Articles of
Organization") authorize the issuance of 20,000,000 shares of Common Stock,
$.008 par value, and 2,000,000 shares of Preferred Stock, $.01 par value. On
February 24, 2000, the Board of Directors of the Company unanimously approved an
amendment to the Articles of Organization to increase the number of authorized
shares of Common Stock from 20,000,000 to 50,000,000 and to submit the proposed
amendment to the stockholders at the Annual Meeting.

PURPOSE AND EFFECT OF THE AMENDMENT

The general purpose and effect of the proposed amendment to the Company's
Articles of Organization will be to authorize 30,000,000 additional shares of
Common Stock to create a sufficient reserve of shares of Common Stock for future
needs of the Company. The Board of Directors believes that it is prudent to have
the additional shares of Common Stock available for general corporate purposes,
including acquisitions, equity financings, grants of stock options, payment of
stock dividends, stock splits or other recapitalizations.

The Company currently has 20,000,000 authorized shares of Common Stock. As
of February 29, 2000, the Company had 8,232,179 shares issued and outstanding,
and of the remaining 11,767,821 authorized but unissued shares, the Company has
reserved approximately 30,655 shares in connection with the possible exercise of
outstanding warrants and 895,427 shares pursuant to the Company's option plans.
The Company also has remaining 1,000,000 shares registered for sale on an S-3
Registration Statement declared effective by the Securities and Exchange
Commission in July 1999.

Except in connection with the aggregate of 926,082 shares reserved for
warrants and options described above, the Company currently has no plans,
arrangements or understandings for the issuance of additional shares of Common
Stock. However, opportunities for acquisitions and equity financings could arise
at any time. If the Board of Directors deems it to be in the best interest of
the Company and the stockholders to issue additional shares of Common Stock in
the future, the Board of Directors generally will not seek further authorization
by vote of the stockholders, unless such authorization is otherwise required by
law or regulations. The proposed amendment would give the Board of Directors the
flexibility to act promptly when it determines that issuance of additional
shares is in the best interest of the Company.

The increase in the number of authorized shares of Common Stock may have a
dilutive effect on existing stockholders and also could have an anti-takeover
effect. If the Company's Board of Directors desired to issue additional shares
in the future, such issuance could dilute the voting power of a person seeking
control of the Company, thereby deterring or rendering more difficult a merger,
tender offer, proxy contest or an extraordinary corporate transaction opposed by
the Company.

VOTE

The affirmative vote of a majority of the outstanding shares of Common Stock
entitled to vote at the Meeting will be required to approve the amendment to the
Company's Articles of Organization increasing the number of authorized shares of
Common Stock from 20,000,000 to 50,000,000.

20
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE THE AMENDMENT TO THE
COMPANY'S RESTATED ARTICLES OF ORGANIZATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK FROM 20,000,000 TO 50,000,000, AND PROXIES SOLICITED BY
THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED
OTHERWISE ON THE PROXY.

21
<PAGE>
OTHER MATTERS

The Board of Directors knows of no other business which will be presented at
the Meeting. If any other business is properly brought before the Meeting, it is
intended that proxies in the enclosed form will be voted in respect thereof in
accordance with the judgment of the persons voting the proxies.

STOCKHOLDER PROPOSALS

To be considered for inclusion in the proxy statement relating to the Annual
Meeting of Stockholders to be held in 2001, stockholder proposals must be
received no later than December 4, 2000. To be considered for presentation at
such meeting, although not included in the proxy statement, proposals must be
received no later than March 5, 2001 and no earlier than February 3, 2001. All
stockholder proposals should be marked for the attention of Clerk, Ibis
Technology Corporation, 32 Cherry Hill Drive, Danvers, MA 01923.

ANNUAL REPORT

A copy of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 (other than exhibits thereto) filed with the Securities and
Exchange Commission, which provides additional information about the Company,
may be obtained by any stockholder without charge at their request by writing
to:

Investor Relations
Ibis Technology Corporation
32 Cherry Hill Drive
Danvers, Massachusetts 01923

WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE URGED TO
FILL OUT, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE.

By order of the Board of Directors:

/s/ Debra L. Nelson

Debra L. Nelson
Clerk

April 3, 2000

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APPENDIX A

IBIS TECHNOLOGY CORPORATION
2000 EMPLOYEE STOCK PURCHASE PLAN

The following constitute the provisions of the 2000 Employee Stock Purchase
Plan (the "Plan") of Ibis Technology Corporation (the "Company").

1. PURPOSE. The purpose of the Plan is to provide Employees of the
Company and its Designated Subsidiaries with an opportunity to purchase
Common Stock of the Company. It is the intention of the Company to have the
Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the
Internal Revenue Code of 1986, as amended. The provisions of the Plan shall,
accordingly, be construed so as to extend and limit participation in a
manner consistent with the requirements of that section of the Code.

2. DEFINITIONS.

(a) "BOARD" shall mean the Board of Directors of the Company, or a
committee of the Board of Directors named by the Board to administer the
Plan.

(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.

(d) "COMPANY" shall mean Ibis Technology Corporation, a Massachusetts
corporation.

(e) "COMPENSATION" shall mean all compensation that is taxable income
for federal income tax purposes, including, payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses, commissions
and other compensation but shall exclude relocation, expense
reimbursements, tuition or other reimbursements and income realized as a
result of participation in any stock option, stock purchase, or similar
plan of the Company or any Designated Subsidiary.

(f) "CONTINUOUS STATUS AS AN EMPLOYEE" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status
as an Employee shall not be considered interrupted in the case of a leave
of absence agreed to in writing by the Company, provided that such leave
is for a period of not more than 90 days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.

(g) "CONTRIBUTIONS" shall mean all amounts credited to the account of
a participant pursuant to the Plan.

(h) "DESIGNATED SUBSIDIARIES" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

(i) "EMPLOYEE" shall mean any person, including an officer, who is
customarily employed for at least 20 hours per week by the Company or one
of its Designated Subsidiaries and is not considered a temporary employee
as defined in the Company's Policy Manual.

(j) "EXERCISE DATE" shall mean the last day of each Offering Period
of the Plan.

(k) "OFFERING DATE" shall mean the first business day of each
Offering Period of the Plan, except that in the case of an individual who
becomes an eligible Employee after the first business

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day of an Offering Period but on or prior to the first business day of
the fourth calendar month within such Offering Period, the term "Offering
Date" shall mean the first business day of such fourth calendar month
coinciding with or next succeeding the day on which that individual
becomes an eligible Employee.

Options granted after the first business day of an Offering Period
will be subject to the same terms as the options granted on the first
business day of such Offering Period except that they will have a
different grant date (thus, potentially, a different exercise price) and,
because they expire at the same time as the options granted on the first
business day of such Offering Period, a shorter term.

(l) "OFFERING PERIOD" shall mean a period of six months.

(m) "PLAN" shall mean this Ibis Technology Corporation 2000 Employee
Stock Purchase Plan.

(n) "SUBSIDIARY" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.

3. ELIGIBILITY.

(a) Any person who has been continuously employed as an Employee for
three (3) months as of the Offering Date of a given Offering Period shall
be eligible to participate in such Offering Period under the Plan,
provided that such person was not eligible to participate in such
Offering Period as of any prior Offering Date, and further, subject to
the requirements of paragraph 5(a) and the limitations imposed by
Section 423(b) of the Code.

(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately
after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would
own stock and/or hold outstanding options to purchase stock possessing
five percent (5%) or more of the total combined voting power or value of
all classes of stock of the Company or of any Subsidiary of the Company;
or (ii) which permits his or her rights to purchase stock under all
employee stock purchase plans (described in Section 423 of the Code) of
the Company and its Subsidiaries to accrue at a rate which exceeds
$25,000 of fair market value of such stock (determined at the time such
option is granted) for each calendar year in which such option is
outstanding at any time. Any option granted under the Plan shall be
deemed to be modified to the extent necessary to satisfy this
paragraph (b).

4. OFFERING PERIODS. The Plan shall be implemented by a series of
Offering Periods, with a new Offering Period commencing on June 1 and
December 1 of each year (or at such other time or times as may be determined
by the Board of Directors). The initial Offering Period shall commence at a
time to be determined by the Board. The Plan shall continue until terminated
in accordance with paragraph 19 hereof. The Board of Directors of the
Company shall have the power to change the duration and/or the frequency of
Offering Periods with respect to future offerings without stockholder
approval if such change is announced at least 15 days prior to the scheduled
beginning of the first Offering Period to be affected.

5. PARTICIPATION.

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(a) An eligible Employee may become a participant in the Plan by
completing an Enrollment Form provided by the Company and filing it with
the Company prior to the applicable Offering Date, unless a later time
for filing the Enrollment Form is set by the Board for all eligible
Employees with respect to a given Offering Period. The Enrollment Form
shall set forth the percentage of the participant's Compensation (which
shall be not less than 1% and not more than 15%) to be paid as
Contributions pursuant to the Plan.

(b) Payroll deductions shall commence on the first payroll following
the Offering Date and shall end on the last payroll paid on or prior to
the Exercise Date of the Offering Periods to which the Enrollment Form is
applicable, unless sooner terminated by the participant as provided in
paragraph 10.

6. METHOD OF PAYMENT OF CONTRIBUTIONS.

(a) The participant shall elect to have payroll deductions made on
each payday during the Offering Period in an amount not less than 1% and
not more than 15% of such participant's Compensation on each such payday;
provided that the aggregate of such payroll deductions during the
Offering Period shall not exceed 15% of the participant's aggregate
Compensation during said Offering Period. All payroll deductions made by
a participant shall be credited to his or her account under the Plan. A
participant may not make any additional payments into such account.

(b) A participant may discontinue his or her participation in the
Plan as provided in paragraph 10, or, on one occasion only during the
Offering Period, may decrease, but may not increase, the rate of his or
her Contributions during the Offering Period by completing and filing
with the Company a new Enrollment Form authorizing a change in the
deduction rate. THE CHANGE IN RATE SHALL BE EFFECTIVE AS OF THE BEGINNING
OF THE NEXT PAYROLL PERIOD FOLLOWING THE DATE OF THE FILING OF SUCH NEW
ENROLLMENT FORM, IF THE ENROLLMENT FORM IS COMPLETED AT LEAST FIVE
(5) BUSINESS DAYS PRIOR TO SUCH DATE, AND, IF NOT, AS OF THE BEGINNING OF
THE NEXT SUCCEEDING PAYROLL PERIOD.

(c) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and paragraph 3(b) hereof, a
participant's payroll deductions may be decreased to 0% at such time and
for so long as the aggregate of all payroll deductions accumulated with
respect to the current Offering Period and any other Offering Period
ending within the current calendar year equals $21,250. Payroll
deductions shall recommence at the rate provided in such participant's
Enrollment Form at the beginning of the first Offering Period which is
scheduled to end in the following calendar year, unless terminated by the
participant as provided in paragraph 10.

7. GRANT OF OPTION.

(a) On the Offering Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option
to purchase on the Exercise Date of such Offering Period a number of
shares of the Common Stock determined by dividing such Employee's
Contributions accumulated prior to such Exercise Date and retained in the
participant's account as of the Exercise Date by the lower of (i) 85% of
the fair market value of a share of Common Stock on the Offering Date, or
(ii) 85% of the fair market value of a share of the Common Stock on the
Exercise Date; provided however, that such purchase shall be subject to

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the limitations set forth in Sections 3(b) and 12 hereof. The fair market
value of a share of the Common Stock shall be determined as provided in
Section 7(b) herein.

(b) The option price per share of the shares offered in a given
Offering Period shall be the lower of (i) 85% of the fair market value of
a share of the Common Stock on the Offering Date, or (ii) 85% of the fair
market value of a share of the Common Stock on the Exercise Date. The
fair market value of the Common Stock on a given date shall be determined
by the Board based on the closing sale price of the Common Stock for such
date (or, in the event that the Common Stock is not traded on such date,
on the immediately preceding trading date), as reported by the National
Association of Securities Dealers Automated Quotation (Nasdaq) National
Market or, if such price is not reported, the mean of the bid and asked
prices per share of the Common Stock as reported by Nasdaq or, in the
event the Common Stock is listed on a stock exchange, the fair market
value per share shall be the closing sale price on such exchange on such
date (or, in the event that the Common Stock is not traded on such date,
on the immediately preceding trading date), as reported in THE WALL
STREET JOURNAL.

8. EXERCISE OF OPTION. Unless a participant withdraws from the Plan as
provided in paragraph 10, his or her option for the purchase of shares will
be exercised automatically on the Exercise Date of the Offering Period, and
the maximum number of full shares subject to option will be purchased for
him or her at the applicable option price with the accumulated Contributions
in his or her account. If a fractional number of shares results, then such
number shall be rounded down to the next whole number and any unapplied cash
shall be carried forward to the next Exercise Date, unless the participant
requests a cash payment. The shares purchased upon exercise of an option
hereunder shall be deemed to be transferred to the participant on the
Exercise Date. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.

9. DELIVERY. Upon the written request of a participant, certificates
representing the shares purchased upon exercise of an option will be issued
as promptly as practicable after the Exercise Date of each Offering Period
to participants who wish to hold their shares in certificate form. Any cash
remaining in a participant's account under the Plan after a purchase by him
or her of shares at the termination of each Offering Period shall be carried
forward to the next Exercise Date unless the participant requests a cash
payment.

10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.

(a) A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time
prior to the Exercise Date of the Offering Period by giving written
notice to the Company. All of the participant's Contributions credited to
his or her account will be paid to him or her promptly after receipt of
his or her notice of withdrawal and his or her option for the current
period will be automatically terminated, and no further Contributions for
the purchase of shares will be made during the Offering Period.

(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Exercise Date of the Offering Period for any
reason, including retirement or death, the Contributions credited to his
or her account will be returned to him or her or, in the case of his or
her death, to the person or persons entitled thereto under paragraph 14
hereof, and his or her option will be automatically terminated.

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(c) In the event an Employee fails to remain in Continuous Status as
an Employee for at least 20 hours per week during the Offering Period in
which the Employee is a participant, he or she will be deemed to have
elected to withdraw from the Plan and the Contributions credited to his
or her account will be returned to him or her and his or her option
terminated.

(d) A participant's withdrawal from an Offering Period will not have
any effect upon his or her eligibility to participate in a succeeding
offering or in any similar plan which may hereafter be adopted by the
Company.

11. INTEREST. No interest shall accrue on the Contributions of a
participant in the Plan.

12. STOCK.

(a) The maximum number of shares of Common Stock which shall be made
available for sale under the Plan shall be 300,000 shares, subject to
adjustment upon changes in capitalization of the Company as provided in
paragraph 18. If the total number of shares which would otherwise be
subject to options granted pursuant to Section 7(a) hereof on the
Offering Date of an Offering Period exceeds the number of shares then
available under the Plan (after deduction of all shares for which options
have been exercised or are then outstanding), the Company shall make a
pro rata allocation of the shares remaining available for option grants
in as uniform a manner as shall be practicable and as it shall determine
to be equitable. Any amounts remaining in an Employee's account not
applied to the purchase of stock pursuant to this Section 12 shall be
refunded on or promptly after the Exercise Date. In such event, the
Company shall give written notice of such reduction of the number of
shares subject to the option to each Employee affected thereby and shall
similarly reduce the rate of Contributions, if necessary.

(b) The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.

13. ADMINISTRATION. The Board shall supervise and administer the Plan
and shall have full power to adopt, amend and rescind any rules deemed
desirable and appropriate for the administration of the Plan and not
inconsistent with the Plan, to construe and interpret the Plan, and to make
all other determinations necessary or advisable for the administration of
the Plan.

14. DESIGNATION OF BENEFICIARY.

(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to the
end of the Offering Period but prior to delivery to him or her of such
shares and cash. In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's
death prior to the Exercise Date of the Offering Period. If a participant
is married and the designated beneficiary is not the spouse, spousal
consent shall be required for such designation to be effective.

(b) Such designation of beneficiary may be changed by the participant
(and his or her spouse, if any) at any time by written notice. In the
event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares and/or cash to
the executor or administrator of the estate of the participant, or if no
such executor or administrator has been

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appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any
one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person
as the Company may designate.

15. TRANSFERABILITY. Neither Contributions credited to a participant's
account nor any rights with regard to the exercise of an option or to
receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent
and distribution or as provided in paragraph 14 hereof) by the participant.
Any such attempt at assignment, transfer, pledge or other disposition shall
be without effect, except that the Company may treat such act as an election
to withdraw funds in accordance with paragraph 10 hereof.

16. USE OF FUNDS. All Contributions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such Contributions.

17. REPORTS. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to
participating Employees promptly following the Exercise Date, which
statements will set forth the amounts of Contributions, the per share
purchase price, the number of shares purchased and the remaining cash
balance, if any.

18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the stockholders of the Company, the number of shares of Common
Stock covered by unexercised options under the Plan and the number of shares
of Common Stock which have been authorized for issuance under the Plan but
are not yet subject to options (collectively, the "Reserves"), as well as
the price per share of Common Stock covered by each unexercised option under
the Plan, shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Common Stock subject to an option.

In the event of the proposed dissolution or liquidation of the Company,
the Offering Period will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board. In the event
of a proposed sale of all or substantially all of the assets of the Company,
or the merger of the Company with or into another corporation, each option
under the Plan shall be assumed or an equivalent option shall be substituted
by such successor corporation or a parent or subsidiary of such successor
corporation, unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, to shorten the
Offering Period then in progress by setting a new Exercise Date (the "New
Exercise Date"). If the Board shortens the Offering Period then in progress
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Board shall notify each participant in writing, at least ten
days prior to the New Exercise Date, that the Exercise Date for his or her
option has been changed to the New Exercise Date and

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that his or her option will be exercised automatically on the New Exercise
Date, unless prior to such date he or she has withdrawn from the Offering
Period as provided in paragraph 10 hereof. For purposes of this paragraph,
an option granted under the Plan shall be deemed to be assumed if, following
the sale of assets or merger, the option confers the right to purchase, for
each share of Common Stock subject to the option immediately prior to the
sale of assets or merger, the consideration (whether stock, cash or other
securities or property) received in the sale of assets or merger by holders
of Common Stock for each share of Common Stock held on the effective date of
the transaction (and if such holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the
outstanding shares of Common Stock); provided, however, that if such
consideration received in the sale of assets or merger was not solely common
stock of the successor corporation or its parent (as defined in
Section 424(e) of the Code), the Board may, with the consent of the
successor corporation, provide for the consideration to be received upon
exercise of the option to be solely common stock of the successor
corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock in the sale of assets or
merger.

The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the
price per share of Common Stock covered by each outstanding option, in the
event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of
shares of its outstanding Common Stock, and in the event of the Company
being consolidated with or merged into any other corporation.

19. AMENDMENT OR TERMINATION. The Board may at any time terminate or
amend the Plan. Except as provided in paragraph 18 hereof, no such
termination may affect options previously granted, nor may an amendment make
any change in any option theretofore granted which adversely affects the
rights of any participant. In addition, to the extent necessary to comply
with Section 423 of the Code (or any successor rule or provision or any
applicable law or regulation), the Company shall obtain stockholder approval
in such a manner and to such a degree as so required.

20. NOTICES. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at the
location, or by the person, designated by the Company for the receipt
thereof.

21. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any
of the aforementioned applicable provisions of law.

22. RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan or in any
agreement entered into pursuant to the Plan shall confer upon any Employee
or other optionee the right to continue in the

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employment of the Company or any Subsidiary, or affect any right which the
Company or any Subsidiary may have to terminate the employment of such
Employee or other optionee.

23. RIGHTS AS A STOCKHOLDER. Neither the granting of an option nor a
deduction from payroll shall constitute an Employee the owner of shares
covered by an option. No optionee shall have any right as a stockholder
unless and until an option has been exercised, and the shares underlying the
option have been registered in the Company's share register.

24. TERM OF PLAN. The Plan became effective upon its adoption by the
Board of Directors in February, 2000 and shall continue in effect for a term
of ten years unless sooner terminated under paragraph 19 hereof.

25. APPLICABLE LAW. This Plan shall be governed in accordance with the
laws of State of Massachusetts, applied without giving effect to any
conflict-of-law principles.

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APPENDIX B
PROXY IBIS TECHNOLOGY CORPORATION PROXY
THIS PROXY IS BEING SOLICITED BY IBIS TECHNOLOGY CORPORATION'S
BOARD OF DIRECTORS

The undersigned, hereby appoints Martin J. Reid and Debra L. Nelson, and
each of them (with full power to act alone), the attorneys and proxies of the
undersigned, with power of substitution to each, to vote all shares of the
Common Stock of Ibis Technology Corporation (the "Company") registered in the
name provided herein which the undersigned is entitled to vote at the 2000
Annual Meeting of Stockholders to be held at the offices of the Company,
32 Cherry Hill Drive, Danvers, Massachusetts, at 10:00 a.m. local time on
Thursday, May 4, 2000, and at any adjournments thereof, with all the powers the
undersigned would have if personally present. Without limiting the general
authorization hereby given, said proxies are, and each of them is, instructed to
vote or act as follows on the proposals set forth in said Proxy.

THIS PROXY WHEN EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO
DIRECTION IS MADE THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSALS 2, 3 AND 4.

1. Election of two (2) Class III Directors: Geoffrey Ryding and Leslie B.
Lewis

/ / FOR / / WITHHELD

/ / FOR ALL NOMINEES EXCEPT AS NOTED ABOVE

2. Proposal to approve the adoption of the Company's 2000 Employee Stock
Purchase Plan and the reservation of 300,000 shares of Common Stock for
issuance under this plan.

/ / FOR / / AGAINST / / ABSTAIN

3. Proposal to ratify the appointment of KPMG LLP as the Company's independent
public accountants for the fiscal year ending December 31, 2000.
/ / FOR / / AGAINST / / ABSTAIN

4. Proposal to approve an amendment to the Company's Articles of Organization to
increase the number of authorized shares of Common Stock from 20,000,000
shares to 50,000,000 shares.
/ / FOR / / AGAINST / / ABSTAIN

(SEE REVERSE SIDE)
<PAGE>
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.

Please sign exactly as name(s)
appears hereon. Joint owners
should each sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give full title
as such.

_________________________________
Signature Date

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS, JUST SIGN AND DATE ABOVE. YOU NEED NOT MARK ANY BOXES.