<SUBMISSION>
<ACCESSION-NUMBER>0000950137-02-001315
<TYPE>10-K
<PUBLIC-DOCUMENT-COUNT>15
<PERIOD>20011231
<FILING-DATE>20020315
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AUGUST TECHNOLOGY CORP
<CIK>0001063527
<ASSIGNED-SIC>3827
<IRS-NUMBER>411729485
<STATE-OF-INCORPORATION>MN
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-K
<ACT>34
<FILE-NUMBER>000-30637
<FILM-NUMBER>02576541
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>4900 W 78TH ST
<CITY>BLOOMINGTON
<STATE>MN
<ZIP>55435
<PHONE>9528200080
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>4900 WEST 78TH STREET
<CITY>BLOOMINGTON
<STATE>MN
<ZIP>55435
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>c67934e10-k.htm
<DESCRIPTION>ANNUAL REPORT
<TEXT>
<HTML>
<HEAD>
<TITLE>Annual Report for August Technology Corporation</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<P align="center">
<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>

<DIV align="center">
<B>Washington, D.C. 20549</B>
</DIV>

<P align="center">
<B><FONT size="5">Form 10-K</FONT></B>

<P align="center">
<B>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)</B>

<DIV align="center">
<B>OF THE SECURITIES EXCHANGE ACT OF 1934</B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="50%"></TD>
	<TD width="50%"></TD>
</TR>

<TR valign="top">
	<TD align="left"><B><FONT size="2">For the fiscal year ended December&nbsp;31, 2001</FONT></B></TD>
	<TD align="right"><B><FONT size="2">Commission File Number 000-30637</FONT></B></TD>
</TR>

</TABLE>

<P align="center">
<IMG src="c67934c67934l1.gif" alt="(AUGUST TECHNOLOGY LOGO)">

<DIV align="center">
<B><FONT size="5">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Exact name of Registrant as specified in its
charter)</FONT></I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Minnesota</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">41-1729485</FONT></B></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<I><FONT size="2">(State or other jurisdiction of<BR>
	incorporation or organization)</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<I><FONT size="2">(I.R.S. Employer<BR>
	Identification No.)</FONT></I></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">4900 West 78th Street</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Bloomington, MN</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">55435</FONT></B></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<I><FONT size="2">(Address of principal executive
	offices)</FONT></I></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<I><FONT size="2">(Zip Code)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">(952)&nbsp;820-0080</FONT></B>

<DIV align="center">
<B><FONT size="2">(Registrant&#146;s telephone number, including
area code)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">Securities registered pursuant to
Section&nbsp;12(b) of the Act:</FONT></B>

<DIV align="center">
<B><FONT size="2">None</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">Securities registered pursuant to
Section&nbsp;12(g) of the Act:</FONT></B>

<P align="center">
<B><U><FONT size="2">Title of each class:</FONT></U></B>

<DIV align="center">
<FONT size="2">Common Stock, no par value
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate by check mark whether the Registrant
(1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12&nbsp;months (or for such shorter period
that the Registrant was required to file such reports), and
(2)&nbsp;has been subject to such filing requirements for the
past
90&nbsp;days.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation&nbsp;S-K is
not contained herein, and will not be contained, to the best of
the Registrant&#146;s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this form 10-K or any amendment to this
form&nbsp;10-K.&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The aggregate market value of voting stock held
by nonaffiliates of the Registrant was $62,962,930 as of
February&nbsp;28, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The number of shares of Common Stock, no par
value, outstanding as of February&nbsp;28, 2002 was 12,825,219.
</FONT>

<P align="center">
<B><FONT size="2">DOCUMENTS INCORPORATED BY REFERENCE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Portions of the definitive Proxy Statement to be
delivered to shareholders in connection with the Annual Meeting
of Shareholders to be held April&nbsp;30, 2002 are incorporated
by reference into Part&nbsp;III.
</FONT>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>

<P align="center">
<B><FONT size="2">FORM 10-K</FONT></B>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended December&nbsp;31,
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="72%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="4" align="center" valign="top">
	<FONT size="2">PART&nbsp;I
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;1.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Business
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;2.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Properties
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;3.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Legal Proceedings
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;4.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Submission of Matters to a Vote of Security
	Holders
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<FONT size="2">&nbsp;&nbsp;Executive Officers of the Registrant
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="center" valign="top">
	<FONT size="2">PART II
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;5.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Market for Registrant&#146;s Common Stock and
	Related Shareholder Matters
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;6.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Selected Financial Data
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;7.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Management&#146;s Discussion and Analysis of
	Financial Condition and<BR>
	Results of Operations
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<FONT size="2">&nbsp;&nbsp;Cautionary Statements
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;7A.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Qualitative and Quantitative Disclosures about
	Market Risk
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;8.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Financial Statements and Supplementary Data
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;9.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Changes in and Disagreements With Accountants on
	Accounting and Financial Disclosure
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="center" valign="top">
	<FONT size="2">PART III
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;10.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Directors and Executive Officers of the Registrant
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;11.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Executive Compensation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;12.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Security Ownership of Certain Beneficial Owners
	and Management
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;13.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Certain Relationships and Related Transactions
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="center" valign="top">
	<FONT size="2">PART&nbsp;IV
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;14.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Exhibits, Financial Statements, Schedules and
	Reports on Form&nbsp;8-K
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<FONT size="2">&nbsp;&nbsp;Signatures
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Schedule&nbsp;II
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Valuation and Qualifying Accounts
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<FONT size="2">&nbsp;&nbsp;Exhibits
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">PART&nbsp;I</FONT></B>

<P align="left">
<B><FONT size="2">Item&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business</FONT></B>

<P align="left">
<B><FONT size="2">Introduction</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">August Technology serves microelectronics device
manufacturing industries with tools that enable manufacturers to
bring new products to market faster and with less cost. As a
worldwide leader in the research, design, development,
manufacture, marketing, sales, distribution and service of
automated micro defect inspection and metrology systems, we make
it possible for microelectronic device manufacturers to more
effectively meet the needs of the high technology communication,
transportation, entertainment, productivity and security
markets. The flexibility of our tools has allowed us to
successfully serve the semiconductor manufacturing market while
concurrently providing effective solutions for high growth
markets such as optoelectronics, photonics, micro
electromechanical systems (MEMS), data storage and micro
displays. Microelectronic devices processed through our systems
can be found in consumer products such as personal computers and
computer peripherals, cell phones, personal digital assistants
(PDAs), set-top boxes, electronic games, security systems,
automobiles and throughout the communications infrastructure in
electrical, optical and wireless networks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1997, the introduction and subsequent adoption
of our NSX Series of automated wafer inspection systems created
a new market for automated visual inspection
(AVI)&nbsp;providing device manufacturers with a product
characterization solution that has the performance and
flexibility to seamlessly provide critical process information
throughout the manufacturing process. This information enables
manufacturers to make process improvements and filter out
defective products with minimal impact on the manufacturing
cycle time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We continued to enhance our product offering in
2001 with the introduction of the 3Di Series of automated
inspection and metrology systems. The 3Di Series again expanded
the AVI market as the first high throughput two dimensional (2D)
and three dimensional (3D) metrology and defect inspection tools
specifically designed for the latest and most advanced
microelectronic device packaging processes, including flip-chip
wafer bumping. We further enhanced our inspection solutions by
introducing our YieldPilot defect review and process analysis
package that allows manufacturers to streamline their inspection
process and effectively convert inspection and metrology data
into useful information for process control.
</FONT>

<P align="left">
<B><FONT size="2">Our Market</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Microelectronic device manufacturers are
continually challenged to meet the price and performance demands
placed on them by the end-user markets. To meet these demands,
manufacturers must continually accelerate time to market, reduce
manufacturing cost and improve device performance. Changes
driven by these demands include the implementation of 300mm
wafer processing, process automation and integration as well as
new process technologies such as advanced packaging and
interconnects (including wafer bumping) and new product designs
such as system level integration(including System-In-a-Package).
Manufacturers in emerging high growth markets such as
optoelectronics, photonics, and MEMS are also making necessary
changes to create cost effective high volume manufacturing
processes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Product characterization solutions, such as
visual inspection, must keep pace with industry trends in order
for manufacturers to achieve their goals. The industry has
historically relied on people using microscopes and offline
metrology systems to detect defects caused by contamination or
mechanical damage and to make measurements on small samples of
features that need to be characterized. However, these
conventional characterization techniques have become obsolete as
manufacturers cannot afford the time or expense of the
inefficient and error-prone manual inspection process. In
addition, ever tightening product tolerances, as well as the
increased use of foundries and subcontractors leads to the
requirement for 100% inspection capability.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our tools provide the platforms with which
manufacturers can replace their costly and slow conventional
inspections with automated high throughput inspections that are
virtually &#147;transparent&#148; to the manufacturing process.
In addition to detecting and filtering out defective products,
our inspection solutions enable device manufacturers to gather
information through AVI that helps them understand their process
and implement
</FONT>

<P align="center"><FONT size="2">2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">enhancements. By incorporating proprietary
software and hardware designs, innovative automated materials
handling capabilities and expertise in machine vision
technology, our tools enable manufacturers to implement new cost
saving and process improving inspections at points in the
manufacturing process previously thought impractical for
inspection, ultimately expanding the overall AVI market
potential. As the applications of our product lines increase, we
have expanded into major microelectronic device manufacturers
and subcontractors worldwide with the largest concentrations in
North America, Taiwan, Europe and Japan.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Our Solution</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We serve these markets with a combination of high
performance systems, world-class service and support and by
focusing on five strategic objectives:
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technological
Leadership</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Superior Performance:
</FONT></I><FONT size="2">We strive to offer the best price/
performance systems in the market by focusing on our core
competencies in machine vision technology, optics, lighting,
precision motion control and data management.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Flexible Technologies:
</FONT></I><FONT size="2">We focus on technologies that allow us
to easily meet the growing and changing needs of our customers
in a timely and cost effective manner. Our flexible designs
enable us to serve multiple microelectronic markets with the
same core products. Our modular solutions provide our customers
with cost efficient choices to configure their systems to meet
specific needs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Complete solutions through data management:
</FONT></I><FONT size="2">We provide products that not only
collect inspection and metrology data but also facilitate
analysis by converting the data into useful process improving
information. Our system software is designed to integrate
seamlessly with the latest technologies in our customers&#146;
manufacturing data management systems enabling the fast and
efficient flow of information.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Market
Expertise</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Paramount to the success of our business is our
ability to interpret the needs of our customers and the market.
We are led by our marketing organization that provides a clear
understanding of the needs of these markets and the possible
solutions that already exist in the industry so that we are
ready when our customers are ready for us.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer
Application Partnerships</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We work very closely with our customers to
develop unique solutions to their inspection needs. Our
engineering services group partners with our customers to
address their specific needs as they look to continually
integrate and optimize our inspection systems in their
production lines. These partnerships allow us to gain market
access, provide competitive barriers and anticipate market needs.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Global
Presence</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We continue to develop the infrastructure
necessary to support a global company, utilizing the latest
technologies to effectively place ourselves in our customers
&#147;back yard&#148;. We have created an efficient global sales
network through international distribution partnerships and an
increasing direct sales and service presence in key regions of
the world. Recently introduced support services include
web-based remote service capability, 24-hour global support and
multi-lingual training.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;External
Growth</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to strategic relationships with
customers, we are working with other industry leaders through
participation in organizations and consortiums that further the
advancement of markets and technology. In 2001, we co-founded
the Advanced Packaging and Interconnect Alliance (APiA), an
organization that brings together equipment suppliers, material
suppliers, technology companies and customers with the purpose
of accelerating the advancement of new high performance and cost
efficient packaging technologies. We
</FONT>

<P align="center"><FONT size="2">3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">continue to look for ways to expand our
technologies and capitalize on market opportunities through
acquisitions, licensing and joint ventures.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Products</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our first product, the CV Series, is an automated
inspection system designed to measure critical dimensions on
wafer carriers used by semiconductor manufacturers. We expanded
our core competency in 1997, becoming pioneers of micro defect
inspection with the introduction of our first NSX Series of
automated wafer inspection systems. In 2001, revenues from the
NSX Series represented 77% of our net revenues. The NSX Series
is driven by advanced proprietary software and includes
integrated yield enhancement tools including automated data
collection and reporting, extensive communication options and
fast, easy setup using Windows&#174;-based menus. The new 3Di
Series, introduced in the third quarter of 2001, builds upon the
NSX technology by incorporating the revolutionary Rapid Confocal
Sensor (RCS)&nbsp;technology to create an inspection system
specifically designed for the advanced packaging and
interconnect market.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Automated micro defect inspection
systems&nbsp;&#151; NSX Series. </FONT></I><FONT size="2">Our
automated micro defect inspection systems deliver high-speed,
consistent, reliable defect detection to microelectronic
manufacturers. These systems assess the quality of products at
several steps in the device manufacturing process and
immediately feed critical information about process integrity to
yield management or factory automation systems. This data allows
for enhanced process control and ultimately leads to improved
yields. The NSX Series allows for the sharing of process
knowledge and inspection results throughout production and test,
assembly and packaging facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently offer the NSX-70, NSX-80, NSX-85,
NSX-90 and NSX-95 models in the NSX Series, providing a wide
range of pricing and functionality. The NSX-105, which is
expected to begin shipping in 2002, will deliver greater
processing speed to customers demanding even higher throughput.
In addition to whole wafer and film frame handling capabilities,
300mm wafer capability was introduced in 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our NSX Series systems currently range in price
from approximately $200,000 to $900,000, depending on the
complexity of the configuration. Customers may tailor systems
toward their specific application, process, or budget, by
choosing from a range of system capabilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Automated Wafer Bump Inspection
Systems&nbsp;&#151; 3Di Series.
</FONT></I><FONT size="2">Introduced in 2001, our 3Di-8000
automated wafer bump inspection system is the first complete 2D
and 3D production worthy bumped wafer inspection system on the
market. Building on the full capability of the NSX Series, the
3Di-8000 features the newly commercialized RCS 3D inspection
technology. This new patent-pending technology combines high
speed and high accuracy 3D inspection by merging the proven
concepts of confocal microscopy with innovative optical design
and proprietary software. This technology, although still in its
infancy, meets and exceeds the performance of existing 3D
metrology technologies. The RCS is particularly well suited for
the future of 3D bump and other advanced packaging inspection
because of its ability to scale down to meet the future
requirements of our customers. RCS technology is also capable of
meeting the 3D inspection needs of the growing markets of
optoelectronics, MEMS and other microstructures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The combination of micro defect inspection and,
2D and 3D measurement capability provides a single complete
inspection solution for those manufacturers who bump wafers or
handle them with subsequent processing. As with the NSX Series,
the 3Di Series is available with the 300mm wafer handler in
addition to smaller wafer sizes and film frames and may be
tailored toward specific customer applications with various
options and features. The 3Di Series currently ranges in price
from approximately $450,000 to $1,300,000, depending upon the
complexity of the configuration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Defect review and process analysis
software&nbsp;&#151; YieldPilot.
</FONT></I><FONT size="2">Introduced in 2001, YieldPilot
provides our customers with additional functionality for their
inspection process by both simplifying and speeding up the
defect review process and providing an engineering data analysis
tool that can be used to turn inspection data into useful
process improving information. YieldPilot can be sold in
multiple configurations ranging from $50,000 to $140,000,
providing users different capabilities depending on their needs.
</FONT>

<P align="center"><FONT size="2">4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Other Products. </FONT></I><FONT size="2">We
offer a series of cassette verification systems, referred to as
the CV Series, designed to automatically verify critical wafer
carrier dimensions. Using advanced machine vision technology and
proprietary software, our CV Series systems identify
out-of-tolerance cassettes, allowing semiconductor device
manufacturers to remove dimensionally defective cassettes and
thereby decrease wafer damage and improve yield. We recently
expanded the CV Series to include 300mm solutions in addition to
our standard 200mm solutions. Systems within the CV Series
currently range in price from $85,000 to $250,000 depending upon
the configuration of the system.
</FONT>

<P align="left">
<B><FONT size="2">Research and Development</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our success depends upon our ability to
effectively develop and commercialize new technologies and
products. Our research and development activities emphasize
application development and new product introductions in
collaboration with our customers. Our engineering teams support
these efforts with software development, machine vision
technology, optics, lighting and precision motion control
expertise. We work closely with our customers to define new
product features and to identify emerging applications for our
products. Our research and development efforts throughout 2001
have focused on the development and introduction of our 3Di and
YieldPilot systems and on developing new application solutions
and automation modules for the NSX Series. We spent 26.7% of our
net revenue on research and development during 2001, 21.9%
during 2000 and 19.2% during 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To maintain technical leadership in each of the
markets we serve, we plan to continue to spend aggressively in
research and development, add additional capabilities and
options to our systems and pursue selective strategic
acquisitions, licenses, joint ventures, collaborations, mergers
or other technology partnerships or arrangements of
technologies, product lines and companies.
</FONT>

<P align="left">
<B><FONT size="2">Customers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have sold our NSX Series systems to many of
the leading semiconductor and microelectronic manufacturers
throughout the world. In 2001, 44% of our net revenues were
derived from sales outside of the U.S., consisting of 18% to
customers in Taiwan, 13% to customers in Japan and 13% to
customers in other countries, including Northern Ireland, South
Korea, Singapore, Switzerland, Germany and the United Kingdom.
Customers accounting for greater than 10% of net revenues during
2001 included Intel Corporation and Seagate Technology LLC.
There were no other customers, excluding our distributors, which
accounted for greater than 10% of net revenues during 2001 or
2000.
</FONT>

<P align="left">
<B><FONT size="2">Sales, Service and Marketing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We provide direct sales, service and field
application support through strategically placed offices in the
U.S. We currently have domestic sales and service personnel in
Silicon Valley, southern California, Arizona, North Carolina,
Texas, Oregon, Connecticut and at our corporate headquarters in
Minnesota.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001 we opened an office in Taiwan providing
direct sales, customer service and support to the significant
and growing Taiwanese semiconductor and microelectronic markets.
With the opening of this office, we modified our ongoing
relationship with our distributor, Metron Technology B.V., to
focus Metron&#146;s activities on the remaining regions in Asia,
excluding Japan where Marubeni Solutions Corporation is our
distributor. We market our products in Europe through our
distributors Quasys AG and Firfax Systems. Each of our primary
distributors has entered into international distributor
agreements with us. All of our distributor agreements grant our
distributors an exclusive territory, provide for price and
payment procedures, specify the applicable warranty procedures
and contain a confidentiality provision.
</FONT>

<P align="left">
<B><FONT size="2">Backlog</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our backlog was $5.2&nbsp;million as of
December&nbsp;31, 2001, as compared to $9.6 million as of
December&nbsp;31, 2000. Our backlog consists of orders for which
we have accepted purchase orders and assigned shipment dates
within the next twelve months. These orders are subject to
cancellation or delay by the customer without
</FONT>

<P align="center"><FONT size="2">5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">penalty. In addition, since only a portion of our
revenues for any quarter represents systems in backlog, we do
not believe that backlog is a meaningful or accurate indication
of our future revenues and performance.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Competition</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While we believe that we currently have a
significant lead in the commercialization of solutions for the
micro defect inspection market, several other firms also
manufacture similar products. Our primary competitors are
Semiconductor Technologies &#38; Instruments, Inc., Robotic
Vision Systems, Inc., Electroglas, Inc. and Toray Industries,
Inc. In addition, a number of other companies are active in the
semiconductor capital equipment market, particularly in
automated inspection for sub-micron defects in the wafer
processing portion of the semiconductor manufacturing process,
and could become competitors in the future. Many of our
competitors and potential competitors have substantially greater
financial, engineering, manufacturing and marketing resources.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Significant competitive factors in our market
include performance, ease of use, development of new
technologies, established customer base, application support,
customer service, product flexibility, price and ability to
deliver products on a timely basis. We believe we compete
favorably with respect to these factors, but must continue to
develop and design new and improved products in order to
maintain our competitive position.
</FONT>

<P align="left">
<B><FONT size="2">Manufacturing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We perform system design, assembly and testing at
our headquarters in Bloomington, Minnesota. We utilize an
outsourcing strategy for the manufacture of many of our
components and major subassemblies. Our manufacturing activities
are considered horizontal in nature and consist primarily of
testing and assembling parts, components and subassemblies
(collectively &#147;parts&#148;) acquired from our vendors and
integrating the parts into our products. To meet specific
customer requirements, we often manufacture products that
include custom system engineering and software development. Our
manufacturing operations do not require a major investment in
capital equipment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We use numerous domestic and international
vendors to supply parts for the manufacture and support of our
products. Although we make reasonable efforts to ensure that
parts are available from multiple qualified suppliers, this is
not always possible; accordingly, some key parts may be obtained
only from a single supplier or a limited group of suppliers. We
endeavor to minimize the risk of product interruption by
selecting and qualifying alternative suppliers for key parts,
monitoring the financial condition of key suppliers and
maintaining appropriate inventories of key parts. If we do not
receive a sufficient quantity of parts in a timely and
cost-effective manner to meet production requirements, our
results of operations may be materially and adversely affected.
We do not maintain long-term supply contracts with any of our
suppliers. We do enter into blanket purchase orders with less
than twelve month terms for parts with long lead times. These
purchase orders are generally to lock-in price and provide the
supplier with visibility of future requirements.
</FONT>

<P align="left">
<B><FONT size="2">Intellectual Property</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Proprietary information plays a significant role
in the development of our products. We rely upon a combination
of contract provisions, copyright, trademark, patent and trade
secret laws to protect our proprietary know-how, ideas,
inventions, goodwill and rights in our solutions and products.
We also have a policy of seeking U.S. and foreign patents on
technology considered of particular strategic or competitive
importance. As of December&nbsp;31, 2001, we have two issued
U.S. patents and a variety of pending U.S. patent applications.
We have also applied for foreign patent rights in key strategic
markets as to key solutions and products. The technological
focus of the issued and pending applications includes general
microelectronic 2D and 3D inspection techniques as well as
devices, systems and processes in the following areas: lighting,
focusing, sensing, viewing, material handling, imaging,
inspecting and data manipulating.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although we believe that the copyrights,
trademarks and U.S. patents we own are of value, we do not
believe that they will determine our success, which depends
principally upon our engineering, manufacturing, marketing and
service skills. We also license some of our non-exclusive
software programs from third party developers and incorporate
them in our products.
</FONT>

<P align="center"><FONT size="2">6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the normal course of business, we regularly
monitor and make inquiries, if necessary, regarding possible
infringement of our patents by others. Should it become
necessary or prudent, we intend to protect our rights when, in
our view, others infringe upon these rights. We similarly take
necessary and prudent steps to respect the intellectual property
rights of others.
</FONT>

<P align="left">
<B><FONT size="2">Employees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, we employed 156
people, including 55 in research and development, 22 in
manufacturing, 26 in service, technical support and training, 31
in sales and marketing, and 22 in administration. We also employ
independent contractors and temporary employees. None of our
employees is represented by a labor union and we consider our
employee relations to be good.
</FONT>

<P align="left">
<B><FONT size="2">Item&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Properties</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Location</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Type</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Principal Use</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Square Footage</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Ownership</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Bloomington, MN
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Office, plant, warehouse
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Headquarters, Research and Development, Sales and
	Service, Marketing, Administration
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">62,843</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">(a)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">Leased</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hsinchu, Taiwan
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Office, warehouse
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Sales and Service
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4,607</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">Leased</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hsinchu, Taiwan
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Warehouse
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Sales and Service
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2,842</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">Leased</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(a)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">We have exercised an option to lease an
	additional 15,594 square feet beginning March&nbsp;1, 2002. The
	lease expires on April&nbsp;30, 2006, but may be renewed by us
	for an additional three-year term.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Item&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal
Proceedings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From time to time in the ordinary course of
business, we are subject to claims, asserted or unasserted, or
named as a party to lawsuits or investigations. Litigation, in
general, and intellectual property and securities litigation in
particular, can be expensive and disruptive to normal business
operations. Moreover, the results of legal proceedings cannot be
predicted with any certainty, and in the case of more complex
legal proceedings such as intellectual property and securities
litigation, the results are difficult to predict at all. We are
not aware of any asserted or unasserted legal proceedings or
claims that we believe would have a material adverse effect on
our financial condition or results of our operations.
</FONT>

<P align="left">
<B><FONT size="2">Item&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Submission
of Matters to a Vote of Security Holders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There were no matters submitted to a vote of our
shareholders during the quarter ended December&nbsp;31, 2001.
</FONT>

<P align="center"><FONT size="2">7
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">Executive Officers of the Registrant</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following sets forth the names and ages of
our current executive officers in addition to information
regarding their positions, their periods of service in such
positions and their business experience for the past five years.
Executive officers generally serve in office for terms of
approximately one year.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Position</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jeff L. O&#146;Dell
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Executive Officer and Director
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">David L. Klenk
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">President and Chief Operating Officer
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Thomas C. Velin
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Financial Officer
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Thomas C. Verburgt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Technology Officer and Director
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Mark R. Harless
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Engineer and Director
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">John M. Vasuta
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">33</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President of Intellectual Property, General
	Counsel and Secretary
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">D. Mayson Brooks
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President of Worldwide Sales and Field
	Operations
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Wayne J. Hubin
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">58</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President of Manufacturing
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Albert A. Eliasen
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President of Engineering
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Jeff L. O&#146;Dell
</FONT></I><FONT size="2">co-founded August Technology in 1992
and has served as our Chief Executive Officer since 1992 and
Chairman of the Board since 1994. From 1992 to July 2001,
Mr.&nbsp;O&#146;Dell also served as President. From August 1987
to August 1992, Mr.&nbsp;O&#146;Dell was Director of Sales and
Marketing for MicroVision Corporation, which develops and
manufactures robotic and inspection systems. From February 1985
to August 1987, Mr.&nbsp;O&#146;Dell was a Field Applications
Engineer for Cognex Corporation, which designs, develops and
markets machine vision systems that are used to automate a wide
range of manufacturing processes. From March 1984 to February
1985, Mr.&nbsp;O&#146;Dell served as a Systems Analyst for
Control Data Corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">David L. Klenk </FONT></I><FONT size="2">has
been with us since April 1993 and was named President and Chief
Operating Officer in July 2001. Mr.&nbsp;Klenk served on our
Board of Directors from 1994 to March 2000. Mr.&nbsp;Klenk
oversees the engineering, manufacturing, customer service, and
human resources groups. Prior to becoming President,
Mr.&nbsp;Klenk served as our Chief Operating Officer and
Director of Operations. Mr.&nbsp;Klenk is a brother-in-law of
Mark Harless, our Chief Engineer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Thomas C. Velin </FONT></I><FONT size="2">has
served as our Chief Financial Officer since September 1998.
Prior to joining us, Mr.&nbsp;Velin was Chief Financial Officer
for Lloyd&#146;s Food Products, Inc., a producer of specialty
food products, from May 1996 to June 1998. From November 1989 to
May 1996, Mr.&nbsp;Velin was Corporate Controller for Telex
Communications, Inc., a provider of sophisticated audio,
wireless and multimedia communications equipment. Mr.&nbsp;Velin
is a licensed certified public accountant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Thomas C. Verburgt
</FONT></I><FONT size="2">has been with us since April 1993,
most recently as Chief Technology Officer, and has served on our
Board of Directors since 1994. Prior to becoming our Chief
Technology Officer in September 1999, Mr.&nbsp;Verburgt served
as Director of Software Engineering since joining us in April
1993. From January 1992 to April 1993, Mr.&nbsp;Verburgt held a
senior software engineering position at MTS Systems Corporation,
a technology based company providing engineering services,
equipment and software for applications in research product
development, quality control and production. From June 1984 to
January 1992, Mr.&nbsp;Verburgt was Senior Software Engineer for
the Perkin Elmer Corporation, a manufacturer of instrument
systems and software for the pharmaceutical, biotechnology,
agricultural and chemical industries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Mark R. Harless
</FONT></I><FONT size="2">co-founded August Technology in 1992
and has been a member of our Board of Directors since 1994.
Mr.&nbsp;Harless has held various positions with us, most
recently serving as our Chief Engineer. From 1988 to 1992, Mr.
Harless was a Systems Engineer at MicroVision Corporation, where
he developed custom robotic and inspection systems. From 1985 to
1988, Mr.&nbsp;Harless worked as a Development Engineer at
Honeywell, Inc. Mr.&nbsp;Harless is a brother-in-law of David
Klenk, our President and Chief Operating Officer.
</FONT>

<P align="center"><FONT size="2">8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">John M. Vasuta
</FONT></I><FONT size="2">joined us as Vice President of
Intellectual Property and General Counsel in May 2000.
Mr.&nbsp;Vasuta has also been our Secretary or Assistant
Secretary since October 2000. From February 1999 to May 2000,
Mr. Vasuta was Senior Intellectual Property Counsel with
Bridgestone-Firestone, a manufacturer of tires, fiber optics and
automotive parts. From July 1997 to February 1999,
Mr.&nbsp;Vasuta was Senior Patent Counsel and Research and
Development Business Manager for Kennametal Inc., a tooling
manufacturer. Mr. Vasuta was an attorney in various law firms
from 1991 to 1997, most recently at Sand &#38; Sebolt, where he
was a partner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">D. Mayson Brooks
</FONT></I><FONT size="2">became our Vice President of Worldwide
Sales and Field Operations in February 2002. Prior to becoming
Vice President of Worldwide Sales and Field Operations,
Mr.&nbsp;Brooks served as our Vice President of Sales and
Marketing since July 1999. Prior to joining us, from June 1987
through June 1999, Mr.&nbsp;Brooks worked in various managerial
capacities for Air Products and Chemicals, Inc., most recently
as Commercial Manager, European electronics division.
Mr.&nbsp;Brooks served from June 1981 to May 1987 in the United
States Navy and was awarded two achievement medals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Wayne J. Hubin </FONT></I><FONT size="2">has
been our Vice President of Manufacturing since November 1999.
Before joining us, Mr.&nbsp;Hubin was Manufacturing Operations
Manager for BOC Edwards, Inc. from August 1999 to November 1999.
From 1984 to August 1999, Mr.&nbsp;Hubin worked in various
managerial capacities for FSI International, Inc., a supplier of
micro-lithography, surface conditioning and chemical dispense
equipment used in the fabrication of microelectronics, most
recently as Manufacturing Operations Manager.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Albert A. Eliasen
</FONT></I><FONT size="2">joined us as Vice President of
Engineering in November 2000. Prior to joining us,
Mr.&nbsp;Eliasen was employed by Axcelis Technologies, Inc., a
semiconductor equipment supplier, from May 1995 to November
2000. He served in various capacities with Axcelis Technologies,
most recently as TPS Platform Manager, managing engineers for
the thermal products platform including new product development
and sustaining engineering.
</FONT>

<P align="center">
<B><FONT size="2">PART&nbsp;II</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="8%"></TD>
	<TD width="92%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;5.</FONT></B></TD>
	<TD>
	<B><FONT size="2">Market for Registrant&#146;s Common Stock and
	Related Shareholder Matters</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Market Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our common stock, no par value (the &#147;Common
Stock&#148;), has traded under the symbol &#147;AUGT&#148; on
the Nasdaq National Market since our initial public offering on
June&nbsp;14, 2000. There was no market for our Common Stock
prior to that date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the reported high
and low closing sale prices for shares of our Common Stock on
the Nasdaq National Market during the indicated quarters.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">First
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.94</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Second
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.60</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.94</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Third
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.71</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.88</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Fourth
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.04</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Holders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of March&nbsp;8, 2002, there were
approximately 225 holders of record of our Common Stock. In
addition, based on information obtained from our transfer agent,
there are approximately 1,908 holders whose stock is held in
nominee name and/or street name brokerage accounts.
</FONT>

<P align="center"><FONT size="2">9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<B><FONT size="2">Dividends</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have not declared or paid any cash dividends
on our Common Stock to date and do not anticipate paying cash
dividends for the foreseeable future. We currently intend to
retain earnings, if any, to support the development of our
business. Payment of future dividends, if any, will be at the
discretion of our board of directors after taking into account
various factors, including our financial condition, operating
results and current and anticipated cash needs. In addition, our
current credit facility limits our ability to pay any cash
dividends without our lender&#146;s consent.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="8%"></TD>
	<TD width="92%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
	<TD>
	<B><FONT size="2">Selected Financial Data</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated statement of operations data set
forth below for each of the years ended December&nbsp;31, 2001,
2000 and 1999 and the consolidated balance sheet data as of
December&nbsp;31, 2001 and 2000 are derived from the audited
consolidated financial statements, included elsewhere in this
Form&nbsp;10-K. The statement of operations data set forth below
for the years ended December&nbsp;31, 1998 and 1997 and the
balance sheet data as of December&nbsp;31, 1999, 1998 and 1997
are derived from audited financial statements, which are not
included in this Form&nbsp;10-K. You should read the data set
forth below in conjunction with the audited consolidated
financial statements and notes thereto and
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&#148; appearing elsewhere in
this Form&nbsp;10-K.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">(In thousands, except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Statement of Operations Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,784</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,666</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,058</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,787</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,192</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,039</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,594</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,110</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,686</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,141</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,745</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,072</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,948</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,101</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,051</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selling, general and administrative expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,800</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,737</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,174</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,004</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Research and development expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,940</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,945</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,318</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">924</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">734</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-recurring expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">579</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">326</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,574</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,701</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(107</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">313</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest income (expense), net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,427</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">978</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(42</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income (loss)&nbsp;before provision for (benefit
	from) income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,164</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,679</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(149</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">312</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for (benefit from) income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(813</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">807</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(351</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">187</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)&nbsp;per share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.03</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.02</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.03</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.02</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average common shares:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,723</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,049</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,688</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,955</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,723</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,688</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,955</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">10
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Working capital
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,171</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,494</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">289</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,155</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,897</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,676</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,686</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,794</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total debt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,224</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">190</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total shareholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,523</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,685</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,347</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,411</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">465</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Item&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations</FONT></B>

<P align="left">
<B><FONT size="2">Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">August Technology serves microelectronics device
manufacturing industries with tools that enable manufacturers to
bring new products to market faster and with less cost. As a
worldwide leader in the research, design, development,
manufacture, marketing, sales, distribution and service of
automated micro defect inspection and metrology systems, we make
it possible for microelectronic device manufacturers to more
effectively meet the needs of the high technology communication,
transportation, entertainment, productivity and security
markets. The flexibility of our tools has allowed us to
successfully serve the semiconductor manufacturing market while
concurrently providing effective solutions for high growth
markets such as data storage, micro displays, optoelectronics,
photonics and MEMS. Microelectronic devices processed through
our systems can be found in consumer products such as personal
computers and computer peripherals, cell phones, personal
digital assistants (PDAs), set-top boxes, electronic games,
security systems, automobiles and throughout the communications
infrastructure in electrical, optical and wireless networks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We were subject to significant quarterly and
annual fluctuations in demand for our products during 2001, 2000
and 1999 due to the cyclical nature of the microelectronic
device manufacturing markets we serve. These cycles were
generally driven by changes in technology, economic conditions
affecting demand for these devices and capacity requirements.
These factors and the overall downturn in the global economy
caused changes in the timing of both orders and sales. Future
quarterly and annual results will continue to be impacted by
these cycles, the timing of new product announcements and
releases by us or our competitors, market acceptance of new or
enhanced versions of our products, changes in the pricing of our
products and the timing and level of our research and
development expenditures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In preparing the consolidated financial
statements in conformity with accounting principles generally
accepted in the United States of America, we must make decisions
which impact the reported amounts and the related disclosures.
Such decisions include the selection of the appropriate
accounting principles to be applied and the assumptions on which
to base accounting estimates. In reaching such decisions, we
apply judgment based on our understanding and analysis of the
relevant circumstances. Note&nbsp;1 to the consolidated
financial statements provides a summary of the significant
accounting policies followed in the preparation of the
consolidated financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our critical accounting policies include the
following:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Revenue Recognition.
</FONT></I></B><FONT size="2">We derive revenues from the sale
of systems, spare parts and services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">System Sales&nbsp;&#151; Established
Products.</FONT></I><FONT size="2"> We require customers,
excluding our distributors, that have new inspection
applications to complete pre-shipment authorization testing of
purchased systems at our facility prior to shipment. During this
testing, the customer verifies that the system meets their
specifications and authorizes shipment. When the customer has
already accepted a previous system, with the same
specifications, for the same application, we do not require
pre-shipment authorization testing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sales of established products are accounted for
as multiple-element arrangements. Under this method, the total
value is allocated first to undelivered elements, such as
installation, based on their fair values, with the remainder
being allocated to system revenue. System revenue is recognized
once the product has shipped, title and risk of loss have
transferred to the customer and collection of the resulting
receivable is probable. We
</FONT>

<P align="center"><FONT size="2">11
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">do not deem installation to be essential to the
functionality of our systems as it does not involve altering the
system&#146;s features or capabilities or the building of
complex interfaces. We have had no systems returned after
shipment.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">System Sales&nbsp;&#151; New
Products.</FONT></I><FONT size="2"> Revenues related to sales of
systems that have not been demonstrated to meet customer
specifications prior to shipment are recognized once title and
risk of loss have transferred to the customer, installation has
occurred and collection of the resulting receivable is probable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Spare parts revenue.</FONT></I><FONT size="2">
Spare parts revenue is recognized when the parts have been
shipped, title and risk of loss have transferred to the customer
and collection of the resulting receivable is probable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Service revenue.</FONT></I><FONT size="2">
Service revenues are recognized after the services are performed
and collection of the resulting receivable is probable. Revenues
from maintenance contracts are recognized ratably over the
period of the contract. Service revenues were insignificant
during the years ended December&nbsp;31, 2001, 2000 and 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Valuation of Accounts Receivable.
</FONT></I></B><FONT size="2">We review accounts receivable to
determine which are doubtful of collection. In making the
determination of the appropriate allowance for doubtful
accounts, we consider our history of write-offs, relationships
with our customers and the overall credit worthiness of our
customers. For the three years ended December&nbsp;31, 2001, we
have had accounts receivable write-offs totaling $21,000.
Changes in the credit worthiness of customers, general economic
conditions and other factors may impact the level of future
write-offs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Valuation of Inventory.
</FONT></I></B><FONT size="2">We review obsolescence to
determine that inventory items deemed obsolete are appropriately
reserved. In making the determination, we consider future sales
of related products and quantity of inventory at the balance
sheet date assessed against each part&#146;s past usage rates
and future expected usage rates. For the three years ended
December&nbsp;31, 2001, we have written off inventory totaling
$128,000. We have an allowance for obsolete inventory of
$193,000 at December&nbsp;31, 2001. This allowance represents
our estimate of obsolete inventory as of December&nbsp;31, 2001.
Changes in factors such as technology, customer demand,
competitor product introductions and other matters could affect
the level of inventory obsolescence in the future.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion of our financial
condition and results of operations should be read in
conjunction with the audited consolidated financial statements
and the notes thereto and with the &#147;Cautionary
Statements&#148; section included elsewhere in this
Form&nbsp;10-K.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents the consolidated
statements of operations as a percentage of net revenues.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="14"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selling, general and administrative expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Research and development expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-recurring expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="14"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest income (expense), net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income (loss)&nbsp;before provision for (benefit
	from) income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for (benefit from) income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">12
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Year ended
December&nbsp;31, 2001 compared to the year ended
December&nbsp;31, 2000</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Net Revenues. </FONT></I><FONT size="2">Net
revenues decreased $1.9&nbsp;million, or 5.9%, to $29.8 million
in 2001, from $31.7&nbsp;million in 2000. The decrease in net
revenues was the result of fewer shipments of our NSX systems
due to a worldwide decline in capital spending by both
semiconductor and microelectronic device manufacturers
throughout 2001. This decline was the result of a significant
slowdown in demand for the devices these manufacturers produce,
which resulted in manufacturers having increased inventory,
overcapacity and, consequently, lower capital spending. Net
revenues derived from the sale of NSX systems represented 77%
and 90% of net revenues in 2001 and 2000, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gross Profit. </FONT></I><FONT size="2">Gross
profit decreased to $17.7&nbsp;million, or 59.6% of net
revenues, in 2001, from $19.1&nbsp;million, or 60.2% of net
revenues, in 2000. The decrease in gross margin percentage was
primarily due to the decrease in the number of systems shipped,
which resulted in lower manufacturing utilization and increased
labor and overhead costs per system sold.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Selling, General and Administrative.
</FONT></I><FONT size="2">Selling, general and administrative
expenses increased $1.7&nbsp;million, or 16.8%, to
$11.8&nbsp;million, or 39.6% of net revenues, in 2001, from
$10.1&nbsp;million, or 31.9% of net revenues, in 2000. The
increased expense dollars were due to salaries and benefits
related to sales, customer service and administrative employees
hired during the second half of 2000 and costs associated with
opening our direct sales and service office in Taiwan in 2001.
These increases were partially offset by lower discretionary and
compensation expenses during the second half of 2001 as a result
of cost cutting initiatives that were implemented in response to
the decrease in orders and shipments during this period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Research and Development.
</FONT></I><FONT size="2">Research and development expenses
increased $1.0&nbsp;million, or 14.3%, to $7.9&nbsp;million, or
26.7% of net revenues, in 2001, from $6.9&nbsp;million, or 21.9%
of net revenues, in 2000. The increase was due to salaries and
benefits related to additional engineers hired during 2000 to
advance the development of our new 3Di and YieldPilot systems,
partially offset by a decrease in hiring and compensation
related expenses during the second half of 2001 as a result of
cost cutting initiatives that were implemented during this
period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Non-recurring expenses.
</FONT></I><FONT size="2">Non-recurring expenses in 2001 of
$579,000 include $231,000 of employee severance costs related to
reductions in work force implemented in the second and fourth
quarters in response to the decrease in orders and shipments
during this period, and $348,000 of expenses related to the
termination of our distributor agreement in Taiwan, as a result
of our decision to sell direct to customers in Taiwan.
Non-recurring expense in 2000 consists entirely of the write-off
of certain internal business automation software as a result of
our decision to discontinue the implementation of this software.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest income (expense), net.
</FONT></I><FONT size="2">Net interest income increased $449,000
to $1.4&nbsp;million in 2001 from $1.0&nbsp;million in 2000. The
increase is due to interest income earned from investing the
proceeds received from our initial public offering (the
&#147;IPO&#148;) in June 2000 for all of 2001, partially offset
by lower overall investment balances in 2001, due to the use of
cash to fund operations and lower rates of return earned on
investment balances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Income Taxes. </FONT></I><FONT size="2">The
benefit from income taxes in 2001 was $813,000, or an effective
tax rate of 69.8%, compared to a provision for income taxes of
$807,000, or an effective tax rate of 30.1%, in 2000. The high
effective income tax rate in 2001, compared to the federal
statutory rate of 34% plus state and local taxes, was primarily
due to the impact of federal and state general business and
extraterritorial income credits and tax exempt interest income
that will not be utilized until future years due to our net
loss. The low effective income tax rate in 2000 was primarily
due to federal and state general business credits. Based on an
assessment of our taxable earnings history and prospective
future taxable income, we have determined it to be more likely
than not that our net deferred tax asset will be realized in
future periods. We may be required to provide a valuation
allowance for this asset in the future if we do not generate
sufficient taxable income as planned.
</FONT>

<P align="center"><FONT size="2">13
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Year ended
December&nbsp;31, 2000 compared to the year ended
December&nbsp;31, 1999</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Net Revenues. </FONT></I><FONT size="2">Net
revenues increased $19.6&nbsp;million, or 162.6%, to $31.7
million in 2000, from $12.1&nbsp;million in 1999. The increase
in net revenues was due primarily to the continued growth in
sales of NSX systems, which increased 177.0% over 1999. The
increase in sales of the NSX systems was driven by the need for
semiconductor and microelectronic device manufacturers to
increase yields and capacity due to strong demand for their
products. Net revenues derived from sales of NSX systems
represented 90% and 85% of net revenues in 2000 and 1999,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gross Profit. </FONT></I><FONT size="2">Gross
profit increased to $19.1&nbsp;million, or 60.2% of net
revenues, in 2000, from $6.9&nbsp;million, or 57.6% of net
revenues, in 1999. The increase in gross margin percentage was
primarily due to the growth in sales of NSX systems, which have
a higher gross margin than our other products, and a stronger
mix of higher margin system sales within the NSX series.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Selling, General and Administrative.
</FONT></I><FONT size="2">Selling, general and administrative
expenses increased $5.4&nbsp;million, or 113.2%, to
$10.1&nbsp;million, or 31.9% of net revenues, in 2000, from
$4.7&nbsp;million, or 39.3% of net revenues, in 1999. The
increased expense dollars was primarily due to the hiring and
recruiting of additional sales, field service and administrative
employees to support our domestic and international growth,
higher international travel costs resulting from our growth in
Asia and Europe and increased occupancy costs related to a new
facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Research and Development.
</FONT></I><FONT size="2">Research and development expenses
increased $4.6&nbsp;million, or 199.6%, to $6.9&nbsp;million, or
21.9% of net revenues, in 2000, from $2.3&nbsp;million, or 19.2%
of net revenues, in 1999. The increase resulted from the hiring
and recruiting of additional engineers, the use of outside
services and the development of product prototypes as we
continued to advance new product initiatives.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Non-recurring expense.
</FONT></I><FONT size="2">Non-recurring expense in 2000 consists
of the write-off of business automation software as a result of
our decision to discontinue the implementation of this software.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest income (expense), net.
</FONT></I><FONT size="2">Net interest income in 2000 was $1.0
million, compared to net interest expense of $42,000 in 1999.
The net interest income in 2000 was the result of interest
earned from investing the net proceeds received from our IPO in
June 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Income Taxes. </FONT></I><FONT size="2">The
provision for income taxes in 2000 was $807,000, or an effective
tax rate of 30.1%, compared to an income tax benefit of $17,500,
or an effective tax rate of 11.7%, in 1999. The low effective
income tax rate in 2000, compared to the federal statutory rate
of 34% plus state and local taxes, was primarily due to the
claiming of federal and state general business credits. The low
effective income tax rate in 1999 was due to a valuation
allowance being recorded against a portion of our operating loss
during 1999.
</FONT>

<P align="left">
<B><FONT size="2">Liquidity and Capital Resources</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Working capital increased to $37.2&nbsp;million
at December&nbsp;31, 2001 as compared to $36.9&nbsp;million at
December&nbsp;31, 2000. As of December&nbsp;31, 2001 we had cash
and cash equivalents of $1.5&nbsp;million, as compared to
$3.1&nbsp;million at December&nbsp;31, 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, net cash used in operating
activities was $1.4&nbsp;million, which resulted primarily from
increased inventories, prepaid and other current assets and
decreased accounts payable, partially offset by decreased
accounts receivable and an increase in customer deposits. Net
cash used in investing activities was $737,000, due to purchases
of held to maturity securities of $54.7&nbsp;million and
$2.5&nbsp;million of additions to property and equipment and
other assets, partially offset by $56.5&nbsp;million of proceeds
from the redemption of securities held to maturity. Net cash
provided by financing activities was $596,000 from the proceeds
of issuances of common stock in conjunction with the exercise of
stock options by employees and purchases under our employee
stock purchase plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, net cash used in operating
activities was $3.4&nbsp;million, which resulted primarily from
increased accounts receivable, inventories and prepaid and other
current assets, partially offset by increased accounts payable,
accrued compensation, other accrued liabilities and accrued
income taxes. Net cash used in investing activities was
$28.2&nbsp;million, due to purchases of held to maturity
securities of $47.8&nbsp;million and
</FONT>

<P align="center"><FONT size="2">14
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">$2.0&nbsp;million of additions to property and
equipment, partially offset by $21.7&nbsp;million of proceeds
from the maturities of securities held to maturity. Net cash
provided by financing activities was $34.7&nbsp;million,
including $35.9&nbsp;million of net proceeds received from the
sale of 3,300,000 shares of common stock in the IPO, partially
offset by the re-payment of $1.2&nbsp;million of debt.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1999, net cash used in operating
activities was $2.4&nbsp;million, which resulted primarily from
increased accounts receivable and inventories, partially offset
by increased accounts payable and accrued compensation. Net cash
used in investing activities was $747,000 for additions to
property and equipment. Net cash provided by financing
activities was $3.2&nbsp;million primarily from net proceeds of
$2.0&nbsp;million from the sale of 824,511 shares of common
stock to outside investors and from $1.0&nbsp;million of
short-term borrowings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001 our principle sources
of liquidity consisted of $25.9 million of cash, cash
equivalents and investments and $5.0&nbsp;million of available
credit facilities. Our liquidity is affected by many factors,
some of which are based on the normal ongoing operations of our
business, and others of which relate to the uncertainties of
global economies and the cyclical nature of the semiconductor
and microelectronic industries. We have no outstanding debt at
December&nbsp;31, 2001. Our future commitments are presented in
Note 10 to the consolidated financial statements included in
this Form&nbsp;10-K. Although liquidity requirements will
fluctuate based on the timing and extent of these factors,
management believes that cash generated from operations,
together with existing cash and investment balances and our line
of credit will be adequate to satisfy our liquidity requirements
for the next 12&nbsp;months.
</FONT>

<P align="left">
<B><FONT size="2">Impact of Accounting Standards</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2001, the Financial Accounting Standards
Board (FASB)&nbsp;issued Statement of Financial Accounting
Standards (SFAS)&nbsp;No.&nbsp;141; <I>Business
Combinations</I>, and SFAS No.&nbsp;142; <I>Goodwill and Other
Intangible Assets</I>, which change the accounting for business
combinations and goodwill. SFAS No.&nbsp;141 requires that the
purchase method of accounting be used for business combinations
initiated after June&nbsp;30, 2001. Use of the
pooling-of-interests method is prohibited. SFAS No.&nbsp;142
changes the accounting for goodwill from an amortization method
to an impairment-only approach. Amortization of goodwill,
including goodwill recorded in past business combinations, will
therefore cease upon adoption of the Statement, which for us
will be in January 2002. We do not expect that SFAS No.&nbsp;141
and SFAS No.&nbsp;142 will have a material effect on our
consolidated financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2001, the FASB issued SFAS
No.&nbsp;144; <I>Accounting for the Impairment or Disposal of
Long-Lived Assets</I>. SFAS No.&nbsp;144 addresses the financial
accounting and reporting for the impairment or disposal of
long-lived assets and supersedes SFAS No.&nbsp;121;
<I>Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of</I>. However, this Statement
retains the fundamental provisions of SFAS No.&nbsp;121 for (a)
recognition and measurement of the impairment of long-lived
assets to be held and used and (b)&nbsp;measurement of
long-lived assets to be disposed of by sale.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SFAS No.&nbsp;144 also supersedes the accounting
and reporting provisions of APB No.&nbsp;30; <I>Reporting the
Results of Operations-Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions</I>, for the
disposal of a segment of a business. However, this Statement
retains the requirement of APB No.&nbsp;30 to report
discontinued operations separately from continuing operations
and extends that reporting to a component of an entity that
either has been disposed of or is classified as held for sale.
The provisions of SFAS No.&nbsp;144 will be effective for us in
January 2002. We do not expect that SFAS No.&nbsp;144 will have
a material effect on our consolidated financial statements.
</FONT>

<P align="center">
<B><FONT size="2">Cautionary Statements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain statements contained in this
Form&nbsp;10-K and other written and oral statements made from
time to time by us do not relate strictly to historical or
current facts. As such, they are considered
&#147;forward-looking statements&#148; which provide current
expectations or forecasts of future events. Such statements can
be identified by the use of terminology such as
&#147;anticipate,&#148; &#147;believe,&#148;
&#147;estimate,&#148; &#147;expect,&#148; &#147;intend,&#148;
&#147;may,&#148;
</FONT>

<P align="center"><FONT size="2">15
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">&#147;could,&#148; &#147;possible,&#148;
&#147;plan,&#148; &#147;project,&#148; &#147;should,&#148;
&#147;will,&#148; &#147;forecast&#148; and similar words or
expressions. Our forward-looking statements generally relate to
our growth strategies, financial results, product development
and sales efforts. One must carefully consider forward-looking
statements and understand that such statements involve a variety
of risks and uncertainties, known and unknown, and may be
affected by inaccurate assumptions, including, among others,
those discussed below. Consequently, no forward-looking
statement can be guaranteed and actual results may vary
materially. We undertake no obligation to update any
forward-looking statement, but investors are advised to consult
any further disclosures by us on this subject in our filings
with the Securities and Exchange Commission, especially on
Forms&nbsp;10-K, 10-Q and 8-K (if any), in which we discuss in
more detail various important factors that could cause actual
results to differ from expected or historic results. We note
these factors as permitted by the Private Securities Litigation
Reform Act of 1995. It is not possible to foresee or identify
all such factors. As such, investors should not consider any
list of such factors to be an exhaustive statement of all risks,
uncertainties or potentially inaccurate assumptions.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Global economic and political environments are
important to economic conditions, and long term continued risk
or concerns could affect our business.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Future political or related events similar or
comparable to those in 2001 such as the September&nbsp;11, 2001
terrorist attacks, or significant or long term reactions
thereto, may significantly affect the willingness or ability of
our customers to visit our facilities or trade shows, review our
systems&#146; capabilities and/or purchase or take delivery of
our products, as well as our abilities to visit our customers,
to perform applications studies for our customers, to sell and
deliver solutions, and to service those solutions. Any decline
in willingness or ability of our customers to travel and visit
our facilities, or our ability to travel and visit our
customers, could be a material adverse effect on our business
and the financial condition and results of operations.
</FONT>

<P align="left">
<B><FONT size="2">The microelectronic industries that we serve
are highly cyclical, and are currently experiencing a severe and
prolonged downturn.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our primary markets are the semiconductor
equipment industry and the emerging microelectronics equipment
industries including optoelectronics, photonics, MEMS or other
micro machines, micro LCDs, printheads, data storage, disk
drives and other similar devices. Our business depends heavily
upon capital expenditures by manufacturers in these industries.
The semiconductor and microelectronic industries are highly
cyclical, with periods of capacity shortage and periods of
excess capacity; this is historically due to sudden changes in
demand for semiconductor and microelectronic devices. In periods
of excess capacity, there are often drastic changes in the
timing and quantity of capital equipment purchases and
investments in new technology or capacity needs by our
customers, including sharp cuts in purchases of capital
equipment by customers, including our products. The timing,
length and volatility of these periods are difficult to predict,
resulting in pressure on our revenues, gross margin and net
income. In addition to affecting our customers, downturns also
challenge our suppliers, vendors, other partners, as well as our
management, sales, engineering, manufacturing, customer service
and other employees who are vital to our success.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The semiconductor equipment industry as well as
many of the microelectronic industries are currently
experiencing a severe and prolonged downturn. Many industry
sources have indicated that the current semiconductor industry
downturn may be the steepest decline in history. Our management
cannot predict when a recovery will begin or how robust it will
be. There are similarly no accurate or reliable market
predictions from industry sources predicting the timing, length
and strength of a recovery.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the past, during semiconductor and
microelectronic downturns, customers typically reduce or delay
purchases, and/or delay delivery or cancel orders. As a result,
it is imperative that we maintain an organization able to
quickly and effectively align with market conditions including
bringing our costs structures in line with current industry and
overall market conditions. At the same time, it is imperative
that we continue to serve our existing customers, provide new
and improved solutions for new and existing customers, operate
effectively with our suppliers, and motivate and retain key
employees. If we are, for any reason, unable to achieve any one
or more of the above objectives in an efficient, effective and
timely manner, there could be a material adverse effect on our
business, financial condition and results of operations.
Furthermore, any delays or reductions in
</FONT>

<P align="center"><FONT size="2">16
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">future purchases of capital equipment or delays
or cancellations of current orders by semiconductor and
microelectronic device manufacturers, for any reason, may have a
material adverse effect on our business and the financial
condition and results of operations.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Our future rate of growth is highly dependent
on the development and growth of the market for semiconductor
and microelectronic test and inspection equipment and the market
acceptance of our products.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We primarily target our products to address the
needs of semiconductor and microelectronic manufacturers for
micro defect inspection. If for any reason the market for
semiconductor and microelectronic test and inspection equipment
fails to grow as we expect, we may be unable to sustain our
growth. In addition, our growth depends upon the adoption of our
products by semiconductor and microelectronic manufacturers. If,
for any reason, these manufacturers do not find our products to
be appropriate for their use, our future growth will be
adversely affected.
</FONT>

<P align="left">
<B><FONT size="2">Our sales and operating results can fluctuate
significantly from period to period which may adversely affect
the market price of our stock.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our quarterly and annual operating results are
affected by a wide variety of factors that could adversely
affect sales or operating results or lead to significant
variability in our operating results. In addition, because a
significant portion of our revenue in any particular quarter has
historically come from the sale of a relatively small number of
systems, the loss of any sale could have a significant negative
impact. A variety of factors could cause this variability,
including the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">order cancellations or delays in orders by
	customers;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the high selling prices of our NSX Series and 3Di
	Series, which typically result in a long sales cycle;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">decreases in capital spending by our customers,
	particularly in light of current conditions in the semiconductor
	and microelectronic industries;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">new product introductions by our competitors and
	competitive pricing pressures;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">component shortages resulting in manufacturing
	delays; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">delays in the development, introduction and
	manufacture of our products.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We cannot predict the impact of these and other
factors on our revenues and operating results in any future
period. Results of operations in any period, therefore, should
not be considered indicative of the results to be expected for
any future period. Because of this difficulty in predicting
future performance, our operating results may fall below
expectations of securities analysts or investors in some future
quarter or quarters. Our failure to meet these expectations
would likely adversely affect the market price of our common
stock.
</FONT>

<P align="left">
<B><FONT size="2">One product line accounts for a significant
portion of our sales, consequently, continued market acceptance
of this product line is critical to our success.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Approximately 77% of our 2001 net revenues came
from the sales of our NSX Series. With the introduction of our
new 3Di Series in 2001, we expect the 3Di line to grow as a
percentage of our sales, however, we still expect that the NSX
Series will continue to account for at least a majority of our
net revenues for the next twelve months. Continued market
acceptance of this product line is critical to our success. Any
decline in demand for or failure to achieve continued market
acceptance of this product line or any new version of this
product line, would harm our business.
</FONT>

<P align="left">
<B><FONT size="2">The market acceptance of our new 3Di Series is
critical to our growth.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Semiconductor and microelectronic equipment and
processes are subject to rapid technological changes and as a
result we recently introduced the new 3Di Series. Our 3Di Series
advances our product offerings into the competitive 3D market
using our proprietary, recently introduced Rapid Confocal Sensor
technology. If
</FONT>

<P align="center"><FONT size="2">17
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">our customers do not accept and integrate our 3Di
Series systems into their operations, our revenue, operating
results or stock price could be negatively impacted.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">If we are unable to develop and introduce
successful new products and technologies in a timely manner, our
business will be harmed.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The semiconductor and microelectronic capital
equipment manufacturing business is a highly competitive
business, and the semiconductor and microelectronic equipment
and processes provided are subject to rapid technological
changes. We believe that our future success will depend in part
upon our ability to continue to enhance our existing product
line to meet customer needs and to develop and introduce new
products in a timely manner. We cannot assure you that our
product enhancement efforts to improve and advance products such
as the NSX Series, or our new product development efforts such
as our 3Di Series incorporating our Rapid Confocal Sensor
technology, and 300mm advances, will be successful or that we
will be able to respond effectively to technological change. If
we are unsuccessful, our expenses, revenue, operating results or
stock price could be negatively impacted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We continue to make and/or review significant
investments in research, development, and engineering in new
technology and/or businesses with new or complementary products,
services and/or technologies, and we are aware of the numerous
risks associated therewith, including but not limited to:
1)&nbsp;diversion of management&#146;s attention from day to day
operational matters; 2)&nbsp;lack of synergy, or the inability
to realize expected synergies, 3) failure to commercialize the
new technology or business; and 4) worse-than-expected
performance of the new technology or business. If we are
unsuccessful, our revenue, operating results or stock price
could be negatively impacted.
</FONT>

<P align="left">
<B><FONT size="2">Our operating results could be negatively
impacted if we are unable to obtain the necessary resources to
invest in our future.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although the semiconductor and microelectronic
industries are currently in a severe and prolonged downturn, we
intend to prepare for the next up-turn in these industries by
continuing to invest in certain areas of our business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These investments may result in the need to spend
significant amounts of cash to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">fund increases in research, development and
	engineering expenses;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">take advantage of unanticipated opportunities,
	such as strategic alliances or other special marketing
	opportunities, acquisitions of complementary businesses or
	assets, or the development of new products; and/or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">respond to unanticipated developments, increasing
	customer demands or competitive pressures.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If our cash, together with cash available under
our credit facility, is insufficient to meet these cash
requirements, we will need to seek alternative sources of
financing to carry out our growth and operating strategies. We
may not be able to raise needed cash on terms acceptable to us,
or at all. Financing may be on terms that are dilutive or
potentially dilutive. If alternative sources of financing are
required but are insufficient or unavailable, we will be
required to modify our growth and operating plans to the extent
of available funding.
</FONT>

<P align="left">
<B><FONT size="2">Our market is highly competitive and we may
lose business to larger and better-financed
competitors.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The semiconductor defect inspection equipment
industry is highly competitive in all areas of the world. Many
other domestic and foreign companies participate in the same
market as our NSX and 3Di Series systems, and the industry is
intensely competitive. Our current primary competitors in the
market for semiconductor micro defect inspection equipment are
Semiconductor Technologies&nbsp;&#38; Instruments, Inc., Robotic
Vision Systems, Inc., Toray Industries, Inc., and Electroglas,
Inc. In addition, companies such as KLA-Tencor Corporation and
Applied Materials, Inc., that are currently providing automated
inspection products for the wafer manufacturing and processing
market, may enter our market. Most of these competitors, as well
as other potential competitors, have substantially greater
financial resources and more
</FONT>

<P align="center"><FONT size="2">18
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">extensive engineering, manufacturing, marketing,
and customer support capabilities than we have. Unless we are
able to invest significant financial resources in developing
products and enhancing customer support worldwide, and are able
to gain customer acceptance of our products, we may not be able
to compete effectively.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As we continue to diversify into the evolving and
emerging microelectronic technologies and devices including
optoelectronics, photonics, MEMS or other micro machines, flat
panel display, printheads, data storage, disk drives and other
similar devices, further competitors may enter our markets, or
we may enter the markets of other companies.
</FONT>

<P align="left">
<B><FONT size="2">Our success depends on attracting and
retaining key personnel.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our future success will depend in large part upon
our ability to recruit and retain highly skilled technical,
manufacturing, managerial, financial and marketing personnel.
The labor market in which we operate is highly competitive and
as a result, we may not be able to retain and recruit key
personnel. Our failure to hire, retain, or adequately train key
personnel could have a negative impact on our performance.
</FONT>

<P align="left">
<B><FONT size="2">Our business may be harmed if we fail to
protect our intellectual property rights.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our success depends in part upon our ability to
obtain intellectual property rights and licenses and to preserve
other intellectual property rights covering our products and our
products under development. To protect these rights, we have
obtained two domestic patents and intend to continue to seek
patents on our inventions when appropriate. As of
December&nbsp;31, 2001, we also have a variety of pending patent
applications in the United States and internationally. The
process of seeking intellectual property protection can be
time-consuming and expensive. We cannot ensure that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">patents will be issued from currently pending or
	future applications;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">our existing patents or any new patents will be
	sufficient in scope or strength to provide meaningful protection
	or any commercial advantage to us;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">foreign intellectual property laws will protect
	our intellectual property rights; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">others will not independently develop similar
	products, duplicate our products or design around our technology.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we do not successfully enforce our
intellectual property rights, our competitive position could
suffer, which could harm our operating results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also rely on trade secrets, proprietary
know-how and confidentiality provisions in agreements with
employees, consultants, key customers and vendors to protect our
intellectual property. Other parties may not comply with the
terms of their agreements with us, and we may not be able to
adequately enforce our rights against these people.
</FONT>

<P align="left">
<B><FONT size="2">Third parties may claim that we are infringing
upon their intellectual property, and we could suffer
significant litigation costs, licensing expenses or be prevented
from selling our products.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Intellectual property rights are uncertain and
involve complex legal and factual questions. We may be
unknowingly infringing upon the intellectual property rights of
others and may be liable for that infringement, which could
result in significant liability for us. If we do infringe upon
the intellectual property rights of others, we could be forced
to either seek a license to those intellectual property rights
or to alter our products so that they no longer infringe. A
license could be very expensive to obtain or may not be
available at all. Similarly, changing our products or processes
to avoid infringing upon the rights of others may be costly or
impractical.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are responsible for any patent litigation
costs. If we were to become involved in a dispute regarding
intellectual property, whether ours or that of another company,
we may have to participate in legal proceedings. These types of
proceedings may be costly and time-consuming for us, even if we
eventually
</FONT>

<P align="center"><FONT size="2">19
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">prevail. If we do not prevail, we might be forced
to pay significant damages, obtain licenses, modify our products
or processes, stop making products or stop using processes.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Our dependence on a few significant customers
exposes us to operating risks.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sales to our ten largest customers accounted for
75% of net revenues in 2001, 63% of net revenues in 2000 and 72%
of net revenues in 1999. In 2001, we had two customers each
account for more than ten percent of our business, with one
accounting for almost eighteen percent. Our customers are able
to cancel orders, prior to shipment, with few or no penalties.
If a significant customer reduces orders for any reason, our
revenues, operating results, and financial condition will be
negatively affected. In addition, our ability to increase our
sales will depend in part upon our ability to obtain orders from
new customers for whom there is intense competition.
</FONT>

<P align="left">
<B><FONT size="2">Our dependence on subcontractors and sole or
limited source suppliers may prevent us from delivering an
acceptable product on a timely basis and could result in
disruption of our operations.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We rely on subcontractors to manufacture many of
the components and subassemblies for our products, and we depend
on single or limited source suppliers for some of our
components. Our reliance on subcontractors gives us little
control over the manufacturing process and exposes us to
significant risks such as inadequate capacity, late delivery,
substandard quality and high costs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a supplier were to become unable to provide
parts in the volumes needed or at an acceptable price, we would
have to identify and qualify acceptable replacements from
alternative sources of supply, or manufacture the components
internally. Depending on the part, the process of qualifying
subcontractors and suppliers generally takes between 60 and
180&nbsp;days. We have no written supply agreements with any of
our single or limited source suppliers and purchase our custom
components through individual purchase orders. If we were unable
to obtain these components in a timely fashion, we may not be
able to meet demands for future shipments. We believe that we
would be able to find alternative solutions if supplies were
unavailable from any of our sole source suppliers, including the
supplier of our image processing component. This may take time
and the disruption would adversely affect our results of
operations.
</FONT>

<P align="left">
<B><FONT size="2">Our dependence upon international customers
and suppliers may reduce our revenues or impede our ability to
supply products.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">International sales have accounted for a
significant portion of our revenues in recent years, and we
expect that the percentage of sales from international customers
will continue to increase. Sales outside of North America
accounted for 44% of our net revenues in 2001, 45% of our net
revenues in 2000, and 37% of our net revenues in 1999. In
addition, we rely on non-U.S. suppliers for several components
of the systems we sell. As a result, a major part of our
revenues and the ability to manufacture our products are subject
to the risks associated with international commerce.
International sales and our relationships with suppliers may be
hurt by many factors, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">changes in law or policy resulting in burdensome
	government controls, tariffs, restrictions, embargoes or export
	license requirements;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">political or economic instability in our target
	international markets;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">longer payment cycles common in foreign markets;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">difficulties in staffing and managing our
	international operations;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">less favorable foreign intellectual property laws
	making it harder to protect our technology from appropriation by
	competitors; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">difficulties in collecting our accounts
	receivable because of the geographic distance and different
	legal rules.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">20
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If our international sales or relationships with
international suppliers are adversely affected by any of these
factors, our financial condition could be adversely affected.
</FONT>

<P align="left">
<B><FONT size="2">Our operational results could be negatively
impacted by currency fluctuations and other global business
risks.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our foreign sales are made in U.S. dollars. A
strengthening in the dollar relative to the currencies of those
countries where we do business would increase the prices of our
products as stated in those currencies and hurt our sales in
those countries. If we lower our prices to reflect a change in
exchange rates, our profitability in those markets will
decrease. In the past, there have been significant fluctuations
in the exchange rates between the dollar and the currencies in
the countries where we do business. We have not historically
tried to reduce our exposure to exchange rate fluctuations by
using hedging transactions. However, we may choose to do so in
the future. We may not be able to do so successfully.
Accordingly, we may experience economic loss and a negative
impact on earnings and equity as a result of foreign currency
exchange rate fluctuations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are also subject to risks associated with
shipping products outside of the U.S. including shipping delays,
varying business conditions, differing business cultures,
cultural diversities, and export laws, among other risks.
</FONT>

<P align="left">
<B><FONT size="2">Failure to increase our sales in Asia will
negatively impact our financial performance.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Asia is an important region for the markets we
serve. We expect our dependence upon the Asian market to
increase. In recent years, Asia has experienced serious economic
problems including currency devaluations, debt defaults, lack of
liquidity and recessions. Our revenues depend upon the capital
expenditures of semiconductor manufacturers, many of who have
operations and customers in Asia. Serious economic problems in
Asia would likely result in a significant decrease in the sale
of equipment to the semiconductor industry. If we are unable to
increase our sales in Asia, our future financial condition,
revenues and operating results will be negatively affected.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we opened an office in Taiwan in
2001 where we will directly sell and service our systems using
our own employees. We believe the semiconductor industry in
Taiwan and surrounding countries have significant sales
potential thus justifying our decision; however should our
predictions be incorrect, our future financial condition,
revenues and operating results will be negatively affected.
Although we believe that the opening of the office will provide
us with more control over our affairs and a direct sales and
service force 100% dedicated to our products, the opening of the
office required a lease of a facility, the hiring of employees,
the formation of a limited liability entity and opening of a
Taiwan branch and other actions all of which may increase our
exposure.
</FONT>

<P align="left">
<B><FONT size="2">We will rely upon distributors for a
significant portion of our future sales, and a disruption in our
relationships with these distributors could have a negative
impact on our international sales.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A substantial portion of our sales have been made
through independent distributors. We expect that sales through
independent distributors will represent a material portion of
our sales for the next several years. In particular, almost all
of our 2001 sales in Asia, Japan, and Europe were made through
independent distributors. In 2001, sales to our exclusive
distributor in Asia (excluding Japan and Taiwan, since the
opening of our direct sales and service office in 2001)
accounted for 13% of our net revenues, sales to our exclusive
distributor in Japan accounted for 13% of our net revenues and
sales to our distributors in Europe accounted for 3% of our net
revenues. The activities of these distributors are not within
our control. Although we believe that we maintain good relations
with our independent distributors, the relationships may
nevertheless deteriorate in the future. A reduction in the sales
or service efforts or financial viability of any of our
independent distributors, or a termination of our relationships
with them, could harm our sales, our financial results and our
ability to support our customers.
</FONT>

<P align="center"><FONT size="2">21
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<B><FONT size="2">Any acquisitions we may make could disrupt and
harm our business.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of the date of this filing on Form&nbsp;10-K,
we do not have any specific plans or agreements to make any
specific material acquisitions, we plan to pursue acquisitions
of related businesses. Our identification of suitable
acquisition candidates involves risks inherent in assessing the
values, strengths, weaknesses, risks and profitability of
acquisition candidates, including the effects of the possible
acquisition on our business, diversion of our management&#146;s
attention and risks associated with unanticipated problems or
latent liabilities. If we are successful in pursuing
acquisitions, we may be required to expend significant funds,
incur additional debt or issue additional securities, which may
negatively affect our results of operations and be dilutive to
our shareholders. If we spend significant funds or incur
additional debt, our ability to obtain financing for working
capital or other purposes could decline and we may be more
vulnerable to economic downturns and competitive pressures. We
cannot guarantee that we will be able to finance acquisitions or
that we will realize any anticipated benefits from acquisitions
that we complete. The process of reviewing and acquiring related
businesses involve numerous risks, including but not limited to:
1)&nbsp;diversion of management&#146;s attention from other
operational matters; 2)&nbsp;lack of synergy, or the inability
to realize expected synergies, resulting from the acquisition;
3)&nbsp;failure to commercialize purchased technology; and 4)
acquired intangible assets becoming impaired as a result of
technological advancements or worse-than-expected performance of
the acquired company. Should we successfully acquire another
business, the process of integrating acquired operations into
our existing operations may result in unforeseen operating
difficulties and may require significant financial resources
that would otherwise be available for the ongoing development or
expansion of our existing business. Mergers and acquisitions are
inherently risky and the inability to effectively manage these
risks could materially and adversely affect our business,
financial condition and results of operations.
</FONT>

<P align="left">
<B><FONT size="2">If a semiconductor or microelectronic
manufacturer is loyal to another semiconductor or
microelectronic equipment supplier, we may be unable to sell our
products to that potential customer, and our sales and market
share could suffer as a result.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that once a semiconductor or
microelectronic device manufacturer has selected one
vendor&#146;s capital equipment for a production line
application, the manufacturer generally relies upon that capital
equipment and, to the extent possible, subsequent generations of
the same vendor&#146;s equipment, for the life of the
application. Once a vendor&#146;s equipment has been installed
in a production line, a semiconductor device manufacturer must
often make substantial technical modifications and may
experience production-line downtime in order to switch to
another vendor&#146;s equipment. Accordingly, unless our systems
offer performance or cost advantages that outweigh a
customer&#146;s expense of switching to our systems, it will be
difficult for us to achieve significant sales to that customer
once it has selected another vendor&#146;s capital equipment for
an application.
</FONT>

<P align="left">
<B><FONT size="2">Item&nbsp;7A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Qualitative
and Quantitative Disclosures about Market Risk</FONT></B>

<P align="left">
<B><FONT size="2">Market Risk</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are exposed to market risk primarily from
changes in interest rates and credit risk. We do not have
material exposure to market risk from fluctuations in foreign
currency exchange rates because all sales are made in U.S.
dollars.
</FONT>

<P align="left">
<B><FONT size="2">Interest Rate Risk</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are exposed to interest rate risk primarily
from investments in cash equivalents and short-term and
long-term marketable debt securities (the &#147;Investment
Portfolio&#148;). The entire Investment Portfolio is classified
as held to maturity and, accordingly, is recorded on the
consolidated balance sheet at cost, with the amortization of any
purchase discounts or premiums recorded in interest income. The
entire Investment Portfolio is denominated in U.S. dollars. We
do not use derivative financial instruments in the Investment
Portfolio. Due to the short duration of our investment
portfolio, an immediate 10&nbsp;percent change in interest rates
is not expected to have a material adverse effect on our
near-term financial condition or results of operations.
</FONT>

<P align="center"><FONT size="2">22
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<B><FONT size="2">Credit Risk</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Financial instruments which potentially subject
us to credit risk consist principally of securities in the
Investment Portfolio and trade receivables. We limit credit risk
related to the Investment Portfolio by placing all investments
with high credit quality issuers and limit the amount of
investment with any one issuer. As of December&nbsp;31, 2001,
95% of the Investment Portfolio consisted of government
securities and corporate commercial paper and bonds with
maturities of one year or less. We limit credit risk associated
with trade receivables by performing ongoing credit evaluations
and believe that there is no additional risk beyond amounts
provided for collection losses to be inherent in trade
receivables.
</FONT>

<P align="center"><FONT size="2">23
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<B><FONT size="2">Item&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Statements and Supplementary Data</FONT></B>

<P align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>

<P align="center">
<B><FONT size="2">INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="93%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Independent Auditors&#146; Report
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Balance Sheets as of
	December&nbsp;31, 2001 and 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Statements of Operations for the
	Years Ended December&nbsp;31, 2001, 2000 and 1999
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Statements of Shareholders&#146;
	Equity for the Years Ended December&nbsp;31, 2001, 2000 and 1999
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Statements of Cash Flows for the
	Years Ended December&nbsp;31, 2001, 2000 and 1999
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes to Consolidated Financial Statements
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">24
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">INDEPENDENT AUDITORS&#146; REPORT</FONT></B>

<P align="left">
<FONT size="2">The Board of Directors and Shareholders
</FONT>

<DIV align="left">
<FONT size="2">August Technology Corporation:
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying consolidated
balance sheets of August Technology Corporation and subsidiary
(the Company) as of December&nbsp;31, 2001 and 2000, and the
related consolidated statements of operations,
shareholders&#146; equity, and cash flows for each of the years
in the three-year period ended December&nbsp;31, 2001. These
consolidated financial statements are the responsibility of the
Company&#146;s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audits in accordance with
auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the consolidated financial
statements referred to above present fairly, in all material
respects, the financial position of August Technology
Corporation and subsidiary as of December&nbsp;31, 2001 and
2000, and the results of their operations and their cash flows
for each of the years in the three-year period ended
December&nbsp;31, 2001, in conformity with accounting principles
generally accepted in the United States of America.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">/s/ KPMG LLP
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Minneapolis, Minnesota
</FONT>

<DIV align="left">
<FONT size="2">February&nbsp;11, 2002
</FONT>
</DIV>

<P align="center"><FONT size="2">25
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED BALANCE SHEETS</FONT></B>

<DIV align="center">
<B><FONT size="2">(In thousands, except share amounts)</FONT></B>
</DIV>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="11" align="center" valign="top">
	<B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Current assets:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash and cash equivalents
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,523</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,103</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Short-term investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,196</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,604</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,737</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,880</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventories
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,384</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,256</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Prepaid expenses and other current assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,838</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,081</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total current assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,678</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,924</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Property and equipment, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,541</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,214</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Long-term investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,138</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,486</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">798</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">273</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,155</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,897</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="11" align="center" valign="top">
	<B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146;
	EQUITY</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Current liabilities:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,641</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,768</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">615</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,256</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">536</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">590</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">846</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer deposits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,715</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">592</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total current liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,507</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,052</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other non-current liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">160</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,632</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,212</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Commitments (note 10)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shareholders&#146; equity:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common stock, no par value, 42,000,000 shares
	authorized 12,812,164 and 12,633,058 shares issued and
	outstanding, respectively
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,020</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39,935</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Undesignated capital stock, no par value,
	3,000,000 shares authorized, no shares issued or outstanding
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred compensation related to stock options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(192</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(305</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Retained earnings
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,704</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,055</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accumulated other comprehensive loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total shareholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,523</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,685</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total liabilities and shareholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,155</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,897</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes to consolidated financial
statements.
</FONT>

<P align="center"><FONT size="2">26
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF
OPERATIONS</FONT></B>

<DIV align="center">
<B><FONT size="2">(In thousands, except per share
amounts)</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,784</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,666</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,058</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,039</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,594</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,110</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,745</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,072</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,948</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selling, general and administrative expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,800</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,737</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Research and development expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,940</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,945</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,318</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-recurring expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">579</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">326</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,574</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,701</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(107</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,427</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,078</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(43</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income (loss)&nbsp;before provision for (benefit
	from) income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,164</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,679</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(149</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for (benefit from) income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(813</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">807</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(351</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)&nbsp;per share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.03</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.03</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes to consolidated financial
statements.
</FONT>

<P align="center"><FONT size="2">27
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF SHAREHOLDERS&#146;
EQUITY</FONT></B>

<DIV align="center">
<B><FONT size="2">(In thousands, except share amounts)</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Deferred</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Issued</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">And</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Related To</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Retained</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Comprehensive</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shareholders&#146;</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Stock Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Earnings</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Loss</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Equity</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balances at December&nbsp;31, 1998
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,323,001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,097</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">315</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,412</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuances of common stock in conjunction with:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales to private investors, net of expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">824,511</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,987</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,987</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercise of employee stock options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">263</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Employee bonuses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,186</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuances of stock options to nonemployees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred compensation related to stock option
	grants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">428</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(428</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balances at December&nbsp;31, 1999
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,163,961</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,592</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(428</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">183</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,347</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuances of common stock in conjunction with:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Initial public offering, net of expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,300,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,860</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,860</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercises of employee stock options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,592</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Employee stock purchase plan
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">203</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">203</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Tax benefit from stock options exercised
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">112</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">112</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuances of stock options to nonemployees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of deferred compensation related to
	stock options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(25</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">123</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">98</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balances at December&nbsp;31, 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,633,058</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39,935</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(305</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,055</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,685</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuances of common stock in conjunction with:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercises of employee stock options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,946</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">307</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">307</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Employee stock purchase plan
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28,160</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">289</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">289</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Tax benefit from stock options exercised
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">501</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">501</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuances of stock options to nonemployees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of deferred compensation related to
	stock options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Foreign currency translation adjustment
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(351</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(351</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balances at December&nbsp;31, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,812,164</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,020</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(192</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,704</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,523</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes to consolidated financial
statements.
</FONT>

<P align="center"><FONT size="2">28
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CASH
FLOWS</FONT></B>

<DIV align="center">
<B><FONT size="2">(In thousands)</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash flows from operating activities:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(351</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Adjustments to reconcile net income
	(loss)&nbsp;to net cash used in operating activities:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">934</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">363</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">151</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(662</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(178</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(67</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for doubtful accounts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">220</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of deferred compensation related to
	stock options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">98</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss on disposition of assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuances of stock options to nonemployees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Write-off of assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">326</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued lease obligation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">106</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">129</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuances of common stock to employees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Changes in operating assets and liabilities:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,986</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,981</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,866</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventories
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,128</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,796</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,437</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Prepaid expenses and other current assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,213</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(861</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(66</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,127</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,970</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">215</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(641</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">696</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">455</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other accrued liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(41</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">396</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(591</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">903</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer deposits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,123</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">380</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net cash used in operating activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,436</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,438</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,434</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash flows from investing activities:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proceeds from maturities of securities held to
	maturity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56,471</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,741</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Purchases of securities held to maturity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(54,715</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(47,831</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Purchases of property and equipment
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,245</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,982</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(747</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Investment in other assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(248</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(118</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net cash used in investing activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(737</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(28,190</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(747</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash flows from financing activities:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net proceeds from issuances of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">596</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36,208</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,987</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proceeds from (payments of) short term debt, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,223</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,033</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Checks issued in excess of bank balance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(254</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net cash provided by financing activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">596</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34,731</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,181</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Effect of exchange rates on cash and cash
	equivalents
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net increase (decrease)&nbsp;in cash and cash
	equivalents
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,580</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,103</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash and cash equivalents at beginning of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,103</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash and cash equivalents at end of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,523</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,103</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Supplemental cash flow information:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash paid for interest
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash paid for income taxes, net of refunds
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,834</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-cash transactions:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">The Company recorded an increase to
	shareholders&#146; equity related to the tax benefit of stock
	options exercised
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">501</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">112</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes to consolidated financial
statements.
</FONT>

<P align="center"><FONT size="2">29
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV align="center">
<B><FONT size="2">(In thousands, except per share
amounts)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Note 1&nbsp;&#151; Nature of Business and
Summary of Significant Accounting Policies</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nature of
Business</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">August Technology Corporation (the
&#147;Company&#148;) is a worldwide leader in the research,
design, development, manufacture, marketing, sales, distribution
and service of automated micro defect inspection systems used in
the manufacture of semiconductor devices as well as the emerging
markets for microelectronic devices. The Company&#146;s systems
automate the inspection process, allowing manufacturers to
inspect 100% of their wafers or die, while providing powerful
information that manufacturers can use to increase yield and
productivity. The Company has sold these systems worldwide to
major semiconductor manufacturers, as well as manufacturing
companies serving the microelectronic markets.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Principles of
Consolidation</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accompanying consolidated financial
statements include the accounts of August Technology Corporation
and its subsidiary (together, the &#147;Company&#148;). All
significant intercompany balances and transactions are
eliminated in consolidation.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Use of
Estimates</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management uses estimates and assumptions in
preparing financial statements in accordance with generally
accepted accounting principles. Those estimates and assumptions
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported revenues and expenses
during the reporting period. Estimates are used for, but not
limited to: allocation of revenues in multiple element
arrangements, allowance for doubtful accounts, inventory
valuation, depreciable lives of assets, useful lives of
intangible assets and taxes. Future events and their effects
cannot be perceived with certainty. As a result, the estimates
used in preparation of the financial statements will change as
new events occur, as additional information is obtained and as
the Company&#146;s operating environment changes. Actual results
could differ from those estimates.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cash and Cash
Equivalents</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash and cash equivalents include highly liquid
debt instruments with original maturities of 90&nbsp;days or
less when purchased.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Investments</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Investments consist of marketable debt
instruments, which were classified at the time of purchase as
held-to-maturity due to the Company&#146;s intent and ability to
hold the investments to maturity. Held-to-maturity securities
are recorded at cost with corresponding premiums or discounts
amortized over the life of the investment to interest income.
Short-term investments mature in less than one year. Long-term
investments have maturities of more than one year.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Fair Value of
Financial Instruments</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The carrying amount of cash and cash equivalents,
accounts receivable, investments and accounts payable
approximates fair value as of December&nbsp;31, 2001 and 2000.
</FONT>

<P align="center"><FONT size="2">30
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Inventories</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventories are stated at the lower of cost
(first-in, first-out) or market.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Property and
Equipment</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property and equipment is stated at cost and is
depreciated over the estimated useful lives of the respective
assets. The estimated useful lives range from two to seven
years. Leasehold improvements are amortized using the
straight-line method over the lesser of the estimated useful
lives or lease terms.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Capitalized
Software Development Costs</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Software development costs incurred subsequent to
the establishment of technological feasibility, which is
demonstrated by the completion of a working model, through
general release of the products are capitalized. Capitalized
costs are amortized over the lesser of the estimated sales of
the product or the straight-line method over a period of three
years. The Company reviews the carrying value of software
development costs regularly and a loss is recognized when the
net realizable value falls below the unamortized cost.
Capitalized software development costs at December&nbsp;31, 2001
and 2000 were $260 and $12, respectively. Accumulated
amortization at December&nbsp;31, 2001 and 2000 were $37 and
none, respectively.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Impairment of
Long Lived Assets</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company reviews long-lived assets for
impairment whenever events or changes in circumstances indicate
that the carrying amount of the assets may not be fully
recoverable or the useful lives of these assets are no longer
appropriate. Each impairment test is based on a comparison of
the carrying amount of an asset to future net undiscounted cash
flows. If an impairment is indicated, the asset is written down
to its estimated fair value on a discounted cash flow basis.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Concentrations
of Credit Risk</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Financial instruments, which potentially subject
the Company to credit risk, consist principally of investments
in cash equivalents and short-term and long-term debt
obligations and trade receivables. The Company limits credit
risk by placing all investments with high credit quality issuers
and limits the amount of investment with any one issuer. The
Company limits credit risk associated with trade receivables by
performing ongoing credit evaluations and believes that there is
no additional risk, beyond amounts provided for collection
losses, to be inherent in trade receivables.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Income
Taxes</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Deferred income taxes are recognized for the
difference between the financial statement carrying amounts and
the tax basis of existing assets and liabilities. Deferred
income taxes are recorded at the tax rates expected to be in
effect when amounts are to be included in future taxable income.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Comprehensive
Income (Loss)</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Comprehensive income (loss)&nbsp;represents the
change in equity during a period from transactions and other
events and circumstances excluding transactions resulting from
investment by shareholders and distribution to shareholders.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Foreign
Currency Translation</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Assets and liabilities of the Company&#146;s
Taiwan subsidiary are translated at year-end exchange rates, and
equity accounts are translated at historical rates. Income and
expense accounts are translated at the average
</FONT>

<P align="center"><FONT size="2">31
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">exchange rate for the year. The resulting
translation adjustment is excluded from operations and
accumulated as a separate component of shareholders&#146; equity.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock-based
Compensation</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company applies Accounting Principles Board
Opinion (APB)&nbsp;No.&nbsp;25, <I>Accounting for Stock Issued
to Employees</I>, and related interpretations in accounting for
stock-based compensation. The Company has adopted the pro forma
disclosure requirements under Statement of Financial Accounting
Standards (SFAS)&nbsp;No.&nbsp;123, <I>Accounting and Disclosure
of Stock-based Compensation</I>.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock-based
Payments to Nonemployees</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recognizes expense for stock options
issued to nonemployees based upon the fair value of the
consideration received or the fair value of the equity
instruments issued in accordance with SFAS No.&nbsp;123.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Revenue
Recognition</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company derives revenues from the sale of
systems, spare parts and services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">System Sales&nbsp;&#151; Established Products:
</FONT></I><FONT size="2">The Company requires customers,
excluding the Company&#146;s distributors, that have new
inspection applications to complete pre-shipment authorization
testing of purchased systems at the Company&#146;s facility
prior to shipment. During this testing, the customer verifies
that the system meets their specifications and authorizes
shipment. When the customer has already accepted a previous
system, with the same specifications, for the same application,
the Company does not require pre-shipment authorization testing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sales of established products are accounted for
as multiple-element arrangements. Under this method, the total
value is allocated first to undelivered elements, such as
installation, based on their fair values, with the remainder
being allocated to system revenue. System revenue is recognized
once the product has shipped, title and risk of loss have
transferred to the customer and collection of the resulting
receivable is probable. The Company does not deem installation
to be essential to the functionality of its&#146; systems as it
does not involve altering the system&#146;s features or
capabilities or the building of complex interfaces.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">System Sales&nbsp;&#151; New Products:
</FONT></I><FONT size="2">Revenues related to sales of systems
that have not been demonstrated to meet customer specifications
prior to shipment are recognized once title and risk of loss
have transferred to the customer, installation has occurred, and
collection of the resulting receivable is probable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Spare parts revenue:
</FONT></I><FONT size="2">Spare parts revenue is recognized when
the parts have been shipped, title and risk of loss have
transferred to the customer and collection of the resulting
receivable is probable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Service revenue:
</FONT></I><FONT size="2">Service revenues are recognized after
the services are performed and collection of the resulting
receivable is probable. Revenues from maintenance contracts are
recognized ratably over the period of the contract. Service
revenues were insignificant during the years ended
December&nbsp;31, 2001, 2000 and 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s distributors are not granted
price protection. Sales to all customers and distributors are
final and no right of return after shipment exists.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unbilled revenue represents revenue that has been
earned for equipment shipped but not billed due to the payment
terms of the customer order.
</FONT>

<P align="center"><FONT size="2">32
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Advertising
Costs</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising costs are expensed as incurred.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Research and
Development</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Research and development costs are expensed as
incurred.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Non-recurring
Expenses</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, the Company made a $348 termination
of agreement payment to its&#146; distributor in Taiwan, as a
result of the Company&#146;s decision to sell directly to
customers in Taiwan. The Company also paid $231 of termination
benefits to 41&nbsp;employees related to a reduction in
workforce which affected all departments within the Company and
was implemented in response to the downturn in the semiconductor
and related industries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, as a result of the Company&#146;s
decision to discontinue the implementation of certain internal
business automation software, the Company wrote-off $326
previously capitalized.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Income
(Loss) Per Share</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Basic net income (loss) per share excludes
dilution and is computed by dividing income (loss) available to
common shareholders by the weighted average number of common
shares outstanding for the period. Diluted net income (loss) per
share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were
exercised or converted into common stock. When there is a net
loss, other potentially dilutive securities are not included in
the calculation of net loss per share since their inclusion
would be anti-dilutive.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Reclassifications</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain prior year amounts have been reclassified
to conform to the 2001 presentation.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>New
Accounting Pronouncements</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2001, the Financial Accounting Standards
Board (FASB)&nbsp;issued SFAS No.&nbsp;141; <I>Business
Combinations</I>, and SFAS No.&nbsp;142; <I>Goodwill and Other
Intangible Assets</I>, which change the accounting for business
combinations and goodwill. SFAS No.&nbsp;141 requires that the
purchase method of accounting be used for business combinations
initiated after June&nbsp;30, 2001. Use of the
pooling-of-interests method is prohibited. SFAS No.&nbsp;142
changes the accounting for goodwill from an amortization method
to an impairment-only approach. Amortization of goodwill,
including goodwill recorded in past business combinations, will
therefore cease upon adoption of the Statement, which for the
Company will be in January 2002. The Company does not expect
that SFAS No.&nbsp;141 and SFAS No.&nbsp;142 will have a
material effect on its consolidated financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2001, the FASB issued SFAS
No.&nbsp;144; <I>Accounting for the Impairment or Disposal of
Long-Lived Assets</I>. SFAS No.&nbsp;144 addresses the financial
accounting and reporting for the impairment or disposal of
long-lived assets and supersedes SFAS No.&nbsp;121;
<I>Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of</I>. However, this statement
retains the fundamental provisions of SFAS No.&nbsp;121 for (a)
recognition and measurement of the impairment of long-lived
assets to be held and used and (b)&nbsp;measurement of
long-lived assets to be disposed of by sale.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SFAS No.&nbsp;144 also supersedes the accounting
and reporting provisions of APB No.&nbsp;30; <I>Reporting the
Results of Operations-Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions</I>, for the
disposal of a segment of a business. However, this Statement
retains the requirement of APB No.&nbsp;30 to report
discontinued operations separately
</FONT>

<P align="center"><FONT size="2">33
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">from continuing operations and extends that
reporting to a component of an entity that either has been
disposed of or is classified as held for sale. The provisions of
SFAS No. 144 will be effective for the Company in January 2002.
The Company does not expect that SFAS No.&nbsp;144 will have a
material effect on its consolidated financial statements.
</FONT>

<P align="left">
<B><FONT size="2">Note 2&nbsp;&#151; Investments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Short-term and long-term investments consisted of
the following:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Due within one year:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Corporate notes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,518</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,516</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Government notes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,678</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,618</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Commercial paper
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,470</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total due within one year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,196</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,604</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Due after one year through two years:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Corporate notes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,138</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,486</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,334</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,090</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Short-term and long-term investments are carried
at amortized cost.
</FONT>

<P align="left">
<B><FONT size="2">Note 3&nbsp;&#151; Accounts
Receivable</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounts receivable consisted of the following:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Billed receivables
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,640</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,269</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unbilled revenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">499</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">866</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,139</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,135</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Allowance for doubtful accounts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(402</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(255</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,737</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,880</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note 4&nbsp;&#151; Inventories</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventories consisted of the following:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Raw materials
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,118</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,393</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Work in process
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">779</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,013</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Finished goods
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,455</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,850</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventory at customers under purchase orders
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,032</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventories
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,384</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,256</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventory at customers under purchase orders
represents systems that have shipped under the terms of a
customer purchase order, but have not yet qualified for revenue
recognition as the systems had not met customer specifications
prior to shipment.
</FONT>

<P align="center"><FONT size="2">34
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note&nbsp;5&nbsp;&#151;&nbsp;Property and
Equipment</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property and equipment consisted of the following:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Furniture and equipment
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,582</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,453</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Computer equipment
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">890</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Computer software
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,227</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">537</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Leasehold improvements
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">389</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,088</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,870</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: accumulated depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,547</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(656</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Property and equipment, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,541</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,214</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation expense for the years ended
December&nbsp;31, 2001, 2000 and 1999 was $897, $363 and $151,
respectively.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;6&nbsp;&#151;&nbsp;Income
Taxes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The provision for (benefit from) income taxes
consisted of the following:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Current income tax expense (benefit):
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Federal
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(152</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">960</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">State
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(151</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">985</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred income tax benefit:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Federal
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(468</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(160</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(57</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">State
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(194</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(10</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(662</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(178</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(67</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total provision for (benefit from) income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(813</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">807</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">35
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A reconciliation of the expected federal income
taxes at the statutory rate of 34% to the actual provision for
(benefit from) income taxes is as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Expected federal tax expense (benefit)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(396</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">911</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(51</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">State tax expense (benefit), net of federal tax
	effect
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(127</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General business credits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(208</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(146</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Nondeductible expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Extraterritorial income exclusion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(97</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Tax exempt income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(81</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Change in valuation allowance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost (benefit)&nbsp;of graduated tax rates
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(10</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Actual provision for (benefit from) income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(813</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">807</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Deferred taxes consisted of the following:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Current deferred tax assets:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Allowance for doubtful accounts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">149</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Compensation accrual
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">71</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventory reserve
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Warranty accrual
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Prepaid expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued lease obligation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total current deferred tax assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">344</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">282</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Long-term deferred tax assets:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General business credits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">596</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Alternative minimum tax credits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">State net operating loss carryovers
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued lease obligation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total gross deferred tax assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,111</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">323</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred tax liabilities:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Property and equipment
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(215</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(89</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net deferred tax assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">896</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">234</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, the Company had net
operating loss carryforwards for state income tax purposes which
are available to offset approximately $49 of future state
regular income taxes through 2016. In addition, the Company had
general business tax credits for federal and state purposes of
approximately $596, which are available to reduce future federal
and state regular income taxes through 2014.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In assessing the recoverability of deferred tax
assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will be
realized. The ultimate realization of deferred tax assets is
dependent upon carry back to prior periods and upon the
generation of future taxable income during the periods in which
those temporary differences become deductible. Management
considers the scheduled
</FONT>

<P align="center"><FONT size="2">36
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">reversal of deferred tax liabilities, carry back
potential and projected future taxable income and tax planning
strategies in making this assessment.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;7&nbsp;&#151;&nbsp;Short-Term
Debt</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;10, 2000, the Company amended and
restated the terms of its revolving credit line agreement, which
was previously amended in March 2000, to increase the allowable
borrowings to $5,000 and extend the agreement through May 2002.
The amendment removed the limitation as to availability based
upon accounts receivable and inventory balances. Interest is
payable monthly at the 30-day LIBOR rate plus 2.25%. The amended
agreement contains the same financial covenants as the original
agreement, which include levels of tangible net worth, capital
expenditures and earnings before interest, taxes, depreciation
and amortization and default provisions, including provisions
related to non-payment of principal and interest, bankruptcy and
default under other debt agreements. There was no balance
outstanding under the agreement at December&nbsp;31, 2001 and
2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;30, 2000, the Company&#146;s bank
released a director of the Company from the personal guaranty of
the revolving credit line.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;8&nbsp;&#151;&nbsp;Comprehensive
Income (Loss)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The components of comprehensive income
(loss)&nbsp;are as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="67%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(351</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other comprehensive loss:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Foreign currency translation adjustment
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Comprehensive income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(360</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note 9&nbsp;&#151;&nbsp;Shareholders&#146;
Equity</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Income
(Loss) Per Share</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The components of basic and diluted net income
(loss)&nbsp;per share are as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(351</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average common shares:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,723</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,049</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,688</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Effect of dilutive stock options and warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">721</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,723</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,688</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)&nbsp;per share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.03</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.03</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The total weighted average number of stock
options and warrants excluded from the calculation of
potentially dilutive securities either due to the exercise price
exceeding the average market price or the inclusion of such
securities in a calculation of net loss per share would have
been anti-dilutive for the years ended December&nbsp;31, 2001,
2000 and 1999 were 1,585, 129 and 852, respectively.
</FONT>

<P align="center"><FONT size="2">37
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Common
Stock</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;14, 2000, the Company sold 3,300
shares of Common Stock in the Company&#146;s initial public
offering for cash of $39,600. The Company incurred expenses of
$3,740 that were netted with the cash proceeds received.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1999, the Company sold 825 shares of
Common Stock for cash of $1,993 to private investors. The
Company incurred expenses of $6 that were netted with the cash
proceeds received.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Deferred
Compensation</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the grant of stock options to
employees in 1999, the Company recorded deferred compensation of
$428, representing the difference between the estimated deemed
value of the Common Stock for accounting purposes and the
exercise price of such options at the date of grant. Such amount
is presented as a reduction of shareholders&#146; equity and
will be amortized ratably over the vesting period of the options
granted, generally five years. The charge to compensation
expense related to this deferred compensation for the years
ended December&nbsp;31, 2001 and 2000 was $93 and $98,
respectively.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Employee
Stock Purchase Plan</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, the Board of Directors and
stockholders adopted the 2000 Employee Stock Purchase Plan (the
&#147;2000 Purchase Plan&#148;). The 2000 Purchase Plan allows
employees, subject to certain restrictions, to purchase the
Company&#146;s Common Stock through payroll deductions.
Contributions are limited to 10% of an employee&#146;s
compensation. The purchase price is set at 85% of the lower of
the closing market price of the Company&#146;s Common Stock at
the commencement or termination of a participation phase.
Participation phases have a duration of six months and begin on
January&nbsp;1 and July&nbsp;1 of each year. The Board of
Directors has reserved 375 shares of Common Stock for issuance
under the 2000 Purchase Plan. As of December&nbsp;31, 2001, 47
shares of Common Stock had been purchased and 328 shares remain
reserved for future issuance under the 2000 Purchase Plan.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock-based
Compensation</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors and stockholders have
adopted the 1997 incentive stock option plan (the &#147;1997
Option Plan&#148;), which originally provided for 1,125 shares
available for issuance primarily to officers, directors and key
employees. On April&nbsp;14, 2000 and April&nbsp;19, 2001, the
shareholders authorized increases in the number of shares
available for issuance to 2,250 and 2,650 shares, respectively.
The 1997 Option Plan permits the granting of incentive stock
options meeting the requirements of Section&nbsp;422 of the
Internal Revenue Code of 1986, as amended, and also nonqualified
stock options which do not meet the requirements of
Section&nbsp;422. The exercise price of incentive stock options
may not be less than the fair market value of the stock at the
date of grant. The exercise price of nonqualified stock options
may not be less than 85% of the fair market value of the stock
at the date of grant. The stock options vest over periods that
range from immediate to five years and expire seven years from
the date of grant. As of December&nbsp;31, 2001, there were
2,348 shares reserved for future issuance under the 1997 Option
Plan.
</FONT>

<P align="center"><FONT size="2">38
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information with respect to option activity is as
follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Subject to</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Price</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Outstanding at December&nbsp;31, 1998
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">714</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.94</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Granted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">467</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercised
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Forfeited
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(37</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Outstanding at December&nbsp;31, 1999
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,144</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.44</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Granted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">679</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.62</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercised
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(151</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.96</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Forfeited
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(167</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.89</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Outstanding at December&nbsp;31, 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Granted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">385</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercised
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(151</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.03</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Forfeited
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.90</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Outstanding at December&nbsp;31, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,616</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.06</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes information about
stock options outstanding at December&nbsp;31, 2001:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Remaining</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Contractual</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Range of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Life (years)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Prices</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Price</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$&nbsp;0.50&nbsp;&#150; &nbsp;0.55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">155</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">155</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap>&nbsp;&nbsp;<FONT size="2">0.56&nbsp;&#150; &nbsp;1.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">334</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">207</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap>&nbsp;&nbsp;<FONT size="2">1.21&nbsp;&#150; &nbsp;2.37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">234</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">81</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap>&nbsp;&nbsp;<FONT size="2">2.38&nbsp;&#150; &nbsp;9.92</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">198</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.62</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap>&nbsp;&nbsp;<FONT size="2">9.93&nbsp;&#150; 11.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">163</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.47</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.87</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap>&nbsp;<FONT size="2">11.26&nbsp;&#150; 12.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">187</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.06</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap>&nbsp;<FONT size="2">12.39&nbsp;&#150; 13.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">172</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">74</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.95</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap>&nbsp;<FONT size="2">13.26&nbsp;&#150; 16.94</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">173</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.99</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$&nbsp;0.50&nbsp;&#150; 16.94</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,616</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.06</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">670</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.84</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The estimated per share weighted average fair
value of all stock options granted during the years ended
December&nbsp;31, 2001, 2000 and 1999 was $7.48, $7.25 and
$0.86, respectively. The fair value of each option
</FONT>

<P align="center"><FONT size="2">39
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">grant was estimated using the Black-Scholes
option pricing model with the following weighted average
assumptions:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Expected life
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.7 years</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5 years</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7 years</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Risk free interest rate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.8%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.1%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.6%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Volatility
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">69.9%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68.6%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Dividend yield
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Had the Company recorded compensation cost based
on the estimated fair value on the date of grant, as defined by
SFAS 123, the Company&#146;s pro forma net income
(loss)&nbsp;would have been as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss):
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">As reported
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(351</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pro forma
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,267</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,309</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(197</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic net income (loss)&nbsp;per share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">As reported
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.03</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pro forma
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.10</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted net income (loss)&nbsp;per share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">As reported
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.03</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pro forma
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.10</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note 10&nbsp;&#151; Leases</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company leases its office and manufacturing
facilities and certain equipment under noncancelable operating
leases. Future minimum lease payments as of December 31, 2001,
excluding operating costs, under these leases are as follows:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">For the Years Ending December 31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">699</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2003
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">665</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2004
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">677</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2005
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">693</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2006
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">231</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Thereafter
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total minimum lease payments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,965</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Rent expense for all operating leases for the
years ended December&nbsp;31, 2001, 2000 and 1999 was $617, $485
and $89, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the Company&#146;s commitment
in October 1999 to relocate to a new facility in February 2000,
the Company recorded a lease obligation in 1999 of $129 related
to the estimated net remaining lease obligation on the facility
being vacated. In August 2000, the Company subleased the vacated
facility and, as a result, recorded an additional lease
obligation of $106 due to the net remaining lease obligation
being greater than originally estimated.
</FONT>

<P align="center"><FONT size="2">40
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note 11&nbsp;&#151; Employee Retirement
Plan</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company maintains an employee benefit plan
(the &#147;Plan&#148;) pursuant to Section&nbsp;401(k) of the
Internal Revenue Code. The Plan is available to all employees
who have reached the age of 18 and provides employees with tax
deferred salary deductions and alternative investment options.
Employees may contribute up to 15% of their eligible
compensation, subject to certain limitations. The Company
matches 50% of the deferrals up to 6% of the employee&#146;s
compensation. The Company made contributions to the Plan for the
years ended December&nbsp;31, 2001, 2000 and 1999 of $250, $88
and $42, respectively.
</FONT>

<P align="left">
<B><FONT size="2">Note 12&nbsp;&#151; Significant Customer
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The percentage of net revenues derived from major
customers, which include distributors, and accounts receivable
related to these customers were as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="67%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer A
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer B
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer C
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer D
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer E
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer F
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer A
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer B
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer C
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer D
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer E
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer F
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">41
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note 13&nbsp;&#151; Geographic
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of the Company&#146;s tangible long-lived
assets are located in the United States, except for a small
amount of property and equipment in Taiwan. The Company derives
revenues from shipments to customers outside of the United
States. The percentage of net revenues by country were as
follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">United States
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Taiwan
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Japan
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Switzerland
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note 14&nbsp;&#151; Quarterly Financial Data
(unaudited)</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Mar. 31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 30,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Dec. 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">(In thousands, except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,904</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,155</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,253</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,472</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,633</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,232</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,759</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,121</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,292</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">553</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,741</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,678</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,149</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">617</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,378</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(739</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)&nbsp;per share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.09</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.05</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.11</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.06</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.09</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.05</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.11</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.06</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average common shares:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,640</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,687</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,768</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,795</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,290</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,301</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,768</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,795</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Mar. 31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 30,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Dec. 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">(In thousands, except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,503</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,696</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,990</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,477</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,619</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,602</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,471</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,380</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(410</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">526</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">750</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">835</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(451</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">881</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">937</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)&nbsp;per share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.05</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.05</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.05</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.05</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average common shares:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,165</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,837</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,591</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,605</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,165</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,604</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,321</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,292</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">42
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="8%"></TD>
	<TD width="92%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
	<TD>
	<B><FONT size="2">Changes in and Disagreements With Accountants
	on Accounting and Financial Disclosure</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None
</FONT>

<P align="center">
<B><FONT size="2">Part III</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="9%"></TD>
	<TD width="91%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
	<TD>
	<B><FONT size="2">Directors and Executive Officers of the
	Registrant</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will furnish to the Securities and
Exchange Commission a definitive Proxy Statement (the
&#147;Proxy Statement&#148;) not later than 120&nbsp;days after
the close of the year ended December&nbsp;31, 2001. Other than
&#147;Executive Officers of the Registrant&#148;, which is set
forth at the end of Part&nbsp;I of this Form&nbsp;10-K, the
information required by this item is incorporated herein by
reference to the sections labeled &#147;Election of
Directors&#148; and &#147;Compliance With Section&nbsp;16(a) of
the Exchange Act&#148;, which appear in the Proxy Statement.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="9%"></TD>
	<TD width="91%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;11.</FONT></B></TD>
	<TD>
	<B><FONT size="2">Executive Compensation</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information required by this item is
incorporated herein by reference to the sections labeled
&#147;Executive Compensation&#148; and &#147;Election of
Directors&#148; in the Proxy Statement.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="9%"></TD>
	<TD width="91%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;12.</FONT></B></TD>
	<TD>
	<B><FONT size="2">Security Ownership of Certain Beneficial
	Owners and Management</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information required by this item is
incorporated herein by reference to the section labeled
&#147;Principal Shareholders and Management Shareholdings&#148;
in the Proxy Statement.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="9%"></TD>
	<TD width="91%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;13.</FONT></B></TD>
	<TD>
	<B><FONT size="2">Certain Relationships and Related
	Transactions</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None
</FONT>

<P align="center">
<B><FONT size="2">PART IV</FONT></B>

<P align="left">
<B><FONT size="2">Item&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits,
Financial Statements, Schedules and Reports on
Form&nbsp;8-K</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">(a)&nbsp;Documents filed as part of this
report.</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="4%"></TD>
	<TD width="90%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><B><FONT size="2">(1)&nbsp;</FONT></B></TD>
	<TD align="left">
	<I><FONT size="2">Financial Statements.
	</FONT></I><FONT size="2">The following financial statements are
	included in Part&nbsp;II, Item&nbsp;8 of this Annual Report on
	Form&nbsp;10-K:
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Independent Auditors&#146; Report
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Consolidated Balance Sheets as of
December&nbsp;31, 2001 and 2000
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Consolidated Statements of Operations for the
Years Ended December&nbsp;31, 2001, 2000 and 1999
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Consolidated Statements of Shareholders&#146;
Equity for the Years Ended December&nbsp;31, 2001, 2000 and 1999
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Consolidated Statements of Cash Flows for the
Years Ended December&nbsp;31, 2001, 2000 and 1999
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notes to Consolidated Financial Statements
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="4%"></TD>
	<TD width="90%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><B><FONT size="2">(2)&nbsp;</FONT></B></TD>
	<TD align="left">
	<I><FONT size="2">Financial Statement Schedules.
	</FONT></I><FONT size="2">The following schedule is included
	immediately following the signature page of this Form&nbsp;10-K:
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Independent Auditors&#146; Report on Financial
Statement Schedule
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schedule&nbsp;II&nbsp;&#151; Valuation and
Qualifying Accounts.
</FONT>

<P align="center"><FONT size="2">43
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="10%"></TD>
	<TD width="90%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">All other schedules are omitted since they are
	not applicable, not required or the information is presented in
	the consolidated financial statements or related notes.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="4%"></TD>
	<TD width="90%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><B><FONT size="2">(3)&nbsp;</FONT></B></TD>
	<TD align="left">
	<I><FONT size="2">Exhibits.</FONT></I></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="10%"></TD>
	<TD width="90%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">The exhibits included in this report are set
	forth on the &#147;Exhibit&nbsp;Index to Form&nbsp;10-K&#148;
	following the signature page of this Form&nbsp;10-K.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">(b)&nbsp;Reports on Form&nbsp;8-K.</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">No reports on Form&nbsp;8-K were filed by the
	Company during the quarter ended December&nbsp;31, 2001;
	however, a Report on Form&nbsp;8-K dated November&nbsp;30, 2001
	was filed by the Company on January&nbsp;10, 2002 pursuant to
	Item&nbsp;5 (Other Events) to report the adoption of a trading
	plan in compliance with Rule&nbsp;10b5-1 of the Securities
	Exchange Act of 1934 by Thomas C. Verburgt, the Company&#146;s
	Chief Technology Officer.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">44
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of Section&nbsp;13
or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">AUGUST TECHNOLOGY CORPORATION
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="2%"></TD>
	<TD width="58%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">By:&nbsp;</FONT></TD>
	<TD align="center">
	<FONT size="2">/s/ JEFF L. O&#146;DELL
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<FONT size="2">Jeff L. O&#146;Dell
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<FONT size="2">Chief Executive Officer
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<I><FONT size="2">(Principal Executive Officer)</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Date: March&nbsp;8, 2002
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with the Exchange Act, this report
has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated
below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each person whose signature appears below
constitutes and appoints Jeff L. O&#146;Dell and Thomas C. Velin
as the undersigned&#146;s true and lawful attorneys-in fact and
agents, each acting alone, with full power of substitution and
resubstitution, for the undersigned and in the
undersigned&#146;s name, place and stead, in any and all
amendments to this Annual Report on Form&nbsp;10-K and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granted unto said attorney&#146;s-in-fact and
agents, each acting alone, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as the undersigned might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents,
each acting alone, or his substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ JEFF L. O&#146;DELL<HR size="1" noshade>
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Chairman of the Board and<BR>
	Chief Executive Officer<BR>
	(Principal Executive Officer)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">March&nbsp;8, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ THOMAS C. VELIN<HR size="1" noshade>
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Chief Financial Officer<BR>
	(Principal Financial Officer and<BR>
	Principal Accounting Officer)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">March&nbsp;8, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ THOMAS C. VERBURGT
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Chief Technology Officer and Director
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">March&nbsp;8, 2002
	</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ MARK R. HARLESS
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Chief Engineer and Director
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">March&nbsp;8, 2002
	</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ JAMES A. BERNARDS
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Director
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">March&nbsp;8, 2002
	</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ ROGER E. GOWER
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Director
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">March&nbsp;8, 2002
	</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ BRAD D. SLYE
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Director
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">March&nbsp;8, 2002
	</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ MICHAEL W. WRIGHT
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Director
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">March&nbsp;8, 2002
	</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">45
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">INDEPENDENT AUDITORS&#146; REPORT</FONT></B>

<DIV align="center">
<B><FONT size="2">ON FINANCIAL STATEMENT SCHEDULE</FONT></B>
</DIV>

<P align="left">
<FONT size="2">The Board of Directors and Shareholders
</FONT>

<DIV align="left">
<FONT size="2">August Technology Corporation:
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under date of February&nbsp;11, 2002, we reported
on the consolidated balance sheets of August Technology
Corporation and subsidiary as of December&nbsp;31, 2001 and
2000, and the related consolidated statements of operations,
shareholders&#146; equity and cash flows for each of the years
in the three-year period ended December&nbsp;31, 2001, as
included in August Technology Corporation&#146;s Annual Report
on Form&nbsp;10-K for the year ended December&nbsp;31, 2001. In
connection with our audits of the aforementioned consolidated
financial statements, we also audited the related financial
statement schedule as listed in the accompanying index (see
Item&nbsp;14(a)(2)). This financial statement schedule is the
responsibility of August Technology Corporation&#146;s
management. Our responsibility is to express an opinion on this
financial statement schedule based on our audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, such financial statement
schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">/s/ KPMG LLP
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Minneapolis, Minnesota
</FONT>

<DIV align="left">
<FONT size="2">February&nbsp;11, 2002
</FONT>
</DIV>

<P align="center"><FONT size="2">46
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">SCHEDULE&nbsp;II VALUATION AND QUALIFYING
ACCOUNTS</FONT></B>

<P align="center">
<B><FONT size="2">VALUATION AND QUALIFYING ACCOUNTS</FONT></B>

<DIV align="center">
<B><FONT size="2">FOR THE THREE YEARS ENDED DECEMBER 31, 2001,
2000 AND 1999</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(In thousands)</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="17%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="9%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="9%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">Charged to</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">Charged</FONT></B></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">Balance</FONT></B></TD>
</TR>

<TR>
        <TD></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">Beginning</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">Costs and</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">to Other</FONT></B></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">at End</FONT></B></TD>
</TR>

<TR>
        <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">of Period</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">Accounts</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">Deductions</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">of Period</FONT></B></TD>
</TR>

<TR>
        <TD align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="1">Allowance for doubtful accounts
        </FONT></DIV>
        </TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="left" colspan="2" valign="bottom" nowrap><FONT size="1">Year ended December 31, 1999</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">15</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">31</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">(1</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="1">)(a)</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">45</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="left" colspan="2" valign="bottom" nowrap><FONT size="1">Year ended December 31, 2000</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">45</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">220</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">(10</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="1">)(a)</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">255</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="left" colspan="2" valign="bottom" nowrap><FONT size="1">Year ended December 31, 2001</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">255</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">157</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">(10</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="1">)(a)</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="1">402</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="4%"></TD>
        <TD width="96%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">(a)&nbsp;</FONT></TD>
        <TD align="left">
        <FONT size="2">Represents write-offs of uncollectible accounts
        receivable.
        </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">47
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">SECURITIES AND EXCHANGE COMMISSION</FONT></B>

<DIV align="center">
<B><FONT size="2">Washington, D.C. 20549</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">EXHIBIT INDEX TO FORM 10-K</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="50%"></TD>
	<TD width="50%"></TD>
</TR>

<TR valign="top">
	<TD align="left"><FONT size="2">For the fiscal year ended:</FONT></TD>
	<TD align="right"><FONT size="2">Commission File No.:&nbsp;000-30637</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">December&nbsp;31, 2001
</FONT>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">AUGUST TECHNOLOGY CORPORATION</FONT></B>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Amended and Restated Articles of Incorporation of
	the Company (incorporated by reference to Exhibit&nbsp;3.1 to
	the Company&#146;s Registration Statement on Form&nbsp;S-1, Reg.
	No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Amended and Restated Bylaws of the Company
	(incorporated by reference to Exhibit&nbsp;3.2 to the
	Company&#146;s Registration Statement on Form&nbsp;S-1, Reg.
	No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Instruments defining the rights of security
	holders, including indentures (reference is made to
	Exhibits&nbsp;3.1 and 3.2)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Stock Certificate (incorporated by
	reference to Exhibit&nbsp;4.2 to the Company&#146;s Registration
	Statement on Form&nbsp;S-1, Reg. No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">1997 Stock Option Plan, as amended and restated
	through April&nbsp;20, 2001 (incorporated by reference to
	Exhibit&nbsp;10.1 to the Company&#146;s Form&nbsp;10-Q for the
	quarter ended June&nbsp;30, 2001)**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">International Distributor Agreement between the
	Company and Marubeni Solutions Corporation dated June&nbsp;14,
	1999 (incorporated by reference to Exhibit&nbsp;10.2 to the
	Company&#146;s Registration Statement on Form&nbsp;S-1, Reg.
	No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">International Distributor Agreement between the
	Company and Metron Technology B.V. dated September&nbsp;10, 1999
	(incorporated by reference to Exhibit&nbsp;10.3 to the
	Company&#146;s Registration Statement on Form&nbsp;S-1, Reg.
	No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">International Distributor Agreement between the
	Company and Quasys AG dated September&nbsp;23, 1996
	(incorporated by reference to Exhibit&nbsp;10.4 to the
	Company&#146;s Registration Statement on Form&nbsp;S-1, Reg.
	No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">International Distributor Agreement between the
	Company and Firfax Systems Ltd. dated September&nbsp;3, 1996
	(incorporated by reference to Exhibit&nbsp;10.5 to the
	Company&#146;s Registration Statement on Form&nbsp;S-1, Reg.
	No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Office Warehouse Lease Agreement between the
	Company and West 78th Street, Bloomington Associates, LLC, dated
	October&nbsp;18, 1999 (incorporated by reference to
	Exhibit&nbsp;10.9 to the Company&#146;s Registration Statement
	on Form&nbsp;S-1, Reg. No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Letter Agreement between the Company and
	Marquette Capital Bank, N.A., dated November&nbsp;4, 1999, as
	amended by Amendment to Letter Agreement dated March&nbsp;10,
	2000, as further amended by Amendment to Letter Agreement dated
	March&nbsp;16, 2000 (incorporated by reference to
	Exhibit&nbsp;10.10 to the Company&#146;s Registration Statement
	on Form&nbsp;S-1, Reg. No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Promissory Note between the Company and Marquette
	Capital Bank, N.A., dated November&nbsp;4, 1999 (incorporated by
	reference to Exhibit&nbsp;10.11 to the Company&#146;s
	Registration Statement on Form&nbsp;S-1, Reg. No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Lease Agreement between the Company and Duke
	Realty Minnesota, LLC, dated August&nbsp;18, 1998 (incorporated
	by reference to Exhibit&nbsp;10.12 to the Company&#146;s
	Registration Statement on Form&nbsp;S-1, Reg. No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Stock Purchase Warrant between the Company and
	III-D Capital, LLC, dated July&nbsp;24, 1998 (incorporated by
	reference to Exhibit&nbsp;10.13 to the Company&#146;s
	Registration Statement on Form&nbsp;S-1, Reg. No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">August Technology 2000 Annual Award Plan
	(incorporated by reference to Exhibit&nbsp;10.14 to the
	Company&#146;s Registration Statement on Form&nbsp;S-1, Reg.
	No.&nbsp;333-32692)**
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">48
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">OEM Agreement between the Company and Santok
	Software Solutions Inc., dated January&nbsp;26, 2000
	(incorporated by reference to Exhibit&nbsp;10.15 to the
	Company&#146;s Registration Statement on Form&nbsp;S-1, Reg.
	No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.13</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">1998 Board of Directors Compensation Plan,
	adopted by the Board of Directors, amended and restated as of
	January&nbsp;1, 2002**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">August Technology 2000 Employee Stock Purchase
	Plan (incorporated by reference to Exhibit&nbsp;10.17 to the
	Company&#146;s Registration Statement on Form&nbsp;S-1, Reg.
	No.&nbsp;333-32692)**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Guaranty for the benefit of Marquette Capital
	Bank, N.A., dated November&nbsp;4, 1999 (incorporated by
	reference to Exhibit&nbsp;10.18 to the Company&#146;s
	Registration Statement on Form&nbsp;S-1, Reg. No.&nbsp;333-32692)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Agreement between the
	Company and John&nbsp;M. Vasuta, dated May&nbsp;8, 2000
	(incorporated by reference to Exhibit&nbsp;10.19 to the
	Company&#146;s Form&nbsp;10-K for the year ended
	December&nbsp;31, 2000)**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Agreement between the
	Company and James&nbsp;K. Nurse, dated August&nbsp;22, 2000
	(incorporated by reference to Exhibit&nbsp;10.20 to the
	Company&#146;s Form&nbsp;10-K for the year ended
	December&nbsp;31, 2000)**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Agreement between the
	Company and Albert&nbsp;A. Eliasen, dated October&nbsp;27, 2000
	(incorporated by reference to Exhibit&nbsp;10.21 to the
	Company&#146;s Form&nbsp;10-K for the year ended
	December&nbsp;31, 2000)**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Amendments to the Lease Agreement between the
	Company and West 78th Street, Bloomington Associates, LLC, dated
	March&nbsp;31, 2000 and July&nbsp;25, 2000 (incorporated by
	reference to Exhibit&nbsp;10.22 to the Company&#146;s
	Form&nbsp;10-K for the year ended December&nbsp;31, 2000)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Amendment to Letter Agreement and Promissory Note
	between the Company and Marquette Capital Bank, N.A., dated
	August&nbsp;10, 2000 (incorporated by reference to
	Exhibit&nbsp;10.23 to the Company&#146;s Form&nbsp;10-K for the
	year ended December&nbsp;31, 2000)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">August Technology 2001 Annual Incentive Plan
	(incorporated by reference to Exhibit&nbsp;10.24 to the
	Company&#146;s Form&nbsp;10-K for the year ended
	December&nbsp;31, 2000)**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.22</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Contract between the Company
	and Jeff&nbsp;L. O&#146;Dell, dated March&nbsp;6, 2002**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.23</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Contract between the Company
	and Thomas&nbsp;C. Velin, dated March&nbsp;6, 2002**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.24</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Contract between the Company
	and David Klenk, dated March&nbsp;6, 2002**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.25</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Contract between the Company
	and Mark Harless, dated March&nbsp;6, 2002**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.26</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Contract between the Company
	and Thomas Verburgt, dated March&nbsp;6, 2002**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.27</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Contract between the Company
	and John&nbsp;M. Vasuta, dated March&nbsp;6, 2002**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.28</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Contract between the Company
	and D.&nbsp;Mayson Brooks, dated March&nbsp;5, 2002**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.29</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Contract between the Company
	and Wayne Hubin, dated March&nbsp;6, 2002**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.30</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Employment Contract between the Company
	and Albert Eliasen, dated March&nbsp;6, 2002**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.31</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">August Technology 2002 Annual Incentive Plan**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.32</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Amendment to the Lease Agreement between the
	Company and West 78th Street, Bloomington Associates, LLC, dated
	June&nbsp;18, 2001
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.33</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Amendment to the International Distributor
	Agreement between the Company and Metron Technology B.V., dated
	April&nbsp;17, 2001
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">49
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">21.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Subsidiaries of the Company (incorporated by
	reference to Exhibit&nbsp;21.1 to the Company&#146;s
	Form&nbsp;10-K for the year ended December&nbsp;31, 2000)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Independent Auditors&#146; Consent
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="2%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Filed herewith
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">**&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Management contract or compensatory plan or
	arrangement
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">50
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<B><FONT size="2">CORPORATE INFORMATION</FONT></B>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="left">
<B><FONT size="2">Corporate Headquarters</FONT></B>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">August Technology Corporation
	</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">4900 West 78th Street
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Bloomington, Minnesota 55435 USA
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Phone: (952)&nbsp;820-0080
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Fax: (952)&nbsp;820-0060
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Corporate Web Site</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;www.AugustTech.com</FONT></I>

<P align="left">
<B><FONT size="2">Investor Relations</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">Jennie Oberg
	</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">Phone: (952)&nbsp;259-1676
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Fax: (952)&nbsp;820-0060
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">E-mail: <I>invest@AugustTech.com</I>
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">General Counsel</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">Fredrikson &#38; Bryon, P.A.
	</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">Minneapolis, Minnesota
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Independent Auditors</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">KPMG LLP
	</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">Minneapolis, Minnesota
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Transfer Agent</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">Wells Fargo Bank Minnesota, N.A.
	</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">Shareowner Services
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">161 North Concord Exchange Street
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">South St. Paul, Minnesota 55075
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Phone: (800)&nbsp;468-9716
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Fax: (651)&nbsp;450-4033
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">E-mail: <I>StockTransfer@Wellsfargo.com</I>
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Market Information</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">The Company&#146;s Common Stock is traded
	</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">on The Nasdaq National Market and is
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">quoted under the symbol &#147;AUGT&#148;.
</FONT>
</DIV>

<DIV align="left">
<B><FONT size="2">Officers</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Jeff L. O&#146;Dell
</FONT>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;Chief Executive Officer
</FONT>
</DIV>

<P align="left">
<FONT size="2">David L. Klenk
</FONT>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;President and Chief Operating Officer
</FONT>
</DIV>

<P align="left">
<FONT size="2">Thomas C. Velin
</FONT>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;Chief Financial Officer
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Board of Directors</FONT></B>

<P align="left">
<FONT size="2">Jeff L. O&#146;Dell
</FONT>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">Chairman of the Board and
	</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">Chief Executive Officer
</FONT>
</DIV>

<P align="left">
<FONT size="2">Mark R. Harless
</FONT>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;Chief Engineer
</FONT>
</DIV>

<P align="left">
<FONT size="2">Thomas C. Verburgt
</FONT>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;Chief Technology Officer
</FONT>
</DIV>

<P align="left">
<FONT size="2">James A. Bernards
</FONT>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">President, Facilitation, Inc.
	</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman,
Compensation Committee
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Committee
</FONT>
</DIV>

<P align="left">
<FONT size="2">Roger E. Gower
</FONT>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">Chairman of the Board and Chief
	</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">Executive Officer, Micro Component
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Technology, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman, Audit
Committee
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation
Committee
</FONT>
</DIV>

<P align="left">
<FONT size="2">Michael W. Wright
</FONT>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">President of the Microelectronics Group,
	</FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">Entegris, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Committee
</FONT>
</DIV>

<P align="left">
<FONT size="2">August Technology, August Technology Logo, 3Di,
NSX, Yield<I>Pilot</I>, Rapid Confocal Sensor, RCS and
clickService are trademarks of August Technology Corporation.
</FONT>

<DIV align="left">
<FONT size="2">&#169;, August Technology Corporation, 2002
</FONT>
</DIV>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.22
<SEQUENCE>3
<FILENAME>c67934ex10-22.txt
<DESCRIPTION>EXECUTIVE EMPLOYMENT CONTRACT FOR JEFF L. O'DELL
<TEXT>
<PAGE>
                                                                  Exhibit 10.22


                              EMPLOYMENT AGREEMENT

      This Agreement is entered into by and between August Technology
Corporation ("August Technology" or the "Company"), a Minnesota corporation,
with its principal place of business at 4900 West 78th Street, Bloomington,
Minnesota 55435, and Jeff L. O'Dell of 20240 Cottagewood Road, Deephaven,
Minnesota 55331 USA ("Employee").

      WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

      WHEREAS, Employee acknowledges and agrees that he has and will continue to
have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

      WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

      NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, August
Technology and Employee agree as follows:

      1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective March 1, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

      2. TERM OF EMPLOYMENT. August Technology shall continue to employ Employee
for an indefinite duration until his/her employment is terminated in accordance
with Paragraph 8 of this Agreement.

      3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

      4. COMPENSATION. August Technology shall pay Employee a gross annual
salary as set forth in Exhibit A as "Base Salary", less appropriate payroll
deductions. Employee may also receive incentive compensation in accordance with
the Annual Incentive Plan, as issued and as may change from time to time by the
Company, or any other similar plan authorized by the Board of Directors.
Employee's compensation may be periodically increased or adjusted as authorized
by the Board of Directors in the case of the Chief Executive Officer, or, in the
case of all others, as recommended by the Chief Executive Officer and approved
by the Board of Directors.
<PAGE>
      5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

      6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

      7. STOCK OPTIONS. At the discretion of August Technology, Employee may be
granted stock options from time to time, which options shall be subject to the
terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

      8. TERMINATION. Employee's employment under this Agreement may be
terminated:

      (a)   At any time upon mutual written agreement of the parties;

      (b)   By either Employee or August Technology at any time, with or without
            cause, upon thirty (30) days' written notice to the other;

      (c)   By August Technology immediately upon notice to Employee for cause
            which shall be defined as:

            (i)   Employee's material failure or neglect, or refusal to perform,
                  the duties and responsibilities of his/her position and/or the
                  reasonable direction of the Board of Directors or his/her
                  superiors;

            (ii)  Commission by Employee of any willful, intentional or
                  negligent act that has the effect of injuring the reputation,
                  business or performance of August Technology;

            (iii) Employee's conviction of a crime, or commission of any act
                  involving moral turpitude;

            (iv)  Any material default or nonperformance of the terms of this
                  Agreement, or any violation of Paragraphs 10, 11, 12, 14
                  and/or 15 of this Employment Agreement; or

      (d)   Employee's employment will terminate immediately upon his/her death.


                                       2
<PAGE>
      Upon Employee's resignation or termination under this Paragraph 8 for any
reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8(b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8(b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

      9. CHANGE IN CONTROL. If, within eighteen (18) months following a Change
in Control (as defined below), Employee's employment is terminated (as defined
below), then:

            (a)   Employee shall be paid his/her last Base Salary on a regular
                  payroll cycle as of the effective date for the time period as
                  set forth in Exhibit A as "Change In Control Severance Period"
                  from the effective date of such termination;

            (b)   For the same Change In Control Severance Period from the
                  effective date of such termination as set forth in Paragraph
                  9(b), the Company shall, if Employee elects to continue group
                  health or other group benefits as allowed under COBRA, make
                  the COBRA payments for the Change In Control Severance Period;

            (c)   The right to exercise all unexpired and non-vested stock
                  options in favor of Employee shall immediately vest and
                  accelerate; and

            (d)   LIMITATION ON CHANGE OF CONTROL PAYMENTS. Employee shall not
                  be entitled to receive any Change of Control Action, as
                  defined below, which would constitute an "excess parachute
                  payment" for purposes of Code Section 280G, or any successor
                  provision, and the regulations thereunder. In the event any
                  Change of Control Action payable to Employee would constitute
                  an "excess parachute payment," then the acceleration of the
                  exercisability of such stock options and the payments to such
                  Participant pursuant to this Paragraph 9 shall be reduced to
                  the largest extent or amount as will result in no portion of
                  such payments being subject to the excise tax imposed by
                  Section 4999 of the Code. For purposes of this Paragraph 9, a
                  "Change of Control Action" shall mean any payment, benefit or
                  transfer of property in the nature of compensation paid to or
                  for the benefit of Employee under any arrangement which is
                  considered contingent on a Change of


                                       3
<PAGE>
                  Control for purposes of Code Section 280G, including, without
                  limitation, any and all salary, bonus, incentive, restricted
                  stock, stock option, compensation or benefit plans, programs
                  or other arrangements, and shall include benefits payable
                  under this Agreement.

            (e)   "CHANGE OF CONTROL." For purposes of this Agreement, "Change
                  of Control" shall mean any of the following events occurring
                  after the date of this Agreement:

                  (1)   A merger or consolidation to which the Company is a
                        party, an acquisition by the Company involving the
                        issuance of the Company's securities as consideration
                        for the acquired business, or any combination of fully
                        closed and completed mergers, consolidations or
                        acquisitions during any consecutive twenty-four (24)
                        month period, if the individuals and entities who were
                        shareholders of the Company immediately prior to the
                        effective date of such merger, consolidation, or
                        acquisition (or prior to the effective date of the first
                        of a combination of such transactions) have, immediately
                        following the effective date of such merger,
                        consolidation or acquisition (or following the effective
                        date of the last of a combination of such transactions),
                        beneficial ownership (as defined in Rule 13d-3 under the
                        Securities Exchange Act of 1934) of less than fifty
                        percent (50%) of the total combined voting power of all
                        classes of securities issued by the surviving
                        corporation for the election of directors of the
                        surviving corporation;

                  (2)   The acquisition of direct or indirect beneficial
                        ownership (as defined in Rule 13d-3 under the Securities
                        Exchange Act of 1934) of securities of the Company by
                        any person or entity or by a group of associated persons
                        or entities acting in concert in one or a series of
                        transactions, which causes the aggregate beneficial
                        ownership of such person, entity or group to equal or
                        exceed twenty percent (20%) or more of the total
                        combined voting power of all classes of the Company's
                        then issued and outstanding securities;

                  (3)   The sale of the properties and assets of the Company
                        substantially as an entirety, to any person or entity
                        which is not a wholly-owned subsidiary of the Company;

                  (4)   The stockholders of the Company approve any plan or
                        proposal for the liquidation of the Company; or

                  (5)   A change in the composition of the Board of the Company
                        at any time during any consecutive twenty-four (24)
                        month period such that the "Continuity Directors" no
                        longer constitute at least a seventy percent (70%)
                        majority of the Board. For purposes of this event,
                        "Continuity Directors" means (i) those members of the
                        Board who were directors


                                       4
<PAGE>
                        at the beginning of such consecutive twenty-four (24)
                        month period or at the date of this Agreement if this
                        Agreement was entered into less than twenty-four months
                        prior to the change in composition of the Board; and
                        (ii) any new director whose election to the Board of
                        Directors or nominations for election to the Board of
                        Directors was approved by a vote of at least two-thirds
                        (2/3) of the directors identified in the immediately
                        preceding clause (i).

                  (6)   The Company enters into a letter of intent, an agreement
                        in principle or a definitive agreement relating to an
                        event described in Paragraph 9(e)(1), 9(e)(2), 9(e)(3),
                        9(e)(4), or 9(e)(5) that ultimately results in such a
                        Change of Control, or a tender or exchange offer or
                        proxy contest is commenced that ultimately results in an
                        event described in Paragraph 9(e)(2) or 9(e)(5).

            (f)   TERMINATION. For purposes of this Paragraph 9, "Termination"
                  shall mean any of the following events occurring within
                  eighteen (18) months after a Change of Control:

                  (1)   The termination of Employee's employment by the Company
                        for any reason, with or without cause, except for
                        termination resulting from conduct by Employee
                        constituting (a) a felony involving moral turpitude
                        under either federal law or the law of the State of
                        Minnesota, or (b) Employee's willful failure to fulfill
                        his/her employment duties with the Company; provided,
                        however, that for purposes of this clause (c), an act or
                        failure to act by Employee shall not be "willful" unless
                        it is done, or omitted to be done, in bad faith and
                        without any reasonable belief that Employee's action or
                        omission were in the best interests of the Company; or

                  (2)   The termination of employment with the Company by
                        Employee for Good Reason. Such termination shall be
                        accomplished by, and effective upon, Employee giving
                        written notice to Company of his/her decision to
                        terminate. "Good Reason" shall mean a good faith
                        determination by Employee, in Employee's sole and
                        absolute judgment, that any one or more of the following
                        events has occurred, at any time during the term of this
                        Agreement or after a Change of Control; provided,
                        however, that such event shall not constitute "Good
                        Reason" if Employee has expressly consented to such
                        event in writing or if Employee fails to provide written
                        notice of his/her decision to terminate within sixty
                        (60) days of the occurrence of such event:

                        (a)   A material change in Employee's reporting
                              responsibilities, titles or offices, or any
                              removal of Employee from or any failure to
                              re-elect Employee to any of such positions, which


                                       5
<PAGE>
                              has the effect of materially diminishing
                              Employee's responsibility or authority;

                        (b)   A reduction by the Company in Employee's base
                              salary (as increased from time to time);

                        (c)   A requirement imposed by the Company on Employee
                              that results in Employee being based at a location
                              that is outside of a twenty-five (25) mile radius
                              of Employee's prior job location;

                        (d)   Without the adoption of a replacement plan,
                              program or arrangement that provides benefits to
                              Employee that are equal to or greater than those
                              benefits that are discontinued or adversely
                              affected:

                              i.    A failure by the Company to continue in
                                    effect, within its maximum stated term, any
                                    pension, bonus, incentive, stock ownership,
                                    stock purchase, stock option, life
                                    insurance, health, accident, disability, or
                                    any other employee compensation or benefit
                                    plan, program or arrangement, in which
                                    Employee is or has been participating;

                              ii.   The taking of any action by the Company that
                                    would adversely affect Employee's
                                    participation or materially reduce
                                    Employee's benefits under any of such plans,
                                    programs or arrangements; or

                        (e)   Any action by the Company that would materially
                              adversely affect the physical conditions in or
                              under which Employee performs his/her employment
                              duties; or

                        (f)   Any material breach by the Company of this
                              Employment Agreement between Employee and the
                              Company.

                        Termination for "Good Reason" shall not include
                  Employee's death or a termination for any reason other than
                  the events specified in clauses (a) through (f) above.

      10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at all
times thereafter, Employee shall not directly or indirectly use or disclose any
trade secret, proprietary or confidential information of August Technology or
any subsidiary for the benefit of any person or entity other than August
Technology or any subsidiary without prior written approval of August
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise, which is not public
information and which relates to August Technology or any subsidiary, or


                                       6
<PAGE>
August Technology's or any subsidiary's existing or reasonably foreseeable
business, including but not limited to information relating to research,
development, technology, manufacturing processes, purchasing and sales,
information relating to sales and other financial strategies, plans and/or
goals, information relating to proprietary rights and data, ideas, know-how,
and/or trade secrets, information regarding the identity and/or needs of clients
or customers, client or customer lists and other client or customer information,
information regarding active and inactive accounts of August Technology or any
subsidiary, and information relating to August Technology's or any subsidiary's
methods of operation.

      11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration of
his/her employment and continued employment, and in exchange for the severance
and Change of Control provisions as set forth in Paragraphs 8 and 9 of this
Employment Agreement, and the mutual covenants herein, Employee agrees that,
during his/her employment and for a period of one (1) year following his/her
voluntary or involuntary resignation or termination for any reason, the Employee
will not, on behalf of himself/herself or any other person or entity:

            (a)   Directly or indirectly solicit, on Employee's own behalf, or
                  on behalf of another, any of August Technology's or any
                  subsidiary's customers or potential customers with whom
                  Employee or Employee's supervisees had contact, either
                  directly or indirectly, within the twelve months immediately
                  preceding Employee's resignation or termination of employment,
                  for the purpose of providing, selling, or attempting to sell
                  any products or services competing with those provided or sold
                  by August Technology or any subsidiary, or clearly
                  contemplated thereby due to research, development,
                  engineering, applications, licensing, or other like projects
                  in process, at the time of resignation or termination; or

            (b)   hire or attempt to hire, or influence or solicit, or attempt
                  to influence or solicit, either directly or indirectly, any
                  employee of August Technology or any subsidiary to leave or
                  terminate his/her or her employment, or to work for any other
                  person or entity.

      12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to
all of the benefits, profits, results and work product arising from or incident
to all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.

      Employee agrees to communicate promptly and fully to August Technology all
inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as provided in this
Paragraph 12, Employee will and hereby does assign to August Technology and/or
its nominees all of the Employee's right, title and interest in such inventions,
discoveries, improvements or designs and all of his/her right, title and
interest in any patents, patent applications or copyrights based thereon without
obligation on the part of August Technology or any subsidiary to make any
further compensation, royalty or payment to Employee. Employee further agrees to


                                       7
<PAGE>
assist August Technology and/or its nominee (without charge but at no expense to
Employee) at any time and in every proper way to obtain and maintain for its
and/or their own benefit, patents for all such inventions, discoveries and
improvements and copyrights for all such designs.

      This Agreement does not obligate Employee to assign to August Technology
any invention, discovery, improvement or design for which no equipment,
supplies, facility or trade secret information of August Technology or any
subsidiary was used and which was developed entirely on Employee's own time, and
(1) which does not relate (a) directly to the business of August Technology or
any subsidiary, or (b) to August Technology's or any subsidiary's actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by Employee for August Technology or any subsidiary.

      13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A by
descriptive title are all of the Inventions, if any, in which Employee possesses
any right, title or interest prior to Employee's employment with August
Technology or execution of this Employment Agreement which are not subject to
the terms hereof.

      14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

      15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.

      16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate remedy. Employee agrees that August
Technology and any subsidiary shall be entitled, in addition to any other remedy
it may have at law or in equity, to an injunction, without the posting of a bond
if allowed by applicable law or with the posting of a minimal bond if required,
enjoining or restraining Employee from any violation or violations or threatened
violation or violations of Paragraphs 10, 11, 12, 14 and 15, and/or for specific
performance of duties and obligations under such paragraphs, and Employee hereby
consents to the issuance of such injunction. If any rights or


                                       8
<PAGE>
restrictions contained in Paragraphs 10, 11, 12, 14 and 15 shall be deemed to be
unenforceable by reason of the extent, duration or geographic scope, or other
provision thereof, the parties contemplate that the Court shall reduce such
extent, duration or geographic scope or other provision and enforce Paragraphs
10, 11, 12, 14 and 15 in their reduced form for all purposes in the manner
contemplated by such Paragraphs.

      17. OTHER AGREEMENTS. By Employee's signature to this Agreement, Employee
warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from accepting employment with
August Technology and fully performing his/her duties and responsibilities as
described in this Agreement. Employee, by his/her signature to this Agreement,
further warrants that he/she has not taken and will not take any trade secret,
proprietary or confidential information of any former employer, and will not use
or disclose any such information to anyone in the performance of duties and
responsibilities under this Agreement.

      18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of August Technology.

      19. NOTICES. All notices and other communications to be given under this
Agreement shall be in writing and shall be deemed to be given when delivered
personally, or when mailed by registered or certified mail, addressed to the
party to whom such notice is intended to be given, at the last known address for
that party or at such other address as the party may specify by written notice.

      (a)   In the case of August Technology, the notice shall be provided to:

                  General Counsel
                  August Technology Corporation
                  4900 West 78th Street
                  Bloomington, MN 55435

      (b)   In the case of Employee, the notice shall be provided to:

                  Jeff L. O'Dell
                  20240 Cottagewood Road
                  Deephaven, MN 55331


      Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received, whichever is
sooner.

      20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are reasonable, shall survive his/her resignation from or
the termination of his/her employment, and shall apply to him/her whether
his/her resignation or termination from employment is voluntary or involuntary
and regardless of the reason for such resignation or termination.


                                       9
<PAGE>
      21. NONWAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

      22. GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

      23. PARAGRAPH HEADINGS. Paragraph headings are included in this Agreement
for convenience of reference only, and are not intended to be full or accurate
descriptions of the contents hereof.

      24. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

      25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                       AUGUST TECHNOLOGY CORPORATION


Dated:                 , 2002          By
      ----------------                   -------------------------------------
                                             Its
                                                ------------------------------



Dated:                 , 2002          By
      ----------------                   -------------------------------------
                                             EMPLOYEE


                                       10
<PAGE>
                                    EXHIBIT A


Employee's Name                     =     Jeff L. O'Dell

Employee's Title                    =     Chief Executive Officer

Manager                             =     Board of Directors

Base Salary                         =     $203,000

Severance Period                    =     twelve (12) months

Change In Control Severance Period  =     eighteen (18) months

Exempted Inventions                 =
                                          ____________________________________
                                          ____________________________________
                                          ____________________________________
                                          ____________________________________




Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP. _______

                                    EMPLOYEE                _______


                                       11


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.23
<SEQUENCE>4
<FILENAME>c67934ex10-23.txt
<DESCRIPTION>EXECUTIVE EMPLOYMENT CONTRACT FOR THOMAS C. VELIN
<TEXT>
<PAGE>
                                                                   Exhibit 10.23


                              EMPLOYMENT AGREEMENT

      This Agreement is entered into by and between August Technology
Corporation ("August Technology" or the "Company"), a Minnesota corporation,
with its principal place of business at 4900 West 78th Street, Bloomington,
Minnesota 55435, and Thomas C. Velin of 12745 Florida Lane, Apple Valley,
Minnesota 55124 USA ("Employee").

      WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

      WHEREAS, Employee acknowledges and agrees that he has and will continue to
have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

      WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

      NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, August
Technology and Employee agree as follows:

      1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective March 1, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

      2. TERM OF EMPLOYMENT. August Technology shall continue to employ Employee
for an indefinite duration until his/her employment is terminated in accordance
with Paragraph 8 of this Agreement.

      3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

      4. COMPENSATION. August Technology shall pay Employee a gross annual
salary as set forth in Exhibit A as "Base Salary", less appropriate payroll
deductions. Employee may also receive incentive compensation in accordance with
the Annual Incentive Plan, as issued and as may change from time to time by the
Company, or any other similar plan authorized by the Board of Directors.
Employee's compensation may be periodically increased or adjusted as authorized
by the Board of Directors in the case of the Chief Executive Officer, or, in the
case of all others, as recommended by the Chief Executive Officer and approved
by the Board of Directors.
<PAGE>
      5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

      6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

      7. STOCK OPTIONS. At the discretion of August Technology, Employee may be
granted stock options from time to time, which options shall be subject to the
terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

      8. TERMINATION. Employee's employment under this Agreement may be
terminated:

            (a)   At any time upon mutual written agreement of the parties;

            (b)   By either Employee or August Technology at any time, with or
                  without cause, upon thirty (30) days' written notice to the
                  other;

            (c)   By August Technology immediately upon notice to Employee for
                  cause which shall be defined as:

                  (i)   Employee's material failure or neglect, or refusal to
                        perform, the duties and responsibilities of his/her
                        position and/or the reasonable direction of the Board of
                        Directors or his/her superiors;

                  (ii)  Commission by Employee of any willful, intentional or
                        negligent act that has the effect of injuring the
                        reputation, business or performance of August
                        Technology;

                  (iii) Employee's conviction of a crime, or commission
                        of any act involving moral turpitude;

                  (iv)  Any material default or nonperformance of the terms of
                        this Agreement, or any violation of Paragraphs 10, 11,
                        12, 14 and/or 15 of this Employment Agreement; or

            (d)   Employee's employment will terminate immediately upon
                  his/her death.


                                       2
<PAGE>
      Upon Employee's resignation or termination under this Paragraph 8 for any
reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

      9. CHANGE IN CONTROL. If, within eighteen (18) months following a Change
in Control (as defined below), Employee's employment is terminated (as defined
below), then:

            (a)   Employee shall be paid his/her last Base Salary on a regular
                  payroll cycle as of the effective date for the time period as
                  set forth in Exhibit A as "Change In Control Severance Period"
                  from the effective date of such termination;

            (b)   For the same Change In Control Severance Period from the
                  effective date of such termination as set forth in Paragraph
                  9(b), the Company shall, if Employee elects to continue group
                  health or other group benefits as allowed under COBRA, make
                  the COBRA payments for the Change In Control Severance Period;

            (c)   The right to exercise all unexpired and non-vested stock
                  options in favor of Employee shall immediately vest and
                  accelerate; and

            (d)   LIMITATION ON CHANGE OF CONTROL PAYMENTS.  Employee shall not
                  be entitled to receive any Change of Control Action, as
                  defined below, which would constitute an "excess parachute
                  payment" for purposes of Code Section 280G, or any successor
                  provision, and the regulations thereunder.  In the event any
                  Change of Control Action payable to Employee would constitute
                  an "excess parachute payment," then the acceleration of the
                  exercisability of such stock options and the payments to such
                  Participant pursuant to this Paragraph 9 shall be reduced to
                  the largest extent or amount as will result in no portion of
                  such payments being subject to the excise tax imposed by
                  Section 4999 of the Code.  For purposes of this Paragraph 9,
                  a


                                       3
<PAGE>
                  "Change of Control Action" shall mean any payment, benefit or
                  transfer of property in the nature of compensation paid to or
                  for the benefit of Employee under any arrangement which is
                  considered contingent on a Change of Control for purposes of
                  Code Section 280G, including, without limitation, any and all
                  salary, bonus, incentive, restricted stock, stock option,
                  compensation or benefit plans, programs or other arrangements,
                  and shall include benefits payable under this Agreement.

            (e)   "CHANGE OF CONTROL." For purposes of this Agreement, "Change
                  of Control" shall mean any of the following events occurring
                  after the date of this Agreement:

                  (1)   A merger or consolidation to which the Company is a
                        party, an acquisition by the Company involving the
                        issuance of the Company's securities as consideration
                        for the acquired business, or any combination of fully
                        closed and completed mergers, consolidations or
                        acquisitions during any consecutive twenty-four (24)
                        month period, if the individuals and entities who were
                        shareholders of the Company immediately prior to the
                        effective date of such merger, consolidation, or
                        acquisition (or prior to the effective date of the first
                        of a combination of such transactions) have, immediately
                        following the effective date of such merger,
                        consolidation or acquisition (or following the effective
                        date of the last of a combination of such transactions),
                        beneficial ownership (as defined in Rule 13d-3 under the
                        Securities Exchange Act of 1934) of less than fifty
                        percent (50%) of the total combined voting power of all
                        classes of securities issued by the surviving
                        corporation for the election of directors of the
                        surviving corporation;

                  (2)   The acquisition of direct or indirect beneficial
                        ownership (as defined in Rule 13d-3 under the Securities
                        Exchange Act of 1934) of securities of the Company by
                        any person or entity or by a group of associated persons
                        or entities acting in concert in one or a series of
                        transactions, which causes the aggregate beneficial
                        ownership of such person, entity or group to equal or
                        exceed twenty percent (20%) or more of the total
                        combined voting power of all classes of the Company's
                        then issued and outstanding securities;

                  (3)   The sale of the properties and assets of the Company
                        substantially as an entirety, to any person or entity
                        which is not a wholly-owned subsidiary of the Company;

                  (4)   The stockholders of the Company approve any plan or
                        proposal for the liquidation of the Company; or


                                       4
<PAGE>
                  (5)   A change in the composition of the Board of the Company
                        at any time during any consecutive twenty-four (24)
                        month period such that the "Continuity Directors" no
                        longer constitute at least a seventy percent (70%)
                        majority of the Board. For purposes of this event,
                        "Continuity Directors" means (i) those members of the
                        Board who were directors at the beginning of such
                        consecutive twenty-four (24) month period or at the date
                        of this Agreement if this Agreement was entered into
                        less than twenty-four months prior to the change in
                        composition of the Board; and (ii) any new director
                        whose election to the Board of Directors or nominations
                        for election to the Board of Directors was approved by a
                        vote of at least two-thirds (2/3) of the directors
                        identified in the immediately preceding clause (i).

                  (6)   The Company enters into a letter of intent, an agreement
                        in principle or a definitive agreement relating to an
                        event described in Paragraph 9(e)(1), 9(e)(2), 9(e)(3),
                        9(e)(4), or 9(e)(5) that ultimately results in such a
                        Change of Control, or a tender or exchange offer or
                        proxy contest is commenced that ultimately results in an
                        event described in Paragraph 9(e)(2) or 9(e)(5).

            (f)   TERMINATION. For purposes of this Paragraph 9, "Termination"
                  shall mean any of the following events occurring within
                  eighteen (18) months after a Change of Control:

                  (1)   The termination of Employee's employment by the Company
                        for any reason, with or without cause, except for
                        termination resulting from conduct by Employee
                        constituting (a) a felony involving moral turpitude
                        under either federal law or the law of the State of
                        Minnesota, or (b) Employee's willful failure to fulfill
                        his/her employment duties with the Company; provided,
                        however, that for purposes of this clause (c), an act or
                        failure to act by Employee shall not be "willful" unless
                        it is done, or omitted to be done, in bad faith and
                        without any reasonable belief that Employee's action or
                        omission were in the best interests of the Company; or

                  (2)   The termination of employment with the Company by
                        Employee for Good Reason. Such termination shall be
                        accomplished by, and effective upon, Employee giving
                        written notice to Company of his/her decision to
                        terminate. "Good Reason" shall mean a good faith
                        determination by Employee, in Employee's sole and
                        absolute judgment, that any one or more of the following
                        events has occurred, at any time during the term of this
                        Agreement or after a Change of Control; provided,
                        however, that such event shall not constitute "Good
                        Reason" if Employee has expressly consented to such
                        event in writing or if Employee fails to provide written
                        notice of his/her


                                       5
<PAGE>
                        decision to terminate within sixty (60) days of the
                        occurrence of such event:

                        (a)   A material change in Employee's reporting
                              responsibilities, titles or offices, or any
                              removal of Employee from or any failure to
                              re-elect Employee to any of such positions, which
                              has the effect of materially diminishing
                              Employee's responsibility or authority;

                        (b)   A reduction by the Company in Employee's base
                              salary (as increased from time to time);

                        (c)   A requirement imposed by the Company on Employee
                              that results in Employee being based at a location
                              that is outside of a twenty-five (25) mile radius
                              of Employee's prior job location;

                        (d)   Without the adoption of a replacement plan,
                              program or arrangement that provides benefits to
                              Employee that are equal to or greater than those
                              benefits that are discontinued or adversely
                              affected:

                              i.    A failure by the Company to continue in
                                    effect, within its maximum stated term, any
                                    pension, bonus, incentive, stock ownership,
                                    stock purchase, stock option, life
                                    insurance, health, accident, disability, or
                                    any other employee compensation or benefit
                                    plan, program or arrangement, in which
                                    Employee is or has been participating;

                              ii.   The taking of any action by the Company
                                    that would adversely affect Employee's
                                    participation or materially reduce
                                    Employee's benefits under any of such
                                    plans, programs or arrangements; or

                        (e)   Any action by the Company that would materially
                              adversely affect the physical conditions in or
                              under which Employee performs his/her employment
                              duties; or

                        (f)   Any material breach by the Company of this
                              Employment Agreement between Employee and the
                              Company.

                        Termination for "Good Reason" shall not include
                  Employee's death or a termination for any reason other than
                  the events specified in clauses (a) through (f) above.


                                       6
<PAGE>
      10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at all
times thereafter, Employee shall not directly or indirectly use or disclose any
trade secret, proprietary or confidential information of August Technology or
any subsidiary for the benefit of any person or entity other than August
Technology or any subsidiary without prior written approval of August
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise, which is not public
information and which relates to August Technology or any subsidiary, or August
Technology's or any subsidiary's existing or reasonably foreseeable business,
including but not limited to information relating to research, development,
technology, manufacturing processes, purchasing and sales, information relating
to sales and other financial strategies, plans and/or goals, information
relating to proprietary rights and data, ideas, know-how, and/or trade secrets,
information regarding the identity and/or needs of clients or customers, client
or customer lists and other client or customer information, information
regarding active and inactive accounts of August Technology or any subsidiary,
and information relating to August Technology's or any subsidiary's methods of
operation.

      11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration of
his/her employment and continued employment, and in exchange for the severance
and Change of Control provisions as set forth in Paragraphs 8 and 9 of this
Employment Agreement, and the mutual covenants herein, Employee agrees that,
during his/her employment and for a period of one (1) year following his/her
voluntary or involuntary resignation or termination for any reason, the Employee
will not, on behalf of himself/herself or any other person or entity:

            (a)   Directly or indirectly solicit, on Employee's own behalf, or
                  on behalf of another, any of August Technology's or any
                  subsidiary's customers or potential customers with whom
                  Employee or Employee's supervisees had contact, either
                  directly or indirectly, within the twelve months immediately
                  preceding Employee's resignation or termination of
                  employment, for the purpose of providing, selling, or
                  attempting to sell any products or services competing with
                  those provided or sold by August Technology or any
                  subsidiary, or clearly contemplated thereby due to research,
                  development, engineering, applications, licensing, or other
                  like projects in process, at the time of resignation or
                  termination; or

            (b)   hire or attempt to hire, or influence or solicit, or attempt
                  to influence or solicit, either directly or indirectly, any
                  employee of August Technology or any subsidiary to leave or
                  terminate his/her or her employment, or to work for any other
                  person or entity.

      12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to
all of the benefits, profits, results and work product arising from or incident
to all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.


                                       7
<PAGE>
      Employee agrees to communicate promptly and fully to August Technology all
inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as provided in this
Paragraph 12, Employee will and hereby does assign to August Technology and/or
its nominees all of the Employee's right, title and interest in such inventions,
discoveries, improvements or designs and all of his/her right, title and
interest in any patents, patent applications or copyrights based thereon without
obligation on the part of August Technology or any subsidiary to make any
further compensation, royalty or payment to Employee. Employee further agrees to
assist August Technology and/or its nominee (without charge but at no expense to
Employee) at any time and in every proper way to obtain and maintain for its
and/or their own benefit, patents for all such inventions, discoveries and
improvements and copyrights for all such designs.

      This Agreement does not obligate Employee to assign to August Technology
any invention, discovery, improvement or design for which no equipment,
supplies, facility or trade secret information of August Technology or any
subsidiary was used and which was developed entirely on Employee's own time, and
(1) which does not relate (a) directly to the business of August Technology or
any subsidiary, or (b) to August Technology's or any subsidiary's actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by Employee for August Technology or any subsidiary.

      13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A by
descriptive title are all of the Inventions, if any, in which Employee possesses
any right, title or interest prior to Employee's employment with August
Technology or execution of this Employment Agreement which are not subject to
the terms hereof.

      14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

      15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.


                                       8
<PAGE>
      16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate remedy. Employee agrees that August
Technology and any subsidiary shall be entitled, in addition to any other remedy
it may have at law or in equity, to an injunction, without the posting of a bond
if allowed by applicable law or with the posting of a minimal bond if required,
enjoining or restraining Employee from any violation or violations or threatened
violation or violations of Paragraphs 10, 11, 12, 14 and 15, and/or for specific
performance of duties and obligations under such paragraphs, and Employee hereby
consents to the issuance of such injunction. If any rights or restrictions
contained in Paragraphs 10, 11, 12, 14 and 15 shall be deemed to be
unenforceable by reason of the extent, duration or geographic scope, or other
provision thereof, the parties contemplate that the Court shall reduce such
extent, duration or geographic scope or other provision and enforce Paragraphs
10, 11, 12, 14 and 15 in their reduced form for all purposes in the manner
contemplated by such Paragraphs.

      17. OTHER AGREEMENTS. By Employee's signature to this Agreement, Employee
warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from accepting employment with
August Technology and fully performing his/her duties and responsibilities as
described in this Agreement. Employee, by his/her signature to this Agreement,
further warrants that he/she has not taken and will not take any trade secret,
proprietary or confidential information of any former employer, and will not use
or disclose any such information to anyone in the performance of duties and
responsibilities under this Agreement.

      18.   SUCCESSORS AND ASSIGNS.  This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of August Technology.

      19. NOTICES. All notices and other communications to be given under this
Agreement shall be in writing and shall be deemed to be given when delivered
personally, or when mailed by registered or certified mail, addressed to the
party to whom such notice is intended to be given, at the last known address for
that party or at such other address as the party may specify by written notice.

      (a)   In the case of August Technology, the notice shall be provided to:

                  General Counsel
                  August Technology Corporation
                  4900 West 78th Street
                  Bloomington, MN 55435

      (b)   In the case of Employee, the notice shall be provided to:

                  Thomas C. Velin
                  12745 Florida Lane
                  Apple Valley, MN 55124


                                       9
<PAGE>
      Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received, whichever is
sooner.

      20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are reasonable, shall survive his/her resignation from or
the termination of his/her employment, and shall apply to him/her whether
his/her resignation or termination from employment is voluntary or involuntary
and regardless of the reason for such resignation or termination.

      21. NONWAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

      22.   GOVERNING LAW.  This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

      23.   PARAGRAPH HEADINGS.  Paragraph headings are included in this
Agreement for convenience of reference only, and are not intended to be full or
accurate descriptions of the contents hereof.

      24.   COUNTERPARTS.  This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

      25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                       AUGUST TECHNOLOGY CORPORATION

Dated:_________________, 2002         By _____________________________________
                                             Its______________________________



Dated:_________________, 2002         By _____________________________________
                                             EMPLOYEE


                                       10
<PAGE>
                                    EXHIBIT A


Employee's Name                     =     Thomas C. Velin

Employee's Title                    =     Chief Financial Officer

Manager                             =     Chief Executive Officer

Base Salary                         =     $140,000

Severance Period                    =     twelve (12) months

Change In Control Severance Period  =     eighteen (18) months

Exempted Inventions                 =
                                     _________________________________________
                                     _________________________________________
                                     _________________________________________
                                     _________________________________________







Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP. _______

                                    EMPLOYEE                _______


                                       11


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.24
<SEQUENCE>5
<FILENAME>c67934ex10-24.txt
<DESCRIPTION>EXECUTIVE EMPLOYMENT CONTRACT FOR DAVID KLENK
<TEXT>
<PAGE>
                                                                   Exhibit 10.24


                              EMPLOYMENT AGREEMENT

      This Agreement is entered into by and between August Technology
Corporation ("August Technology" or the "Company"), a Minnesota corporation,
with its principal place of business at 4900 West 78th Street, Bloomington,
Minnesota 55435, and David Klenk of 8744 Logan Avenue S., Bloomington, Minnesota
55431 ("Employee").

      WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

      WHEREAS, Employee acknowledges and agrees that he has and will continue to
have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

      WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

      NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, August
Technology and Employee agree as follows:

      1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective March 1, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

      2. TERM OF EMPLOYMENT. August Technology shall continue to employ Employee
for an indefinite duration until his/her employment is terminated in accordance
with Paragraph 8 of this Agreement.

      3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

      4. COMPENSATION. August Technology shall pay Employee a gross annual
salary as set forth in Exhibit A as "Base Salary", less appropriate payroll
deductions. Employee may also receive incentive compensation in accordance with
the Annual Incentive Plan, as issued and as may change from time to time by the
Company, or any other similar plan authorized by the Board of Directors.
Employee's compensation may be periodically increased or adjusted as authorized
by the Board of Directors in the case of the Chief Executive Officer, or, in the
case of all others, as recommended by the Chief Executive Officer and approved
by the Board of Directors.
<PAGE>
      5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

      6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

      7. STOCK OPTIONS. At the discretion of August Technology, Employee may be
granted stock options from time to time, which options shall be subject to the
terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

      8. TERMINATION. Employee's employment under this Agreement may be
terminated:

            (a)   At any time upon mutual written agreement of the parties;

            (b)   By either Employee or August Technology at any time, with or
                  without cause, upon thirty (30) days' written notice to the
                  other;

            (c)   By August Technology immediately upon notice to Employee for
                  cause which shall be defined as:

                  (i)   Employee's material failure or neglect, or refusal to
                        perform, the duties and responsibilities of his/her
                        position and/or the reasonable direction of the Board of
                        Directors or his/her superiors;

                  (ii)  Commission by Employee of any willful, intentional or
                        negligent act that has the effect of injuring the
                        reputation, business or performance of August
                        Technology;

                  (iii) Employee's conviction of a crime, or commission of any
                        act involving moral turpitude;

                  (iv)  Any material default or nonperformance of the terms of
                        this Agreement, or any violation of Paragraphs 10, 11,
                        12, 14 and/or 15 of this Employment Agreement; or

            (d)   Employee's employment will terminate immediately upon his/her
                  death.


                                       2
<PAGE>
      Upon Employee's resignation or termination under this Paragraph 8 for any
reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

      9. CHANGE IN CONTROL. If, within eighteen (18) months following a Change
in Control (as defined below), Employee's employment is terminated (as defined
below), then:

            (a)   Employee shall be paid his/her last Base Salary on a regular
                  payroll cycle as of the effective date for the time period as
                  set forth in Exhibit A as "Change In Control Severance Period"
                  from the effective date of such termination;

            (b)   For the same Change In Control Severance Period from the
                  effective date of such termination as set forth in Paragraph
                  9(b), the Company shall, if Employee elects to continue group
                  health or other group benefits as allowed under COBRA, make
                  the COBRA payments for the Change In Control Severance Period;

            (c)   The right to exercise all unexpired and non-vested stock
                  options in favor of Employee shall immediately vest and
                  accelerate; and

            (d)   LIMITATION ON CHANGE OF CONTROL PAYMENTS. Employee shall not
                  be entitled to receive any Change of Control Action, as
                  defined below, which would constitute an "excess parachute
                  payment" for purposes of Code Section 280G, or any successor
                  provision, and the regulations thereunder. In the event any
                  Change of Control Action payable to Employee would constitute
                  an "excess parachute payment," then the acceleration of the
                  exercisability of such stock options and the payments to such
                  Participant pursuant to this Paragraph 9 shall be reduced to
                  the largest extent or amount as will result in no portion of
                  such payments being subject to the excise tax imposed by
                  Section 4999 of the Code. For purposes of this Paragraph 9, a
                  "Change of Control Action" shall mean any payment, benefit or
                  transfer of property in the nature of compensation paid to or
                  for the benefit of Employee


                                       3
<PAGE>
                  under any arrangement which is considered contingent on a
                  Change of Control for purposes of Code Section 280G,
                  including, without limitation, any and all salary, bonus,
                  incentive, restricted stock, stock option, compensation or
                  benefit plans, programs or other arrangements, and shall
                  include benefits payable under this Agreement.

            (e)   "CHANGE OF CONTROL." For purposes of this Agreement, "Change
                  of Control" shall mean any of the following events occurring
                  after the date of this Agreement:

                  (1)   A merger or consolidation to which the Company is a
                        party, an acquisition by the Company involving the
                        issuance of the Company's securities as consideration
                        for the acquired business, or any combination of fully
                        closed and completed mergers, consolidations or
                        acquisitions during any consecutive twenty-four (24)
                        month period, if the individuals and entities who were
                        shareholders of the Company immediately prior to the
                        effective date of such merger, consolidation, or
                        acquisition (or prior to the effective date of the first
                        of a combination of such transactions) have, immediately
                        following the effective date of such merger,
                        consolidation or acquisition (or following the effective
                        date of the last of a combination of such transactions),
                        beneficial ownership (as defined in Rule 13d-3 under the
                        Securities Exchange Act of 1934) of less than fifty
                        percent (50%) of the total combined voting power of all
                        classes of securities issued by the surviving
                        corporation for the election of directors of the
                        surviving corporation;

                  (2)   The acquisition of direct or indirect beneficial
                        ownership (as defined in Rule 13d-3 under the Securities
                        Exchange Act of 1934) of securities of the Company by
                        any person or entity or by a group of associated persons
                        or entities acting in concert in one or a series of
                        transactions, which causes the aggregate beneficial
                        ownership of such person, entity or group to equal or
                        exceed twenty percent (20%) or more of the total
                        combined voting power of all classes of the Company's
                        then issued and outstanding securities;

                  (3)   The sale of the properties and assets of the Company
                        substantially as an entirety, to any person or entity
                        which is not a wholly-owned subsidiary of the Company;

                  (4)   The stockholders of the Company approve any plan or
                        proposal for the liquidation of the Company; or

                  (5)   A change in the composition of the Board of the Company
                        at any time during any consecutive twenty-four (24)
                        month period such that the "Continuity Directors" no
                        longer constitute at least a seventy percent (70%)
                        majority of the Board. For purposes of this event,
                        "Continuity


                                       4
<PAGE>
                        Directors" means (i) those members of the Board who were
                        directors at the beginning of such consecutive
                        twenty-four (24) month period or at the date of this
                        Agreement if this Agreement was entered into less than
                        twenty-four months prior to the change in composition of
                        the Board; and (ii) any new director whose election to
                        the Board of Directors or nominations for election to
                        the Board of Directors was approved by a vote of at
                        least two-thirds (2/3) of the directors identified in
                        the immediately preceding clause (i).

                  (6)   The Company enters into a letter of intent, an agreement
                        in principle or a definitive agreement relating to an
                        event described in Paragraph 9(e)(1), 9(e)(2), 9(e)(3),
                        9(e)(4), or 9(e)(5) that ultimately results in such a
                        Change of Control, or a tender or exchange offer or
                        proxy contest is commenced that ultimately results in an
                        event described in Paragraph 9(e)(2) or 9(e)(5).

            (f)   TERMINATION. For purposes of this Paragraph 9, "Termination"
                  shall mean any of the following events occurring within
                  eighteen (18) months after a Change of Control:

                  (1)   The termination of Employee's employment by the Company
                        for any reason, with or without cause, except for
                        termination resulting from conduct by Employee
                        constituting (a) a felony involving moral turpitude
                        under either federal law or the law of the State of
                        Minnesota, or (b) Employee's willful failure to fulfill
                        his/her employment duties with the Company; provided,
                        however, that for purposes of this clause (c), an act or
                        failure to act by Employee shall not be "willful" unless
                        it is done, or omitted to be done, in bad faith and
                        without any reasonable belief that Employee's action or
                        omission were in the best interests of the Company; or

                  (2)   The termination of employment with the Company by
                        Employee for Good Reason. Such termination shall be
                        accomplished by, and effective upon, Employee giving
                        written notice to Company of his/her decision to
                        terminate. "Good Reason" shall mean a good faith
                        determination by Employee, in Employee's sole and
                        absolute judgment, that any one or more of the following
                        events has occurred, at any time during the term of this
                        Agreement or after a Change of Control; provided,
                        however, that such event shall not constitute "Good
                        Reason" if Employee has expressly consented to such
                        event in writing or if Employee fails to provide written
                        notice of his/her decision to terminate within sixty
                        (60) days of the occurrence of such event:

                        (a)   A material change in Employee's reporting
                              responsibilities, titles or offices, or any
                              removal of Employee from or any failure to
                              re-elect Employee to any of such positions, which


                                       5
<PAGE>
                              has the effect of materially diminishing
                              Employee's responsibility or authority;

                        (b)   A reduction by the Company in Employee's base
                              salary (as increased from time to time);

                        (c)   A requirement imposed by the Company on Employee
                              that results in Employee being based at a location
                              that is outside of a twenty-five (25) mile radius
                              of Employee's prior job location;

                        (d)   Without the adoption of a replacement plan,
                              program or arrangement that provides benefits to
                              Employee that are equal to or greater than those
                              benefits that are discontinued or adversely
                              affected:

                              i.    A failure by the Company to continue in
                                    effect, within its maximum stated term, any
                                    pension, bonus, incentive, stock ownership,
                                    stock purchase, stock option, life
                                    insurance, health, accident, disability, or
                                    any other employee compensation or benefit
                                    plan, program or arrangement, in which
                                    Employee is or has been participating;

                              ii.   The taking of any action by the Company
                                    that would adversely affect Employee's
                                    participation or materially reduce
                                    Employee's benefits under any of such
                                    plans, programs or arrangements; or

                        (e)   Any action by the Company that would materially
                              adversely affect the physical conditions in or
                              under which Employee performs his/her employment
                              duties; or

                        (f)   Any material breach by the Company of this
                              Employment Agreement between Employee and the
                              Company.

                        Termination for "Good Reason" shall not include
                  Employee's death or a termination for any reason other than
                  the events specified in clauses (a) through (f) above.

      10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at all
times thereafter, Employee shall not directly or indirectly use or disclose any
trade secret, proprietary or confidential information of August Technology or
any subsidiary for the benefit of any person or entity other than August
Technology or any subsidiary without prior written approval of August
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise,


                                       6
<PAGE>
which is not public information and which relates to August Technology or any
subsidiary, or August Technology's or any subsidiary's existing or reasonably
foreseeable business, including but not limited to information relating to
research, development, technology, manufacturing processes, purchasing and
sales, information relating to sales and other financial strategies, plans
and/or goals, information relating to proprietary rights and data, ideas,
know-how, and/or trade secrets, information regarding the identity and/or needs
of clients or customers, client or customer lists and other client or customer
information, information regarding active and inactive accounts of August
Technology or any subsidiary, and information relating to August Technology's or
any subsidiary's methods of operation.

      11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration of
his/her employment and continued employment, and in exchange for the severance
and Change of Control provisions as set forth in Paragraphs 8 and 9 of this
Employment Agreement, and the mutual covenants herein, Employee agrees that,
during his/her employment and for a period of one (1) year following his/her
voluntary or involuntary resignation or termination for any reason, the Employee
will not, on behalf of himself/herself or any other person or entity:

            (a)   Directly or indirectly solicit, on Employee's own behalf, or
                  on behalf of another, any of August Technology's or any
                  subsidiary's customers or potential customers with whom
                  Employee or Employee's supervisees had contact, either
                  directly or indirectly, within the twelve months immediately
                  preceding Employee's resignation or termination of
                  employment, for the purpose of providing, selling, or
                  attempting to sell any products or services competing with
                  those provided or sold by August Technology or any
                  subsidiary, or clearly contemplated thereby due to research,
                  development, engineering, applications, licensing, or other
                  like projects in process, at the time of resignation or
                  termination; or

            (b)   hire or attempt to hire, or influence or solicit, or attempt
                  to influence or solicit, either directly or indirectly, any
                  employee of August Technology or any subsidiary to leave or
                  terminate his/her or her employment, or to work for any other
                  person or entity.

      12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to
all of the benefits, profits, results and work product arising from or incident
to all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.

      Employee agrees to communicate promptly and fully to August Technology all
inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as provided in this
Paragraph 12, Employee will and hereby does assign to August Technology and/or
its nominees all of the Employee's right, title and interest in such inventions,
discoveries, improvements or designs and all of his/her right, title and
interest in any patents, patent applications


                                       7
<PAGE>
or copyrights based thereon without obligation on the part of August Technology
or any subsidiary to make any further compensation, royalty or payment to
Employee. Employee further agrees to assist August Technology and/or its nominee
(without charge but at no expense to Employee) at any time and in every proper
way to obtain and maintain for its and/or their own benefit, patents for all
such inventions, discoveries and improvements and copyrights for all such
designs.

      This Agreement does not obligate Employee to assign to August Technology
any invention, discovery, improvement or design for which no equipment,
supplies, facility or trade secret information of August Technology or any
subsidiary was used and which was developed entirely on Employee's own time, and
(1) which does not relate (a) directly to the business of August Technology or
any subsidiary, or (b) to August Technology's or any subsidiary's actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by Employee for August Technology or any subsidiary.

      13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A by
descriptive title are all of the Inventions, if any, in which Employee possesses
any right, title or interest prior to Employee's employment with August
Technology or execution of this Employment Agreement which are not subject to
the terms hereof.

      14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

      15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.

      16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate remedy. Employee agrees that August
Technology and any subsidiary shall be entitled, in addition to any other remedy
it may have at law or in equity, to an injunction, without the posting of a bond
if allowed by applicable law or with the posting of a minimal bond if required,
enjoining or


                                       8
<PAGE>
restraining Employee from any violation or violations or threatened violation or
violations of Paragraphs 10, 11, 12, 14 and 15, and/or for specific performance
of duties and obligations under such paragraphs, and Employee hereby consents to
the issuance of such injunction. If any rights or restrictions contained in
Paragraphs 10, 11, 12, 14 and 15 shall be deemed to be unenforceable by reason
of the extent, duration or geographic scope, or other provision thereof, the
parties contemplate that the Court shall reduce such extent, duration or
geographic scope or other provision and enforce Paragraphs 10, 11, 12, 14 and 15
in their reduced form for all purposes in the manner contemplated by such
Paragraphs.

      17. OTHER AGREEMENTS. By Employee's signature to this Agreement, Employee
warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from accepting employment with
August Technology and fully performing his/her duties and responsibilities as
described in this Agreement. Employee, by his/her signature to this Agreement,
further warrants that he/she has not taken and will not take any trade secret,
proprietary or confidential information of any former employer, and will not use
or disclose any such information to anyone in the performance of duties and
responsibilities under this Agreement.

      18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of August Technology.

      19. NOTICES. All notices and other communications to be given under this
Agreement shall be in writing and shall be deemed to be given when delivered
personally, or when mailed by registered or certified mail, addressed to the
party to whom such notice is intended to be given, at the last known address for
that party or at such other address as the party may specify by written notice.

      (a)   In the case of August Technology, the notice shall be provided to:

                  General Counsel
                  August Technology Corporation
                  4900 West 78th Street
                  Bloomington, MN 55435

      (b)   In the case of Employee, the notice shall be provided to:

                  David Klenk
                  8744 Logan Ave. S.
                  Bloomington, MN 55431

      Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received, whichever is
sooner.

      20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are


                                       9
<PAGE>
reasonable, shall survive his/her resignation from or the termination of his/her
employment, and shall apply to him/her whether his/her resignation or
termination from employment is voluntary or involuntary and regardless of the
reason for such resignation or termination.

      21. NONWAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

      22. GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

      23. PARAGRAPH HEADINGS. Paragraph headings are included in this Agreement
for convenience of reference only, and are not intended to be full or accurate
descriptions of the contents hereof.

      24. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

      25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                       AUGUST TECHNOLOGY CORPORATION

Dated:_________________, 2002         By _____________________________________
                                             Its______________________________



Dated:_________________, 2002         By _____________________________________
                                             EMPLOYEE


                                       10
<PAGE>
                                    EXHIBIT A


Employee's Name                     =     David Klenk

Employee's Title                    =     President, and Chief Operating Officer

Manager                             =     Chief Executive Officer

Base Salary                         =     $140,000

Severance Period                    =     twelve (12) months

Change In Control Severance Period  =     eighteen (18) months

Exempted Inventions                 =
                                          ____________________________________
                                          ____________________________________
                                          ____________________________________
                                          ____________________________________










Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP. _______

                                    EMPLOYEE                _______


                                       11


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.25
<SEQUENCE>6
<FILENAME>c67934ex10-25.txt
<DESCRIPTION>EXECUTIVE EMPLOYMENT CONTRACT FOR MARK HARLESS
<TEXT>
<PAGE>
                                                                   Exhibit 10.25


                              EMPLOYMENT AGREEMENT

     This Agreement is entered into by and between August Technology Corporation
("August Technology " or the "Company"), a Minnesota corporation, with its
principal place of business at 4900 West 78th Street, Bloomington, Minnesota
55435, and Mark Harless of 13000 38th Place North, Plymouth, Minnesota 55441,
USA ("Employee").

     WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

     WHEREAS, Employee acknowledges and agrees that he has and will continue to
have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

     WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, August
Technology and Employee agree as follows:

     1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective March 1, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

     2. TERM OF EMPLOYMENT. August Technology shall continue to employ Employee
for an indefinite duration until his/her employment is terminated in accordance
with Paragraph 8 of this Agreement.

     3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

     4. COMPENSATION. August Technology shall pay Employee a gross annual salary
as set forth in Exhibit A as "Base Salary", less appropriate payroll deductions.
Employee may also receive incentive compensation in accordance with the Annual
Incentive Plan, as issued and as may change from time to time by the Company, or
any other similar plan authorized by the Board of Directors. Employee's
compensation may be periodically increased or adjusted as authorized by the
Board of Directors in the case of the Chief Executive Officer, or, in the case
of all others, as recommended by the Chief Executive Officer and approved by the
Board of Directors.
<PAGE>
     5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

     6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

     7. STOCK OPTIONS. At the discretion of August Technology, Employee may be
granted stock options from time to time, which options shall be subject to the
terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

     8. TERMINATION. Employee's employment under this Agreement may be
terminated:

          (a)  At any time upon mutual written agreement of the parties;

          (b)  By either Employee or August Technology at any time, with or
               without cause, upon thirty (30) days' written notice to the
               other;

          (c)  By August Technology immediately upon notice to Employee for
               cause which shall be defined as:

               (i)  Employee's material failure or neglect, or refusal to
                    perform, the duties and responsibilities of his/her position
                    and/or the reasonable direction of the Board of Directors or
                    his/her superiors;

               (ii) Commission by Employee of any willful, intentional or
                    negligent act that has the effect of injuring the
                    reputation, business or performance of August Technology;

               (iii) Employee's conviction of a crime, or commission of any act
                    involving moral turpitude;

               (iv) Any material default or nonperformance of the terms of this
                    Agreement, or any violation of Paragraphs 10, 11, 12, 14
                    and/or 15 of this Employment Agreement; or

          (d)  Employee's employment will terminate immediately upon his/her
               death.


                                       2
<PAGE>
     Upon Employee's resignation or termination under this Paragraph 8 for any
reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

     9. CHANGE IN CONTROL. If, within eighteen (18) months following a Change in
Control (as defined below), Employee's employment is terminated (as defined
below), then:

          (a)  Employee shall be paid his/her last Base Salary on a regular
               payroll cycle as of the effective date for the time period as set
               forth in Exhibit A as "Change In Control Severance Period" from
               the effective date of such termination;

          (b)  For the same Change In Control Severance Period from the
               effective date of such termination as set forth in Paragraph
               9(b), the Company shall, if Employee elects to continue group
               health or other group benefits as allowed under COBRA, make the
               COBRA payments for the Change In Control Severance Period;

          (c)  The right to exercise all unexpired and non-vested stock options
               in favor of Employee shall immediately vest and accelerate; and

          (d)  LIMITATION ON CHANGE OF CONTROL PAYMENTS. Employee shall not be
               entitled to receive any Change of Control Action, as defined
               below, which would constitute an "excess parachute payment" for
               purposes of Code Section 280G, or any successor provision, and
               the regulations thereunder. In the event any Change of Control
               Action payable to Employee would constitute an "excess parachute
               payment," then the acceleration of the exercisability of such
               stock options and the payments to such Participant pursuant to
               this Paragraph 9 shall be reduced to the largest extent or amount
               as will result in no portion of such payments being subject to
               the excise tax imposed by Section 4999 of the Code. For purposes
               of this Paragraph 9, a "Change of Control Action" shall mean any
               payment, benefit or transfer of property in the nature of
               compensation paid to or for the benefit of Employee


                                       3
<PAGE>
               under any arrangement which is considered contingent on a Change
               of Control for purposes of Code Section 280G, including, without
               limitation, any and all salary, bonus, incentive, restricted
               stock, stock option, compensation or benefit plans, programs or
               other arrangements, and shall include benefits payable under this
               Agreement.

          (e)  "CHANGE OF CONTROL." For purposes of this Agreement, "Change of
               Control" shall mean any of the following events occurring after
               the date of this Agreement:

               (1)  A merger or consolidation to which the Company is a party,
                    an acquisition by the Company involving the issuance of the
                    Company's securities as consideration for the acquired
                    business, or any combination of fully closed and completed
                    mergers, consolidations or acquisitions during any
                    consecutive twenty-four (24) month period, if the
                    individuals and entities who were shareholders of the
                    Company immediately prior to the effective date of such
                    merger, consolidation, or acquisition (or prior to the
                    effective date of the first of a combination of such
                    transactions) have, immediately following the effective date
                    of such merger, consolidation or acquisition (or following
                    the effective date of the last of a combination of such
                    transactions), beneficial ownership (as defined in Rule
                    13d-3 under the Securities Exchange Act of 1934) of less
                    than fifty percent (50%) of the total combined voting power
                    of all classes of securities issued by the surviving
                    corporation for the election of directors of the surviving
                    corporation;

               (2)  The acquisition of direct or indirect beneficial ownership
                    (as defined in Rule 13d-3 under the Securities Exchange Act
                    of 1934) of securities of the Company by any person or
                    entity or by a group of associated persons or entities
                    acting in concert in one or a series of transactions, which
                    causes the aggregate beneficial ownership of such person,
                    entity or group to equal or exceed twenty percent (20%) or
                    more of the total combined voting power of all classes of
                    the Company's then issued and outstanding securities;

               (3)  The sale of the properties and assets of the Company
                    substantially as an entirety, to any person or entity which
                    is not a wholly-owned subsidiary of the Company;

               (4)  The stockholders of the Company approve any plan or proposal
                    for the liquidation of the Company; or

               (5)  A change in the composition of the Board of the Company at
                    any time during any consecutive twenty-four (24) month
                    period such that the "Continuity Directors" no longer
                    constitute at least a seventy percent


                                       4
<PAGE>
                    (70%) majority of the Board. For purposes of this event,
                    "Continuity Directors" means (i) those members of the Board
                    who were directors at the beginning of such consecutive
                    twenty-four (24) month period or at the date of this
                    Agreement if this Agreement was entered into less than
                    twenty-four months prior to the change in composition of the
                    Board; and (ii) any new director whose election to the Board
                    of Directors or nominations for election to the Board of
                    Directors was approved by a vote of at least two-thirds
                    (2/3) of the directors identified in the immediately
                    preceding clause (i).

               (6)  The Company enters into a letter of intent, an agreement in
                    principle or a definitive agreement relating to an event
                    described in Paragraph 9(e)(1), 9(e)(2), 9(e)(3), 9(e)(4),
                    or 9(e)(5) that ultimately results in such a Change of
                    Control, or a tender or exchange offer or proxy contest is
                    commenced that ultimately results in an event described in
                    Paragraph 9(e)(2) or 9(e)(5).

          (f)  TERMINATION. For purposes of this Paragraph 9, "Termination"
               shall mean any of the following events occurring within eighteen
               (18) months after a Change of Control:

               (1)  The termination of Employee's employment by the Company for
                    any reason, with or without cause, except for termination
                    resulting from conduct by Employee constituting (a) a felony
                    involving moral turpitude under either federal law or the
                    law of the State of Minnesota, or (b) Employee's willful
                    failure to fulfill his/her employment duties with the
                    Company; provided, however, that for purposes of this clause
                    (c), an act or failure to act by Employee shall not be
                    "willful" unless it is done, or omitted to be done, in bad
                    faith and without any reasonable belief that Employee's
                    action or omission were in the best interests of the
                    Company; or

               (2)  The termination of employment with the Company by Employee
                    for Good Reason. Such termination shall be accomplished by,
                    and effective upon, Employee giving written notice to
                    Company of his/her decision to terminate. "Good Reason"
                    shall mean a good faith determination by Employee, in
                    Employee's sole and absolute judgment, that any one or more
                    of the following events has occurred, at any time during the
                    term of this Agreement or after a Change of Control;
                    provided, however, that such event shall not constitute
                    "Good Reason" if Employee has expressly consented to such
                    event in writing or if Employee fails to provide written
                    notice of his/her decision to terminate within sixty (60)
                    days of the occurrence of such event:


                                       5
<PAGE>
                    (a)  A material change in Employee's reporting
                         responsibilities, titles or offices, or any removal of
                         Employee from or any failure to re-elect Employee to
                         any of such positions, which has the effect of
                         materially diminishing Employee's responsibility or
                         authority;

                    (b)  A reduction by the Company in Employee's base salary
                         (as increased from time to time);

                    (c)  A requirement imposed by the Company on Employee that
                         results in Employee being based at a location that is
                         outside of a twenty-five (25) mile radius of Employee's
                         prior job location;

                    (d)  Without the adoption of a replacement plan, program or
                         arrangement that provides benefits to Employee that are
                         equal to or greater than those benefits that are
                         discontinued or adversely affected:

                         i.   A failure by the Company to continue in effect,
                              within its maximum stated term, any pension,
                              bonus, incentive, stock ownership, stock purchase,
                              stock option, life insurance, health, accident,
                              disability, or any other employee compensation or
                              benefit plan, program or arrangement, in which
                              Employee is or has been participating;

                         ii.  The taking of any action by the Company that would
                              adversely affect Employee's participation or
                              materially reduce Employee's benefits under any of
                              such plans, programs or arrangements; or

                    (e)  Any action by the Company that would materially
                         adversely affect the physical conditions in or under
                         which Employee performs his/her employment duties; or

                    (f)  Any material breach by the Company of this Employment
                         Agreement between Employee and the Company.

                    Termination for "Good Reason" shall not include Employee's
               death or a termination for any reason other than the events
               specified in clauses (a) through (f) above.

     10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at all
times thereafter, Employee shall not directly or indirectly use or disclose any
trade secret, proprietary or confidential information of August


                                       6
<PAGE>
Technology or any subsidiary for the benefit of any person or entity other than
August Technology or any subsidiary without prior written approval of August
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise, which is not public
information and which relates to August Technology or any subsidiary, or August
Technology's or any subsidiary's existing or reasonably foreseeable business,
including but not limited to information relating to research, development,
technology, manufacturing processes, purchasing and sales, information relating
to sales and other financial strategies, plans and/or goals, information
relating to proprietary rights and data, ideas, know-how, and/or trade secrets,
information regarding the identity and/or needs of clients or customers, client
or customer lists and other client or customer information, information
regarding active and inactive accounts of August Technology or any subsidiary,
and information relating to August Technology's or any subsidiary's methods of
operation.

     11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration of
his/her employment and continued employment, and in exchange for the severance
and Change of Control provisions as set forth in Paragraphs 8 and 9 of this
Employment Agreement, and the mutual covenants herein, Employee agrees that,
during his/her employment and for a period of one (1) year following his/her
voluntary or involuntary resignation or termination for any reason, the Employee
will not, on behalf of himself/herself or any other person or entity:

          (a)  Directly or indirectly solicit, on Employee's own behalf, or on
               behalf of another, any of August Technology's or any subsidiary's
               customers or potential customers with whom Employee or Employee's
               supervisees had contact, either directly or indirectly, within
               the twelve months immediately preceding Employee's resignation or
               termination of employment, for the purpose of providing, selling,
               or attempting to sell any products or services competing with
               those provided or sold by August Technology or any subsidiary, or
               clearly contemplated thereby due to research, development,
               engineering, applications, licensing, or other like projects in
               process, at the time of resignation or termination; or

          (b)  hire or attempt to hire, or influence or solicit, or attempt to
               influence or solicit, either directly or indirectly, any employee
               of August Technology or any subsidiary to leave or terminate
               his/her or her employment, or to work for any other person or
               entity.

     12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to all
of the benefits, profits, results and work product arising from or incident to
all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.

     Employee agrees to communicate promptly and fully to August Technology all
inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as


                                       7
<PAGE>
provided in this Paragraph 12, Employee will and hereby does assign to August
Technology and/or its nominees all of the Employee's right, title and interest
in such inventions, discoveries, improvements or designs and all of his/her
right, title and interest in any patents, patent applications or copyrights
based thereon without obligation on the part of August Technology or any
subsidiary to make any further compensation, royalty or payment to Employee.
Employee further agrees to assist August Technology and/or its nominee (without
charge but at no expense to Employee) at any time and in every proper way to
obtain and maintain for its and/or their own benefit, patents for all such
inventions, discoveries and improvements and copyrights for all such designs.

     This Agreement does not obligate Employee to assign to August Technology
any invention, discovery, improvement or design for which no equipment,
supplies, facility or trade secret information of August Technology or any
subsidiary was used and which was developed entirely on Employee's own time, and
(1) which does not relate (a) directly to the business of August Technology or
any subsidiary, or (b) to August Technology's or any subsidiary's actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by Employee for August Technology or any subsidiary.

     13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A by
descriptive title are all of the Inventions, if any, in which Employee possesses
any right, title or interest prior to Employee's employment with August
Technology or execution of this Employment Agreement which are not subject to
the terms hereof.

     14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

     15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.

     16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate


                                       8
<PAGE>
remedy. Employee agrees that August Technology and any subsidiary shall be
entitled, in addition to any other remedy it may have at law or in equity, to an
injunction, without the posting of a bond if allowed by applicable law or with
the posting of a minimal bond if required, enjoining or restraining Employee
from any violation or violations or threatened violation or violations of
Paragraphs 10, 11, 12, 14 and 15, and/or for specific performance of duties and
obligations under such paragraphs, and Employee hereby consents to the issuance
of such injunction. If any rights or restrictions contained in Paragraphs 10,
11, 12, 14 and 15 shall be deemed to be unenforceable by reason of the extent,
duration or geographic scope, or other provision thereof, the parties
contemplate that the Court shall reduce such extent, duration or geographic
scope or other provision and enforce Paragraphs 10, 11, 12, 14 and 15 in their
reduced form for all purposes in the manner contemplated by such Paragraphs.

     17. OTHER AGREEMENTS. By Employee's signature to this Agreement, Employee
warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from accepting employment with
August Technology and fully performing his/her duties and responsibilities as
described in this Agreement. Employee, by his/her signature to this Agreement,
further warrants that he/she has not taken and will not take any trade secret,
proprietary or confidential information of any former employer, and will not use
or disclose any such information to anyone in the performance of duties and
responsibilities under this Agreement.

     18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of August Technology.

     19. NOTICES. All notices and other communications to be given under this
Agreement shall be in writing and shall be deemed to be given when delivered
personally, or when mailed by registered or certified mail, addressed to the
party to whom such notice is intended to be given, at the last known address for
that party or at such other address as the party may specify by written notice.

     (a) In the case of August Technology, the notice shall be provided to:

                           General Counsel
                           August Technology Corporation
                           4900 West 78th Street
                           Bloomington, MN 55435

     (b) In the case of Employee, the notice shall be provided to:

                           Mark Harless
                           13000 38th Place North
                           Plymouth, MN 55441

     Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received, whichever is
sooner.


                                       9
<PAGE>
     20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are reasonable, shall survive his/her resignation from or
the termination of his/her employment, and shall apply to him/her whether
his/her resignation or termination from employment is voluntary or involuntary
and regardless of the reason for such resignation or termination.

     21. NONWAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

     22. GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

     23. PARAGRAPH HEADINGS. Paragraph headings are included in this Agreement
for convenience of reference only, and are not intended to be full or accurate
descriptions of the contents hereof.

     24. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

     25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                     AUGUST TECHNOLOGY CORPORATION

Dated:                  , 2002       By
        ----------------               -----------------------------------------
                                               Its
                                                  ------------------------------



Dated:                  , 2002       By
        ----------------               -----------------------------------------
                                               EMPLOYEE


                                       10
<PAGE>
                                    EXHIBIT A

Employee's Name                     =       Mark Harless

Employee's Title                    =       Chief Engineer

Manager                             =       Chief Executive Officer

Base Salary                         =       $140,000

Severance Period                    =       twelve (12) months

Change In Control Severance Period  =       eighteen (18) months

Exempted Inventions                 =
                                            ------------------------------------
                                            ------------------------------------
                                            ------------------------------------
                                            ------------------------------------










Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP.   _______

                                    EMPLOYEE                  _______




                                       11


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>7
<FILENAME>c67934ex10-26.txt
<DESCRIPTION>EXECUTIVE EMPLOYMENT CONTRACT FOR THOMAS VERBURGT
<TEXT>
<PAGE>
                                                                   Exhibit 10.26


                              EMPLOYMENT AGREEMENT

     This Agreement is entered into by and between August Technology Corporation
("August Technology " or the "Company"), a Minnesota corporation, with its
principal place of business at 4900 West 78th Street, Bloomington, Minnesota
55435, and Thomas Verburgt of 5310 Elmridge Circle, Excelsior, Minnesota 55331
USA ("Employee").

     WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

     WHEREAS, Employee acknowledges and agrees that he has and will continue to
have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

     WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, August
Technology and Employee agree as follows:

     1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective March 1, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

     2. TERM OF EMPLOYMENT. August Technology shall continue to employ Employee
for an indefinite duration until his/her employment is terminated in accordance
with Paragraph 8 of this Agreement.

     3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

     4. COMPENSATION. August Technology shall pay Employee a gross annual salary
as set forth in Exhibit A as "Base Salary", less appropriate payroll deductions.
Employee may also receive incentive compensation in accordance with the Annual
Incentive Plan, as issued and as may change from time to time by the Company, or
any other similar plan authorized by the Board of Directors. Employee's
compensation may be periodically increased or adjusted as authorized by the
Board of Directors in the case of the Chief Executive Officer, or, in the case
of all others, as recommended by the Chief Executive Officer and approved by the
Board of Directors.

<PAGE>

     5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

     6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

     7. STOCK OPTIONS. At the discretion of August Technology, Employee may be
granted stock options from time to time, which options shall be subject to the
terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

     8. TERMINATION. Employee's employment under this Agreement may be
terminated:

          (a)  At any time upon mutual written agreement of the parties;

          (b)  By either Employee or August Technology at any time, with or
               without cause, upon thirty (30) days' written notice to the
               other;

          (c)  By August Technology immediately upon notice to Employee for
               cause which shall be defined as:

               (i)  Employee's material failure or neglect, or refusal to
                    perform, the duties and responsibilities of his/her position
                    and/or the reasonable direction of the Board of Directors or
                    his/her superiors;

               (ii) Commission by Employee of any willful, intentional or
                    negligent act that has the effect of injuring the
                    reputation, business or performance of August Technology;

               (iii) Employee's conviction of a crime, or commission of any act
                    involving moral turpitude;

               (iv) Any material default or nonperformance of the terms of this
                    Agreement, or any violation of Paragraphs 10, 11, 12, 14
                    and/or 15 of this Employment Agreement; or

          (d)  Employee's employment will terminate immediately upon his/her
               death.


                                       2
<PAGE>

     Upon Employee's resignation or termination under this Paragraph 8 for any
reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

     9. CHANGE IN CONTROL. If, within eighteen (18) months following a Change in
Control (as defined below), Employee's employment is terminated (as defined
below), then:

          (a)  Employee shall be paid his/her last Base Salary on a regular
               payroll cycle as of the effective date for the time period as set
               forth in Exhibit A as "Change In Control Severance Period" from
               the effective date of such termination;

          (b)  For the same Change In Control Severance Period from the
               effective date of such termination as set forth in Paragraph
               9(b), the Company shall, if Employee elects to continue group
               health or other group benefits as allowed under COBRA, make the
               COBRA payments for the Change In Control Severance Period;

          (c)  The right to exercise all unexpired and non-vested stock options
               in favor of Employee shall immediately vest and accelerate; and

          (d)  LIMITATION ON CHANGE OF CONTROL PAYMENTS. Employee shall not be
               entitled to receive any Change of Control Action, as defined
               below, which would constitute an "excess parachute payment" for
               purposes of Code Section 280G, or any successor provision, and
               the regulations thereunder. In the event any Change of Control
               Action payable to Employee would constitute an "excess parachute
               payment," then the acceleration of the exercisability of such
               stock options and the payments to such Participant pursuant to
               this Paragraph 9 shall be reduced to the largest extent or amount
               as will result in no portion of such payments being subject to
               the excise tax imposed by Section 4999 of the Code. For purposes
               of this Paragraph 9, a "Change of Control Action" shall mean any
               payment, benefit or transfer of property in the nature of
               compensation paid to or for the benefit of Employee



                                       3
<PAGE>

               under any arrangement which is considered contingent on a Change
               of Control for purposes of Code Section 280G, including, without
               limitation, any and all salary, bonus, incentive, restricted
               stock, stock option, compensation or benefit plans, programs or
               other arrangements, and shall include benefits payable under this
               Agreement.

          (e)  "CHANGE OF CONTROL." For purposes of this Agreement, "Change of
               Control" shall mean any of the following events occurring after
               the date of this Agreement:

               (1)  A merger or consolidation to which the Company is a party,
                    an acquisition by the Company involving the issuance of the
                    Company's securities as consideration for the acquired
                    business, or any combination of fully closed and completed
                    mergers, consolidations or acquisitions during any
                    consecutive twenty-four (24) month period, if the
                    individuals and entities who were shareholders of the
                    Company immediately prior to the effective date of such
                    merger, consolidation, or acquisition (or prior to the
                    effective date of the first of a combination of such
                    transactions) have, immediately following the effective date
                    of such merger, consolidation or acquisition (or following
                    the effective date of the last of a combination of such
                    transactions), beneficial ownership (as defined in Rule
                    13d-3 under the Securities Exchange Act of 1934) of less
                    than fifty percent (50%) of the total combined voting power
                    of all classes of securities issued by the surviving
                    corporation for the election of directors of the surviving
                    corporation;

               (2)  The acquisition of direct or indirect beneficial ownership
                    (as defined in Rule 13d-3 under the Securities Exchange Act
                    of 1934) of securities of the Company by any person or
                    entity or by a group of associated persons or entities
                    acting in concert in one or a series of transactions, which
                    causes the aggregate beneficial ownership of such person,
                    entity or group to equal or exceed twenty percent (20%) or
                    more of the total combined voting power of all classes of
                    the Company's then issued and outstanding securities;

               (3)  The sale of the properties and assets of the Company
                    substantially as an entirety, to any person or entity which
                    is not a wholly-owned subsidiary of the Company;

               (4)  The stockholders of the Company approve any plan or proposal
                    for the liquidation of the Company; or

               (5)  A change in the composition of the Board of the Company at
                    any time during any consecutive twenty-four (24) month
                    period such that the "Continuity Directors" no longer
                    constitute at least a seventy percent



                                       4
<PAGE>

                    (70%) majority of the Board. For purposes of this event,
                    "Continuity Directors" means (i) those members of the Board
                    who were directors at the beginning of such consecutive
                    twenty-four (24) month period or at the date of this
                    Agreement if this Agreement was entered into less than
                    twenty-four months prior to the change in composition of the
                    Board; and (ii) any new director whose election to the Board
                    of Directors or nominations for election to the Board of
                    Directors was approved by a vote of at least two-thirds
                    (2/3) of the directors identified in the immediately
                    preceding clause (i).

               (6)  The Company enters into a letter of intent, an agreement in
                    principle or a definitive agreement relating to an event
                    described in Paragraph 9(e)(1), 9(e)(2), 9(e)(3), 9(e)(4),
                    or 9(e)(5) that ultimately results in such a Change of
                    Control, or a tender or exchange offer or proxy contest is
                    commenced that ultimately results in an event described in
                    Paragraph 9(e)(2) or 9(e)(5).

          (f)  TERMINATION. For purposes of this Paragraph 9, "Termination"
               shall mean any of the following events occurring within eighteen
               (18) months after a Change of Control:

               (1)  The termination of Employee's employment by the Company for
                    any reason, with or without cause, except for termination
                    resulting from conduct by Employee constituting (a) a felony
                    involving moral turpitude under either federal law or the
                    law of the State of Minnesota, or (b) Employee's willful
                    failure to fulfill his/her employment duties with the
                    Company; provided, however, that for purposes of this clause
                    (c), an act or failure to act by Employee shall not be
                    "willful" unless it is done, or omitted to be done, in bad
                    faith and without any reasonable belief that Employee's
                    action or omission were in the best interests of the
                    Company; or

               (2)  The termination of employment with the Company by Employee
                    for Good Reason. Such termination shall be accomplished by,
                    and effective upon, Employee giving written notice to
                    Company of his/her decision to terminate. "Good Reason"
                    shall mean a good faith determination by Employee, in
                    Employee's sole and absolute judgment, that any one or more
                    of the following events has occurred, at any time during the
                    term of this Agreement or after a Change of Control;
                    provided, however, that such event shall not constitute
                    "Good Reason" if Employee has expressly consented to such
                    event in writing or if Employee fails to provide written
                    notice of his/her decision to terminate within sixty (60)
                    days of the occurrence of such event:


                                       5
<PAGE>

                    (a)  A material change in Employee's reporting
                         responsibilities, titles or offices, or any removal of
                         Employee from or any failure to re-elect Employee to
                         any of such positions, which has the effect of
                         materially diminishing Employee's responsibility or
                         authority;

                    (b)  A reduction by the Company in Employee's base salary
                         (as increased from time to time);

                    (c)  A requirement imposed by the Company on Employee that
                         results in Employee being based at a location that is
                         outside of a twenty-five (25) mile radius of Employee's
                         prior job location;

                    (d)  Without the adoption of a replacement plan, program or
                         arrangement that provides benefits to Employee that are
                         equal to or greater than those benefits that are
                         discontinued or adversely affected:

                         i.   A failure by the Company to continue in effect,
                              within its maximum stated term, any pension,
                              bonus, incentive, stock ownership, stock purchase,
                              stock option, life insurance, health, accident,
                              disability, or any other employee compensation or
                              benefit plan, program or arrangement, in which
                              Employee is or has been participating;

                        ii.   The taking of any action by the Company that would
                              adversely affect Employee's participation or
                              materially reduce Employee's benefits under any of
                              such plans, programs or arrangements; or

                    (e)  Any action by the Company that would materially
                         adversely affect the physical conditions in or under
                         which Employee performs his/her employment duties; or

                    (f)  Any material breach by the Company of this Employment
                         Agreement between Employee and the Company.

                    Termination for "Good Reason" shall not include Employee's
               death or a termination for any reason other than the events
               specified in clauses (a) through (f) above.

     10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at all
times thereafter, Employee shall not directly or indirectly use or disclose any
trade secret, proprietary or confidential information of August


                                       6
<PAGE>

Technology or any subsidiary for the benefit of any person or entity other than
August Technology or any subsidiary without prior written approval of August
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise, which is not public
information and which relates to August Technology or any subsidiary, or August
Technology's or any subsidiary's existing or reasonably foreseeable business,
including but not limited to information relating to research, development,
technology, manufacturing processes, purchasing and sales, information relating
to sales and other financial strategies, plans and/or goals, information
relating to proprietary rights and data, ideas, know-how, and/or trade secrets,
information regarding the identity and/or needs of clients or customers, client
or customer lists and other client or customer information, information
regarding active and inactive accounts of August Technology or any subsidiary,
and information relating to August Technology's or any subsidiary's methods of
operation.

     11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration of
his/her employment and continued employment, and in exchange for the severance
and Change of Control provisions as set forth in Paragraphs 8 and 9 of this
Employment Agreement, and the mutual covenants herein, Employee agrees that,
during his/her employment and for a period of one (1) year following his/her
voluntary or involuntary resignation or termination for any reason, the Employee
will not, on behalf of himself/herself or any other person or entity:

     (a)  Directly or indirectly solicit, on Employee's own behalf, or on behalf
          of another, any of August Technology's or any subsidiary's customers
          or potential customers with whom Employee or Employee's supervisees
          had contact, either directly or indirectly, within the twelve months
          immediately preceding Employee's resignation or termination of
          employment, for the purpose of providing, selling, or attempting to
          sell any products or services competing with those provided or sold by
          August Technology or any subsidiary, or clearly contemplated thereby
          due to research, development, engineering, applications, licensing, or
          other like projects in process, at the time of resignation or
          termination; or

     (b)  hire or attempt to hire, or influence or solicit, or attempt to
          influence or solicit, either directly or indirectly, any employee of
          August Technology or any subsidiary to leave or terminate his/her or
          her employment, or to work for any other person or entity.

     12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to all
of the benefits, profits, results and work product arising from or incident to
all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.

     Employee agrees to communicate promptly and fully to August Technology all
inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as


                                       7
<PAGE>

provided in this Paragraph 12, Employee will and hereby does assign to August
Technology and/or its nominees all of the Employee's right, title and interest
in such inventions, discoveries, improvements or designs and all of his/her
right, title and interest in any patents, patent applications or copyrights
based thereon without obligation on the part of August Technology or any
subsidiary to make any further compensation, royalty or payment to Employee.
Employee further agrees to assist August Technology and/or its nominee (without
charge but at no expense to Employee) at any time and in every proper way to
obtain and maintain for its and/or their own benefit, patents for all such
inventions, discoveries and improvements and copyrights for all such designs.

     This Agreement does not obligate Employee to assign to August Technology
any invention, discovery, improvement or design for which no equipment,
supplies, facility or trade secret information of August Technology or any
subsidiary was used and which was developed entirely on Employee's own time, and
(1) which does not relate (a) directly to the business of August Technology or
any subsidiary, or (b) to August Technology's or any subsidiary's actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by Employee for August Technology or any subsidiary.

     13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A by
descriptive title are all of the Inventions, if any, in which Employee possesses
any right, title or interest prior to Employee's employment with August
Technology or execution of this Employment Agreement which are not subject to
the terms hereof.

     14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

     15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.

     16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate


                                       8
<PAGE>

remedy. Employee agrees that August Technology and any subsidiary shall be
entitled, in addition to any other remedy it may have at law or in equity, to an
injunction, without the posting of a bond if allowed by applicable law or with
the posting of a minimal bond if required, enjoining or restraining Employee
from any violation or violations or threatened violation or violations of
Paragraphs 10, 11, 12, 14 and 15, and/or for specific performance of duties and
obligations under such paragraphs, and Employee hereby consents to the issuance
of such injunction. If any rights or restrictions contained in Paragraphs 10,
11, 12, 14 and 15 shall be deemed to be unenforceable by reason of the extent,
duration or geographic scope, or other provision thereof, the parties
contemplate that the Court shall reduce such extent, duration or geographic
scope or other provision and enforce Paragraphs 10, 11, 12, 14 and 15 in their
reduced form for all purposes in the manner contemplated by such Paragraphs.

     17. OTHER AGREEMENTS. By Employee's signature to this Agreement, Employee
warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from accepting employment with
August Technology and fully performing his/her duties and responsibilities as
described in this Agreement. Employee, by his/her signature to this Agreement,
further warrants that he/she has not taken and will not take any trade secret,
proprietary or confidential information of any former employer, and will not use
or disclose any such information to anyone in the performance of duties and
responsibilities under this Agreement.

     18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of August Technology.

     19. NOTICES. All notices and other communications to be given under this
Agreement shall be in writing and shall be deemed to be given when delivered
personally, or when mailed by registered or certified mail, addressed to the
party to whom such notice is intended to be given, at the last known address for
that party or at such other address as the party may specify by written notice.

     (a) In the case of August Technology, the notice shall be provided to:

                           General Counsel
                           August Technology Corporation
                           4900 West 78th Street
                           Bloomington, MN 55435

     (b) In the case of Employee, the notice shall be provided to:

                           Thomas Verburgt
                           5310 Elmridge Circle
                           Excelsior, MN 55331

     Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched


                                       9
<PAGE>

on the registered date or that stamped on the certified mail receipt, and shall
be deemed received within the fifth business day thereafter, or when it is
actually received, whichever is sooner.

     20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are reasonable, shall survive his/her resignation from or
the termination of his/her employment, and shall apply to him/her whether
his/her resignation or termination from employment is voluntary or involuntary
and regardless of the reason for such resignation or termination.

     21. NONWAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

     22. GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

     23. PARAGRAPH HEADINGS. Paragraph headings are included in this Agreement
for convenience of reference only, and are not intended to be full or accurate
descriptions of the contents hereof.

     24. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

     25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                    AUGUST TECHNOLOGY CORPORATION

Dated:                 , 2002       By
      -----------------               ------------------------------------------
                                           Its
                                              ----------------------------------



Dated:                 , 2002       By
      -----------------               ------------------------------------------
                                           EMPLOYEE


                                       10
<PAGE>




                                    EXHIBIT A

Employee's Name                     =       Thomas Verburgt

Employee's Title                    =       Chief Technology Officer

Manager                             =       Chief Executive Officer

Base Salary                         =       $160,000

Severance Period                    =       twelve (12) months

Change In Control Severance Period  =       eighteen (18) months

Exempted Inventions                 =
                                            ------------------------------------
                                            ------------------------------------
                                            ------------------------------------
                                            ------------------------------------













Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP.   _______

                                    EMPLOYEE                  _______


                                       11

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.27
<SEQUENCE>8
<FILENAME>c67934ex10-27.txt
<DESCRIPTION>EXECUTIVE EMPLOYMENT CONTRACT FOR JOHN M. VASUTA
<TEXT>
<PAGE>
                                                                   Exhibit 10.27

                              EMPLOYMENT AGREEMENT

     This Agreement is entered into by and between August Technology Corporation
("August Technology" or the "Company"), a Minnesota corporation, with its
principal place of business at 4900 West 78th Street, Bloomington, Minnesota
55435, and John M. Vasuta of 7570 Hudson Park Drive, Hudson, OH 44236
("Employee").

     WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

     WHEREAS, Employee acknowledges and agrees that he has and will continue to
have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

     WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, August
Technology and Employee agree as follows:

     1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective March 1, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

     2. TERM OF EMPLOYMENT. August Technology shall continue to employ Employee
for an indefinite duration until his/her employment is terminated in accordance
with Paragraph 8 of this Agreement.

     3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

     4. COMPENSATION. August Technology shall pay Employee a gross annual salary
as set forth in Exhibit A as "Base Salary", less appropriate payroll deductions.
Employee may also receive incentive compensation in accordance with the Annual
Incentive Plan, as issued and as may change from time to time by the Company, or
any other similar plan authorized by the Board of Directors. Employee's
compensation may be periodically increased or adjusted as authorized by the
Board of Directors in the case of the Chief Executive Officer, or, in the case
of all others, as recommended by the Chief Executive Officer and approved by the
Board of Directors.
<PAGE>
     5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

     6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

     7. STOCK OPTIONS. At the discretion of August Technology, Employee may be
granted stock options from time to time, which options shall be subject to the
terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

     8. TERMINATION. Employee's employment under this Agreement may be
terminated:

     (a)  At any time upon mutual written agreement of the parties;

     (b)  By either Employee or August Technology at any time, with or without
          cause, upon thirty (30) days' written notice to the other;

     (c)  By August Technology immediately upon notice to Employee for cause
          which shall be defined as:

          (i)  Employee's material failure or neglect, or refusal to perform,
               the duties and responsibilities of his/her position and/or the
               reasonable direction of the Board of Directors or his/her
               superiors;

          (ii) Commission by Employee of any willful, intentional or negligent
               act that has the effect of injuring the reputation, business or
               performance of August Technology;

          (iii) Employee's conviction of a crime, or commission of any act
               involving moral turpitude;

          (iv) Any material default or nonperformance of the terms of this
               Agreement, or any violation of Paragraphs 10, 11, 12, 14 and/or
               15 of this Employment Agreement; or

     (d)  Employee's employment will terminate immediately upon his/her death.


                                       2
<PAGE>
     Upon Employee's resignation or termination under this Paragraph 8 for any
reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

     9. CHANGE IN CONTROL. If, within eighteen (18) months following a Change in
Control (as defined below), Employee's employment is terminated (as defined
below), then:

     (a)  Employee shall be paid his/her last Base Salary on a regular payroll
          cycle as of the effective date for the time period as set forth in
          Exhibit A as "Change In Control Severance Period" from the effective
          date of such termination;

     (b)  For the same Change In Control Severance Period from the effective
          date of such termination as set forth in Paragraph 9(b), the Company
          shall, if Employee elects to continue group health or other group
          benefits as allowed under COBRA, make the COBRA payments for the
          Change In Control Severance Period;

     (c)  The right to exercise all unexpired and non-vested stock options in
          favor of Employee shall immediately vest and accelerate; and

     (d)  LIMITATION ON CHANGE OF CONTROL PAYMENTS. Employee shall not be
          entitled to receive any Change of Control Action, as defined below,
          which would constitute an "excess parachute payment" for purposes of
          Code Section 280G, or any successor provision, and the regulations
          thereunder. In the event any Change of Control Action payable to
          Employee would constitute an "excess parachute payment," then the
          acceleration of the exercisability of such stock options and the
          payments to such Participant pursuant to this Paragraph 9 shall be
          reduced to the largest extent or amount as will result in no portion
          of such payments being subject to the excise tax imposed by Section
          4999 of the Code. For purposes of this Paragraph 9, a "Change of
          Control Action" shall mean any payment, benefit or transfer of
          property in the nature of compensation paid to or for the benefit of
          Employee


                                       3
<PAGE>
          under any arrangement which is considered contingent on a Change of
          Control for purposes of Code Section 280G, including, without
          limitation, any and all salary, bonus, incentive, restricted stock,
          stock option, compensation or benefit plans, programs or other
          arrangements, and shall include benefits payable under this Agreement.

     (e)  "CHANGE OF CONTROL." For purposes of this Agreement, "Change of
          Control" shall mean any of the following events occurring after the
          date of this Agreement:

          (1)  A merger or consolidation to which the Company is a party, an
               acquisition by the Company involving the issuance of the
               Company's securities as consideration for the acquired business,
               or any combination of fully closed and completed mergers,
               consolidations or acquisitions during any consecutive twenty-four
               (24) month period, if the individuals and entities who were
               shareholders of the Company immediately prior to the effective
               date of such merger, consolidation, or acquisition (or prior to
               the effective date of the first of a combination of such
               transactions) have, immediately following the effective date of
               such merger, consolidation or acquisition (or following the
               effective date of the last of a combination of such
               transactions), beneficial ownership (as defined in Rule 13d-3
               under the Securities Exchange Act of 1934) of less than fifty
               percent (50%) of the total combined voting power of all classes
               of securities issued by the surviving corporation for the
               election of directors of the surviving corporation;

          (2)  The acquisition of direct or indirect beneficial ownership (as
               defined in Rule 13d-3 under the Securities Exchange Act of 1934)
               of securities of the Company by any person or entity or by a
               group of associated persons or entities acting in concert in one
               or a series of transactions, which causes the aggregate
               beneficial ownership of such person, entity or group to equal or
               exceed twenty percent (20%) or more of the total combined voting
               power of all classes of the Company's then issued and outstanding
               securities;

          (3)  The sale of the properties and assets of the Company
               substantially as an entirety, to any person or entity which is
               not a wholly-owned subsidiary of the Company;

          (4)  The stockholders of the Company approve any plan or proposal for
               the liquidation of the Company; or

          (5)  A change in the composition of the Board of the Company at any
               time during any consecutive twenty-four (24) month period such
               that the "Continuity Directors" no longer constitute at least a
               seventy percent


                                       4
<PAGE>
               (70%) majority of the Board. For purposes of this event,
               "Continuity Directors" means (i) those members of the Board who
               were directors at the beginning of such consecutive twenty-four
               (24) month period or at the date of this Agreement if this
               Agreement was entered into less than twenty-four months prior to
               the change in composition of the Board; and (ii) any new director
               whose election to the Board of Directors or nominations for
               election to the Board of Directors was approved by a vote of at
               least two-thirds (2/3) of the directors identified in the
               immediately preceding clause (i).

          (6)  The Company enters into a letter of intent, an agreement in
               principle or a definitive agreement relating to an event
               described in Paragraph 9(e)(1), 9(e)(2), 9(e)(3), 9(e)(4), or
               9(e)(5) that ultimately results in such a Change of Control, or a
               tender or exchange offer or proxy contest is commenced that
               ultimately results in an event described in Paragraph 9(e)(2) or
               9(e)(5).

     (f)  TERMINATION. For purposes of this Paragraph 9, "Termination" shall
          mean any of the following events occurring within eighteen (18) months
          after a Change of Control:

          (1)  The termination of Employee's employment by the Company for any
               reason, with or without cause, except for termination resulting
               from conduct by Employee constituting (a) a felony involving
               moral turpitude under either federal law or the law of the State
               of Minnesota, or (b) Employee's willful failure to fulfill
               his/her employment duties with the Company; provided, however,
               that for purposes of this clause (c), an act or failure to act by
               Employee shall not be "willful" unless it is done, or omitted to
               be done, in bad faith and without any reasonable belief that
               Employee's action or omission were in the best interests of the
               Company; or

          (2)  The termination of employment with the Company by Employee for
               Good Reason. Such termination shall be accomplished by, and
               effective upon, Employee giving written notice to Company of
               his/her decision to terminate. "Good Reason" shall mean a good
               faith determination by Employee, in Employee's sole and absolute
               judgment, that any one or more of the following events has
               occurred, at any time during the term of this Agreement or after
               a Change of Control; provided, however, that such event shall not
               constitute "Good Reason" if Employee has expressly consented to
               such event in writing or if Employee fails to provide written
               notice of his/her decision to terminate within sixty (60) days of
               the occurrence of such event:


                                       5
<PAGE>
     (a)  A material change in Employee's reporting responsibilities, titles or
          offices, or any removal of Employee from or any failure to re-elect
          Employee to any of such positions, which has the effect of materially
          diminishing Employee's responsibility or authority;

     (b)  A reduction by the Company in Employee's base salary (as increased
          from time to time);

     (c)  A requirement imposed by the Company on Employee that results in
          Employee being based at a location that is outside of a twenty-five
          (25) mile radius of Employee's prior job location;

     (d)  Without the adoption of a replacement plan, program or arrangement
          that provides benefits to Employee that are equal to or greater than
          those benefits that are discontinued or adversely affected:

          i.   A failure by the Company to continue in effect, within its
               maximum stated term, any pension, bonus, incentive, stock
               ownership, stock purchase, stock option, life insurance, health,
               accident, disability, or any other employee compensation or
               benefit plan, program or arrangement, in which Employee is or has
               been participating;

          ii.  The taking of any action by the Company that would adversely
               affect Employee's participation or materially reduce Employee's
               benefits under any of such plans, programs or arrangements; or

     (e)  Any action by the Company that would materially adversely affect the
          physical conditions in or under which Employee performs his/her
          employment duties; or

     (f)  Any material breach by the Company of this Employment Agreement
          between Employee and the Company.

     Termination for "Good Reason" shall not include Employee's death or a
termination for any reason other than the events specified in clauses (a)
through (f) above.

     10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at all
times thereafter, Employee shall not directly or indirectly use or disclose any
trade secret, proprietary or confidential information of August nology or any
subsidiary for the benefit of any person or entity other than August Technology
or any subsidiary without prior written approval of August


                                       6
<PAGE>
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise, which is not public
information and which relates to August Technology or any subsidiary, or August
Technology's or any subsidiary's existing or reasonably foreseeable business,
including but not limited to information relating to research, development,
technology, manufacturing processes, purchasing and sales, information relating
to sales and other financial strategies, plans and/or goals, information
relating to proprietary rights and data, ideas, know-how, and/or trade secrets,
information regarding the identity and/or needs of clients or customers, client
or customer lists and other client or customer information, information
regarding active and inactive accounts of August Technology or any subsidiary,
and information relating to August Technology's or any subsidiary's methods of
operation.

     11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration of
his/her employment and continued employment, and in exchange for the severance
and Change of Control provisions as set forth in Paragraphs 8 and 9 of this
Employment Agreement, and the mutual covenants herein, Employee agrees that,
during his/her employment and for a period of one (1) year following his/her
voluntary or involuntary resignation or termination for any reason, the Employee
will not, on behalf of himself/herself or any other person or entity:

          (a)  Directly or indirectly solicit, on Employee's own behalf, or on
               behalf of another, any of August Technology's or any subsidiary's
               customers or potential customers with whom Employee or Employee's
               supervisees had contact, either directly or indirectly, within
               the twelve months immediately preceding Employee's resignation or
               termination of employment, for the purpose of providing, selling,
               or attempting to sell any products or services competing with
               those provided or sold by August Technology or any subsidiary, or
               clearly contemplated thereby due to research, development,
               engineering, applications, licensing, or other like projects in
               process, at the time of resignation or termination; or

          (b)  hire or attempt to hire, or influence or solicit, or attempt to
               influence or solicit, either directly or indirectly, any employee
               of August Technology or any subsidiary to leave or terminate
               his/her or her employment, or to work for any other person or
               entity.

     12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to all
of the benefits, profits, results and work product arising from or incident to
all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.

     Employee agrees to communicate promptly and fully to August Technology all
inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as


                                       7
<PAGE>
provided in this Paragraph 12, Employee will and hereby does assign to August
Technology and/or its nominees all of the Employee's right, title and interest
in such inventions, discoveries, improvements or designs and all of his/her
right, title and interest in any patents, patent applications or copyrights
based thereon without obligation on the part of August Technology or any
subsidiary to make any further compensation, royalty or payment to Employee.
Employee further agrees to assist August Technology and/or its nominee (without
charge but at no expense to Employee) at any time and in every proper way to
obtain and maintain for its and/or their own benefit, patents for all such
inventions, discoveries and improvements and copyrights for all such designs.

     This Agreement does not obligate Employee to assign to August Technology
any invention, discovery, improvement or design for which no equipment,
supplies, facility or trade secret information of August Technology or any
subsidiary was used and which was developed entirely on Employee's own time, and
(1) which does not relate (a) directly to the business of August Technology or
any subsidiary, or (b) to August Technology's or any subsidiary's actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by Employee for August Technology or any subsidiary.

     13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A by
descriptive title are all of the Inventions, if any, in which Employee possesses
any right, title or interest prior to Employee's employment with August
Technology or execution of this Employment Agreement which are not subject to
the terms hereof.

     14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

     15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.

     16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate


                                       8
<PAGE>
remedy. Employee agrees that August Technology and any subsidiary shall be
entitled, in addition to any other remedy it may have at law or in equity, to an
injunction, without the posting of a bond if allowed by applicable law or with
the posting of a minimal bond if required, enjoining or restraining Employee
from any violation or violations or threatened violation or violations of
Paragraphs 10, 11, 12, 14 and 15, and/or for specific performance of duties and
obligations under such paragraphs, and Employee hereby consents to the issuance
of such injunction. If any rights or restrictions contained in Paragraphs 10,
11, 12, 14 and 15 shall be deemed to be unenforceable by reason of the extent,
duration or geographic scope, or other provision thereof, the parties
contemplate that the Court shall reduce such extent, duration or geographic
scope or other provision and enforce Paragraphs 10, 11, 12, 14 and 15 in their
reduced form for all purposes in the manner contemplated by such Paragraphs.

     17. OTHER AGREEMENTS. By Employee's signature to this Agreement, Employee
warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from accepting employment with
August Technology and fully performing his/her duties and responsibilities as
described in this Agreement. Employee, by his/her signature to this Agreement,
further warrants that he/she has not taken and will not take any trade secret,
proprietary or confidential information of any former employer, and will not use
or disclose any such information to anyone in the performance of duties and
responsibilities under this Agreement.

     18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of August Technology.

     19. NOTICES. All notices and other communications to be given under this
Agreement shall be in writing and shall be deemed to be given when delivered
personally, or when mailed by registered or certified mail, addressed to the
party to whom such notice is intended to be given, at the last known address for
that party or at such other address as the party may specify by written notice.

     (a) In the case of August Technology, the notice shall be provided to:

                           General Counsel
                           August Technology Corporation
                           4900 West 78th Street
                           Bloomington, MN 55435

     (b) In the case of Employee, the notice shall be provided to:

                           John M. Vasuta
                           7570 Hudson Park Drive
                           Hudson, OH  44236

     Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received, whichever is
sooner.


                                       9
<PAGE>
     20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are reasonable, shall survive his/her resignation from or
the termination of his/her employment, and shall apply to him/her whether
his/her resignation or termination from employment is voluntary or involuntary
and regardless of the reason for such resignation or termination.

     21. NONWAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

     22. GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

     23. PARAGRAPH HEADINGS. Paragraph headings are included in this Agreement
for convenience of reference only, and are not intended to be full or accurate
descriptions of the contents hereof.

     24. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

     25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                      AUGUST TECHNOLOGY CORPORATION


Dated:                  , 2002        By
      ------------------                ----------------------------------------
                                                 Its
                                                    ----------------------------



Dated:                  , 2002        By
      ------------------                ----------------------------------------
                                                 EMPLOYEE


                                       10
<PAGE>
                                    EXHIBIT A

<TABLE>
<S>                                 <C>     <C>
Employee's Name                     =       John M. Vasuta

Employee's Title                    =       V.P. Intellectual Property, General Counsel

Manager                             =       Chief Executive Officer

Base Salary                         =       $140,000

Severance Period                    =       twelve (12) months

Change In Control Severance Period  =       eighteen (18) months

Exempted Inventions                 =
                                            ------------------------------------
                                            ------------------------------------
                                            ------------------------------------
                                            ------------------------------------
</TABLE>




Other Terms:

     1.   John Vasuta is granted a minimum four weeks of vacation per year
          effective May 22, 2002, and thus the minimum personal time off
          (vacation plus personal days) is 26 days per year.

     2.   As agreed to at hiring, for all pension, vacation, personal time off,
          or other benefits, John Vasuta shall be given the benefit of all time
          served as outside counsel and consultant, and thus his start date
          shall be considered June 28, 1994 rather than his employment date of
          May 22, 2000.

Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP.   _______

                                    EMPLOYEE                  _______



                                       11


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.28
<SEQUENCE>9
<FILENAME>c67934ex10-28.txt
<DESCRIPTION>EXECUTIVE EMPLOYMENT CONTRACT FOR D. MAYSON BROOKS
<TEXT>
<PAGE>
                                                                   Exhibit 10.28


                              EMPLOYMENT AGREEMENT

     This Agreement is entered into by and between August Technology Corporation
("August Technology" or the "Company"), a Minnesota corporation, with its
principal place of business at 4900 West 78th Street, Bloomington, Minnesota
55435, and D. Mayson Brooks of 9724 Brassie Circle, Eden Prairie, Minnesota
55347, USA ("Employee").

     WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

     WHEREAS, Employee acknowledges and agrees that he has and will continue to
have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

     WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, August
Technology and Employee agree as follows:

     1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective March 1, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

     2. TERM OF EMPLOYMENT. August Technology shall continue to employ Employee
for an indefinite duration until his/her employment is terminated in accordance
with Paragraph 8 of this Agreement.

     3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

     4. COMPENSATION. August Technology shall pay Employee a gross annual salary
as set forth in Exhibit A as "Base Salary", less appropriate payroll deductions.
Employee may also receive incentive compensation in accordance with the Annual
Incentive Plan, as issued and as may change from time to time by the Company, or
any other similar plan authorized by the Board of Directors. Employee's
compensation may be periodically increased or adjusted as authorized by the
Board of Directors in the case of the Chief Executive Officer, or, in the case
of all others, as recommended by the Chief Executive Officer and approved by the
Board of Directors.
<PAGE>
     5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

     6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

     7. STOCK OPTIONS. At the discretion of August Technology, Employee may be
granted stock options from time to time, which options shall be subject to the
terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

     8. TERMINATION. Employee's employment under this Agreement may be
terminated:

          (a)  At any time upon mutual written agreement of the parties;

          (b)  By either Employee or August Technology at any time, with or
               without cause, upon thirty (30) days' written notice to the
               other;

          (c)  By August Technology immediately upon notice to Employee for
               cause which shall be defined as:

               (i)  Employee's material failure or neglect, or refusal to
                    perform, the duties and responsibilities of his/her position
                    and/or the reasonable direction of the Board of Directors or
                    his/her superiors;

               (ii) Commission by Employee of any willful, intentional or
                    negligent act that has the effect of injuring the
                    reputation, business or performance of August Technology;

               (iii) Employee's conviction of a crime, or commission of any act
                    involving moral turpitude;

               (iv) Any material default or nonperformance of the terms of this
                    Agreement, or any violation of Paragraphs 10, 11, 12, 14
                    and/or 15 of this Employment Agreement; or

          (d)  Employee's employment will terminate immediately upon his/her
               death.


                                       2
<PAGE>
     Upon Employee's resignation or termination under this Paragraph 8 for any
reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

     9. CHANGE IN CONTROL. If, within eighteen (18) months following a Change in
Control (as defined below), Employee's employment is terminated (as defined
below), then:

          (a)  Employee shall be paid his/her last Base Salary on a regular
               payroll cycle as of the effective date for the time period as set
               forth in Exhibit A as "Change In Control Severance Period" from
               the effective date of such termination;

          (b)  For the same Change In Control Severance Period from the
               effective date of such termination as set forth in Paragraph
               9(b), the Company shall, if Employee elects to continue group
               health or other group benefits as allowed under COBRA, make the
               COBRA payments for the Change In Control Severance Period;

          (c)  The right to exercise all unexpired and non-vested stock options
               in favor of Employee shall immediately vest and accelerate; and

          (d)  LIMITATION ON CHANGE OF CONTROL PAYMENTS. Employee shall not be
               entitled to receive any Change of Control Action, as defined
               below, which would constitute an "excess parachute payment" for
               purposes of Code Section 280G, or any successor provision, and
               the regulations thereunder. In the event any Change of Control
               Action payable to Employee would constitute an "excess parachute
               payment," then the acceleration of the exercisability of such
               stock options and the payments to such Participant pursuant to
               this Paragraph 9 shall be reduced to the largest extent or amount
               as will result in no portion of such payments being subject to
               the excise tax imposed by Section 4999 of the Code. For purposes
               of this Paragraph 9, a "Change of Control Action" shall mean any
               payment, benefit or transfer of property in the nature of
               compensation paid to or for the benefit of Employee


                                       3
<PAGE>
               under any arrangement which is considered contingent on a Change
               of Control for purposes of Code Section 280G, including, without
               limitation, any and all salary, bonus, incentive, restricted
               stock, stock option, compensation or benefit plans, programs or
               other arrangements, and shall include benefits payable under this
               Agreement.

          (e)  "CHANGE OF CONTROL." For purposes of this Agreement, "Change of
               Control" shall mean any of the following events occurring after
               the date of this Agreement:

               (1)  A merger or consolidation to which the Company is a party,
                    an acquisition by the Company involving the issuance of the
                    Company's securities as consideration for the acquired
                    business, or any combination of fully closed and completed
                    mergers, consolidations or acquisitions during any
                    consecutive twenty-four (24) month period, if the
                    individuals and entities who were shareholders of the
                    Company immediately prior to the effective date of such
                    merger, consolidation, or acquisition (or prior to the
                    effective date of the first of a combination of such
                    transactions) have, immediately following the effective date
                    of such merger, consolidation or acquisition (or following
                    the effective date of the last of a combination of such
                    transactions), beneficial ownership (as defined in Rule
                    13d-3 under the Securities Exchange Act of 1934) of less
                    than fifty percent (50%) of the total combined voting power
                    of all classes of securities issued by the surviving
                    corporation for the election of directors of the surviving
                    corporation;

               (2)  The acquisition of direct or indirect beneficial ownership
                    (as defined in Rule 13d-3 under the Securities Exchange Act
                    of 1934) of securities of the Company by any person or
                    entity or by a group of associated persons or entities
                    acting in concert in one or a series of transactions, which
                    causes the aggregate beneficial ownership of such person,
                    entity or group to equal or exceed twenty percent (20%) or
                    more of the total combined voting power of all classes of
                    the Company's then issued and outstanding securities;

               (3)  The sale of the properties and assets of the Company
                    substantially as an entirety, to any person or entity which
                    is not a wholly-owned subsidiary of the Company;

               (4)  The stockholders of the Company approve any plan or proposal
                    for the liquidation of the Company; or

               (5)  A change in the composition of the Board of the Company at
                    any time during any consecutive twenty-four (24) month
                    period such that the "Continuity Directors" no longer
                    constitute at least a seventy percent (70%) majority of the
                    Board. For purposes of this event, "Continuity


                                       4
<PAGE>
                    Directors" means (i) those members of the Board who were
                    directors at the beginning of such consecutive twenty-four
                    (24) month period or at the date of this Agreement if this
                    Agreement was entered into less than twenty-four months
                    prior to the change in composition of the Board; and (ii)
                    any new director whose election to the Board of Directors or
                    nominations for election to the Board of Directors was
                    approved by a vote of at least two-thirds (2/3) of the
                    directors identified in the immediately preceding clause
                    (i).

               (6)  The Company enters into a letter of intent, an agreement in
                    principle or a definitive agreement relating to an event
                    described in Paragraph 9(e)(1), 9(e)(2), 9(e)(3), 9(e)(4),
                    or 9(e)(5) that ultimately results in such a Change of
                    Control, or a tender or exchange offer or proxy contest is
                    commenced that ultimately results in an event described in
                    Paragraph 9(e)(2) or 9(e)(5).

          (f)  TERMINATION. For purposes of this Paragraph 9, "Termination"
               shall mean any of the following events occurring within eighteen
               (18) months after a Change of Control:

               (1)  The termination of Employee's employment by the Company for
                    any reason, with or without cause, except for termination
                    resulting from conduct by Employee constituting (a) a felony
                    involving moral turpitude under either federal law or the
                    law of the State of Minnesota, or (b) Employee's willful
                    failure to fulfill his/her employment duties with the
                    Company; provided, however, that for purposes of this clause
                    (c), an act or failure to act by Employee shall not be
                    "willful" unless it is done, or omitted to be done, in bad
                    faith and without any reasonable belief that Employee's
                    action or omission were in the best interests of the
                    Company; or

               (2)  The termination of employment with the Company by Employee
                    for Good Reason. Such termination shall be accomplished by,
                    and effective upon, Employee giving written notice to
                    Company of his/her decision to terminate. "Good Reason"
                    shall mean a good faith determination by Employee, in
                    Employee's sole and absolute judgment, that any one or more
                    of the following events has occurred, at any time during the
                    term of this Agreement or after a Change of Control;
                    provided, however, that such event shall not constitute
                    "Good Reason" if Employee has expressly consented to such
                    event in writing or if Employee fails to provide written
                    notice of his/her decision to terminate within sixty (60)
                    days of the occurrence of such event:

                    (a)  A material change in Employee's reporting
                         responsibilities, titles or offices, or any removal of
                         Employee from or any failure to re-elect Employee to
                         any of such positions, which


                                       5
<PAGE>
                         has the effect of materially diminishing Employee's
                         responsibility or authority;

                    (b)  A reduction by the Company in Employee's base salary
                         (as increased from time to time);

                    (c)  A requirement imposed by the Company on Employee that
                         results in Employee being based at a location that is
                         outside of a twenty-five (25) mile radius of Employee's
                         prior job location;

                    (d)  Without the adoption of a replacement plan, program or
                         arrangement that provides benefits to Employee that are
                         equal to or greater than those benefits that are
                         discontinued or adversely affected:

                         i.   A failure by the Company to continue in effect,
                              within its maximum stated term, any pension,
                              bonus, incentive, stock ownership, stock purchase,
                              stock option, life insurance, health, accident,
                              disability, or any other employee compensation or
                              benefit plan, program or arrangement, in which
                              Employee is or has been participating;

                         ii.  The taking of any action by the Company that would
                              adversely affect Employee's participation or
                              materially reduce Employee's benefits under any of
                              such plans, programs or arrangements; or

                    (e)       Any action by the Company that would materially
                              adversely affect the physical conditions in or
                              under which Employee performs his/her employment
                              duties; or

                    (f)       Any material breach by the Company of this
                              Employment Agreement between Employee and the
                              Company.

     Termination for "Good Reason" shall not include Employee's death or a
termination for any reason other than the events specified in clauses (a)
through (f) above.

     10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at all
times thereafter, Employee shall not directly or indirectly use or disclose any
trade secret, proprietary or confidential information of August Technology or
any subsidiary for the benefit of any person or entity other than August
Technology or any subsidiary without prior written approval of August
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise,


                                       6
<PAGE>
which is not public information and which relates to August Technology or any
subsidiary, or August Technology's or any subsidiary's existing or reasonably
foreseeable business, including but not limited to information relating to
research, development, technology, manufacturing processes, purchasing and
sales, information relating to sales and other financial strategies, plans
and/or goals, information relating to proprietary rights and data, ideas,
know-how, and/or trade secrets, information regarding the identity and/or needs
of clients or customers, client or customer lists and other client or customer
information, information regarding active and inactive accounts of August
Technology or any subsidiary, and information relating to August Technology's or
any subsidiary's methods of operation.

     11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration of
his/her employment and continued employment, and in exchange for the severance
and Change of Control provisions as set forth in Paragraphs 8 and 9 of this
Employment Agreement, and the mutual covenants herein, Employee agrees that,
during his/her employment and for a period of one (1) year following his/her
voluntary or involuntary resignation or termination for any reason, the Employee
will not, on behalf of himself/herself or any other person or entity:

          (a)  Directly or indirectly solicit, on Employee's own behalf, or on
               behalf of another, any of August Technology's or any subsidiary's
               customers or potential customers with whom Employee or Employee's
               supervisees had contact, either directly or indirectly, within
               the twelve months immediately preceding Employee's resignation or
               termination of employment, for the purpose of providing, selling,
               or attempting to sell any products or services competing with
               those provided or sold by August Technology or any subsidiary, or
               clearly contemplated thereby due to research, development,
               engineering, applications, licensing, or other like projects in
               process, at the time of resignation or termination; or

          (b)  hire or attempt to hire, or influence or solicit, or attempt to
               influence or solicit, either directly or indirectly, any employee
               of August Technology or any subsidiary to leave or terminate
               his/her or her employment, or to work for any other person or
               entity.

     12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to all
of the benefits, profits, results and work product arising from or incident to
all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.

     Employee agrees to communicate promptly and fully to August Technology all
inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as provided in this
Paragraph 12, Employee will and hereby does assign to August Technology and/or
its nominees all of the Employee's right, title and interest in such inventions,
discoveries, improvements or designs and all of his/her right, title and
interest in any patents, patent applications


                                       7
<PAGE>
or copyrights based thereon without obligation on the part of August Technology
or any subsidiary to make any further compensation, royalty or payment to
Employee. Employee further agrees to assist August Technology and/or its nominee
(without charge but at no expense to Employee) at any time and in every proper
way to obtain and maintain for its and/or their own benefit, patents for all
such inventions, discoveries and improvements and copyrights for all such
designs.

     This Agreement does not obligate Employee to assign to August Technology
any invention, discovery, improvement or design for which no equipment,
supplies, facility or trade secret information of August Technology or any
subsidiary was used and which was developed entirely on Employee's own time, and
(1) which does not relate (a) directly to the business of August Technology or
any subsidiary, or (b) to August Technology's or any subsidiary's actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by Employee for August Technology or any subsidiary.

     13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A by
descriptive title are all of the Inventions, if any, in which Employee possesses
any right, title or interest prior to Employee's employment with August
Technology or execution of this Employment Agreement which are not subject to
the terms hereof.

     14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

     15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.

     16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate remedy. Employee agrees that August
Technology and any subsidiary shall be entitled, in addition to any other remedy
it may have at law or in equity, to an injunction, without the posting of a bond
if allowed by applicable law or with the posting of a minimal bond if required,
enjoining or


                                       8
<PAGE>
restraining Employee from any violation or violations or threatened violation or
violations of Paragraphs 10, 11, 12, 14 and 15, and/or for specific performance
of duties and obligations under such paragraphs, and Employee hereby consents to
the issuance of such injunction. If any rights or restrictions contained in
Paragraphs 10, 11, 12, 14 and 15 shall be deemed to be unenforceable by reason
of the extent, duration or geographic scope, or other provision thereof, the
parties contemplate that the Court shall reduce such extent, duration or
geographic scope or other provision and enforce Paragraphs 10, 11, 12, 14 and 15
in their reduced form for all purposes in the manner contemplated by such
Paragraphs.

     17. OTHER AGREEMENTS. By Employee's signature to this Agreement, Employee
warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from accepting employment with
August Technology and fully performing his/her duties and responsibilities as
described in this Agreement. Employee, by his/her signature to this Agreement,
further warrants that he/she has not taken and will not take any trade secret,
proprietary or confidential information of any former employer, and will not use
or disclose any such information to anyone in the performance of duties and
responsibilities under this Agreement.

     18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of August Technology.

     19. NOTICES. All notices and other communications to be given under this
Agreement shall be in writing and shall be deemed to be given when delivered
personally, or when mailed by registered or certified mail, addressed to the
party to whom such notice is intended to be given, at the last known address for
that party or at such other address as the party may specify by written notice.

     (a) In the case of August Technology, the notice shall be provided to:

                           General Counsel
                           August Technology Corporation
                           4900 West 78th Street
                           Bloomington, MN 55435

     (b) In the case of Employee, the notice shall be provided to:

                           Mayson Brooks
                           9724 Brassie Circle
                           Eden Prairie, Minnesota 55347

     Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received, whichever is
sooner.

     20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are


                                       9
<PAGE>
reasonable, shall survive his/her resignation from or the termination of his/her
employment, and shall apply to him/her whether his/her resignation or
termination from employment is voluntary or involuntary and regardless of the
reason for such resignation or termination.

     21. NONWAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

     22. GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

     23. PARAGRAPH HEADINGS. Paragraph headings are included in this Agreement
for convenience of reference only, and are not intended to be full or accurate
descriptions of the contents hereof.

     24. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

     25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                        AUGUST TECHNOLOGY CORPORATION


Dated:                   , 2002         By
      -------------------                 --------------------------------------
                                                   Its
                                                      --------------------------



Dated:                   , 2002         By
      -------------------                 --------------------------------------
                                                   EMPLOYEE


                                       10
<PAGE>
                                    EXHIBIT A

<TABLE>
<S>                                 <C>     <C>
Employee's Name                     =       D. Mayson Brooks

Employee's Title                    =       V.P. Worldwide Sales and Field Operations

Manager                             =       Chief Operating Officer

Base Salary                         =       $145,000

Severance Period                    =       twelve (12) months

Change In Control Severance Period  =       eighteen (18) months

Exempted Inventions                 =       1. Book titled
                                                     Sales 101: How to sell to the recurring customer
                                            ------------------------------------
                                            ------------------------------------
                                            ------------------------------------
</TABLE>







Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP.   _______

                                    EMPLOYEE                  _______


                                       11


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.29
<SEQUENCE>10
<FILENAME>c67934ex10-29.txt
<DESCRIPTION>EXECUTIVE EMPLOYMENT CONTRACT FOR WAYNE HUBIN
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.29

                              EMPLOYMENT AGREEMENT

         This Agreement is entered into by and between August Technology
Corporation ("August Technology" or the "Company"), a Minnesota corporation,
with its principal place of business at 4900 West 78th Street, Bloomington,
Minnesota 55435, and Wayne Hubin of 11975 Swede Lake Road, Watertown, Minnesota
55388 USA ("Employee").

         WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

         WHEREAS, Employee acknowledges and agrees that he has and will continue
to have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

         WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein and for other good and valuable consideration the
receipt and sufficiency of which is specifically acknowledged by the parties,
August Technology and Employee agree as follows:

         1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective March 1, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

         2. TERM OF EMPLOYMENT. August Technology shall continue to employ
Employee for an indefinite duration until his/her employment is terminated in
accordance with Paragraph 8 of this Agreement.

         3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

         4. COMPENSATION. August Technology shall pay Employee a gross annual
salary as set forth in Exhibit A as "Base Salary", less appropriate payroll
deductions. Employee may also receive incentive compensation in accordance with
the Annual Incentive Plan, as issued and as may change from time to time by the
Company, or any other similar plan authorized by the Board of Directors.
Employee's compensation may be periodically increased or adjusted as authorized
by the Board of Directors in the case of the Chief Executive Officer, or, in the
case of all others, as recommended by the Chief Executive Officer and approved
by the Board of Directors.
<PAGE>
         5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

         6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

         7. STOCK OPTIONS. At the discretion of August Technology, Employee may
be granted stock options from time to time, which options shall be subject to
the terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

         8. TERMINATION. Employee's employment under this Agreement may be
terminated:

                  (a)      At any time upon mutual written agreement of the
                           parties;

                  (b)      By either Employee or August Technology at any time,
                           with or without cause, upon thirty (30) days' written
                           notice to the other;

                  (c)      By August Technology immediately upon notice to
                           Employee for cause which shall be defined as:

                           (i)      Employee's material failure or neglect, or
                                    refusal to perform, the duties and
                                    responsibilities of his/her position and/or
                                    the reasonable direction of the Board of
                                    Directors or his/her superiors;

                           (ii)     Commission by Employee of any willful,
                                    intentional or negligent act that has the
                                    effect of injuring the reputation, business
                                    or performance of August Technology;

                           (iii)    Employee's conviction of a crime, or
                                    commission of any act involving moral
                                    turpitude;

                           (iv)     Any material default or nonperformance of
                                    the terms of this Agreement, or any
                                    violation of Paragraphs 10, 11, 12, 14
                                    and/or 15 of this Employment Agreement; or

                  (d)      Employee's employment will terminate immediately upon
                           his/her death.


                                       2
<PAGE>
         Upon Employee's resignation or termination under this Paragraph 8 for
any reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

         9. CHANGE IN CONTROL. If, within eighteen (18) months following a
Change in Control (as defined below), Employee's employment is terminated (as
defined below), then:

                  (a)      Employee shall be paid his/her last Base Salary on a
                           regular payroll cycle as of the effective date for
                           the time period as set forth in Exhibit A as "Change
                           In Control Severance Period" from the effective date
                           of such termination;

                  (b)      For the same Change In Control Severance Period from
                           the effective date of such termination as set forth
                           in Paragraph 9(b), the Company shall, if Employee
                           elects to continue group health or other group
                           benefits as allowed under COBRA, make the COBRA
                           payments for the Change In Control Severance Period;

                  (c)      The right to exercise all unexpired and non-vested
                           stock options in favor of Employee shall immediately
                           vest and accelerate; and

                  (d)      LIMITATION ON CHANGE OF CONTROL PAYMENTS. Employee
                           shall not be entitled to receive any Change of
                           Control Action, as defined below, which would
                           constitute an "excess parachute payment" for purposes
                           of Code Section 280G, or any successor provision, and
                           the regulations thereunder. In the event any Change
                           of Control Action payable to Employee would
                           constitute an "excess parachute payment," then the
                           acceleration of the exercisability of such stock
                           options and the payments to such Participant pursuant
                           to this Paragraph 9 shall be reduced to the largest
                           extent or amount as will result in no portion of such
                           payments being subject to the excise tax imposed by
                           Section 4999 of the Code. For purposes of this
                           Paragraph 9, a "Change of Control Action" shall mean
                           any payment, benefit or transfer of property in the
                           nature of compensation paid to or for the benefit of
                           Employee


                                       3
<PAGE>
                           under any arrangement which is considered contingent
                           on a Change of Control for purposes of Code Section
                           280G, including, without limitation, any and all
                           salary, bonus, incentive, restricted stock, stock
                           option, compensation or benefit plans, programs or
                           other arrangements, and shall include benefits
                           payable under this Agreement.

                  (e)      "CHANGE OF CONTROL." For purposes of this Agreement,
                           "Change of Control" shall mean any of the following
                           events occurring after the date of this Agreement:

                           (1)      A merger or consolidation to which the
                                    Company is a party, an acquisition by the
                                    Company involving the issuance of the
                                    Company's securities as consideration for
                                    the acquired business, or any combination of
                                    fully closed and completed mergers,
                                    consolidations or acquisitions during any
                                    consecutive twenty-four (24) month period,
                                    if the individuals and entities who were
                                    shareholders of the Company immediately
                                    prior to the effective date of such merger,
                                    consolidation, or acquisition (or prior to
                                    the effective date of the first of a
                                    combination of such transactions) have,
                                    immediately following the effective date of
                                    such merger, consolidation or acquisition
                                    (or following the effective date of the last
                                    of a combination of such transactions),
                                    beneficial ownership (as defined in Rule
                                    13d-3 under the Securities Exchange Act of
                                    1934) of less than fifty percent (50%) of
                                    the total combined voting power of all
                                    classes of securities issued by the
                                    surviving corporation for the election of
                                    directors of the surviving corporation;

                           (2)      The acquisition of direct or indirect
                                    beneficial ownership (as defined in Rule
                                    13d-3 under the Securities Exchange Act of
                                    1934) of securities of the Company by any
                                    person or entity or by a group of associated
                                    persons or entities acting in concert in one
                                    or a series of transactions, which causes
                                    the aggregate beneficial ownership of such
                                    person, entity or group to equal or exceed
                                    twenty percent (20%) or more of the total
                                    combined voting power of all classes of the
                                    Company's then issued and outstanding
                                    securities;

                           (3)      The sale of the properties and assets of the
                                    Company substantially as an entirety, to any
                                    person or entity which is not a wholly-owned
                                    subsidiary of the Company;

                           (4)      The stockholders of the Company approve any
                                    plan or proposal for the liquidation of the
                                    Company; or

                           (5)      A change in the composition of the Board of
                                    the Company at any time during any
                                    consecutive twenty-four (24) month period
                                    such that the "Continuity Directors" no
                                    longer constitute at least a seventy percent
                                    (70%) majority of the Board. For purposes of
                                    this event, "Continuity


                                       4
<PAGE>
                                    Directors" means (i) those members of the
                                    Board who were directors at the beginning of
                                    such consecutive twenty-four (24) month
                                    period or at the date of this Agreement if
                                    this Agreement was entered into less than
                                    twenty-four months prior to the change in
                                    composition of the Board; and (ii) any new
                                    director whose election to the Board of
                                    Directors or nominations for election to the
                                    Board of Directors was approved by a vote of
                                    at least two-thirds (2/3) of the directors
                                    identified in the immediately preceding
                                    clause (i).

                           (6)      The Company enters into a letter of intent,
                                    an agreement in principle or a definitive
                                    agreement relating to an event described in
                                    Paragraph 9(e)(1), 9(e)(2), 9(e)(3),
                                    9(e)(4), or 9(e)(5) that ultimately results
                                    in such a Change of Control, or a tender or
                                    exchange offer or proxy contest is commenced
                                    that ultimately results in an event
                                    described in Paragraph 9(e)(2) or 9(e)(5).

                  (f)      TERMINATION. For purposes of this Paragraph 9,
                           "Termination" shall mean any of the following events
                           occurring within eighteen (18) months after a Change
                           of Control:

                           (1)      The termination of Employee's employment by
                                    the Company for any reason, with or without
                                    cause, except for termination resulting from
                                    conduct by Employee constituting (a) a
                                    felony involving moral turpitude under
                                    either federal law or the law of the State
                                    of Minnesota, or (b) Employee's willful
                                    failure to fulfill his/her employment duties
                                    with the Company; provided, however, that
                                    for purposes of this clause (c), an act or
                                    failure to act by Employee shall not be
                                    "willful" unless it is done, or omitted to
                                    be done, in bad faith and without any
                                    reasonable belief that Employee's action or
                                    omission were in the best interests of the
                                    Company; or

                           (2)      The termination of employment with the
                                    Company by Employee for Good Reason. Such
                                    termination shall be accomplished by, and
                                    effective upon, Employee giving written
                                    notice to Company of his/her decision to
                                    terminate. "Good Reason" shall mean a good
                                    faith determination by Employee, in
                                    Employee's sole and absolute judgment, that
                                    any one or more of the following events has
                                    occurred, at any time during the term of
                                    this Agreement or after a Change of Control;
                                    provided, however, that such event shall not
                                    constitute "Good Reason" if Employee has
                                    expressly consented to such event in writing
                                    or if Employee fails to provide written
                                    notice of his/her decision to terminate
                                    within sixty (60) days of the occurrence of
                                    such event:

                                    (a)      A material change in Employee's
                                             reporting responsibilities, titles
                                             or offices, or any removal of
                                             Employee from or any failure to
                                             re-elect Employee to any of such
                                             positions, which


                                       5
<PAGE>
                                             has the effect of materially
                                             diminishing Employee's
                                             responsibility or authority;

                                    (b)      A reduction by the Company in
                                             Employee's base salary (as
                                             increased from time to time);

                                    (c)      A requirement imposed by the
                                             Company on Employee that results in
                                             Employee being based at a location
                                             that is outside of a twenty-five
                                             (25) mile radius of Employee's
                                             prior job location;

                                    (d)      Without the adoption of a
                                             replacement plan, program or
                                             arrangement that provides benefits
                                             to Employee that are equal to or
                                             greater than those benefits that
                                             are discontinued or adversely
                                             affected:

                                             i.       A failure by the Company
                                                      to continue in effect,
                                                      within its maximum stated
                                                      term, any pension, bonus,
                                                      incentive, stock
                                                      ownership, stock purchase,
                                                      stock option, life
                                                      insurance, health,
                                                      accident, disability, or
                                                      any other employee
                                                      compensation or benefit
                                                      plan, program or
                                                      arrangement, in which
                                                      Employee is or has been
                                                      participating;

                                             ii.      The taking of any action
                                                      by the Company that would
                                                      adversely affect
                                                      Employee's participation
                                                      or materially reduce
                                                      Employee's benefits under
                                                      any of such plans,
                                                      programs or arrangements;
                                                      or

                                    (e)      Any action by the Company that
                                             would materially adversely affect
                                             the physical conditions in or under
                                             which Employee performs his/her
                                             employment duties; or

                                    (f)      Any material breach by the Company
                                             of this Employment Agreement
                                             between Employee and the Company.

                           Termination for "Good Reason" shall not include
                  Employee's death or a termination for any reason other than
                  the events specified in clauses (a) through (f) above.

         10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at
all times thereafter, Employee shall not directly or indirectly use or disclose
any trade secret, proprietary or confidential information of August Technology
or any subsidiary for the benefit of any person or entity other than August
Technology or any subsidiary without prior written approval of August
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise,


                                       6
<PAGE>
which is not public information and which relates to August Technology or any
subsidiary, or August Technology's or any subsidiary's existing or reasonably
foreseeable business, including but not limited to information relating to
research, development, technology, manufacturing processes, purchasing and
sales, information relating to sales and other financial strategies, plans
and/or goals, information relating to proprietary rights and data, ideas,
know-how, and/or trade secrets, information regarding the identity and/or needs
of clients or customers, client or customer lists and other client or customer
information, information regarding active and inactive accounts of August
Technology or any subsidiary, and information relating to August Technology's or
any subsidiary's methods of operation.

         11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration
of his/her employment and continued employment, and in exchange for the
severance and Change of Control provisions as set forth in Paragraphs 8 and 9 of
this Employment Agreement, and the mutual covenants herein, Employee agrees
that, during his/her employment and for a period of one (1) year following
his/her voluntary or involuntary resignation or termination for any reason, the
Employee will not, on behalf of himself/herself or any other person or entity:

                  (a)      Directly or indirectly solicit, on Employee's own
                           behalf, or on behalf of another, any of August
                           Technology's or any subsidiary's customers or
                           potential customers with whom Employee or Employee's
                           supervisees had contact, either directly or
                           indirectly, within the twelve months immediately
                           preceding Employee's resignation or termination of
                           employment, for the purpose of providing, selling, or
                           attempting to sell any products or services competing
                           with those provided or sold by August Technology or
                           any subsidiary, or clearly contemplated thereby due
                           to research, development, engineering, applications,
                           licensing, or other like projects in process, at the
                           time of resignation or termination; or

                  (b)      hire or attempt to hire, or influence or solicit, or
                           attempt to influence or solicit, either directly or
                           indirectly, any employee of August Technology or any
                           subsidiary to leave or terminate his/her or her
                           employment, or to work for any other person or
                           entity.

         12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to
all of the benefits, profits, results and work product arising from or incident
to all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.

         Employee agrees to communicate promptly and fully to August Technology
all inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as provided in this
Paragraph 12, Employee will and hereby does assign to August Technology and/or
its nominees all of the Employee's right, title and interest in such inventions,
discoveries, improvements or designs and all of his/her right, title and
interest in any patents, patent applications or copyrights based thereon without
obligation on the part of August Technology or any subsidiary


                                       7
<PAGE>
to make any further compensation, royalty or payment to Employee. Employee
further agrees to assist August Technology and/or its nominee (without charge
but at no expense to Employee) at any time and in every proper way to obtain and
maintain for its and/or their own benefit, patents for all such inventions,
discoveries and improvements and copyrights for all such designs.

         This Agreement does not obligate Employee to assign to August
Technology any invention, discovery, improvement or design for which no
equipment, supplies, facility or trade secret information of August Technology
or any subsidiary was used and which was developed entirely on Employee's own
time, and (1) which does not relate (a) directly to the business of August
Technology or any subsidiary, or (b) to August Technology's or any subsidiary's
actual or demonstrably anticipated research or development, or (2) which does
not result from any work performed by Employee for August Technology or any
subsidiary.

         13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A
by descriptive title are all of the Inventions, if any, in which Employee
possesses any right, title or interest prior to Employee's employment with
August Technology or execution of this Employment Agreement which are not
subject to the terms hereof.

         14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

         15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.

         16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate remedy. Employee agrees that August
Technology and any subsidiary shall be entitled, in addition to any other remedy
it may have at law or in equity, to an injunction, without the posting of a bond
if allowed by applicable law or with the posting of a minimal bond if required,
enjoining or restraining Employee from any violation or violations or threatened
violation or violations of Paragraphs 10, 11, 12, 14 and 15, and/or for specific
performance of duties and obligations under


                                       8
<PAGE>
such paragraphs, and Employee hereby consents to the issuance of such
injunction. If any rights or restrictions contained in Paragraphs 10, 11, 12, 14
and 15 shall be deemed to be unenforceable by reason of the extent, duration or
geographic scope, or other provision thereof, the parties contemplate that the
Court shall reduce such extent, duration or geographic scope or other provision
and enforce Paragraphs 10, 11, 12, 14 and 15 in their reduced form for all
purposes in the manner contemplated by such Paragraphs.

         17. OTHER AGREEMENTS. By Employee's signature to this Agreement,
Employee warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from accepting employment with
August Technology and fully performing his/her duties and responsibilities as
described in this Agreement. Employee, by his/her signature to this Agreement,
further warrants that he/she has not taken and will not take any trade secret,
proprietary or confidential information of any former employer, and will not use
or disclose any such information to anyone in the performance of duties and
responsibilities under this Agreement.

         18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of August Technology.

         19. NOTICES. All notices and other communications to be given under
this Agreement shall be in writing and shall be deemed to be given when
delivered personally, or when mailed by registered or certified mail, addressed
to the party to whom such notice is intended to be given, at the last known
address for that party or at such other address as the party may specify by
written notice.

         (a)      In the case of August Technology, the notice shall be provided
                  to:

                           General Counsel
                           August Technology Corporation
                           4900 West 78th Street
                           Bloomington, MN 55435

         (b)      In the case of Employee, the notice shall be provided to:

                           Wayne Hubin
                           11975 Swede Lake Road
                           Watertown, MN 55388

         Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received, whichever is
sooner.

         20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are reasonable, shall survive his/her resignation from or
the termination of his/her employment, and shall apply to him/her whether
his/her resignation or termination from employment is voluntary or involuntary
and regardless of the reason for such resignation or termination.


                                       9
<PAGE>
         21. NONWAIVERS. No failure on the part of either party to exercise, and
no delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

         22. GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

         23. PARAGRAPH HEADINGS. Paragraph headings are included in this
Agreement for convenience of reference only, and are not intended to be full or
accurate descriptions of the contents hereof.

         24. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

         25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                                  AUGUST TECHNOLOGY CORPORATION

Dated:________________________, 2002              By____________________________
                                                           Its__________________



Dated:________________________, 2002              By____________________________
                                                           EMPLOYEE


                                       10
<PAGE>
                                    EXHIBIT A


Employee's Name                     =       Wayne Hubin

Employee's Title                    =       V.P. Manufacturing

Manager                             =       Chief Operating Officer

Base Salary                         =       $136,000

Severance Period                    =       twelve (12) months

Change In Control Severance Period  =       eighteen (18) months

Exempted Inventions                 =       _________________________
                                            _________________________
                                            _________________________
                                            _________________________
Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP.   _______

                                    EMPLOYEE                  _______


                                       11

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>11
<FILENAME>c67934ex10-30.txt
<DESCRIPTION>EXECUTIVE EMPLOYMENT CONTRACT FOR ALBERT ELIASEN
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.30

                              EMPLOYMENT AGREEMENT

         This Agreement is entered into by and between August Technology
Corporation ("August Technology" or the "Company"), a Minnesota corporation,
with its principal place of business at 4900 West 78th Street, Bloomington,
Minnesota 55435, and Albert Eliasen of 17617 GeorgeMoran Drive, Eden Prairie,
Minnesota 55347, USA ("Employee").

         WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

         WHEREAS, Employee acknowledges and agrees that he has and will continue
to have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

         WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein and for other good and valuable consideration the
receipt and sufficiency of which is specifically acknowledged by the parties,
August Technology and Employee agree as follows:

         1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective March 1, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

         2. TERM OF EMPLOYMENT. August Technology shall continue to employ
Employee for an indefinite duration until his/her employment is terminated in
accordance with Paragraph 8 of this Agreement.

         3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

         4. COMPENSATION. August Technology shall pay Employee a gross annual
salary as set forth in Exhibit A as "Base Salary", less appropriate payroll
deductions. Employee may also receive incentive compensation in accordance with
the Annual Incentive Plan, as issued and as may change from time to time by the
Company, or any other similar plan authorized by the Board of Directors.
Employee's compensation may be periodically increased or adjusted as authorized
by the Board of Directors in the case of the Chief Executive Officer, or, in the
case of all others, as recommended by the Chief Executive Officer and approved
by the Board of Directors.
<PAGE>
         5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

         6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

         7. STOCK OPTIONS. At the discretion of August Technology, Employee may
be granted stock options from time to time, which options shall be subject to
the terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

         8. TERMINATION. Employee's employment under this Agreement may be
terminated:


                  (a)      At any time upon mutual written agreement of the
                           parties;

                  (b)      By either Employee or August Technology at any time,
                           with or without cause, upon thirty (30) days' written
                           notice to the other;

                  (c)      By August Technology immediately upon notice to
                           Employee for cause which shall be defined as:

                           (i)      Employee's material failure or neglect, or
                                    refusal to perform, the duties and
                                    responsibilities of his/her position and/or
                                    the reasonable direction of the Board of
                                    Directors or his/her superiors;

                           (ii)     Commission by Employee of any willful,
                                    intentional or negligent act that has the
                                    effect of injuring the reputation, business
                                    or performance of August Technology;

                           (iii)    Employee's conviction of a crime, or
                                    commission of any act involving moral
                                    turpitude;

                           (iv)     Any material default or nonperformance of
                                    the terms of this Agreement, or any
                                    violation of Paragraphs 10, 11, 12, 14
                                    and/or 15 of this Employment Agreement; or

                  (d)      Employee's employment will terminate immediately upon
                           his/her death.


                                       2
<PAGE>
         Upon Employee's resignation or termination under this Paragraph 8 for
any reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

         9. CHANGE IN CONTROL. If, within eighteen (18) months following a
Change in Control (as defined below), Employee's employment is terminated (as
defined below), then:

                  (a)      Employee shall be paid his/her last Base Salary on a
                           regular payroll cycle as of the effective date for
                           the time period as set forth in Exhibit A as "Change
                           In Control Severance Period" from the effective date
                           of such termination;

                  (b)      For the same Change In Control Severance Period from
                           the effective date of such termination as set forth
                           in Paragraph 9(b), the Company shall, if Employee
                           elects to continue group health or other group
                           benefits as allowed under COBRA, make the COBRA
                           payments for the Change In Control Severance Period;

                  (c)      The right to exercise all unexpired and non-vested
                           stock options in favor of Employee shall immediately
                           vest and accelerate; and

                  (d)      LIMITATION ON CHANGE OF CONTROL PAYMENTS. Employee
                           shall not be entitled to receive any Change of
                           Control Action, as defined below, which would
                           constitute an "excess parachute payment" for purposes
                           of Code Section 280G, or any successor provision, and
                           the regulations thereunder. In the event any Change
                           of Control Action payable to Employee would
                           constitute an "excess parachute payment," then the
                           acceleration of the exercisability of such stock
                           options and the payments to such Participant pursuant
                           to this Paragraph 9 shall be reduced to the largest
                           extent or amount as will result in no portion of such
                           payments being subject to the excise tax imposed by
                           Section 4999 of the Code. For purposes of this
                           Paragraph 9, a "Change of Control Action" shall mean
                           any payment, benefit or transfer of property in the
                           nature of compensation paid to or for the benefit of
                           Employee


                                       3
<PAGE>
                           under any arrangement which is considered contingent
                           on a Change of Control for purposes of Code Section
                           280G, including, without limitation, any and all
                           salary, bonus, incentive, restricted stock, stock
                           option, compensation or benefit plans, programs or
                           other arrangements, and shall include benefits
                           payable under this Agreement.

                  (e)      "CHANGE OF CONTROL." For purposes of this Agreement,
                           "Change of Control" shall mean any of the following
                           events occurring after the date of this Agreement:

                           (1)      A merger or consolidation to which the
                                    Company is a party, an acquisition by the
                                    Company involving the issuance of the
                                    Company's securities as consideration for
                                    the acquired business, or any combination of
                                    fully closed and completed mergers,
                                    consolidations or acquisitions during any
                                    consecutive twenty-four (24) month period,
                                    if the individuals and entities who were
                                    shareholders of the Company immediately
                                    prior to the effective date of such merger,
                                    consolidation, or acquisition (or prior to
                                    the effective date of the first of a
                                    combination of such transactions) have,
                                    immediately following the effective date of
                                    such merger, consolidation or acquisition
                                    (or following the effective date of the last
                                    of a combination of such transactions),
                                    beneficial ownership (as defined in Rule
                                    13d-3 under the Securities Exchange Act of
                                    1934) of less than fifty percent (50%) of
                                    the total combined voting power of all
                                    classes of securities issued by the
                                    surviving corporation for the election of
                                    directors of the surviving corporation;

                           (2)      The acquisition of direct or indirect
                                    beneficial ownership (as defined in Rule
                                    13d-3 under the Securities Exchange Act of
                                    1934) of securities of the Company by any
                                    person or entity or by a group of associated
                                    persons or entities acting in concert in one
                                    or a series of transactions, which causes
                                    the aggregate beneficial ownership of such
                                    person, entity or group to equal or exceed
                                    twenty percent (20%) or more of the total
                                    combined voting power of all classes of the
                                    Company's then issued and outstanding
                                    securities;

                           (3)      The sale of the properties and assets of the
                                    Company substantially as an entirety, to any
                                    person or entity which is not a wholly-owned
                                    subsidiary of the Company;

                           (4)      The stockholders of the Company approve any
                                    plan or proposal for the liquidation of the
                                    Company; or

                           (5)      A change in the composition of the Board of
                                    the Company at any time during any
                                    consecutive twenty-four (24) month period
                                    such that the "Continuity


                                       4
<PAGE>
                                    Directors" no longer constitute at least a
                                    seventy percent (70%) majority of the Board.
                                    For purposes of this event, "Continuity
                                    Directors" means (i) those members of the
                                    Board who were directors at the beginning of
                                    such consecutive twenty-four (24) month
                                    period or at the date of this Agreement if
                                    this Agreement was entered into less than
                                    twenty-four months prior to the change in
                                    composition of the Board; and (ii) any new
                                    director whose election to the Board of
                                    Directors or nominations for election to the
                                    Board of Directors was approved by a vote of
                                    at least two-thirds (2/3) of the directors
                                    identified in the immediately preceding
                                    clause (i).

                           (6)      The Company enters into a letter of intent,
                                    an agreement in principle or a definitive
                                    agreement relating to an event described in
                                    Paragraph 9(e)(1), 9(e)(2), 9(e)(3),
                                    9(e)(4), or 9(e)(5) that ultimately results
                                    in such a Change of Control, or a tender or
                                    exchange offer or proxy contest is commenced
                                    that ultimately results in an event
                                    described in Paragraph 9(e)(2) or 9(e)(5).

                  (f)      TERMINATION. For purposes of this Paragraph 9,
                           "Termination" shall mean any of the following events
                           occurring within eighteen (18) months after a Change
                           of Control:

                           (1)      The termination of Employee's employment by
                                    the Company for any reason, with or without
                                    cause, except for termination resulting from
                                    conduct by Employee constituting (a) a
                                    felony involving moral turpitude under
                                    either federal law or the law of the State
                                    of Minnesota, or (b) Employee's willful
                                    failure to fulfill his/her employment duties
                                    with the Company; provided, however, that
                                    for purposes of this clause (c), an act or
                                    failure to act by Employee shall not be
                                    "willful" unless it is done, or omitted to
                                    be done, in bad faith and without any
                                    reasonable belief that Employee's action or
                                    omission were in the best interests of the
                                    Company; or

                           (2)      The termination of employment with the
                                    Company by Employee for Good Reason. Such
                                    termination shall be accomplished by, and
                                    effective upon, Employee giving written
                                    notice to Company of his/her decision to
                                    terminate. "Good Reason" shall mean a good
                                    faith determination by Employee, in
                                    Employee's sole and absolute judgment, that
                                    any one or more of the following events has
                                    occurred, at any time during the term of
                                    this Agreement or after a Change of Control;
                                    provided, however, that such event shall not
                                    constitute "Good Reason" if Employee has
                                    expressly consented to such event in writing
                                    or if Employee fails to provide written
                                    notice of his/her decision to terminate
                                    within sixty (60) days of the occurrence of
                                    such event:

                                    (a)      A material change in Employee's
                                             reporting responsibilities, titles
                                             or offices, or any removal of
                                             Employee from or any failure to
                                             re-elect Employee to any of such
                                             positions, which


                                       5
<PAGE>
                                             has the effect of materially
                                             diminishing Employee's
                                             responsibility or authority;

                                    (b)      A reduction by the Company in
                                             Employee's base salary (as
                                             increased from time to time);

                                    (c)      A requirement imposed by the
                                             Company on Employee that results in
                                             Employee being based at a location
                                             that is outside of a twenty-five
                                             (25) mile radius of Employee's
                                             prior job location;

                                    (d)      Without the adoption of a
                                             replacement plan, program or
                                             arrangement that provides benefits
                                             to Employee that are equal to or
                                             greater than those benefits that
                                             are discontinued or adversely
                                             affected:

                                             i.       A failure by the Company
                                                      to continue in effect,
                                                      within its maximum stated
                                                      term, any pension, bonus,
                                                      incentive, stock
                                                      ownership, stock purchase,
                                                      stock option, life
                                                      insurance, health,
                                                      accident, disability, or
                                                      any other employee
                                                      compensation or benefit
                                                      plan, program or
                                                      arrangement, in which
                                                      Employee is or has been
                                                      participating;

                                             ii.      The taking of any action
                                                      by the Company that would
                                                      adversely affect
                                                      Employee's participation
                                                      or materially reduce
                                                      Employee's benefits under
                                                      any of such plans,
                                                      programs or arrangements;
                                                      or

                                    (e)      Any action by the Company that
                                             would materially adversely affect
                                             the physical conditions in or under
                                             which Employee performs his/her
                                             employment duties; or

                                    (f)      Any material breach by the Company
                                             of this Employment Agreement
                                             between Employee and the Company.

                                    Termination for "Good Reason" shall not
                           include Employee's death or a termination for any
                           reason other than the events specified in clauses (a)
                           through (f) above.

         10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at
all times thereafter, Employee shall not directly or indirectly use or disclose
any trade secret, proprietary or confidential information of August Technology
or any subsidiary for the benefit of any person or entity other than August
Technology or any subsidiary without prior written approval of August
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise,


                                       6
<PAGE>
which is not public information and which relates to August Technology or any
subsidiary, or August Technology's or any subsidiary's existing or reasonably
foreseeable business, including but not limited to information relating to
research, development, technology, manufacturing processes, purchasing and
sales, information relating to sales and other financial strategies, plans
and/or goals, information relating to proprietary rights and data, ideas,
know-how, and/or trade secrets, information regarding the identity and/or needs
of clients or customers, client or customer lists and other client or customer
information, information regarding active and inactive accounts of August
Technology or any subsidiary, and information relating to August Technology's or
any subsidiary's methods of operation.

         11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration
of his/her employment and continued employment, and in exchange for the
severance and Change of Control provisions as set forth in Paragraphs 8 and 9 of
this Employment Agreement, and the mutual covenants herein, Employee agrees
that, during his/her employment and for a period of one (1) year following
his/her voluntary or involuntary resignation or termination for any reason, the
Employee will not, on behalf of himself/herself or any other person or entity:

                  (a)      Directly or indirectly solicit, on Employee's own
                           behalf, or on behalf of another, any of August
                           Technology's or any subsidiary's customers or
                           potential customers with whom Employee or Employee's
                           supervisees had contact, either directly or
                           indirectly, within the twelve months immediately
                           preceding Employee's resignation or termination of
                           employment, for the purpose of providing, selling, or
                           attempting to sell any products or services competing
                           with those provided or sold by August Technology or
                           any subsidiary, or clearly contemplated thereby due
                           to research, development, engineering, applications,
                           licensing, or other like projects in process, at the
                           time of resignation or termination; or

                  (b)      hire or attempt to hire, or influence or solicit, or
                           attempt to influence or solicit, either directly or
                           indirectly, any employee of August Technology or any
                           subsidiary to leave or terminate his/her or her
                           employment, or to work for any other person or
                           entity.

         12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to
all of the benefits, profits, results and work product arising from or incident
to all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.

         Employee agrees to communicate promptly and fully to August Technology
all inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as provided in this
Paragraph 12, Employee will and hereby does assign to August Technology and/or
its nominees all of the Employee's right, title and interest in such inventions,
discoveries, improvements or designs and all of his/her right, title and
interest in any patents, patent applications


                                       7
<PAGE>
or copyrights based thereon without obligation on the part of August Technology
or any subsidiary to make any further compensation, royalty or payment to
Employee. Employee further agrees to assist August Technology and/or its nominee
(without charge but at no expense to Employee) at any time and in every proper
way to obtain and maintain for its and/or their own benefit, patents for all
such inventions, discoveries and improvements and copyrights for all such
designs.

         This Agreement does not obligate Employee to assign to August
Technology any invention, discovery, improvement or design for which no
equipment, supplies, facility or trade secret information of August Technology
or any subsidiary was used and which was developed entirely on Employee's own
time, and (1) which does not relate (a) directly to the business of August
Technology or any subsidiary, or (b) to August Technology's or any subsidiary's
actual or demonstrably anticipated research or development, or (2) which does
not result from any work performed by Employee for August Technology or any
subsidiary.

         13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A
by descriptive title are all of the Inventions, if any, in which Employee
possesses any right, title or interest prior to Employee's employment with
August Technology or execution of this Employment Agreement which are not
subject to the terms hereof.

         14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

         15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.

         16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate remedy. Employee agrees that August
Technology and any subsidiary shall be entitled, in addition to any other remedy
it may have at law or in equity, to an injunction, without the posting of a bond
if allowed by applicable law or with the posting of a minimal bond if required,
enjoining or


                                       8
<PAGE>
restraining Employee from any violation or violations or threatened violation or
violations of Paragraphs 10, 11, 12, 14 and 15, and/or for specific performance
of duties and obligations under such paragraphs, and Employee hereby consents to
the issuance of such injunction. If any rights or restrictions contained in
Paragraphs 10, 11, 12, 14 and 15 shall be deemed to be unenforceable by reason
of the extent, duration or geographic scope, or other provision thereof, the
parties contemplate that the Court shall reduce such extent, duration or
geographic scope or other provision and enforce Paragraphs 10, 11, 12, 14 and 15
in their reduced form for all purposes in the manner contemplated by such
Paragraphs.

         17. OTHER AGREEMENTS. By Employee's signature to this Agreement,
Employee warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from accepting employment with
August Technology and fully performing his/her duties and responsibilities as
described in this Agreement. Employee, by his/her signature to this Agreement,
further warrants that he/she has not taken and will not take any trade secret,
proprietary or confidential information of any former employer, and will not use
or disclose any such information to anyone in the performance of duties and
responsibilities under this Agreement.

         18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of August Technology.

         19. NOTICES. All notices and other communications to be given under
this Agreement shall be in writing and shall be deemed to be given when
delivered personally, or when mailed by registered or certified mail, addressed
to the party to whom such notice is intended to be given, at the last known
address for that party or at such other address as the party may specify by
written notice.

         (a)      In the case of August Technology, the notice shall be provided
                  to:

                           General Counsel
                           August Technology Corporation
                           4900 West 78th Street
                           Bloomington, MN 55435

         (b)      In the case of Employee, the notice shall be provided to:

                           Al Eliasen
                           17617 GeorgeMoran Drive
                           Eden Prairie, MN 55347

         Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received, whichever is
sooner.

         20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are


                                       9
<PAGE>
reasonable, shall survive his/her resignation from or the termination of his/her
employment, and shall apply to him/her whether his/her resignation or
termination from employment is voluntary or involuntary and regardless of the
reason for such resignation or termination.

         21. NONWAIVERS. No failure on the part of either party to exercise, and
no delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

         22. GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

         23. PARAGRAPH HEADINGS. Paragraph headings are included in this
Agreement for convenience of reference only, and are not intended to be full or
accurate descriptions of the contents hereof.

         24. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

         25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                                  AUGUST TECHNOLOGY CORPORATION

Dated:________________________, 2002              By____________________________
                                                           Its__________________



Dated:________________________, 2002              By____________________________
                                                           EMPLOYEE


                                       10
<PAGE>
                                    EXHIBIT A

Employee's Name                     =       Al Eliasen

Employee's Title                    =       V.P. Engineering

Manager                             =       Chief Operating Officer

Base Salary                         =       $138,000

Severance Period                    =       twelve (12) months

Change In Control Severance Period  =       eighteen (18) months

Exempted Inventions                 =       _________________________
                                            _________________________
                                            _________________________
                                            _________________________
Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP.   _______

                                    EMPLOYEE                  _______


                                       11

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.31
<SEQUENCE>12
<FILENAME>c67934ex10-31.txt
<DESCRIPTION>2002 ANNUAL INCENTIVE PLAN
<TEXT>
<PAGE>

                                                                   Exhibit 10.31



                            [AUGUST TECHNOLOGY LOGO]

                                    OVERVIEW
                                AUGUST TECHNOLOGY
                           ANNUAL INCENTIVE PLAN (AIP)
                       EFFECTIVE FOR THE FISCAL YEAR 2002


PURPOSE OF THE PLAN

August Technology's Annual Incentive Plan (AIP) is established to provide a
bonus to participants who meet annual corporate performance goals.

ELIGIBILITY FOR PLAN

-     The CEO will propose the eligible participants prior to the beginning of
      each calendar year. The Plan is generally intended for Officers, Vice
      Presidents, CTO, Chief Engineer, Directors and managers, as well as any
      other key employees such as key technical personnel.

-     The Compensation Committee will review and approve the listing provided by
      the CEO at the beginning of the Plan year, subject to final approval by
      the Board of Directors.

-     Participant must be employed at the end of the plan year to receive their
      respective bonus.

-     Provisions are included in the plan to cover issues of death or
      disability.

DETERMINATION OF THE AWARD

The Bonus will be calculated based upon two measures: (1) satisfaction of the
operating margin target; and (2) satisfaction of the revenue target, as
determined by the plan matrix (shown below).

         The Bonus is calculated based on the following Plan Matrix:

<TABLE>
<CAPTION>
                                                  Revenue (millions)
         ------------------------------------------------------------------------------------
         Operating      >$32.5     $34.6     $36.5      $38.4     $40.3     $42.2       $44.1
         Margin.
         ------------------------------------------------------------------------------------
<S>                     <C>        <C>       <C>        <C>       <C>       <C>         <C>
         >4.7%          55%        65%       75%        80%       85%       90%         92.5%
         ------------------------------------------------------------------------------------
         5.2%           60%        70%       80%        85%       90%       95%         97.5%
         ------------------------------------------------------------------------------------
         5.7 %          65%        75%       85%        100%      110%      120%        130%
         ------------------------------------------------------------------------------------
         6.2%           70%        80%       90%        105%      115%      125%        135%
         ------------------------------------------------------------------------------------
         6.7%           75%        85%       95%        110%      120%      130%        140%
         ------------------------------------------------------------------------------------
         7.1%           77.5%      92.5%     97.5%      115%      125%      135%        145%
         ------------------------------------------------------------------------------------
</TABLE>

         The participant will receive a percent of the target bonus based upon
         the satisfaction of the revenue and operating margin targets as set
         forth in the Plan Matrix. There is no interpolation between the points
         on the Plan Matrix (i.e., each is defined as a distinct achievement).



                                                                          Page 1
<PAGE>
If the Company does not achieve the minimum performance levels to participate in
the above bonus structure:

      1)    AND its revenue growth rate is equal to or greater than the
            Worldwide Semiconductor Capital Equipment annual revenue growth rate
            for 2002, as reported by DATAQUEST,

      2)    AND the company generates positive EBITDA;

then the following Alternative Matrix will be used to determine the
Participant's Bonus.

<TABLE>
<CAPTION>
                           -----------------------
                           Percentage        % of
                           Points Above      Target
                           Industry          Bonus
                           -----------------------
<S>                                          <C>
                           0 to 5 pts.       22.5%
                           -----------------------
                           6 to 10 pts       25%
                           -----------------------
                           11 to 15 pts      27.5%
                           -----------------------
                           16 to 20 pts      30%
                           -----------------------
                           21 to 25 pts      32.5%
                           -----------------------
                           >25 pts.          35%
                           -----------------------
</TABLE>


PAYMENT OF AWARD

-     Participant's Bonus will be equal to XX % of their annual base salary as
      defined above by the Plan Matrix or the Alternative Matrix . Subject to
      Board of Director approval, August Technology may propose an early partial
      payment ("Partial Bonus") of Participant's bonus equal to 30% of the
      Participant's Bonus, and where such Partial Bonus is paid, the Participant
      shall only be entitled to the Remaining Bonus defined as the remaining 70%
      of Participant's Bonus. Each participant will have the option to receive
      the Bonus in the following manner (and where a Partial Bonus and thus
      Remaining Bonus are paid, each shall calculated pro-rata):

            (1)   100% stock options*

            (2)   50% cash and 50% stock options**

            (3)   Any participant with 5% or greater ownership, at December 31,
                  2002, will be awarded 100% cash

These stock options are fully vested at the time of grant. All stock option
grants are subject to Board of Director approval. Should the Board of Directors
decide not to grant the options, participants will receive 100% Cash.

*For 100% Incentive Stock Options, the number of Incentive Stock Options to be
granted is calculated by dividing the total dollar value of the bonus by the
closing stock price as of February 28, 2003 (or October 15, 2002 for the Partial
Bonus, if any), and then multiplying by three.

**The number of Incentive Stock Options to be granted, is calculated by dividing
50% of the total bonus by the closing stock price as of February 28, 2003 (or
October 15, 2002 for the Partial Bonus, if any), and then multiplying by three.

VALUATION OF STOCK OPTIONS AWARDED

-     Valuation will be based on the closing stock price on February 28, 2003
      (or October 15, 2002 for the Partial Bonus, if any).

TAX AND CASH FLOW CONSIDERATION

-     Bonus or Remaining Bonus awards will be paid not later than 2 -1/2 months
      after the close of August Technology's fiscal year, except for the Partial
      Bonus which will be paid later than October 30, 2002.


                                                                          Page 2
<PAGE>
CHANGE IN CONTROL  (FOR CEO/PRESIDENT, OFFICERS, CTO, CHIEF ENGINEER AND VP'S)

-     If >50% of the Company is sold during the year, and the participant is
      negatively impacted by the change of control as outlined below, then all
      Bonuses will be paid in full at 100% of target at the date of the change
      of control. Negative impacts include:

      -     Termination of employment

      -     Participant's status within the Company is adversely changed

      -     Or, the participant's salary is substantially reduced.


TIER STRUCTURE FOR ANNUAL INCENTIVE PLAN (AIP) PARTICIPANTS:


<TABLE>
<CAPTION>
        --------------------------------------------------------------------------------------------------
                              % OF         COMPONENTS OF
              TIER            BASE       ANNUAL INCENTIVE           SELECTIONS           CHANGE OF CONTROL
                             SALARY          PLAN (AIP)              AVAILABLE              PROVISION?
        --------------------------------------------------------------------------------------------------
<S>                          <C>         <C>                    <C>                      <C>
              CEO
          (co-founder)         90%        100% Corporate             100% Cash                 Yes
        --------------------------------------------------------------------------------------------------
            Officers           80%        100% Corporate        50%Cash/Options or             Yes
                                                                    100% Options
        --------------------------------------------------------------------------------------------------
              VP's             70%        100% Corporate        50%Cash/Options or             Yes
                                                                    100% Options
        --------------------------------------------------------------------------------------------------
        CTO, Chief Engr.       50%        100% Corporate             100% Cash                 Yes
         (co-founders)
        --------------------------------------------------------------------------------------------------
           Directors           35%        100% Corporate        50%Cash/Options or             No
                                                                    100% Options
        --------------------------------------------------------------------------------------------------
            Managers           20%        100% Corporate        50% Cash/Options or            No
                                                                    100% Options
        --------------------------------------------------------------------------------------------------
</TABLE>



                                                                          Page 3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.32
<SEQUENCE>13
<FILENAME>c67934ex10-32.txt
<DESCRIPTION>AMENDMENT TO THE LEASE AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.32


                       THIRD AMENDMENT TO LEASE AGREEMENT

           THIS THIRD AMENDMENT TO LEASE AGREEMENT (this "THIRD AMENDMENT") is
made as of the 18th day of June, 2001 by and between WEST 78TH STREET
BLOOMINGTON ASSOCIATES, LLC ("LANDLORD") and AUGUST TECHNOLOGY CORPORATION
("TENANT").

                                R E C I T A L S:

           A. Landlord and Tenant entered into that certain Lease Agreement
dated October 18, 1999 (the "ORIGINAL LEASE") as amended by that certain First
Amendment to Lease Agreement dated March 31, 2000 (the "FIRST AMENDMENT") and
that certain Second Amendment to Lease Agreement dated July 25, 2000 (the
"SECOND AMENDMENT"; the Original Lease as amended by the First Amendment and the
Second Amendment is referred to herein as the "LEASE") demising approximately
62,843 square feet of space comprised of the "Initial Premises," the "First
Expansion Premises" and the "Second Expansion Premises" (collectively, the
"EXISTING PREMISES") in the building located at 4900 W. 78th Street in
Bloomington, Minnesota.

           B. Landlord and Tenant desire to expand the Existing Premises, extend
the term of the Lease and make certain changes to the Lease as provided herein.

           NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, Landlord and Tenant hereby amend the Lease as
follows:

           1. TERM. Section 2 of the Original Lease is hereby modified to change
the Lease expiration date from January 31, 2005 to April 30, 2006 (hereinafter,
the "EXPIRATION DATE").

           2. MONTHLY BASE RENT. Effective as of September 30, 2000, Section 3
of the Original Lease is hereby deleted in its entirety and the following
Section 3 is substituted therefor:

MONTHLY BASE RENT: Monthly Base Rent for the Existing Premises shall be as
follows:1

                                  INITIAL TERM:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
        DATE            ANNUAL BASE RENT PER      SQUARE FEET      ANNUAL BASE RENT FOR
                             SQUARE FOOT                            EXISTING PREMISES
----------------------------------------------------------------------------------------
<S>                     <C>                       <C>              <C>
  10/l/00 - 4/30/02             $7.45                62,843            $468,180.35
----------------------------------------------------------------------------------------
  5/l/02 - 4/30/03              $7.94                62,843            $498,973.42
----------------------------------------------------------------------------------------
  5/1/03 - 4/30/04              $7.94                62,843            $498,973.42
----------------------------------------------------------------------------------------
  5/l/04 - 4/30/05              $8.59                62,843            $539,821.37
----------------------------------------------------------------------------------------
  5/l/05 - 4/30/06              $8.59                62,843            $539,821.37
----------------------------------------------------------------------------------------
</TABLE>



------------------------
(1) BASE RENT FOR THE THIRD EXPANSION PREMISES AND THE FOURTH EXPANSION PREMISES
ARE SET FORTH IN SECTIONS 3 AND 4 BELOW.
<PAGE>
                                  RENEWAL TERM:


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
         DATE           ANNUAL BASE RENT PER     SQUARE FEET     ANNUAL BASE RENT
                             SQUARE FOOT                           FOR EXISTING
                                                                     PREMISES
---------------------------------------------------------------------------------
<S>                     <C>                      <C>             <C>
  5/1/06 - 4/30/07             $8.19               62,843           $514,684.17
---------------------------------------------------------------------------------
  5/l/07 - 4/30/08             $8.48               62,843           $532,908.64
---------------------------------------------------------------------------------
  5/1/08 - 4/30/09             $8.48               62,843           $532,908.64
---------------------------------------------------------------------------------
</TABLE>

      3. THIRD EXPANSION PREMISES. Tenant has notified Landlord of Tenant's
desire to lease the Third Expansion Premises as defined in Section 1B of the
Original Lease, and Landlord has agreed to lease the Third Expansion Premises to
Tenant on all of the terms, conditions and obligations contained in the Lease,
with the following modifications:

       (a)    Sections 1B(i) and (ii) of the Original Lease are deleted in their
              entirety. The Lease Term for the Third Expansion Premises shall
              commence on March 1, 2002 (the "THIRD EXPANSION PREMISES
              COMMENCEMENT DATE"), and shall continue until the Expiration Date.

       (b)    Landlord shall deliver possession of the Third Expansion Premises
              to Tenant, broom clean and free of all tenants, subtenants, and
              other occupants, on or before November 1, 2001. Prior to delivery
              of possession, Landlord shall, at Landlord's sole cost and
              expense: (i) timely fulfill all of Landlord's obligations set
              forth in Section 9(c) below (relating to replacement of the HVAC
              systems serving the Premises including the Third Expansion
              Premises) and Section 9(d) below (relating to replacement of the
              roof of the Building); and (ii) remove, at Landlord's expense, all
              work or improvements associated with the current occupant of the
              Third Expansion Premises (as well as any subsequent occupant of
              the Third Expansion Premises prior to Landlord's delivery of the
              same to Tenant) and fill, patch and repair all holes in the floor
              of the area occupied or utilized by such current tenant or any
              subsequent tenant prior to the date possession of the Third
              Expansion Premises is tendered to Tenant (however, Landlord shall
              not be required to fill and patch holes in the floor if Tenant
              notifies Landlord of its intention to remove the current flooring
              from the Third Expansion Premises as part of its improvement
              work). From and after the date that Landlord delivers the Third
              Expansion Premises to Tenant, the provisions of Section 11 of the
              Original Lease setting forth Tenant's insurance requirements with
              respect to the Existing Premises shall be applicable to the Third
              Expansion Premises. Landlord shall not be deemed to have delivered
              possession of the Third Expansion Premises to Tenant until it has
              provided evidence, reasonably acceptable to Tenant, that it has
              complied with the foregoing. None of Landlord's expenses or costs
              incurred in complying with the foregoing shall be charged to
              Tenant, either directly or as part of Operating Costs.

       (c)    Section 16D of the Original Lease is hereby deleted in its
              entirety. The Third Expansion Commencement Date shall be delayed
              one day for each day after December 1, 2001 that Landlord delivers
              possession of the Third Expansion Premises to Tenant in the
              condition as set forth above. In addition, and without limitation
              of the foregoing, if, except for Excused Delays, the Third
              Expansion


                                       2
<PAGE>
              Premises have not been delivered to Tenant in the condition
              required hereunder by January 1, 2002 and such failure to deliver
              the Third Expansion Premises in fact delays Tenant's occupancy of
              the Third Expansion Premises, then, Tenant shall be entitled to
              Third Expansion Rent Abatement (as hereinafter defined), which
              Third Expansion Rent Abatement shall be applied against the first
              installment(s) of Base Rent due and owing with respect to the
              Third Expansion Premises until the same is fully utilized. For
              purposes hereof, the term "THIRD EXPANSION RENT ABATEMENT" shall
              mean, in the aggregate, (i) one day of Base Rent abatement at the
              then applicable rate for each day that the Third Expansion
              Delivery Date (as hereinafter defined) is delayed beyond January
              1, 2002 and up to February 1, 2002, (ii) one and one-half days of
              Base Rent abatement at the then applicable rate for each day that
              the Third Expansion Delivery Date is delayed beyond February 1,
              2002 and up to March 1, 2002 and (iii) two days of Base Rent
              abatement at the then applicable rate for each day that the Third
              Expansion Delivery Date is delayed beyond March 1, 2002. For
              purposes hereof, the term "THIRD EXPANSION DELIVERY DATE" shall
              mean the date that Landlord delivers the Third Expansion Premises
              to Tenant in the condition required under the Lease as amended by
              this Third Amendment.

       (d)    Tenant shall pay Base Rent for the Third Expansion Premises,
              commencing on the Third Expansion Premises Commencement Date, in
              the following amounts:


                                  INITIAL TERM:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
       DATE            ANNUAL BASE RENT     SQUARE FEET        ANNUAL BASE RENT
                        PER SQUARE FOOT                          FOR THIRD
                                                             EXPANSION PREMISES
---------------------------------------------------------------------------------
<S>                    <C>                  <C>              <C>
  3/l/02 - 4/30/02          $7.50            15,594              $116,955.00
---------------------------------------------------------------------------------
  5/l/02 - 4/30/03          $7.50            15,594              $116,955.00
---------------------------------------------------------------------------------
  5/1/03 - 4/30/04          $7.50            15,594              $116,955.00
---------------------------------------------------------------------------------
  5/l/04 - 4/30/05          $8.00            15,594              $124,752.00
---------------------------------------------------------------------------------
  5/l/05 - 4/30/06          $8.00            15,594              $124,752.00
---------------------------------------------------------------------------------
</TABLE>

Notwithstanding the foregoing or anything contained in the Lease or this Third
Amendment to the contrary, if for any reason Tenant does not take occupancy of
the Third Expansion Premises (i.e. does not take possession for purposes of
conducting business therefrom) by the Third Expansion Premises Commencement
Date, Tenant shall be entitled to a credit against monthly Base Rent for the
Third Expansion Premises in an amount equal to $4,873.13 for the period
commencing on the Third Expansion Premises Commencement Date and ending on the
earlier of (i) the first anniversary of the Third Expansion Premises
Commencement Date and (ii) the date Tenant takes occupancy of the Third
Expansion Premises and begins conducting business therefrom (the "THIRD
EXPANSION PREMISES CREDIT TERMINATION DATE").

                                  RENEWAL TERM:


<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
        DATE            ANNUAL BASE RENT      SQUARE FEET        ANNUAL BASE RENT
                         PER SQUARE FOOT                            FOR THIRD
                                                                EXPANSION PREMISES
-----------------------------------------------------------------------------------
<S>                     <C>                   <C>               <C>

</TABLE>



                                       3
<PAGE>
<TABLE>
<S>                          <C>                 <C>                 <C>
-----------------------------------------------------------------------------------
  5/1/06 - 4/30/07           $8.00               15,594              $124,752.00
-----------------------------------------------------------------------------------
  5/l/07 - 4/30/08           $8.00               15,594              $124,752.00
-----------------------------------------------------------------------------------
  5/1/08 - 4/30/09           $8.00               15,594              $124,752.00
-----------------------------------------------------------------------------------
</TABLE>


       (e)    Effective on the Third Expansion Premises Commencement Date, the
              Premises shall be expanded to include the Third Expansion Premises
              and Tenant's Proportionate Share shall likewise be adjusted. All
              caps of Operating Costs set forth in Section 5B of the Original
              Lease (e.g. the Operating Cost Cap, the HVAC Cap and the Roof Cap)
              shall apply to the entire Premises (including the Third Expansion
              Premises), on an aggregate basis, after it has been expanded to
              include the Third Expansion Premises.

       (f)    Section 8 of the Original Lease is modified in the following
              respects: without limiting any of Landlord's affirmative
              obligations concerning the maintenance and repair of the Third
              Expansion Premises contained in the Lease or this Third Amendment,
              Tenant shall be responsible, at Tenant's expense, for the
              demolition of any existing leasehold improvements and construction
              of any new leasehold improvements in the Third Expansion Premises
              desired by Tenant, which shall be performed in accordance with
              Tenant's design and specification therefor, subject to Landlord's
              reasonable prior approval, which shall not unreasonably be
              withheld, delayed, or conditioned. Subject to Landlord's prior
              approval, which shall not be unreasonably withheld, delayed, or
              conditioned, Tenant may select the contractors and professionals
              of Tenant's choosing to perform this work. Tenant may commence its
              leasehold improvement work immediately upon delivery of possession
              of the Third Expansion Premises. Landlord shall contribute to
              Tenant's demolition and leasehold improvements in the amount of
              (i) $4.00 per foot for demolition and (ii) $15.00 per foot for
              construction (said $15.00 per foot allowance being referred to as
              the "THIRD EXPANSION PREMISES CONSTRUCTION ALLOWANCE") for a total
              of $19.00 per foot. Landlord shall pay such allowances directly to
              Tenant promptly upon presentation of invoices or bills relating to
              said demolition or construction (which may be presented and paid
              on a progress payment basis at Tenant's election); provided,
              however, that if Tenant does not take occupancy of the Third
              Expansion Premises on or prior to the Third Expansion Premises
              Commencement Date, Landlord may delay its payment of the Third
              Expansion Premises Construction Allowance until the Third
              Expansion Premises Credit Termination Date. Tenant may use such
              allowances for any and all expenses relating to or arising from
              the demolition, design and/or construction of leasehold
              improvements to the Third Expansion Premises as well as for the
              payment of any broker's commissions that are due and payable
              specifically with respect to Tenant's leasing of the Third
              Expansion Premises. To the extent Tenant does not use the entire
              amount of such allowances for the foregoing items, Tenant may use
              the excess toward: (a) improvements and expenses, including,
              without limitation, brokers commissions, relating to the Fourth
              Expansion Premises (as defined in Section 4 below); (b) leasehold
              improvements during any renewal term; and/or (c) repayment of the
              Third Expansion Premises Expiration Payment and/or the Fourth
              Expansion Premises Expiration Payment (as such terms are defined
              below). Any excess so utilized shall be promptly paid by Landlord
              to Tenant in accordance with the payment procedures set forth
              above. In addition to the foregoing, Tenant may use up to $5.00
              per foot of the allowances for the Third Expansion Premises to pay
              rental obligations with respect to the Third Expansion


                                       4
<PAGE>
              Premises. This amount shall be applied evenly, without interest,
              over the period between the Third Expansion Premises Commencement
              Date and the Expiration Date.

       (g)    Should Tenant fail to exercise its Renewal Option as set forth in
              Section 5 below, then Tenant shall repay to Landlord a portion of
              the Third Expansion Premises Construction Allowance (the "THIRD
              EXPANSION PREMISES EXPIRATION PAYMENT"). The Third Expansion
              Premises Expiration Payment shall equal the principal amount which
              would have been outstanding as of the Expiration Date had Landlord
              made a loan to Tenant on the Third Expansion Premises Commencement
              Date (or the Third Expansion Premises Credit Termination Date if
              Tenant is entitled to a credit against Base Rent for the Third
              Expansion Premises pursuant to subsection 3[d] above) in the
              original principal amount equal to the Third Expansion Premises
              Construction Allowance, less all amounts which would have been
              received by Landlord assuming Tenant had repaid said loan from the
              Third Expansion Premises Commencement Date (or the Third Expansion
              Premises Credit Termination Date, as applicable) until the
              Expiration Date in equal monthly installments of principal and
              interest at the rate of 10% per annum, so as to completely
              amortize such principal and interest over a period of sixty (60)
              months. Said payment shall be made on or before the last day upon
              which Tenant may give Tenant's notice of intent to exercise the
              Renewal Option as set forth in Section 5 below, and shall be
              discounted to present value to account for the period between the
              date of payment and the Expiration Date at the same 10% interest
              rate set forth above. Once all of the variables necessary to
              determine the Third Expansion Premises Expiration Payment are
              known, Landlord and Tenant agree to work together, with reasonable
              diligence, to determine the Third Expansion Premises Expiration
              Payment.

       (h)    Simultaneously with Landlord's payment to Tenant of the Third
              Expansion Premises Construction Allowance, Tenant shall increase
              the Security Deposit by an amount equal to $25,000.00 (said amount
              being referred to as the "THIRD EXPANSION SECURITY Deposit"). The
              Third Expansion Security Deposit shall be paid and held pursuant
              to the terms of Section 7 of the Original Lease as amended;
              provided, however, that (i) Landlord shall pay Tenant interest on
              the Third Expansion Security Deposit at the rate of 5% per annum
              and (ii) so long as Tenant is not then in default under the terms
              of the Lease beyond any applicable notice and cure periods, then
              on August 3, 2005, Landlord shall return the Third Expansion
              Security Deposit, together with all interest earned thereon, to
              Tenant. Notwithstanding the foregoing, at Landlord's election
              which must be given to Tenant in writing at least twenty (20) days
              prior to the date that the Third Expansion Security Deposit must
              be furnished by Tenant to Landlord, Tenant shall be required, in
              lieu of posting the same in cash, to post the Third Expansion
              Security Deposit in the form of a letter of credit, the form and
              substance of which letter of credit shall be reasonably acceptable
              to both Landlord and Tenant; it being further agreed that if
              Landlord so elects to have Tenant post the Third Expansion
              Security Deposit in the form of a letter of credit, Landlord shall
              bear any and all costs (including, without limitation, annual fees
              and other charges) relating to such letter of credit but, in such
              case, Landlord shall not be required to pay Tenant interest on the
              Third Expansion Security Deposit.


                                       5
<PAGE>
      4. FOURTH EXPANSION PREMISES. Tenant shall have the option (the "FOURTH
EXPANSION PREMISES OPTION") to lease approximately 20,176 square feet as
depicted on Exhibit A hereto (the "FOURTH EXPANSION PREMISES") for a period
commencing as set forth below and terminating on the Expiration Date.

       (a)    Tenant shall give written notice (the "FOURTH EXPANSION PREMISES
              NOTICE") to Landlord, if at all, on or before December 31, 2001 of
              Tenant's exercise of the Fourth Expansion Premises Option. The
              Fourth Expansion Premises Notice shall specify a proposed
              commencement date for the Fourth Expansion Premises that is not
              later than April 1, 2002 (the "FOURTH EXPANSION PREMISES
              COMMENCEMENT DATE"); provided, however, that, if Tenant desires to
              take early delivery of the Fourth Expansion Premises, Tenant shall
              so notify Landlord in writing and so long as Landlord does not
              have a binding agreement with a third party for the lease of the
              Fourth Expansion Premises for the period prior to the Fourth
              Expansion Premises Commencement Date, Landlord shall use
              commercially reasonable efforts to provide early delivery of the
              Fourth Expansion Premises to Tenant in accordance with Tenant's
              desired timing.

       (b)    If Tenant does not exercise its Fourth Expansion Premises Option
              by December 31, 2001, then, and only then, Landlord may market the
              Fourth Expansion Premises to third parties for leasing (the period
              from and after January 1, 2002 through the date falling nine [9]
              months prior to the Expiration Date if the Lease term is not
              extended or twelve [12] months prior to the Expiration Date if the
              Lease term is extended is hereinafter referred to as the "OFFER
              PERIOD"); provided, however, that Tenant shall have an ongoing
              option (the "ONGOING OPTION") during the Offer Period unless and
              until a Refusal Notice (as hereinafter defined) is furnished to
              Tenant, to lease the Fourth Expansion Premises on the terms set
              forth in this Section 4 by notifying Landlord of its intent to so
              lease the Fourth Expansion Premises at any time during the Offer
              Period; it being further agreed that (i) the leasing of the Fourth
              Expansion Premises pursuant to an exercise of the Ongoing Option
              shall be on the same terms and conditions set forth in this
              Section 4 except that the Fourth Expansion Premises Commencement
              Date shall be as specified by Tenant in Tenant's exercise notice
              but, in any case, shall be no more than ninety (90) days after the
              date of such exercise notice and (ii) any exercise of the Ongoing
              Option within the final six (6) months of the Offer Period shall
              be conditioned upon Tenant's simultaneous exercise of the first
              available renewal option, if any, under the Lease. Furthermore, if
              a Refusal Notice is furnished to Tenant and Landlord does not
              lease the Fourth Expansion Premises to Tenant or a third party
              within four (4) months after the date of such Refusal Notice, then
              the Ongoing Option shall again be afforded to Tenant. In addition
              to the Ongoing Option, in the event Landlord shall locate a
              prospective third party tenant or occupant for the Fourth
              Expansion Premises during the Offer Period and reach a point of
              negotiation with that prospective tenant or occupant where there
              is substantial evidence of an intent to proceed to execution of a
              lease or other occupancy agreement - such as a term sheet, letter
              of intent, or the like - then, prior to entering into a lease or
              any other binding agreement with such prospective tenant or
              occupant for the Fourth Expansion Premises (or any portion
              thereof), Landlord shall first notify Tenant (a "REFUSAL NOTICE")
              and Tenant shall have the right to exercise its right to lease the
              Fourth Expansion Premises by providing notice to Landlord of its
              intent to do so within five (5) business days of Tenant's


                                       6
<PAGE>
              receipt of the given Refusal Notice (the "DELAYED FOURTH EXPANSION
              PREMISES NOTICE"); it being agreed that the leasing of the Fourth
              Expansion Premises pursuant to this subsection (b) shall be on the
              same terms and conditions set forth in this Section 4 except that
              the Fourth Expansion Premises Commencement Date shall be as
              specified by Tenant in the Delayed Fourth Expansion Premises
              Notice but, in any case, shall be no more than ninety (90) days
              after the date of the Delayed Fourth Expansion Premises Notice.

       (c)    Landlord shall deliver possession of the Fourth Expansion Premises
              to Tenant, broom clean and free of all tenants, subtenants, and
              other occupants, at least ninety (90) days prior to the Fourth
              Expansion Premises Commencement Date. Prior to delivery of
              possession, Landlord shall, at Landlord's sole cost and expense
              timely fulfill all of Landlord's obligations set forth in Section
              9(c) below relating to replacement of the HVAC systems serving the
              Fourth Expansion Premises. Landlord shall not be deemed to have
              delivered possession of the Fourth Expansion Premises to Tenant
              until it has provided evidence, reasonably acceptable to Tenant,
              that it has complied with the foregoing. None of Landlord's
              expenses or costs incurred in complying with the foregoing shall
              be charged to Tenant, either directly or indirectly as part of
              Operating Costs. From and after the date that Landlord delivers
              the Fourth Expansion Premises to Tenant, the provisions of Section
              11 of the Original Lease setting forth Tenant's insurance
              requirements with respect to the Existing Premises shall be
              applicable to the Fourth Expansion Premises.

       (d)    The Fourth Expansion Premises Commencement Date shall be the later
              of: (i) ninety (90) days after the date upon which Landlord
              delivers possession of the Fourth Expansion Premises to Tenant in
              the condition described above; or (ii) the Fourth Expansion
              Premises Commencement Date as specified in the Fourth Expansion
              Premises Notice.

       (e)    Tenant shall not be required to pay rent or other charges for the
              Fourth Expansion Premises prior to the Fourth Expansion Premises
              Commencement Date. Tenant shall pay Base Rent for the Fourth
              Expansion Premises, commencing on the Fourth Expansion Premises
              Commencement Date, in the following amounts:


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
         PERIOD(2)          ANNUAL BASE RENT     SQUARE FEET      ANNUAL BASE RENT
                            PER SQUARE FOOT                          FOR FOURTH
                                                                 EXPANSION PREMISES
------------------------------------------------------------------------------------
<S>                         <C>                  <C>             <C>
    Fourth Expansion            $10.00              20,176           $201,760.00
        Premises
   Commencement Date -
        6/30/04
------------------------------------------------------------------------------------
    7/1/04 - 4/30/06            $10.37              20,176           $209,225.12
------------------------------------------------------------------------------------
</TABLE>


-------------------
(2) IF THE FOURTH EXPANSION PREMISES COMMENCEMENT DATE IS ON OR AFTER JULY 1,
2004 THEN (a) THE FIRST ROW BELOW SHALL NOT BE APPLICABLE AND (b) THE SECOND ROW
BELOW SHALL RUN FOR THE "PERIOD" FROM THE FOURTH EXPANSION PREMISES COMMENCEMENT
DATE THROUGH APRIL 30, 2006.


                                       7
<PAGE>
Notwithstanding the foregoing or anything contained in the Lease or this Third
Amendment to the contrary, if for any reason Tenant does not take occupancy of
the Fourth Expansion Premises (i.e. does not take possession for purposes of
conducting business therefrom) by the Fourth Expansion Premises Commencement
Date, Tenant shall be entitled to a credit against monthly Base Rent for the
Fourth Expansion Premises in an amount equal to $8,407.92 for the period
commencing on the Fourth Expansion Premises Commencement Date and ending on the
earlier of (i) the first anniversary of the Fourth Expansion Premises
Commencement Date and (ii) the date Tenant takes occupancy of the Fourth
Expansion Premises and begins conducting business therefrom (the "FOURTH
EXPANSION PREMISES CREDIT TERMINATION DATE").



                                  RENEWAL TERM:


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
       PERIOD            ANNUAL BASE RENT      SQUARE FEET      ANNUAL BASE RENT
                         PER SQUARE FOOT                           FOR FOURTH
                                                               EXPANSION PREMISES
----------------------------------------------------------------------------------
<S>                      <C>                   <C>             <C>
  5/1/06 - 4/30/09           $10.25              20,179            $206,834.75
----------------------------------------------------------------------------------
</TABLE>

       (f)    Effective on the Fourth Expansion Premises Commencement Date, the
              Premises shall be expanded to include the Fourth Expansion
              Premises and Tenant's Proportionate Share shall likewise be
              adjusted. All caps of Operating Costs set forth in Section 5B of
              the Original Lease (e.g. the Operating Cost Cap, the HVAC Cap and
              the Roof Cap) shall apply to the entire Premises (including the
              Fourth Expansion Premises), on an aggregate basis, after it has
              been expanded to include the Fourth Expansion Premises.
              Additionally, effective on the Fourth Expansion Premises
              Commencement Date, the cap on Landlord's management fees set forth
              in Section 5A of the Original Lease shall be lowered from 5% of
              gross rents for the Project to 3.5% of gross rents for the Project
              (specifically excluding, however, utilities and janitorial costs
              and expenses).

       (g)    Without limiting any of Landlord's affirmative obligations
              concerning the maintenance and repair of the Fourth Expansion
              Premises contained in the Lease or this Fourth Amendment, Tenant
              shall be responsible, at Tenant's expense, for the demolition of
              any existing leasehold improvements and construction of any new
              leasehold improvements in the Fourth Expansion Premises desired by
              Tenant, which shall be performed in accordance with Tenant's
              design and specification therefor, subject to Landlord's
              reasonable prior approval, which shall not unreasonably be
              withheld, delayed, or conditioned. Subject to Landlord's prior
              approval, which shall not be unreasonably withheld, delayed, or
              conditioned, Tenant may select the contractors and professionals
              of Tenant's choosing to perform this work. Tenant may commence its
              leasehold improvement work immediately upon delivery of possession
              of the Fourth Expansion Premises. Landlord shall contribute to
              Tenant's demolition and leasehold improvements in the amount of
              (i) $4.00 per foot for demolition and (ii) $25.00 per foot for
              construction (said $25.00 per foot allowance being referred to as
              the "FOURTH EXPANSION PREMISES CONSTRUCTION ALLOWANCE") for a
              total of $29.00 per foot. Landlord shall pay such allowances
              directly to Tenant promptly upon presentation of invoices or bills
              relating to said demolition or construction (which may be
              presented and paid on a progress payment basis at Tenant's
              election); provided,


                                       8
<PAGE>
              however, that if Tenant does not take occupancy of the Fourth
              Expansion Premises on or prior to the Fourth Expansion
              Commencement Date, Landlord may delay its payment of the Fourth
              Expansion Premises Construction Allowance until the Fourth
              Expansion Premises Credit Termination Date. Tenant may use such
              allowances for any and all expenses relating to or arising from
              the demolition, design and/or construction of leasehold
              improvements to the Fourth Expansion Premises as well as for the
              payment of any broker's commissions that are due and payable
              specifically with respect to Tenant's leasing of the Fourth
              Expansion Premises. To the extent Tenant does not use the entire
              amount of such allowances for the foregoing items, Tenant may use
              the excess toward: (a) leasehold improvements during any renewal
              term; and/or (b) repayment of the Third Expansion Premises
              Expiration Payment and/or the Fourth Expansion Premises Expiration
              Payment (as such term is defined below). Any excess so utilized
              shall be promptly paid by Landlord to Tenant in accordance with
              the payment procedures set forth above. In addition to the
              foregoing, Tenant may use up to $5.00 per foot of the allowances
              for the Fourth Expansion Premises to pay current rental
              obligations on any Premises leased or occupied by Tenant. This
              amount shall be applied evenly, without interest, over the period
              between the Fourth Expansion Premises Commencement Date and the
              Expiration Date.

       (h)    Should Tenant fail to exercise its Renewal Option as set forth in
              Section 5 below, then Tenant shall repay a portion of the Fourth
              Expansion Premises Construction Allowance (the "FOURTH EXPANSION
              PREMISES EXPIRATION PAYMENT"). The Fourth Expansion Premises
              Expiration Payment shall equal the principal amount which would
              have been outstanding as of the Expiration Date had Landlord made
              a loan to Tenant on the Fourth Expansion Premises Commencement
              Date (or the Fourth Expansion Premises Credit Termination Date if
              Tenant is entitled to a credit against Base Rent for the Fourth
              Expansion Premises pursuant to subsection 4[d] above) in the
              original principal amount equal to the Fourth Expansion Premises
              Construction Allowance, less all amounts which would have been
              received by Landlord assuming Tenant had repaid said loan from the
              Fourth Expansion Premises Commencement Date (or the Fourth
              Expansion Premises Credit Termination Date, as applicable), until
              the Expiration Date in equal monthly installments of principal and
              interest at the rate of 10% per annum, so as to completely
              amortize such principal and interest over a period of sixty (60)
              months. Said payment shall be made on or before the last day upon
              which Tenant may give Tenant's notice of intent to exercise its
              Renewal Option as set forth in Section 5 below, and shall be
              discounted to present value to account for the period between the
              date of payment and the Expiration Date at the same 10% interest
              rate set forth, above. Once all of the variables necessary to
              determine the Fourth Expansion Premises Expiration Payment are
              known, Landlord and Tenant agree to work together, with reasonable
              diligence, to determine the Fourth Expansion Premises Expiration
              Payment.

       (i)    Simultaneously with Landlord's payment to Tenant of the Fourth
              Expansion Premises Construction Allowance, Tenant shall increase
              the Security Deposit by an amount equal to $40,000.00 (said amount
              being referred to as the "FOURTH EXPANSION SECURITY DEPOSIT"). The
              Fourth Expansion Security Deposit shall be paid and held pursuant
              to the terms of Section 7 of the Lease as amended hereby;
              provided, however, that (i) Landlord shall pay Tenant interest on
              the Fourth

                                       9
<PAGE>
              Expansion Security Deposit at the rate of 5% per annum and (ii) so
              long as Tenant is not then in default under the terms of the Lease
              beyond any applicable notice and cure periods, then on August 3,
              2005, Landlord shall return the Fourth Expansion Security Deposit,
              together with all interest earned thereon, to Tenant.
              Notwithstanding the foregoing, at Landlord's election which must
              be given to Tenant in writing at least twenty (20) days prior to
              the date that the Fourth Expansion Security Deposit must be
              furnished by Tenant to Landlord, Tenant shall be required, in lieu
              of posting the same in cash, to post the Fourth Expansion Security
              Deposit in the form of a letter of credit, the form and substance
              of which letter of credit shall be reasonably acceptable to both
              Landlord and Tenant; it being further agreed that if Landlord so
              elects to have Tenant post the Fourth Expansion Security Deposit
              in the form of a letter of credit, Landlord shall bear any and all
              costs (including, without limitation, annual fees and other
              charges) relating to such letter of credit but, in such case,
              Landlord shall not be required to pay Tenant interest on the
              Fourth Expansion Security Deposit.

      5. RENEWAL OPTION. Tenant shall retain the renewal option set forth in
Section 2A of the Original Lease. The notice shall be given at least two hundred
seventy (270) days prior to the Expiration Date set forth above, the Renewal
Term shall commence on May 1, 2006, and the option shall apply to all Premises
occupied by Tenant as of the Expiration Date. Base Rent for the Renewal Term
shall be as set forth in Section 3 of the Original Lease (as modified by this
Third Amendment). Additionally, if Tenant exercises such renewal option and is
not in default under the Lease beyond the expiration of all applicable notice
and cure periods on the Expiration Date set forth above (i.e. April 30, 2006),
then, on the commencement date of the Renewal Term, Landlord shall return the
entire accumulated Security Deposit.

      6. ADDITIONAL RENEWAL OPTIONS. In addition to the foregoing, Tenant shall
have two additional options to renew the Lease (each singularly an "ADDITIONAL
RENEWAL OPTION" and collectively the "ADDITIONAL RENEWAL OPTIONS" as to all
Premises then being leased by Tenant, on all terms and conditions of the Lease
as modified herein, for two (2) additional terms of two (2) years each,
commencing on May 1, 2009, and May 1, 2011, respectively. Tenant shall provide
written notice of its exercise of (a) the first Additional Renewal Option on or
prior to May 1, 2008 and (b) the second Additional Renewal Option on or prior to
May 1, 2010. Base Rent for the first additional renewal term shall be (a) $8.65
per square foot of the Premises then being leased by Tenant if Tenant has not
elected to lease the Fourth Expansion Premises pursuant to Section 4 above or
(b) $9.00 per square foot of the Premises then being leased by Tenant if Tenant
has elected to lease the Fourth Expansion Premises pursuant to Section 4 above.
Base Rent for the second additional renewal term shall be (a) $8.85 per square
foot of the Premises then being leased by Tenant if Tenant has not elected to
lease the Fourth Expansion Premises pursuant to Section 4 above or (b) $9.25 per
square foot of the Premises then being leased by Tenant if Tenant has elected to
lease the Fourth Expansion Premises pursuant to Section 4 above.

      7. REVOCATION OF ADDITIONAL RENEWAL OPTION(S) UPON DEMOLITION OF BUILDING.
Notwithstanding anything contained in Section 6 of this Third Amendment to the
contrary, if Tenant exercises an Additional Renewal Option and, within sixty
(60) days after notice of such exercise, Landlord notifies Tenant in writing
that it intends to demolish the Building within one (1) year after the
expiration of the then Term of the Lease (a "DEMOLITION NOTICE"), then Tenant's
exercise of such Additional Renewal Option shall be deemed null and void and of
no further force and effect and Tenant shall have no further rights to renew the
Lease pursuant to Section 6 of this Third Amendment; provided, however, if,
Landlord provides Tenant with a Demolition Notice and


                                       10
<PAGE>
does not in fact demolish the Building within such one (1) year period following
the expiration of the then Term of the Lease, Landlord shall within thirty (30)
days following the end of such one-year period pay Tenant One Hundred Twenty
Five Thousand and No/100 Dollars ($125,000.00) (the "REVOCATION PAYMENT"). As
security for the Revocation Payment, on the first (1st) day of each of the last
ten (10) months of the then Term of the Lease, Landlord agrees to deposit
$12,500.00 in a third-party controlled escrow account. The terms and provisions
governing such escrow account, as well as the third party-escrowee, shall be
subject to Tenant's reasonable prior approval.

      8. RIGHT OF FIRST OFFER TO PURCHASE. In the event Landlord intends to sell
the Project or any portion thereof during the Term of the Lease, Landlord will
first be obligated to provide Tenant with written notice of its intent to sell
the Project or material portion thereof (the "SALE NOTICE") and the general
terms on which Landlord intends to market the Building for sale (e.g. price,
terms, closing date). Landlord agrees that for a period of 60 days following the
Sale Notice (the "NEGOTIATION PERIOD"), Tenant shall be afforded the exclusive
opportunity to enter into a binding agreement to purchase the Building on terms
mutually acceptable to both Landlord and Tenant; it being further agreed that if
Tenant desires to purchase the Project (or applicable portion thereof), then
Landlord and Tenant agree to negotiate the terms of sale in good faith during
the Negotiation Period. Furthermore, if (a) Tenant desires to purchase the
Project (or applicable portion thereof) during the Negotiation Period but does
not agree to mutually acceptable terms with the Landlord and (b) a Third Party
Proposal (as hereinafter defined) exists at any time thereafter during the Term
(as the same may be extended) for the sale of the Project or material portion
thereof at a net price (i.e. cash price less estimated transaction costs) lesser
than or equal to seventy-five percent (75%) of the list price originally offered
by Landlord in negotiations with Tenant during the Negotiation Period, then,
under such circumstances, Landlord shall offer the Project (or applicable
portion thereof) for sale to Tenant on all of the terms set forth in the Third
Party Proposal; provided, further, that in the event the purchase price set
forth in the Third Party Proposal includes a brokerage commission due from
Landlord which will not be due and owing pursuant to Landlord's listing
agreement with such broker if Tenant purchases the Project or applicable portion
thereof pursuant to this Section 8, then Tenant shall be obligated to pay the
purchase price less said broker's commission. Tenant must accept any offer by
Landlord pursuant to the previous sentence, if at all, by notice given to
Landlord given within seven (7) days after Tenant's receipt of the given Third
Party Proposal, and, if Tenant so accepts an offer, Landlord and Tenant shall
use good faith, diligent efforts to negotiate a commercially reasonable purchase
agreement reflecting the terms of the Third Party Proposal within twenty (20)
days after Tenant's acceptance of such offer; it being further agreed that if
Tenant does not accept such offer with said 7-day period, Tenant shall have no
further rights to acquire the Project pursuant to the terms and provisions of
this Section. For purposes hereof, "THIRD PARTY PROPOSAL" shall mean a bona fide
arms-length offer which Landlord desires to accept, from a third party to
purchase the Project or material portion thereof. Notwithstanding the foregoing,
this right of first offer to purchase will not apply to any partial or whole
transfers or changes in ownership amongst and between the current members of
Landlord (i.e. Lutheran Brotherhood and Ryan Properties, Inc.) or any affiliates
or subsidiaries thereof.

      9. LEASEHOLD IMPROVEMENTS.

       (a)    Floor Tile: Landlord represents and warrants that to the best of
              its knowledge the Third Expansion Premises and Fourth Expansion
              Premises shall be free of all toxic or hazardous substances on the
              date upon which possession is tendered to Tenant, with the
              exception of existing vinyl composite floor tile covering
              substantially all of the floor in the Third and Fourth Expansion
              Premises, which the Landlord believes to contain asbestos fibers
              ("ACM"). Without otherwise

                                       11
<PAGE>
              limiting any of Landlord's covenants and obligations in the Lease
              concerning ACM and other Hazardous Substances, Tenant agrees that,
              as to the Third and Fourth Expansion Premises, its demolition and
              leasehold improvement responsibilities shall include removal
              and/or remediation of the floor tile if and to the extent required
              by code. Any such removal of the floor tile and related disposal
              shall be performed in accordance with applicable federal, state
              and local laws and ordinances.

       (b)    Restroom: While Landlord acknowledges that Tenant has no
              obligation to fulfill a Restroom Event (as defined below),
              Landlord has constructed restrooms for the Second Expansion
              Premises, at no cost to Tenant pursuant to the plans drawn by BDH
              & Young dated September 12, 2000 in anticipation of one of the
              following (each, a "RESTROOM EVENT"): (i) Tenant's exercise of the
              Fourth Expansion Premises Option; (ii) Tenant's election not to
              exercise the Fourth Expansion Premises Option, but nonetheless to
              permit sharing of said restrooms with a third party tenant and to
              construct, at Tenant's expense, reasonable improvements necessary
              to effect such sharing; or (iii) Tenant's exercise of the first
              Renewal Option. If no Restroom Event occurs, then Tenant shall,
              within 30 days of the determination that no Restroom Event could
              occur, pay to Landlord the sum of $30,000.

       (c)    HVAC: Notwithstanding anything contained in the Lease (as amended
              hereby) to the contrary, Landlord shall, at Landlord's sole cost
              and expense, remove and replace all HVAC units which have not been
              replaced with new HVAC units since the Commencement Date (the
              "HVAC WORK") that service or are otherwise located on or about the
              Building or Project in accordance with the HVAC Requirements (as
              hereinafter defined). All replacement HVAC units (collectively,
              the "HVAC Requirements") (i) shall be new first-grade units, (ii)
              shall have sufficient capacity to meet the HVAC Specifications for
              (A) Tenant's use of the Premises (specifically including the First
              Expansion Premises and the Second Expansion Premises) for office
              and production purposes in the same manner that Tenant is using
              the Premises as of the date of this Third Amendment, (B) Tenant's
              use of the Third Expansion Premises as production space and (C)
              Tenant's use of the Fourth Expansion Premises as office space,
              (iii) servicing the Premises (specifically including the First
              Expansion Premises and the Second Expansion Premises) shall be
              distributed in a manner consistent with Tenant's use of the
              Premises as of the date of this Third Amendment (i.e. the HVAC
              units shall be reconnected to the existing duct work located in
              the Premises), (iv) shall be installed and connected to existing
              zoning systems with new thermostat controls that include
              programmable temperature controls (i.e. set-backs) and (v) shall
              be installed by licensed contractors, in a good and workmanlike
              manner and in compliance with all applicable laws, codes and
              ordinances. All HVAC Work shall be commenced by Landlord upon the
              date of full execution and delivery of this Third Amendment by
              Landlord and Tenant and completed as soon thereafter as is
              practicable (with the use of diligent efforts by Landlord and its
              contractors), except the HVAC Work relating specifically to the
              Fourth Expansion Premises which, subject to Excused Delays, shall
              be completed within sixty (60) days after Tenant notifies Landlord
              of its election to lease the Fourth Expansion Premises.
              Furthermore, except with respect to the HVAC Work relating to the
              Third Expansion Premises and the Fourth Expansion Premises which
              may be performed


                                       12
<PAGE>
              at any time of day, all HVAC Work shall be performed outside of
              Tenant's normal business hours (i.e. after 5:00 p.m. [Minneapolis
              time] on business days and at any time on non-business days) and,
              in any case, in a manner that minimizes interference with Tenant's
              business operations and use and quiet enjoyment of the Premises.
              Notwithstanding anything in the Lease to the contrary, Tenant's
              Proportionate Share of Operating Costs solely as they relate to
              the maintenance, repair and replacement of all HVAC units serving
              the Building shall be fixed at the HVAC Cap (i.e., $.20 annually
              per square foot of the Premises) for the period commencing on the
              first (1st) month following substantial completion of all HVAC
              Work and ending on the expiration date of the Initial Term (as the
              same may be extended to the expiration date of the first Renewal
              Term if Tenant exercises its option to extend the Term for the
              first Renewal Term) (the "HVAC CAP ADJUSTMENT PERIOD"); it being
              further agreed and understood that during the HVAC Cap Adjustment
              Period such agreement by Tenant to pay the HVAC Cap (i) shall be
              in lieu of all other payments and costs associated with repairing,
              replacing and maintaining (other than routine semi-annual filter
              changes) the HVAC units serving the Building including, without
              limitation, all costs associated with the HVAC Maintenance
              Contract and (ii) shall be factored in when calculating the
              Operating Cost Cap. Following the HVAC Cap Adjustment Period, the
              provisions concerning Operating Costs, including all caps of
              Operating Costs relating thereto (i.e. the Operating Cost Cap, the
              HVAC Cap and the Roof Cap), shall again be applicable to Tenant's
              obligation to pay its Proportionate Share of Operating Costs for
              the entire Premises.

       (d)    Roof: Notwithstanding anything contained in the Lease (as amended
              hereby) to the contrary, Landlord shall, at Landlord's sole cost
              and expense, replace the existing roof on the Building with a new
              roof (the "ROOF WORK"). The new roof shall be rated to have a
              minimum life of at least 12 years. Landlord shall cause the Roof
              Work to be performed by licensed contractors, in a good and
              workmanlike manner, in compliance with all applicable laws, codes
              and ordinances, and in a manner that is otherwise consistent with
              work on first class office-warehouse buildings located in the
              Minneapolis, Minnesota metropolitan area. All Roof Work shall be
              commenced by Landlord upon the date of full execution and delivery
              of this Third Amendment by Landlord and Tenant and completed as
              soon thereafter as is practicable (with the use of diligent
              efforts by Landlord and its contractors), except the Roof Work
              relating specifically to the Fourth Expansion Premises which,
              subject to Excused Delays, shall be completed within sixty (60)
              days after Tenant notifies Landlord of its election to lease the
              Fourth Expansion Premises. Furthermore, except with respect to the
              Roof Work relating to the Third Expansion Premises and the Fourth
              Expansion Premises which may be performed at any time of day, the
              Roof Work shall be performed outside of Tenant's normal business
              hours (i.e. after 5:00 p.m. [Minneapolis time] on business days
              and at any time on non-business days) and, in a manner that
              minimizes interference with Tenant's business operations and use
              and quiet enjoyment of the Premises. Notwithstanding anything in
              the Lease to the contrary, Tenant's Proportionate Share of
              Operating Costs solely as they relate to the maintenance, repair
              and replacement of the roof of the Building shall be fixed at the
              Roof Cap (i.e., $.20 annually per square foot of the Premises) for
              the period commencing on the first (1st) month following
              substantial completion of all Roof Work and ending on the
              expiration date of the Initial Term (as the same may be


                                       13
<PAGE>
              extended to the expiration date of the first Renewal Term if
              Tenant exercises its option to extend the Term for the first
              Renewal Term) (the "ROOF CAP ADJUSTMENT PERIOD"); it being further
              agreed and understood that during the Roof Cap Adjustment Period
              such agreement by Tenant to pay the Roof Cap (i) shall be in lieu
              of all other payments and costs associated with repairing,
              replacing and maintaining the roof of the Building and (ii) shall
              be factored in when calculating the Operating Cost Cap. Following
              the Roof Cap Adjustment Period, the provisions concerning
              Operating Costs, including all caps of Operating Costs relating
              thereto (i.e. the Operating Cost Cap, the HVAC Cap and the Roof
              Cap), shall again be applicable to Tenant's obligation to pay its
              Proportionate Share of Operating Costs for the entire Premises.

       (e)    Utility Savings: Due to the savings on the cost of utilities that
              will inure to the benefit of Tenant as a result of the HVAC Work,
              from and after the date that both the HVAC Work and the Roof Work
              are completed in accordance with the terms hereof through the
              expiration date of the Initial Term (as the same may be extended
              to the expiration date of the first Renewal Term if Tenant
              exercises its option to extend the Term for the first Renewal
              Term), Tenant shall pay Landlord on the first day of each month
              during such period an amount equal to 1/12 of the product of (i)
              $.15, multiplied by (ii) the number of square feet in the Premises
              then being leased by Tenant under the Lease.

       10.    PARKING.

       (a)    Landlord shall provide on-site parking for all Premises,
              including, without limitation, the Third and Fourth Expansion
              Premises, at a ratio of not less than 4.0 stalls per 1,000 square
              feet of space leased. Landlord shall provide said parking at
              Landlord's sole cost and expense, with all necessary permits, in
              compliance with all applicable laws, and otherwise in accordance
              with Section 13 of the Original Lease.

       (b)    Section 13 of the Original Lease requires Landlord to provide not
              less than 160 parking spaces on the north and east sides of the
              Building (such parking spaces are hereinafter referred to as the
              "NORTHEAST SPACES" and shall be located within the area designated
              as the "NORTHEAST PARKING AREA" on Exhibit B attached hereto).
              Landlord shall continue to provide the Northeast Spaces for use by
              Tenant, Tenant's employees, guests, and invitees in accordance
              with the terms and provisions of the Lease. All other parking
              spaces required under the provisions of the Lease to meet parking
              ratio (i.e. - those parking spaces in excess of the Northeast
              Spaces), shall be provided within (i) the current parking areas
              for the Project or (ii) if necessary, elsewhere in the areas
              adjacent to the Project identified on Exhibit B attached hereto or
              other parking areas adjacent to the Project that are reasonably
              acceptable to Tenant (collectively, the "ADJACENT PARKING AREAS").
              All costs relating to construction, grading, striping and lighting
              and otherwise readying the Adjacent Parking Areas for use by
              Tenant and other tenants of the Project, if any, shall be borne by
              Landlord. Parking spaces required to meet the applicable ratio as
              to the Third Expansion Premises and Fourth Expansion Premises
              shall be supplied to Tenant on the Third Expansion Premises
              Commencement Date and the Fourth Expansion Premises Commencement
              Date respectively.


                                       14
<PAGE>
       (c)    Landlord has informed Tenant that the Minnesota Department of
              Transportation ("MNDOT") intends to relocate the primary access
              road servicing the Project from the south side of the Project to
              the north side of the Project, and to condemn a strip of land
              along the north side of the Project to enable MNDOT to construct a
              street contiguous to the north side of the Project (the "TAKING").
              Notwithstanding anything contained in the Lease to the contrary,
              and without limitation of Tenant's rights under Section 15 of the
              Original Lease, Tenant shall be entitled to a pro rata abatement
              of Base Rent and all components of Additional Rent hereunder if
              and to the extent that Tenant's use and quiet enjoyment of any of
              the parking spaces to which Tenant is entitled is denied, blocked
              or materially and adversely interfered with either during or as a
              direct or indirect result of the Taking. For purposes of the
              foregoing sentence, the pro rata rent abatement shall be equal to
              the product obtained by multiplying the sum of Base Rent and
              Additional Rent otherwise owing hereunder for the applicable
              period by a fraction, equal to (i) one (1) minus (ii) a fraction,
              the numerator of which is the number of parking spaces then
              available for Tenant's use at the Project in accordance with the
              terms of the Lease and the denominator of which is the product of
              .004 multiplied by the number of square feet in the Premises. By
              way of example, if the sum of Base Rent and Additional Rent for
              the given period is equal to $100,000.00, the square feet in the
              Premises is equal to 100,000 square feet and the total number of
              parking spaces then available for Tenant's use at the Project is
              equal to 320 parking spaces, then the pro rata rent abatement to
              which Tenant would be entitled is $20,000.00 (i.e. $100,000 x [1 -
              320/400] = $20,000.00). Additionally, the words "including,
              without limitation, any reduction of the number of parking spaces
              in the parking area for the Project which results in a parking
              ratio that is less than 4 stalls per 1,000 square feet of space in
              the Premises" is hereby added immediately after the word
              "operations" in the third sentence of Section 15 of the Original
              Lease.

       (d)    Tenant acknowledges that Landlord owns or controls the property
              immediately to the east of the Project and intends to redevelop
              and/or sell such property (the "NEIGHBORING DEVELOPMENT"). In
              connection with the Neighboring Development, without limitation of
              any Tenant's rights under the Lease, Tenant acknowledges and
              agrees that certain portions of the eastern most portion of the
              parking area of the Project may be reconfigured and/or utilized as
              a temporary staging area and Tenant consents to the same so long
              as Landlord uses commercially reasonable efforts (consistent with
              owners of other first class, multi-tenant office warehouse
              buildings) to minimize any interference with Tenant's use and
              enjoyment of the Premises and the parking areas serving the
              Premises.

       (e)    Notwithstanding anything contained in the Lease to the contrary,
              if as a result of the Taking or the Neighboring Development, it
              becomes necessary for Landlord to provide Tenant with parking
              spaces in Adjacent Parking Areas in order to meet the parking
              requirements under the Lease, then Landlord shall be entitled to
              expand the Project to include such portion of the Adjacent Parking
              Areas that are necessary to meet such parking ratios (such
              expanded area being hereinafter referred to as the "EXPANDED
              PROJECT AREA") and from and after such expansion Tenant shall be
              obligated to pay its Proportionate Share of Operating Costs with
              respect to the Expanded Project Area with the following
              limitations: (a) such obligation to pay Operating Costs shall be
              subject to all applicable caps of


                                       15
<PAGE>
              Operating Costs set forth in Section 5(b) of the Original Lease,
              and (b) if the Expanded Project Area is part of a larger tax
              parcel then (i) Tenant shall only be obligated to pay its
              Proportionate Share of the portion of taxes, assessments (both
              general and special) and related costs allocated to the Expanded
              Project Area on a pro rata basis and (ii) if the overall tax
              parcel on which the Expanded Project Area is included contains any
              improvements other than a parking lot, then taxes, assessments
              (general and special) and related costs allocated to the Expanded
              Project Area shall be equitably adjusted on account thereof.

      11. SIGNAGE. Section 1F of the Original Lease is hereby deleted in its
entirety and the following is substituted therefor:

    Tenant shall be entitled to place one or more signs on the Building at its
    own cost. The aggregate size of such signs shall not exceed 100% of the
    total area permitted for exterior signage on the Building per city codes;
    provided, however, that if Tenant does not exercise the Fourth Expansion
    Option and if Landlord requires signage for a tenant (other than Tenant) of
    the Fourth Expansion Premises, Tenant agrees to relinquish its right to no
    more than 20% of the maximum signage permitted by code upon not less than
    ninety (90) days prior written notice from Landlord (the "RELINQUISHED
    SIGNAGE"). The Relinquished Signage shall be in an area mutually acceptable
    to Landlord and Tenant. Tenant's signage shall be subject to Landlord's
    approval, which shall not be unreasonably withheld, conditioned or delayed
    so long as such signage meets applicable code requirements.

      12. SECURITY DEPOSIT. Section 7 of the Original Lease is hereby modified
in the following respects:

      (a)   The fourth sentence is hereby deleted in its entirety and of no
            further force and effect; and

      (b)   The following sentence is added to the end of Section 7: In lieu of
            posting the Security Deposit required under this Section in cash,
            Tenant may post the same in the form of a letter of credit or other
            security provided that the form and substance of such other security
            is reasonably acceptable to Landlord.

      13. ADDITIONAL RENT. In the third grammatical line of Section 7 of the
First Amendment, the words "during the Initial Term" are hereby deleted and the
words "through and including January 1, 2005" are substituted therefor

      14. DEFINITIONS. Each capitalized term used as a defined term in this
Third Amendment but not otherwise defined in this Third Amendment shall have the
same meaning ascribed to such term in the Lease.

      15. NO OFFER. Submission of this instrument for examination or negotiation
shall not bind Landlord or Tenant, and no obligation on the part of Landlord or
Tenant shall arise until this instrument is signed and delivered by Landlord and
Tenant.

      16. LEASE IN FULL FORCE AND EFFECT. Except as herein provided, all of the
terms and provisions of the Lease shall remain in full force and effect. All
capitalized terms used in this Third Amendment shall have the definition given
to them in the Lease unless otherwise defined herein.


                                       16
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
Lease Agreement to be duly executed and delivered as of the day and year first
written above.


LANDLORD:                                              TENANT:

WEST 78TH STREET                                    AUGUST TECHNOLOGY
BLOOMINGTON ASSOCIATES, LLC                         CORPORATION

BLOOMINGTON OFFICE PROJECT, LLC,
ITS MANAGER


By  /s/ _______________                              By  /s/ _______________
Its __________________                               Its __________________




                                    EXHIBIT A

                     DEPICTION OF FOURTH EXPANSION PREMISES

                                 (see attached)



                                    EXHIBIT B

                       DEPICTION OF ADJACENT PARKING AREAS

                                 (see attached)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.33
<SEQUENCE>14
<FILENAME>c67934ex10-33.txt
<DESCRIPTION>AMENDMENT TO THE INTERNATIONAL DISTRIBUTOR AGMT
<TEXT>
<PAGE>

                                                                   Exhibit 10.33


[AUGUST TECHNOLOGY LOGO]

4900 West 78th Street              Tel: 952-820-0080       www.AugustTech.com
Bloomington, MN 55435 USA          Fax: 952-820-0060       info@augusttech.com




Mr. Keith Reidy                                      17 April 2001
Metron Technology
770 Lucerne Drive
Sunnyvale, CA 94086-3844

Dear Keith,

As we discussed last week, please find listed below our agreement for the
termination of our agreement with you for Taiwan. If you agree with the below
listed terms, please sign your acceptance at the end of this letter.

Specifically:

      1.    August Technology will assume all service coverage in Taiwan
            effective 1 Apr 01.

      2.    August Technology will assume direct sales for existing accounts
            effective 1 Apr 01.

      3.    August Technology will pay Metron Technology commissions for systems
            sold to the existing known customer base (those customers listed on
            the Metron Taiwan Sales Forecast as of 1 Mar 01) per the following
            schedule:

                  a.    For orders received in April, May, June 2001: 7%

                  b.    For orders received in July, August, September 2001: 6%

                  c.    For orders received in October, November, December 2001:
                        5%

                  d.    For orders received in January, February 2002: 5%

                  e.    Commissions will be paid upon shipment of the tools.

                  f.    August Technology (Mayson Brooks) will provide Kenneth
                        Looi a month end summary of orders received by the 7th
                        of the following month.

      4.    Metron Technology will provide August Technology a Sales Manager
            (anticipated to be Emilio Chang) to act in a sales representative
            role calling on new markets (opto-electronics, compound
            semiconductors, photonics) in support of August Technology products
            until 28 Feb 02. August Technology will compensate Metron Technology
            9% commission on these sales upon shipment of the tools.

      5.    August Technology will buy back the NSX-90 demo tool that Metron
            Taiwan has held at the original price paid for the tool.

      6.    August Technology will pay Metron Technology 7% of the Chipbond
            order.

      7.    Metron Technology will extend the demo period by 30 days for the NSX
            that was sold to TSMC Fab 7.

      8.    August Technology and Metron Technology will present both parties in
            favorable standing to all customers in Taiwan.
<PAGE>
            Keith, if you agree the above, please indicate your acceptance by
            signing and returning this letter to me via fax at 952-820-0060.


            We look forward to continuing our relationship with Metron in the
            rest of Asia and to a mutually rewarding 2001.

            Best respects,


            Mayson Brooks
            VP, Sales & Marketing
            August Technology



            Agreed to:


            --------------------------------------------------------------------
            Keith Reidy                                     Date
            Metron Technology

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>15
<FILENAME>c67934ex23-1.txt
<DESCRIPTION>CONSENT OF INDEPENDENT AUDITORS'
<TEXT>
<PAGE>

                                                                    EXHIBIT 23.1

                        CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
August Technology Corporation:

     We consent to incorporation by reference in Registration Statement Nos.
333-45848 and 333-45850 on Forms S-8 of August Technology Corporation of our
reports dated February 11, 2002. Such reports relate to the consolidated balance
sheets of August Technology Corporation and subsidiary as of December 31, 2001
and 2000 and the related consolidated statements of operations, shareholders'
equity and comprehensive income and cash flows for each of the years in the
three-year period ended December 31, 2001 and the related financial statement
schedule, which reports appear in the December 31, 2001 Annual Report on Form
10-K of August Technology Corporation.

                                                     /s/ KPMG LLP

Minneapolis, Minnesota
March 15, 2002

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>17
<FILENAME>c67934c67934l1.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 c67934c67934l1.gif
M1TE&.#EAR@`P`/?_````````,P``9@``F0``S```_P`S```S,P`S9@`SF0`S
MS``S_P!F``!F,P!F9@!FF0!FS`!F_P"9``"9,P"99@"9F0"9S`"9_P#,``#,
M,P#,9@#,F0#,S`#,_P#_``#_,P#_9@#_F0#_S`#__S,``#,`,S,`9C,`F3,`
MS#,`_S,S`#,S,S,S9C,SF3,SS#,S_S-F`#-F,S-F9C-FF3-FS#-F_S.9`#.9
M,S.99C.9F3.9S#.9_S/,`#/,,S/,9C/,F3/,S#/,_S/_`#/_,S/_9C/_F3/_
MS#/__V8``&8`,V8`9F8`F68`S&8`_V8S`&8S,V8S9F8SF68SS&8S_V9F`&9F
M,V9F9F9FF69FS&9F_V:9`&:9,V:99F:9F6:9S&:9_V;,`&;,,V;,9F;,F6;,
MS&;,_V;_`&;_,V;_9F;_F6;_S&;__YD``)D`,YD`9ID`F9D`S)D`_YDS`)DS
M,YDS9IDSF9DSS)DS_YEF`)EF,YEF9IEFF9EFS)EF_YF9`)F9,YF99IF9F9F9
MS)F9_YG,`)G,,YG,9IG,F9G,S)G,_YG_`)G_,YG_9IG_F9G_S)G__\P``,P`
M,\P`9LP`F<P`S,P`_\PS`,PS,\PS9LPSF<PSS,PS_\QF`,QF,\QF9LQFF<QF
MS,QF_\R9`,R9,\R99LR9F<R9S,R9_\S,`,S,,\S,9LS,F<S,S,S,_\S_`,S_
M,\S_9LS_F<S_S,S___\``/\`,_\`9O\`F?\`S/\`__\S`/\S,_\S9O\SF?\S
MS/\S__]F`/]F,_]F9O]FF?]FS/]F__^9`/^9,_^99O^9F?^9S/^9___,`/_,
M,__,9O_,F?_,S/_,____`/__,___9O__F?__S/___P``````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M`````````````````````"P`````R@`P```(_P"O"1Q(L*!!@L-J*5S(D.&P
M@Q`C2IQ(L:+%BQ@S:MR8,6'#CPH?<AQ)LJ3)DRA->@394&3*ES!CRIQI$!I+
ME@>A#=O)DR>TB3V#NH3(\V8M7CQK"O4)=.G.B#J=2IU*=2A*7D8_'L3*TJI!
MHSE79@7)Z^<UKB"]$K3)DE?!86C'RIWKEFTMLR/MSCUH5.U`L2W?SLTJTBC>
M@X`="H06=[#COGIKE7Q<RRM8B8D7NHQ,F>%/S@PG-E:<N;/INSN/(B4Y>JS5
MT@HG&A;8^K1`V&XE@JU]NO,UN$=C<P3M6G!7V3=I]_XHDK??@7V72Q>.-6'N
MC=';%NR+^:9;WJ8+W_]\_MO[=.DNDW+D[?8R].3=NX)WZ'<GVL7NB9Y&6C6H
M4?Y"'482<0K]Q!M"^6W56UD7/54>?!&9=EU&L]%TS7^W0?@@6<A).!)LY%W8
MF8`7)1@3>'^-]]YQ4)U&(D;<181;C!V9^!*!E0U$H$L5ZM?9A-C=]&**764U
M9'QI68@B02I>@Z-H/Y8$FV2ZC3?6:B4V*=.4`EXV98>/'6D1;F!J-9]F8JX(
M$DTX`GD6?,Z5.9B/RY'WY)1)MJ@A3."Y"9M`-"+6F5]G*@2>F"`J%R:='[F)
M$IYH9L@2-$\BZ9A?YT')XIN/J15G3*#UA!1:9>WX9964O8AC0TM&*"2"BV[_
M]^J)<O&WD'-DHOH8HUE]ZBI.!D':T&&5PI08@'")95]VFPKJF[-U6LJJC(7F
M2"2',*VJ66J&,C:BM`[UR.1<IT;DJXQRP9KG2Z.)RFU(*[T[IZX?X1CBALS9
M..ZD%LVW[[HH:0LO6MR.ZIA$3[)'T8'Z2@ILO_DU/!*K0^E$:L'>5B:L<!#%
MR:6<H4E\;D7NE7L50XY>:_!1;)4UUY`X?F8DO8HU;')%Y2::DEXI%Y1Q65QY
MZ_*5.6&HZ*S!JFBTSQA26E&;`XT\F6(696PU5\(R>"V_^/5*(F\_]6K<J]M"
MI!-A:M:;4F/W&C<T4B$-EG5!U08WEL/,-FWEO$Y*_YP19VW[C)7!+@]]WM?G
M'=7U='B?EIYW`3^<4="#VV3X<D/6C?;1O9DUW812;[3C<`4.7IWF7'<\W5"H
MJ]WW<D`&RA&>>95^%U8">Y?FZ[T9U'JW6W\KJ^0:G5T<Z;??=51"&<N-$7"F
MY82Z5;DWJM;-%/(M>H'+*__7E$CM+B.D_.TNK_6(GF^]G5*);V'5W=L$U_OT
MUV___>@R-FK@^/?O__\7P9UD[@+``AKP@$^K#-P&LH(&.G`%!GE@`P-Q$%9(
MT""!<.`U'AC!%5A!(!E<`04-8@4/3O`@#AQA!4M8PA6P`B*L:.$)"1)""&H0
M@?TJWT`^F$$*?K"#`F'%"_\+8L$?7D.%-!2A0!I8P0;^,!!(W*$+!5+"*"X1
M@A'Q8!`;.$2"%'&'71Q(!C]H01Q>1'Y>Z6$6L6C%#6)1(FIT(T0<R,,V*G&+
M;R0($R$2QR/>48]Y7&,,VVA&B$B&1'WLX`V]J,6)U'"1!7'A!*&(P3_*$8A\
MS*,%K;A'1SJQD`W*)"$O&4@_&C$B<>QD)*]A00]:,9&J9&`IQ6A)2UX1A)`D
M2`G#"$J$B7*-$6DE15(YRPWBT8K"9.`I98G*/VX2DWXD9`9[69)$1A*+,21A
M(XU9R1'&DH&T;",+<<G+6[(RBJT<8@D/,D9<2K.8U*Q(#=OXR&WJ\H(%F6<-
<%;D7PS;&T(E35&0*#=)*%I:3BA(\Z#Y)$A``.S\_
`
end

</TEXT>
</DOCUMENT>
</SUBMISSION>
