1.	To elect two directors of the Company; and

2.	To transact such other business as may properly come before the Annual Meeting.

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†	Member of the Audit Committee. Mr. Stonecipher was appointed to the Audit Committee on August 10, 2004.

*	Member of the Compensation Committee.

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Summary Compensation Table
		Annual Compensation												Long-Term Compensation Awards
Name and Principal Position		Year			Salary (1) ($)			Bonus ($)			Other Annual Compensation ($)			Securities Underlying Options/SARs (#)			All Other Compensation ($)
Kirk W. Morton President and Chief Executive Officer			2004 2003 2002			219,999 202,307 200,000			101 85,000 0	(3)		* * *			0 20,000 10,000			18,702 8,249 4,346			(2) (2) (2)
Gordon Wicher Vice President of Operations			2004 2003 2002			185,001 178,162 176,923			101 52,500 0			* * *			0 7,500 7,500			18,309 7,874 4,433			(4) (4) (4)
Rodney W. Larson Vice President of Sales and Marketing			2004 2003 2002			185,001 162,884 159,999			101 52,500 0			* * *			0 7,500 5,000			18,894 6,668 2,558			(5) (5) (5)
Phyllis C. Best Chief Financial Officer			2004 2003			150,000 103,846	(7)		101 32,500			* *			0 20,000			4,424 548			(6) (6)

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		Shares Acquired on			Value			Number of Securities Underlying Unexercised Options/SARs at FY-End (#)						Value of Unexercised In-the-Money Options/SARs at FY-End ($) (1)
Name		Exercise (#)			Realized ($)			Exercisable			Unexercisable			Exercisable			Unexercisable
Kirk W. Morton			35,000			224,859			15,000			25,000		$	28,350		$	74,343
Gordon Wicher			7,500			54,525			70,625			9,375		$	79,744		$	39,656
Rodney W. Larson			6,194			53,826			19,181			8,125		$	57,373		$	29,344
Phyllis C. Best			0			0			5,000			15,000		$	22,525		$	67,575

(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, 2004, and the exercise price of the options.

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TOTAL RETURN ANALYSIS
		9/30/1999			9/30/2000			9/30/2001			9/29/2002			9/29/2003			9/29/2004
Key Technology		$	100.00		$	119.50		$	39.87		$	67.94		$	160.95		$	152.57
Peer Group		$	100.00		$	120.59		$	87.27		$	82.92		$	123.31		$	189.46
Russell 2000		$	100.00		$	123.38		$	97.31		$	88.25		$	120.45		$	143.08

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·	Identify individuals qualified to become members of the Board of Directors, consistent with criteria approved by the Board;

·	Select, or recommend to the Board for selection, director nominees to be presented for stockholder approval at the next annual meeting of stockholders;

·	Select, or recommend to the Board for selection, director nominees to fill vacancies on the Board as necessary;

·	Develop and recommend to the Board of Directors for approval a set of corporate governance principles applicable to the Company; and

·	Recommend nominees for each committee.

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·

Audits of consolidated financial statements, including reviews of quarterly financial statements, consultation on accounting issues, internal control work, attendance at Audit Committee meetings, use of specialists in connection with the foregoing and other services integral to audits of financial statements.

·	Assistance in the implementation of new accounting principles.

·	Audits of opening balance sheets of acquired companies.

·	Audits and accounting consultation on acquisitions, dispositions and discontinued operations.

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·	Compliance letters, agreed-upon procedures, reviews and similar reports based on audited financial statements.

·	Audits of financial statements and transactions that are used by lenders, filed with government and regulatory bodies and similar reports.

·	Audits or reviews of financial statements of subsidiaries or affiliates of the Company as may be requested by the Audit Committee.

·	Reporting on management's internal control assertions.

·	Services that result from the role of the firm as independent auditor, such as reviews of SEC filings, letters to underwriters and other services related to financings.

·	Employee benefit plan audits and reviews of relevant filings.

·	Assistance in reviews and tests of internal control and related systems.

·	Assessment of the design and implementation of internal accounting controls (e.g., in connection with implementation of an ERP system or as a result of reviews of existing systems).

·	Foreign statutory audits and other regulatory reports.

·	Tax return and tax accrual reviews, consultations and assistance.

·	Tax planning and other noncompliance related consultation or services, including employee benefit taxes.

·	Expatriate tax services, including return preparation and consultation on employment issues.

·	Tax consulting related to VAT and other foreign operations issues.

·	Tax/legal assistance in the Netherlands to comply with corporate statutory and business related issues.

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·	Forensic and other investigative services if directed by the Board of Directors or the Audit Committee, or outside counsel engaged by the Board, its Audit Committee or the Company’s CEO or CFO.

·	M&A transactional assistance.

·	Assessment of the design and implementation of risk management controls.

·	Bookkeeping or other services related to accounting records or financial statements (e.g., recording journal entries, reconciling accounts, processing data, preparing financial statements, etc.).

·	Internal audit services.

·	Appraisals, valuation services or fairness opinions or contribution-in-kind reports.

·	Signing tax returns (including payroll tax returns) on behalf of the Company.

·	Actuarial services.

·	Signing or co-signing checks.

·	Acting as agent for the Company.

·	Management or human resources functions (managerial position search and evaluation activities).

·	Payroll services.

·	Broker-Dealer services (including underwriting, investment adviser services, investment banking and investment management).

·	Maintaining custody of the Company funds.

·	Acting in a capacity equivalent to that of the Company management or employee, or performing any decision-making, supervisory or ongoing monitoring functions for the Company.

·	Financial information systems design and/or implementation.

·	Legal services.

·	Expert witness or testimony services, except where specifically related to the Company’s accounting policy, procedure, or audited financial statements.

1. Election of Directors:			The shares represented by this proxy will be voted as specified on the above matters, but if no specification is made, this proxy will be voted for the election of the nominees for Director. In addition, the proxies may vote in their discretion as to other matters as may properly come before the annual meeting, or any adjournments or postponements thereof.   Please mark, date, sign and return this proxy in the enclosed envelope.
	Nominees:
¨ FOR ALL NOMINEES	¡ THOMAS C. MADSEN
	¡ KIRK W. MORTON
¨ WITHHOLD AUTHORITY      FOR ALL NOMINEES
¨ FOR ALL EXCEPT      (SEE INSTRUCTIONS BELOW)
INSTRUCTION:   To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: l
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.		¨

Note:

Please sign exactly as your name or names appear on the Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

 

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