SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )

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2

[KEY TECHNOLOGY, INC. LOGO]

150 AVERY STREET
WALLA WALLA, WASHINGTON 99362

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 7, 2001

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

To Our Shareholders:

The Annual Meeting of Shareholders of Key Technology, Inc. (the
"Company") will be held at 8:00 A.M. on February 7, 2001 at the offices of the
Company, 150 Avery Street, Walla Walla, Washington, for the following purposes:

1. To elect two directors of the Company;

2. To ratify the selection of auditors for fiscal 2001; and

3. To transact such other business as may properly come
before the meeting.

Only holders of the Company's Common Stock, Series B Convertible
Preferred Stock ("Series B Preferred"), and Series C Convertible Preferred Stock
("Series C Preferred") each on an as-converted basis to Common, at the close of
business on December 6, 2000 are entitled to notice of, and to vote at, the
meeting and any adjournments or postponements thereof. Shareholders may vote in
person or by proxy. The accompanying form of proxy is solicited by the Board of
Directors of the Company.

By order of the Board of Directors,

/s/ GORDON WICHER

Gordon Wicher
Secretary

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING
IN PERSON, PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY IN THE
ENCLOSED ENVELOPE.

Walla Walla, Washington
January 2, 2001

[KEY TECHNOLOGY, INC. LOGO]

150 AVERY STREET
WALLA WALLA, WASHINGTON 99362

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

PROXY STATEMENT
2001 ANNUAL MEETING OF SHAREHOLDERS

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

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Key Technology, Inc. (the "Company") of proxies to be
voted at the 2001 Annual Meeting of Shareholders of the Company to be held at
8:00 A.M. on February 7, 2001 at the Company's executive offices located at 150
Avery Street, Walla Walla, Washington, and at any adjournments or postponements
thereof. If proxies in the accompanying form are properly executed, dated and
returned prior to the voting at the meeting, the shares represented thereby will
be voted as instructed in the proxy. If no instructions are given, shares will
be voted FOR the election of the directors, FOR ratification of the selection of
auditors, and in support of the recommendations of management on such other
business as may properly come before the meeting or any adjournments or
postponements thereof.

Any proxy may be revoked by a shareholder prior to its exercise upon
written notice to the Secretary of the Company, by delivering a duly executed
proxy bearing a later date, or by the vote of a shareholder cast in person at
the meeting. The cost of soliciting proxies will be borne by the Company. To
assist in the proxy solicitation, the Company has engaged Allen Nelson &
Company, Incorporated for a fee of $2,380.00 plus out-of-pocket expenses. In
addition to solicitation by mail, proxies may be solicited personally by the
Company's officers and regular employees or by telephone, facsimile transmission
or express mail. The Company will reimburse brokerage houses, banks and other
custodians, nominees and fiduciaries for their reasonable expenses incurred in
forwarding proxies and proxy material to their principals. This proxy statement
and the accompanying form of proxy are first being mailed to shareholders on or
about January 2, 2001.

VOTING

Holders of record of the Company's Common Stock, and Series B and C
Convertible Preferred on an as-converted basis to Common, on December 6, 2000
will be entitled to vote at the Annual Meeting or any adjournments or
postponements thereof. As of that date, there were 5,825,671 shares of Common
Stock outstanding, on an as-converted basis, and entitled to vote, which
includes 1,339,999 shares of Series B Preferred, which converted to 893,332
shares of Common, and 119,106 shares of Series C Preferred, which converted to
198,510 shares of Common, and a majority, or 2,912,836 of these shares,
including Series B and C Preferred on an as-converted basis, will constitute a
quorum for the transaction of business. Each share of Common Stock entitles the
holder to one vote on the election of directors and

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on any other matter that may properly come before the meeting. Series B and C
Preferred are entitled to vote on an as-converted basis to Common, with one vote
for each share as converted to Common. Both Common and Preferred vote together
as a single class on all matters. Shareholders are not entitled to cumulative
voting in the election of directors.

ITEM 1
ELECTION OF DIRECTORS

The Board of Directors is comprised of seven directors. The directors
are divided into three classes, two of which are comprised of two directors and
one of which is comprised of three directors. One class is elected each year for
a three-year term. The two nominees for election as directors at this year's
Annual Meeting, to serve until the Annual Meeting of Shareholders in 2004, or
until their respective successors are elected and qualified, are John E. Pelo
and Peter H. van Oppen. Directors are elected by a plurality of the votes cast
by holders of the shares entitled to vote in the election at a meeting at which
a quorum is present.

Unless marked otherwise, proxies received will be voted FOR the election
of each of the nominees named below. As with all matters to be voted upon,
abstentions and broker non-votes will be counted toward the quorum requirement
for the meeting, but will not be counted for or against any proposal.

If either nominee is unable or unwilling to serve as a director at the
date of the Annual Meeting or any postponement or adjournment thereof, the
proxies may be voted for a substitute nominee designated by the proxy holders or
by the present Board of Directors to fill such vacancy, or for the other nominee
named without nomination of a substitute, or the Board may be reduced
accordingly. The Board of Directors has no reason to believe that either of the
nominees will be unwilling or unable to serve if elected a director.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MESSRS. PELO AND
VAN OPPEN.

The following table sets forth certain information about each nominee
for election to the Company's Board of Directors, each continuing director and
each executive officer who is not also a director. Stock ownership information
is shown elsewhere in this Proxy Statement under the heading Principal
Shareholders - Security Ownership of Certain Beneficial Owners and Management
and is based upon information furnished by the respective individuals. The table
sets forth the following, as of December 6, 2000: (i) age; (ii) all positions
and offices held with the Company; (iii) the period of time served as a director
or officer of the Company; and (iv) the expiration of his current term as a
director of the Company.

HAS BEEN
A DIRECTOR OR
OFFICER EXPIRATION OF
NAME AGE POSITIONS SINCE CURRENT TERM
- - ------------------------------ -------- ----------------------------------- --------------- ------------------

NOMINEES FOR ELECTION
John E. Pelo+ 44 Director 1998 2001
Peter H. van Oppen+ 48 Director 1998 2001

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HAS BEEN
A DIRECTOR OR
OFFICER EXPIRATION OF
NAME AGE POSITIONS SINCE CURRENT TERM
- - ------------------------------ -------- ----------------------------------- --------------- ------------------

DIRECTORS CONTINUING IN OFFICE

Thomas C. Madsen 53 President, Chief Executive 1982 2002
Officer, Chairman of the Board
and Director
Gordon Wicher 54 Vice President-General Manager of 1982 2002
Specialized Conveying Systems,
Secretary and Director
Rodger A. Van Voorhis 43 President of Ventek, Inc. and 2000 2002
Director
Harold R. Frank+* 76 Director 1983 2003
Michael L. Shannon* 50 Director 2000 2003

ADDITIONAL OFFICERS
James H. Stanton 56 Vice President of Corporate 1982
Accounts
Glenn A. Waller 55 Vice President of Western Region 1982
Sales
Steven D. Evans 53 Vice President of Administration 1991
Ted R. Sharp 44 Chief Financial Officer 2000
Kirk W. Morton 40 Senior Vice President of Sales 1999
and Marketing
Teri A. Johnson 40 Vice President-General Manager of 1999
Automated Inspection Systems
Rodney W. Larson 42 Vice President-General Manager of 2000
SRC Vision and Vice
President-General Manager of
Service

+ Member of the Audit Committee
* Member of the Compensation Committee

___________________

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Mr. Pelo has served as a director of the Company since 1998. He has been
President and Chief Executive Officer of Swire Coca-Cola USA, a subsidiary of
Swire Pacific Holdings, Inc., since 1996. Swire Pacific is a diversified holding
company with real estate, shipping, airline, trading, and soft drink interests
in Asia and North America. Between 1984 and 1996, he served as General Manager
of one of Swire's soft drink operations in the United States.

Mr. van Oppen has been a director of the Company since 1998. He has
served as Chairman and Chief Executive Officer of Advanced Digital Information
Corporation (ADIC), a supplier of automated tape storage libraries for client
server networks, since 1994. Between 1985 and 1996, he served in several
capacities at Interpoint Corporation, including Chairman, President and Chief
Executive Officer. Mr. van Oppen is also a director of PhotoWorks.Com, Inc.,
Spacelabs Medical, Inc., and Western Wireless Corporation.

Mr. Madsen, a founder of the Company, has been President and Chief
Executive Officer of the Company and a director since 1982. He was elected
Chairman of the Company in February 2000. He served in various executive
capacities with the Company's predecessor beginning in 1972, including President
from 1980 to 1983, Vice President of Operations from 1979 to 1980 and Vice
President of Engineering from 1975 to 1979.

Mr. Wicher, a founder of the Company, has been Secretary and a director
since 1982. In 1996 he became Vice President-General Manager of Specialized
Conveying Systems. He served as Chief Financial Officer from 1983 to 1994, and
as Vice President of Manufacturing from 1991 to 1996. Mr. Wicher served as
Controller of the Company's predecessor from 1980 to 1983 and served from 1977
to 1980 as Controller of the telecommunications division of California
Microwave, a communications equipment manufacturer.

Mr. Van Voorhis was appointed Director of the Company in August 2000. He
filled the vacancy that was created when Key increased the size of their Board
of Directors by one member, as defined in the Plan of Merger between Key
Technology and Advanced Machine Vision Corporation, which occurred in July of
this year. Mr. Van Voorhis has served as President of Ventek, Inc. since 1996.
Ventek, a designer and manufacturer of machine vision systems for automated
inspection and process control in the plywood and wood panel industries, is one
of two subsidiaries acquired by Key Technology in the merger with AMVC. Mr. Van
Voorhis joined Ventek in 1992 as Vice President of Operations. From 1984 to
1992, he was Assistant Vice President of Marketing at United Financial Systems,
Inc. He served in various management positions with Morvue Electronics, Inc. and
D.W. Fritz Engineers between 1974 and 1984. Mr. Van Voorhis also serves on the
Board of Directors of McKenzie State Bank.

Mr. Frank, a founder of the Company, has been a director of the Company
since 1983 and was Chairman of the Board from 1983 to February 2000. Mr. Frank
has been a Director of Applied Magnetics Corporation, a producer of magnetic
recording heads for the computer industry, since 1957, and served as Chairman
from 1957 to 1995.

Mr. Shannon has been a director of the Company since February 2000. He
is a principal of the General Counsel Law Firm, which he founded in 1994.
Between 1985 and 1993, he served as Associate General Counsel for the Santa Fe
International Corporation and, in 1989, was appointed Senior Vice President,
General Counsel, and Secretary of that company. From 1976 to 1985, he practiced
at the firm of McCutchen, Black, Verleger, and Shea, becoming a partner in 1984.
Mr. Shannon is Chairman and

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Chief Executive Officer of Data Access Technologies, Inc., a start-up software
company, and on the board of directors of A Sport, Inc., a sporting goods
manufacturer.

Mr. Stanton, a founder of the Company, has been Vice President of
Corporate Accounts since 1997. He was Vice President-Product Management,
Specialized Conveying Systems from 1994 to 1997, and was a director from 1982 to
1998. He served as the Company's Vice President of Corporate Accounts from 1992
to 1994, and as Vice President of International Marketing from 1983 to 1992. Mr.
Stanton served in various capacities with the Company's predecessor beginning in
1972, including General Sales Manager from 1980 to 1983 and International
Manager from 1977 to 1980.

Mr. Waller, a founder of the Company, has served as Vice President of
Western Region Sales since 1992 and was a director from 1982 to 1998. He served
as Vice President/Manager of Optical Products Marketing and Sales from 1990 to
1992 and as Vice President/Product Engineering Manager from 1986 to 1990. He was
Vice President of Engineering from 1983 to 1986. Mr. Waller served in various
engineering management capacities with the Company's predecessor from 1972 to
1983.

Mr. Evans has served as Vice President of Administration since he joined
the Company in 1991. From 1994 to 1999, he also served as Chief Financial
Officer, and as Vice President of Finance from 1991 to 1999. He was employed as
Vice President of Finance and Chief Financial Officer for NeuroCom
International, Inc., a medical equipment manufacturer, between 1988 and 1990,
and served as Corporate Controller of Synektron Corp., a disk drive component
manufacturer, from 1986 until 1988.

Mr. Sharp was appointed Chief Financial Officer of the Company in
January 2000, after serving as Controller from 1993 to 1999. Between 1998 and
1999, Mr. Sharp served as Managing Director of the Company's European
operations, KEY/Superior B.V. in the Netherlands. He joined the Company in 1989
as Accounting Manager and served in that capacity until 1991, when he was
appointed Assistant Controller. He operated a tax consulting business from 1987
to 1989, and served as Controller of Varsity Contractors, Inc. from 1984 to
1987. Between 1982 and 1984, he was a Senior Tax Accountant for Beckstead Cooper
Company, Certified Public Accountants.

Mr. Morton joined the Company in 1999 as Senior Vice President of Sales
and Marketing. From 1998 to 1999, he served as Vice President of Sales and
Marketing for Stein, Inc., a business unit of FMC Corporation. He served as
Director of Sales and Marketing of the Citrus Processing business unit of FMC
Corporation from 1995 to 1997, and as Product Manager of that business unit in
1995. From 1993 to 1994, Mr. Morton served as Business Planner for FMC
Corporation.

Ms. Johnson was appointed Vice President-General Manager of Automated
Inspection Systems in 1999. She has served in various engineering and managerial
capacities since she joined the Company in 1984, including Customer Service
Manager from 1997 to 1999, Sales Engineering and Project Engineering Manager
from 1996 to 1997, Inside Sales Manager from 1992 to 1996, and Documentation
Manager from 1990 to 1992.

Mr. Larson served as Vice President of Sales and Marketing for SRC
Vision, Inc. from 1999 until he joined Key Technology in June 2000 as Vice
President-General Manager of SRC Vision and Vice President-General Manager of
Service. SRC Vision is one of the two subsidiaries that Key Technology acquired
in their merger with AMVC in July 2000. Mr. Larson held various executive
management positions in Frigoscandia, Inc., a manufacturer and supplier of
freezing and refrigeration systems and a

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subsidiary of FMC Corporation, including General Manager from 1997 to 1999 and
Director of Business Integration from 1996 to 1997. He served in several
management roles with FMC Corporation, including Director of Sales and Marketing
for the Packaging and Material Handling Division from 1992 to 1996, Manager of
International Marketing for the same division from 1990 to 1992, and Business
Planner for Corporate Development from 1989 to 1990.

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

During the fiscal year ended September 30, 2000, the Board of Directors
held nine meetings. Each director attended all of the meetings of the Board of
Directors with the exception of Mr. Van Oppen, who was absent from three
meetings.

The Audit Committee consists of three members, Messrs. Pelo, van Oppen
and Frank, who are all independent directors, and each of whom is able to read
and understand fundamental financial statements. As directed by the Company's
Audit Committee Charter, at least one member has past experience in finance or
accounting or professional certification in accounting. The function of the
Audit Committee is to recommend to the Board of Directors the appointment of the
Company's independent public accountants, to review and approve the scope of the
yearly audit and proposed budget for audit fees, to review the Company's
internal controls and to consult with, and review recommendations made by the
accounting firm with respect to financial statements, financial records and
internal controls, and to make such other recommendations to the Board of
Directors as it deems appropriate from time to time. The Audit Committee met
twice during fiscal 2000 and all members attended both meetings.

The Compensation Committee consists of Messrs. Frank and Shannon. Mr.
Madsen participates in meetings as an ex officio member. The Compensation
Committee considers recommendations of the Company's management regarding the
compensation of the senior executives of the Company, considers management's
proposals regarding stock incentive grants and their consistency with policies
established by the Board of Directors and administers the Company's stock option
plans. The Compensation Committee met three times during fiscal 2000 and each
member attended all meetings.

The Board of Directors does not have a standing nominating committee.

COMPENSATION OF DIRECTORS

Members of the Board of Directors who are employees of the Company are
not separately compensated for serving on the Board of Directors. Directors who
are not employees of the Company are paid an annual retainer of $6,000 and
$1,000 for each regularly scheduled quarterly board meeting attended, plus
reimbursement of expenses. Independent directors also receive annual
Non-statutory Stock Option grants to purchase shares of Common Stock subject to
the terms of the Company's 1996 Employees' Stock Option Plan.

EMPLOYMENT AGREEMENTS

As a result of the Company's acquisition of Advanced Machine Vision
Corporation ("AMVC"), the Company acquired an employment agreement between
AMVC's subsidiary, Ventek, Inc. and Mr. Van Voorhis for the employment of Mr.
Van Voorhis as the President of Ventek. This agreement was entered into between
Ventek, Inc. and Mr. Van Voorhis on July 24, 1996 and has a term of five-years.
The agreement, as amended in February 1999, provides for an annual base salary
of $175,000 and a $375

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monthly automobile allowance. The agreement is automatically renewable for one
additional year unless either party gives notice for termination to the other
party, in writing, at least 30 days prior to the expiration of the agreement.
The agreement also contains a non-compete provision whereby Mr. Van Voorhis
agrees that, for the duration of the agreement and for a period of 36 months
following termination of employment, Mr. Van Voorhis will not engage in any
business anywhere in the world that is competitive with the business of Ventek,
Inc. provided that, in the event Ventek defaults on its obligations to Mr. Van
Voorhis under the employment agreement and fails to cure such default, Mr. Van
Voorhis shall be released from the non-compete restrictions in his employment
agreement. The agreement also provides that if Mr. Van Voorhis' employment is
terminated by Ventek other than for cause, Ventek shall pay Mr. Van Voorhis his
annual base salary through the date of termination to the extent not previously
paid, reasonable employment expenses through the date of termination and any
accrued vacation pay to the extent not previously paid.

___________________

EXECUTIVE COMPENSATION

CASH AND NON-CASH COMPENSATION PAID TO CERTAIN EXECUTIVE OFFICERS

The following table sets forth, for the fiscal years ended September 30,
2000, 1999 and 1998, compensation information with respect to the Company's
Chief Executive Officer and each of the four other most highly compensated
executive officers, based on the salary and bonus earned during fiscal 2000. One
additional officer has been included who would have been among the four most
highly compensated officers during the fiscal year but for the fact that he was
no longer with the Company at the end of fiscal 2000.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG-TERM
COMPENSATION
AWARDS
-------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
SECURITIES
UNDERLYING
OTHER ANNUAL OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION SARS COMPENSATION
($) ($) ($) (#) ($)
- - --------------------------------- ---- ---------- ------ ------------ ---------- ------------

Thomas C. Madsen 2000 285,935 101 * 21,000 13,500(2)
President and Chief 1999 266,432 55,000 * 0 7,948(2)
Executive Officer 1998 255,000 0 * 20,000 8,924(2)

Gordon Wicher 2000 174,336 101 * 15,000 11,578(3)
Vice President-General Manager, 1999 165,150 45,000(4) * 0 5,704(3)
Specialized Conveying Systems 1998 161,731 0 * 15,000 7,119(3)

Kirk W. Morton 2000 169,087 101 33,814(5) 10,000 3,444(6)
Senior Vice President, 1999 107,692(7) 25,000 34,759(8) 15,000 166(6)
Sales and Marketing 1998 -- -- -- -- --

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Richard J. Hebel 2000 130,988(9) 101 * 0 8,162(10)
Vice President, Corporate 1999 114,805 5,000 * 0 3,118(10)
Marketing and Business 1998 111,142 0 * 5,000 3,135(10)
Development

Steven D. Evans 2000 126,000 5,101(11) * 5,000 10,950(12)
Vice President, Administration 1999 125,727 25,000 * 0 3,808(12)
1998 121,246 0 * 7,000 3,810(12)

Teri A. Johnson 2000 109,679 10,101 * 25,000 6,475(14)
Vice President - General Manager, 1999 69,476 20,000(13) * 0 1,558(14)
Automated Inspection Systems 1998 69,484 0 * 3,000 1,519(14)

------------------
* Benefits and perquisites received totaled less than 10% of combined salary and
bonus.

(1) Includes amounts deferred by the executive officers under the Company's
Profit Sharing and 401(k) Plan.

(2) Consists of the following: $12,654, $5,166, and $5,401 contributed by
the Company under its Profit Sharing and 401(k) Plan in 2000, 1999, and
1998, respectively; and term life insurance premiums of $846, $2,783,
and $3,523 in 2000, 1999, and 1998, respectively.

(3) Consists of the following: $11,041, $3,768, and $4,625 contributed by
the Company under its Profit Sharing and 401(k) Plan in 2000, 1999, and
1998, respectively; and term life insurance premiums of $538, $1,936,
and $2,494 in 2000, 1999, and 1998, respectively.

(4) Includes a $10,000 incentive bonus outside the Management Incentive
Plan.

(5) Consists of reimbursed moving expenses of $27,814 and auto allowance of
$6,000.

(6) Consists of the following: $3,233 contributed by the Company under its
Profit Sharing and 401(k) Plan in 2000; and term life insurance premiums
of $211 and $166 in 2000 and 1999, respectively.

(7) Mr. Morton was hired on January 18, 1999.

(8) Consists of reimbursed moving expenses of $30,259 and auto allowance of
$4,500.

(9) Mr. Hebel resigned from the Company effective September 29, 2000.
Consists of $4,596 of paid vacation and two weeks of salary that would
have normally been paid in the first paycheck received in the next
fiscal year had Mr. Hebel not left the Company.

(10) Consists of the following: $7,866, $2,653, and $2,629 contributed by the
Company under its Profit Sharing and 401(k) Plan in 2000, 1999, and
1998, respectively; and term life insurance premiums of $296, $465, and
$506 in 2000, 1999, and 1998, respectively.

(11) Includes a $5,000 incentive bonus outside the Management Incentive Plan.

(12) Consists of the following: $10,461, $2,927, and $2,842 contributed by
the Company under its Profit Sharing and 401(k) Plan in 2000, 1999, and
1998, respectively; and term life insurance premiums of $499, $882, and
$968 in 2000, 1999, and 1998, respectively.

(13) Includes a $10,000 incentive bonus outside the Management Incentive
Plan.

(14) Consists of the following: $6,317, $1,493, and $1,461 contributed by the
Company under its Profit Sharing and 401(k) Plan in 2000, 1999, and
1998, respectively; and term life insurance premiums of $158, $65, and
$58 in 2000, 1999, and 1998, respectively.

STOCK OPTIONS GRANTED TO CERTAIN EXECUTIVE OFFICERS DURING LAST FISCAL YEAR

The following table sets forth certain information regarding options for
the purchase of the Company's Common Stock that were awarded to the Company's
Chief Executive Officer, each of the four other most highly compensated
executive officers, and one additional officer who would have been among the
four most highly compensated if he was still with the Company at the end of
fiscal 2000.

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OPTION/SAR GRANTS IN FISCAL 2000

POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERMS
- - --------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS/
OPTIONS/ SARS GRANTED EXERCISE OR
SARS TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- - ---------------- ----------- --------------- ----------- ---------- ------- --------

Thomas C. Madsen 21,000 7.04% $8.94 8/8/05 $51,815 $114,550
Gordon Wicher 15,000 5.03% $8.94 8/8/05 $37,011 $ 81,821
Kirk W. Morton 10,000 3.35% $8.94 8/8/05 $24,674 $ 54,547
Richard J. Hebel 0 -- -- -- -- --
Steven D. Evans 5,000 1.68% $8.94 8/8/05 $12,337 $ 27,274
Teri A. Johnson 15,000 5.03% $8.25 11/17/04 $34,190 $ 75,551
Teri A. Johnson 10,000 3.35% $8.94 8/8/05 $24,674 $ 54,547

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END (#) AT FY-END ($)(1)
ACQUIRED ON VALUE ----------------------------- ----------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ----------------- ------------ ------------ ----------- ------------- ----------- -------------

Thomas C. Madsen 0 0 50,000 36,000 $ 0 $ 0
Gordon Wicher 0 0 46,250 26,250 $13,597.50 $ 0
Kirk W. Morton 0 0 3,750 21,250 $ 2,336.25 $7,008.75
Richard J. Hebel 0 0 0 0 $ 0 $ 0
Steven D. Evans 0 0 30,875 10,500 $ 5,439.00 $ 0
Teri A. Johnson 0 0 10,000 27,250 $ 1,813.00 $8,445.00

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

(1) The dollar values were calculated by determining the difference between the
closing market price of the securities underlying the options at fiscal
year end, September 30, 2000, and the exercise price of the options.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

Notwithstanding anything to the contrary set forth in any of the
Company's filings under the Securities Act of 1933 or the Securities Exchange
Act of 1934, the following report of the Audit Committee shall not be
incorporated by reference into any such filings and shall not otherwise be
deemed filed under such acts.

With respect to fiscal 2000, the Audit Committee has reviewed and
discussed the audited financial statements with management. The Audit Committee
has discussed with the independent

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auditors the matters required to be discussed by SAS 61. The Audit Committee
received the written disclosures and the letter from the independent auditors
required by Independence Standards Board Standard No. 1, and has discussed with
the independent auditors the auditors' independence.

Based on the review and discussions referred to above, the Audit
Committee has recommended to the Board of Directors that the financial
statements be included in the Annual Report on Form 10-K for the fiscal year
ended September 30, 2000 for filing with the Securities and Exchange Commission.

During fiscal 2000, the Board of Directors adopted the written Audit
Committee Charter, as presented in Appendix A, in accordance with the Securities
and Exchange Commission Regulation 4460(d)(1).

Respectfully submitted,

Harold R. Frank
John E. Pelo
Peter H. van Oppen

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

With respect to fiscal 2000, the Compensation Committee reviewed and
assumed responsibility for oversight of the determination of the salary,
incentive and stock option compensation for the executive officers of the
Company. The two members of the Compensation Committee are not eligible to
participate in any of the incentive compensation plans, but do receive
nondiscretionary grants under the 1996 Employees' Stock Option Plan. Mr. Madsen
makes recommendations to the members of the Compensation Committee regarding the
compensation of the other executive officers of the Company, but does not
participate in the determination of his own compensation. As used in this
report, the term "Compensation Committee" refers to Messrs. Frank and Shannon.

It is the Company's policy to offer competitive compensation
opportunities for its employees based on a combination of factors, including
corporate performance, business unit performance and the individual's personal
contribution to the business. With respect to fiscal 2000, the Compensation
Committee did not consider or adopt compensation policies for the President that
were different from the compensation policies considered and adopted for the
executive officers as a group.

There are three basic elements to executive officer compensation: base
salary, management incentive compensation, and stock incentives in the form of
stock options granted at market value.

Base Salary

In reaching the determinations concerning fiscal 2000 executive officer
base salaries, the Compensation Committee considered the recommendations of the
President, individual performance and the Company's financial performance. Among
other factors, the recommendations of the President were based upon review of
competitive compensation information published by the American Electronics
Association and information provided by an independent compensation consultant.
In making his

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recommendations, the President compared the Company to a self-selected group of
companies of similar size and considered compensation only for executives with
similar job descriptions. The comparable companies considered for compensation
purposes are not the same as the peer companies utilized in the Stock
Performance Graph included elsewhere herein because the President believes the
Company's most direct competitors for executives are not necessarily the same
companies that would be included in a peer group established to compare
shareholder return.

In addition to the recommendations of the President, the Compensation
Committee considered its own assessment of the individual performance of the
executives and its own subjective assessment of the Company's overall financial
performance. There is no fixed relationship between base salary and corporate
performance or between base salary and the competitive range of salaries that
may be offered by competitive companies. The members of the Compensation
Committee consider their business judgment in light of their experience to be an
important factor in establishing executive compensation.

Management Incentive Compensation

The Company's bonus program, in the form of its Management Incentive
Plan, is designed to tie executive compensation to the Company's performance.
The program blends objective factors for funding the Management Incentive Plan
with subjective evaluations of each participant's contributions to the success
of the Company.

Funding of the Management Incentive Plan bonus pool is based on three
factors: (1) new bookings, (2) profitability, and (3) return on net assets. For
each of these three factors, the Company establishes annual goals for the
eligible group of executives and other employees. An amount equal to $250,000 is
added to the bonus pool for each of the three factors if the Company achieves
the maximum goals. Therefore, a maximum of $750,000 could be added to the bonus
pool with respect to a particular fiscal year. If the Company attains a certain
level of performance but does not reach the stated goal, an amount equal to the
corresponding proportion of the total goal will be added to the Management
Incentive Plan bonus pool. The participants in the Management Incentive Plan are
selected on the basis of perceived contribution to the success of the Company by
the Compensation Committee upon the recommendation of the President.

The President makes recommendations to the Compensation Committee
concerning distribution of the Management Incentive Plan bonus pool funds. The
recommendations are based on the participants' contributions to the Company for
the fiscal year, giving primary consideration to the same factors used in
determining the funding of the Management Incentive Plan bonus pool. The
Compensation Committee may amend, modify or approve the recommended
distributions. In fiscal 2000, the Company's booked orders, profitability, and
return on assets did not meet the minimum level to qualify for funding of the
Management Incentive Plan and, therefore, no bonuses were paid.

Stock Incentive Compensation

The Board of Directors believes that stock ownership by executive
officers and key employees provides valuable incentives for such persons to
benefit as the Company's Common Stock price increases and that stock
option-based incentive compensation arrangements help align the interests of
executives, employees and shareholders. To facilitate these objectives, the
Board of Directors, since 1989, has

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granted stock options to executive officers and key employees through the 1996
Employees' Stock Option Plan, formerly the 1989 Employees' Stock Option Plan
(the "Plan").

Pursuant to this Plan, ninety-three individuals were granted options
during fiscal 2000 to purchase 298,250 shares at a price equal to fair market
value at the date of grant. In determining the number of options granted to
executive officers, the Board of Directors considered the person's opportunity
to affect the share price of the Company's Common Stock, the level of the
person's performance based on past performance and the anticipated incentive
effect of the number of options granted. The grants provided that one-quarter of
such options were to become exercisable one year from the date of grant and in
one-quarter increments on the anniversary date of the original grant in each of
the Company's next three succeeding fiscal years. The options have five- or
ten-year terms. For additional information regarding stock option grants and
exercises see the "Option/SAR Grants in Fiscal 2000," "Aggregated Option/SAR
Exercises in Last Fiscal Year and FY-End Option/SAR Values," and "Summary
Compensation" tables included elsewhere herein.

Messrs. Frank and Shannon and the other directors believe that the
policies and plans described above provide competitive levels of compensation
and effectively link executive and shareholder interests. Moreover, the
directors believe such policies and plans are consistent with the long-term
investment objectives appropriate to the business in which the Company is
engaged.

Respectfully submitted,

Harold R. Frank
Michael L. Shannon

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Mr. Madsen, the Chairman, President and Chief Executive Officer, is not
a voting member but does participate as an ex officio member of the Compensation
Committee with respect to compensation recommendations for the executive
officers other than himself. To the extent the responsibilities of the
Compensation Committee were performed by the Board of Directors, Messrs. Van
Voorhis and Wicher, who are both directors and executive officers of the
Company, did not participate in the deliberations regarding executive officer
compensation.

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STOCK PERFORMANCE GRAPH

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG KEY TECHNOLOGY, INC., THE RUSSELL 2000 INDEX, AND A PEER GROUP

[PERFORMANCE GRAPH]

-------------------------------------------------------------------------------------------------------
TOTAL RETURN ANALYSIS
9/29/95 9/30/96 9/30/97 9/30/98 9/30/99 9/29/00
-------------------------------------------------------------------------------------------------------

KEY TECHNOLOGY $100.00 $201.90 $121.90 $56.19 $56.19 $67.14
-------------------------------------------------------------------------------------------------------
NEW PEER GROUP $100.00 $87.15 $122.22 $64.58 $86.10 $112.72
-------------------------------------------------------------------------------------------------------
OLD PEER GROUP* $100.00 $102.13 $126.05 $68.14 $89.22 $131.59
-------------------------------------------------------------------------------------------------------
RUSSELL 2000 $100.00 $111.32 $144.62 $118.89 $134.38 $166.11
-------------------------------------------------------------------------------------------------------

Source: Carl Thompson Associates www.ctaonline.com (800) 959-9677. Data from
Bloomberg Financial Markets.

Note: CEM Corp., a member of the old peer group, was acquired in June 2000.
Elbit Vision Systems Ltd., a member of the new peer group, started trading in
July 1996.

OLD PEER GROUP: COGNEX CORP., MTS SYSTEMS CORP., NORDSON CORP., THERMO ELECTRON
CORP., BALDWIN TECHNOLOGY CO., INC., CEM CORP., IDEX CORP., PERCEPTRON, INC.,
FLIR SYSTEMS, INC., FIGGIE INTERNATIONAL, INC., FLOW INTERNATIONAL CORP., FMC
CORP., FLOWSERVE CORP.

NEW PEER GROUP: COGNEX CORP., PERCEPTRON, INC., FLIR SYSTEMS, INC., FLOW
INTERNATIONAL CORP., FMC CORP., ELBIT VISION SYSTEMS LTD., PPT VISION, INC.,
ROBOTIC VISION SYSTEMS, INC.

*Beginning with next year's Proxy Statement, the Company will no longer include
the Old Peer Group in the Stock Performance Graph. The Company believes that the
New Peer Group is a more appropriate representation of the Company's peers for
comparing to the performance of Key Technology.

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PRINCIPAL SHAREHOLDERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, as of December 6, 2000, with
respect to the beneficial ownership of the Company's Common and Series B
Convertible Preferred Stock (hereafter "Series B") by each director or nominee
for director, by each named executive officer, by all directors and officers as
a group, and by each person who is known to the Company to be the beneficial
owner of more than five percent of the Company's outstanding Common Stock.
Unless otherwise indicated, each person has sole voting power and sole
investment power. Because Series B is convertible into two-thirds of a share of
Common Stock, each beneficial owner of Series B is deemed by the Securities and
Exchange Commission to be a beneficial owner of Common Stock on a converted
basis. Therefore, in indicating a person's beneficial ownership of shares of
Common Stock in the table, it has been assumed that such person has converted
into Common Stock all shares of Series B of which such person is a beneficial
owner. For these reasons the table contains substantial duplications in the
numbers of shares and percentages of Common Stock and Series B.

NAME AND ADDRESS OF TITLE OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER CLASS BENEFICIAL OWNERSHIP CLASS
-------------------------------------- --------------- ----------------------------- --------------

Thomas C. Madsen Common 536,579(1)(2)(3) 9.1
150 Avery Street Series B 10 *
Walla Walla, Washington 99362
Gordon Wicher Common 254,146(1) 4.3
150 Avery Street
Walla Walla, Washington 99362
Harold R. Frank Common 151,000(1) 2.6
6054 La Goleta
Goleta, California 93117
John E. Pelo Common 9,500(1) *
#6 Gatehouse Lane
Sandy, Utah 84092
Michael L. Shannon Common 196,400(4) 3.4
1000 South Fremont Avenue
Alhambra, California 93117
Peter H. van Oppen Common 35,650(1) *
Advanced Digital Information
Corporation
P.O. Box 97057
Redmond, WA 98073-9757
Rodger A. Van Voorhis Common 154,513(2)(5) 2.6
Ventek, Inc. Series B 207,995(5) 15.5
4030 West First Avenue, Suite 100
Eugene, Oregon 97402
James A. Frank Common 298,927 5.1
P.O. Box 6527
Santa Barbara, CA 93160-6527
Kirk W. Morton Common 9,500(1) *
150 Avery Street
Walla Walla, Washington 99362
Steven D. Evans Common 46,323(1) *
150 Avery Street
Walla Walla, Washington 99362

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Teri A. Johnson Common 13,870(1) *
150 Avery Street
Walla Walla, Washington 99362
All executive officers and directors Common 1,684,359 27.2
as a group (14 persons)

* Less than one percent.

(1) Includes shares purchasable under options exercisable within 60 days of
December 6, 2000 in the following amounts:

Thomas C. Madsen 50,000 Peter H. van Oppen 6,250
Gordon Wicher 46,250 Kirk W. Morton 7,500
Harold R. Frank 25,000 Steven D. Evans 30,875
John E. Pelo 6,250 Teri A. Johnson 13,750

(2) Includes shares issuable upon the exercise of warrants on a share for share
basis in the following amounts:

Thomas C. Madsen 2 Rodger A. Van Voorhis 1,850

(3) Includes Series B as if converted to Common in the following amount:

Thomas C. Madsen 6

(4) Includes 26,400 shares owned by a trust of which the beneficiaries are the
children of Michael L. Shannon. Mr. Shannon disclaims beneficial ownership
of these shares.

(5) Includes 200,595 Series B, or 133,730 shares on a converted basis to Common
Stock, owned by Veneer Technology, Inc. which is 25% owned by Mr. Van
Voorhis. It further includes 7,400 Series B, or 4,933 shares on a converted
basis to Common Stock, owned by Mr. Van Voorhis.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "Commission"). Officers, directors and greater than ten percent beneficial
owners are required by Commission regulations to furnish the Company with copies
of all forms they file pursuant to Section 16(a).

Based solely on the Company's review of the copies of such forms it
received and written representations from reporting persons required to file
reports under Section 16(a), to the Company's knowledge all of the Section 16(a)
filing requirements applicable to such persons with respect to fiscal 2000 were
complied with.

ITEM 2
RATIFICATION OF SELECTION OF AUDITORS

The Board of Directors has selected Deloitte & Touche LLP, independent
public accountants, to audit the consolidated financial statements of the
Company for the fiscal year ending September 30, 2001. Deloitte & Touche LLP has
acted as independent public accountants for the Company since 1985. A
representative of Deloitte & Touche LLP is expected to be present at the Annual
Meeting, will have the opportunity to make a statement, and will be available to
respond to appropriate questions.

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Unless marked to the contrary, proxies received will be voted FOR
ratification of the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the 2001 fiscal year.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR
THE 2001 FISCAL YEAR.

OTHER BUSINESS

Management knows of no other matters that will be presented for action
at the Annual Meeting. However, the enclosed proxy gives discretionary authority
to the persons named in the proxy in the event that any other matters should be
properly presented to the meeting.

Shareholders may only bring business before an annual meeting if the
shareholder proceeds in compliance with the Company's Restated Bylaws. For
business to be properly brought before the 2001 Annual Meeting by a shareholder,
notice of the proposed business must be given to the Secretary of the Company in
writing on or before the close of business on January 12, 2001. The notice to
the Secretary must set forth as to each matter that the shareholder proposes to
bring before the meeting: (a) a brief description of the business; (b) the
shareholder's name and address as they appear on the Company's books; (c) the
class and number of shares beneficially owned by the shareholder; and (d) any
material interest of the shareholder in such business. The presiding officer at
any annual meeting will determine whether any matter was properly brought before
the meeting in accordance with the above provisions. If he should determine that
any matter has not been properly brought before the meeting, he will so declare
at the meeting and the matter will not be considered or acted upon.

SHAREHOLDER PROPOSALS

To be eligible for inclusion in the Company's proxy materials for the
2002 Annual Meeting of Shareholders, a proposal intended to be presented by a
shareholder for action at that meeting must, in addition to complying with the
shareholder eligibility and other requirements of the Securities and Exchange
Commission's rules governing such proposals, be received not later than
September 4, 2001 by the Secretary of the Company at the Company's principal
executive offices, 150 Avery Street, Walla Walla, Washington 99362.

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

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING.
THEREFORE, WHETHER OR NOT YOU EXPECT TO BE PRESENT IN PERSON, YOU ARE
RESPECTFULLY REQUESTED TO MARK, SIGN AND DATE THE ENCLOSED PROXY AND PROMPTLY
RETURN IT IN THE ENCLOSED ENVELOPE.

By order of the Board of Directors,

/s/ GORDON WICHER

Gordon Wicher
Secretary

Dated: January 2, 2001

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APPENDIX A

Key Technology, Inc.
AUDIT COMMITTEE CHARTER
May 3, 2000

I. PURPOSE

The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Corporation to
any governmental body or the public; the Corporation's systems of internal
controls regarding finance, accounting, legal compliance and ethics that
management and the Board have established; and the Corporation's auditing,
accounting and financial reporting processes generally. Consistent with this
function, the Audit Committee should encourage continuous improvement of, and
should foster adherence to, the corporation's policies, procedures and practices
at all levels. The Audit Committee's primary duties and responsibilities are to:

- Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control
system.

- Review and appraise the audit efforts of the Corporation's
independent accounting and internal auditing department.

- Provide an open avenue of communication among the independent
accountants, financial and senior management, the internal
auditing department, and the Board of Directors.

THE AUDIT COMMITTEE WILL PRIMARILY FULFILL THESE RESPONSIBILITIES BY CARRYING
OUT THE ACTIVITIES ENUMERATED IN SECTION IV.

II. COMPOSITION

The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgement as a member of the Committee.
Members of the Audit Committee shall be considered independent if they have no
relationship to the corporation that may interfere with the exercise of their
independence from management and the corporation. All members of the Committee
shall have a working familiarity with basic finance and accounting practices,
and at least one member of the Committee shall have accounting or related
financial management expertise. Committee members may enhance their familiarity
with finance and accounting by participating in educational programs conducted
by the Corporation or an outside consultant.

THE MEMBERS OF THE COMMITTEE SHALL BE ELECTED BY THE BOARD AT THE ANNUAL
ORGANIZATIONAL MEETING OF THE BOARD OR UNTIL THEIR SUCCESSORS SHALL BE DULY
ELECTED AND QUALIFIED. UNLESS A CHAIR IS ELECTED BY THE FULL BOARD, THE MEMBERS
OF THE COMMITTEE MAY DESIGNATE A CHAIR BY MAJORITY VOTE OR THE FULL COMMITTEE
MEMBERSHIP.

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III. MEETINGS

The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. As part of its job to foster open
communication, the Committee should meet at least annually with management, the
director of the internal auditing department and the independent accountants in
separate executive sessions to discuss any matters that the Committee or each of
these groups believe should be discussed privately. In addition, the Committee
or at least its Chair should meet with the independent accountants and
management quarterly to review the Corporations financials consistent with IV.4
below.

IV. RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties the Audit Committee shall:

Documents/Reports Review

1. Review and update this Charter periodically, at least annually, as
conditions dictate.

2. Review the organization's annual financial statements and any reports or
other financial information submitted to any governmental body, or the
public, including any certification, report, opinion, or review rendered by
the independent accountants.

3. Review the regular internal reports to management prepared by the internal
auditing department and management's response.

4. Review with financial management and the independent accountants the 10-Q
prior to its filing or prior to the release of earnings. The Chair of the
Committee may represent the entire Committee for purposes of this review.

Independent Accountants

5. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness and approve the
fees and other compensation to be paid to the independent accountants. On
an annual basis, the Committee should review and discuss with the
accountants all significant relationships the accountants have with the
Corporation to determine the accountants' independence.

6. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.

7. Periodically consult with the independent accountants out of the presence
of management about internal controls and the fullness and accuracy of the
organization's financial statements.

Financial Reporting Processes

8. In consultation with the independent accountants and the internal auditors,
review the integrity of the organization's financial reporting processes,
both internal and external.

9. Consider the independent accountants' judgements about the quality and
appropriateness of the Corporation's accounting principles as applied in
its financial reporting.

10. Consider and approve, if appropriate, major changes to the Corporation's
auditing and accounting principles and practices as suggested by the
independent accountants, management, or the internal auditing department.

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Process Improvement

11. Establish regular and separate systems of reporting to the Audit Committee
by each of management, the independent accountants and the internal
auditors regarding any significant judgements made in management's
preparation of the financial statements and the view of each as to
appropriateness of such judgements.

12. Following completion of the annual audit, review separately with each of
management, the independent accountants and the internal auditing
department any significant difficulties encountered during the course of
the audit, including any restrictions on the scope of work or access to
required information.

13. Review any significant disagreement among management and the independent
accountants or the internal auditing department in connection with the
preparation of the financial statements.

14. Review with the independent accountants, the internal auditing department
and management the extent to which changes or improvements in financial or
accounting practices, as approved by the Audit Committee, have been
implemented. (This review should be conducted at an appropriate time
subsequent to implementation of changes or improvements, as decided by the
Committee.)

Ethical and Legal Compliance

15. Establish, review and update periodically a Code of Ethical Conduct and
ensure that management has established a system to enforce this Code.

16. Review management's monitoring of the Corporation's compliance with the
organization's Ethical Code, and ensure that management has the proper
review system in place to ensure that the Corporation's financial
statements, reports and other financial information disseminated to
governmental organizations, and the public satisfy legal requirements.

17. Review activities, organizational structure, and qualifications of the
internal audit department.

18. Review, with the organization's counsel, legal compliance matters including
corporate securities trading policies.

19. Review, with the organization's counsel, any legal matter that could have a
significant impact on the organization's financial statements.

20. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law, as the Committee or the Board
deems necessary or appropriate.

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PROXY

KEY TECHNOLOGY, INC.

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS, FEBRUARY 7, 2001

The undersigned hereby appoints Thomas C. Madsen and Gordon Wicher, and each of
them, proxies with full power of substitution, to represent and vote, as
designated below, on behalf of the undersigned, all shares which the
undersigned may be entitled to vote at the Annual Meeting of Shareholders of KEY
TECHNOLOGY, INC. on February 7, 2001, and any adjournment or postponement
thereof. A majority of the proxies or substitutes present at the meeting, or if
only one person shall be present then that one, may exercise all powers granted
hereby.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

- - -------------------------------------------------------------------------------
-FOLD AND DETACH HERE-
23
Please mark
your votes as [X]
indicated in
this example

WITHHOLD
FOR AUTHORITY The shares represented by this proxy will be voted as
Proposal to elect the following nominees as specified on the above matters, but if no specification
directors. is made, this proxy will be voted for the election of
JOHN E. PELO [ ] [ ] the nominees for Director, and for approval of the selection
of auditors. In addition, the proxies may vote in their
PETER H. VAN OPPEN [ ] [ ] discretion as to other matters as may properly come before
the annual meeting.

FOR AGAINST ABSTAIN
Proposal to ratify selection of Deloitte & Touche [ ] [ ] [ ] Please mark, date, sign and return this proxy
LLP as independent auditors for the 2001 in the enclosed envelope.
fiscal year:

Signature(s) ______________________________________ Dated: ___________, 2001
Please sign above exactly as your name or names appear on this card. If more
than one name appears, all should sign. Persons signing as executor,
administrator, trustee, guardian, corporate officer or in any other official
or representative capacity, should also provide full title.
- - ----------------------------------------------------------------------------
-FOLD AND DETACH HERE-