##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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|(Mark One)
|[X]        |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
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|           |  | For the quarterly period ended June 30, 2002                                            
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|[   ]      |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|           |  | For the transition period from  to                                                      

Commission File Number 000-30637

AUGUST TECHNOLOGY CORPORATION
(Exact name of Registrant as specified in its charter)

|                                                                         |  |                                                
|------------------------------------------------------------------------ |  | -----------------------------------------------
|Minnesota
(State or other jurisdiction of
incorporation or organization) |  | 41-1729485
(I.R.S. Employer
Identification No.)

|                                                                               |  |                 
|------------------------------------------------------------------------------ |  | ----------------
|4900 West 78th Street
Bloomington, MN
(Address of principal executive offices) |  | 55435
(Zip Code)

(952) 820-0080
(Registrants telephone number, including area code)

N/A
(Former name, former address, and former fiscal year, if changed since last report.)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes
X No

As of July 31, 2002, there were 13,120,624 shares of common stock outstanding.



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AUGUST TECHNOLOGY CORPORATION
TABLE OF CONTENTS

|           |                       |                                                                                                                 |  |    |         
|---------- | --------------------- | --------------------------------------------------------------------------------------------------------------- |  | -- | --------
|           |                       | Description                                                                                                     |  |    | Page No.
|           |                       |                                                                                                                 |  |    |         
|PART I     | FINANCIAL INFORMATION |                                                                                                                 |  |    |         
|           |                       |                                                                                                                 |  |    |         
|Item 1.    | Financial Statements  |                                                                                                                 |  |   
|           |                       |                                                                                                                 |  |    |         
|           |                       | Consolidated Balance Sheets as of June 30, 2002 and December 31,     2001 (unaudited)                           |  | 3 
|           |                       |                                                                                                                 |  |   
|           |                       | Consolidated Statements of Operations for the three and six months     ended June 30,
2002 and 2001 (unaudited) |  | 4 
|           |                       |                                                                                                                 |  |   
|           |                       | Consolidated Statements of Cash Flows for the six months ended     June 30, 2002
and 2001 (unaudited)           |  | 5 
|           |                       |                                                                                                                 |  |   
|           |                       | Notes to Consolidated Financial Statements (unaudited)                                                          |  | 6 
|           |                       |                                                                                                                 |  |   
|Item 2.    |                       | Managements Discussion and Analysis of Financial Condition and     Results of Operations                       |  | 10
|           |                       |                                                                                                                 |  |   
|Item 3.    |                       | Qualitative and Quantitative Disclosures about Market Risk                                                      |  | 14
|           |                       |                                                                                                                 |  |   
|PART II    | OTHER INFORMATION     |                                                                                                                 | 
|           |                       |                                                                                                                 |  |   
|Item 4.    |                       | Submission of Matters to a Vote of Security Holders                                                             |  | 15
|           |                       |                                                                                                                 |  |   
|Item 6.    |                       | Exhibits and Reports on Form 8-K                                                                                |  | 16
|           |                       |                                                                                                                 |  |   
|SIGNATURES |                       |                                                                                                                 |  |    | 17      

2



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##### 



PART I                      FINANCIAL INFORMATION

Item 1. Financial Statements

AUGUST TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)

|                              |                                                                                                                                 |  |                                            |                                      |        |          |       |        |              |        |  | 
|----------------------------- | ------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------ | ------------------------------------ | ------ | -------- | ----- | ------ | ------------ | ------ |  | 
|                              |                                                                                                                                 |  |                                            |                                      |        | June 30, |       |        | December 31, |       
|                              |                                                                                                                                 |  |                                            |                                      |        | 2002     |       |        | 2001         |       
|                              |                                                                                                                                 |  |                                            |                                      |        |          |       |        |              |       
|                              |                                                                                                                                 |  |                                            | ASSETS                               |        |          |       |        |              |        |  | 
|                              |                                                                                                                                 |  |                                            |                                      |        |          |       |       
|Current assets:               |                                                                                                                                 |  |                                            |                                      |        |          |       |       
|                              | Cash and cash equivalents                                                                                                       |  | $                                          | 3,406                                |        |          | $     | 1,523  |             
|                              | Short-term investments                                                                                                          |  |                                            | 18,950                               |        |          |       | 23,196 |             
|                              | Accounts receivable, net                                                                                                        |  |                                            | 4,638                                |        |          |       | 4,737  |             
|                              | Inventories                                                                                                                     |  |                                            | 8,663                                |        |          |       | 9,384  |             
|                              | Prepaid expenses and other current assets                                                                                       |  |                                            | 1,388                                |        |          |       | 2,838  |             
|                              |                                                                                                                                 |  |                                            |                                      |        |         
|                              |                                                                                                                                 |  | Total current assets                       |                                      |        | 37,045   |       |        |              | 41,678 | 
|Property and equipment, net   |                                                                                                                                 |  | 3,703                                      |                                      |        |          | 3,541 |       
|Long-term investments         |                                                                                                                                 |  | 2,088                                      |                                      |        |          | 1,138 |       
|Other assets                  |                                                                                                                                 |  | 725                                        |                                      |        |          | 798   |       
|                              |                                                                                                                                 |  |                                            |                                      |        |         
|                              |                                                                                                                                 |  | Total assets                               |                                      | $      | 43,561   |       |        | $            | 47,155 | 
|                              |                                                                                                                                 |  |                                            |                                      |        |         
|                              |                                                                                                                                 |  |                                            |                                      |        |          |       |       
|                              |                                                                                                                                 |  |                                            | LIABILITIES AND SHAREHOLDERS EQUITY |        |          |       |        |              |        |  | 
|                              |                                                                                                                                 |  |                                            |                                      |        |          |       |       
|Current liabilities:          |                                                                                                                                 |  |                                            |                                      |        |          |       |       
|                              | Accounts payable                                                                                                                |  | $                                          | 1,976                                |        |          | $     | 1,641  |             
|                              | Accrued compensation                                                                                                            |  |                                            | 672                                  |        |          |       | 615    |             
|                              | Accrued liabilities                                                                                                             |  |                                            | 465                                  |        |          |       | 536    |             
|                              | Customer deposits                                                                                                               |  |                                            | 932                                  |        |          |       | 1,715  |             
|                              |                                                                                                                                 |  |                                            |                                      |        |         
|                              |                                                                                                                                 |  | Total current liabilities                  |                                      |        | 4,045    |       |        |              | 4,507  | 
|Other non-current liabilities |                                                                                                                                 |  | 110                                        |                                      |        |          | 125   |       
|                              |                                                                                                                                 |  |                                            |                                      |        |         
|                              |                                                                                                                                 |  | Total liabilities                          |                                      | 4,155  |          |       |        | 4,632        |       
|                              |                                                                                                                                 |  |                                            |                                      |        |         
|                              |                                                                                                                                 |  |                                            |                                      |        |          |       |       
|Shareholders equity:         |                                                                                                                                 |  |                                            |                                      |        |          |       |       
|                              | Common stock, no par value, 42,000,000 shares
authorized, 13,112,586 and 12,812,164 shares issued
and outstanding, respectively |  |                                            | 42,037                               |        |          |       | 41,020 |             
|                              | Undesignated capital stock, no par value, 3,000,000 shares
authorized, no shares issued or outstanding                          |  |                                            |                                     |        |          |       |       |             
|                              | Deferred compensation related to stock options                                                                                  |  |                                            | (135                                 | )      |          |       | (192   | )           
|                              | Retained earnings (accumulated deficit)                                                                                         |  |                                            | (2,530                               | )      |          |       | 1,704  |             
|                              | Accumulated other comprehensive income (loss)                                                                                   |  |                                            | 34                                   |        |          |       | (9     | )           
|                              |                                                                                                                                 |  |                                            |                                      |        |         
|                              |                                                                                                                                 |  | Total shareholders equity                 |                                      |        | 39,406   |       |        |              | 42,523 | 
|                              |                                                                                                                                 |  |                                            |                                      |        |         
|                              |                                                                                                                                 |  | Total liabilities and shareholders equity | $                                    | 43,561 |          |       | $      | 47,155       |       
|                              |                                                                                                                                 |  |                                            |                                      |        |         

See accompanying notes to consolidated financial statements.

3



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##### 



AUGUST TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

|                                                |         |                         |        |                             |        |   |        |      |       |                           |  |  |      |        |       |        |   |        |      |        | 
|----------------------------------------------- | ------- | ----------------------- | ------ | --------------------------- | ------ | - | ------ | ---- | ----- | ------------------------- |  |  | ---- | ------ | ----- | ------ | - | ------ | ---- | ------ | 
|                                                |         |                         |        | Three Months Ended June 30, |        |   |        |      |       | Six Months Ended June 30, | 
|                                                |         |                         |        |                             |        |   |        |      |       |                           | 
|                                                |         |                         |        | 2002                        |        |   | 2001   |      |       |                           |  |  | 2002 |        |       | 2001   |  
|                                                |         |                         |        |                             |        |   |        |      |       |                           |  |  |      |        |       |        |  
|Net revenues                                    |         | $                       | 6,980  |                             |        | $ | 10,155 |      |       |                           |  |  | $    | 12,490 |       |        | $ | 21,059 |     
|Cost of revenues                                |         |                         | 2,965  |                             |        |   | 3,923  |      |       |                           |  |  |      | 5,329  |       |        |   | 8,194  |     
|                                                |         |                         |        |                             |        |   |        |      |       |                           |  |  |      |        |      
|                                                |         | Gross profit            |        |                             | 4,015  |   |        |      | 6,232 |                           |  |  |      |        |       | 7,161  |   |        |      | 12,865 | 
|Selling, general and administrative expenses    |         |                         | 2,832  |                             |        |   | 3,071  |      |       |                           |  |  |      | 5,658  |       |        |   | 6,248  |     
|Research and development expenses               |         |                         | 2,729  |                             |        |   | 2,176  |      |       |                           |  |  |      | 4,864  |       |        |   | 4,340  |     
|Non-recurring expenses                          |         |                         | 568    |                             |        |   | 432    |      |       |                           |  |  |      | 568    |       |        |   | 432    |     
|                                                |         |                         |        |                             |        |   |        |      |       |                           |  |  |      |        |      
|                                                |         | Operating income (loss) |        |                             | (2,114 | ) |        |      | 553   |                           |  |  |      |        |       | (3,929 | ) |        |      | 1,845  | 
|Interest income                                 |         |                         | 174    |                             |        |   | 371    |      |       |                           |  |  |      | 382    |       |        |   | 847    |     
|Other expense                                   |         |                         |       |                             |        |   | (17    | )    |       |                           |  |  |      |       |       |        |   | (17    | )   
|                                                |         |                         |        |                             |        |   |        |      |       |                           |  |  |      |        |      
|Income (loss) before provision for income taxes |         |                         | (1,940 | )                           |        |   | 907    |      |       |                           |  |  |      | (3,547 | )     |        |   | 2,675  |     
|Provision for income taxes                      |         |                         | 1,491  |                             |        |   | 290    |      |       |                           |  |  |      | 687    |       |        |   | 909    |     
|                                                |         |                         |        |                             |        |   |        |      |       |                           |  |  |      |        |      
|Net income (loss)                               |         | $                       | (3,431 | )                           |        | $ | 617    |      |       |                           |  |  | $    | (4,234 | )     |        | $ | 1,766  |     
|                                                |         |                         |        |                             |        |   |        |      |       |                           |  |  |      |        |      
|                                                |         |                         |        |                             |        |   |        |      |       |                           |  |  |      |        |       |        |   |       
|Net income (loss) per share:                    |         |                         |        |                             |        |   |        |      |       |                           |  |  |      |        |       |        |   |       
|                                                | Basic   |                         | $      | (0.26                       | )      |   | $      | 0.05 |       |                           |  |  |      | $      | (0.33 | )      |   | $      | 0.14 |       
|                                                | Diluted |                         | $      | (0.26                       | )      |   | $      | 0.05 |       |                           |  |  |      | $      | (0.33 | )      |   | $      | 0.13 |       

See accompanying notes to consolidated financial statements.

4



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AUGUST TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |       |         |     |       |  
|----------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------------------------- | --------------------------------------------------- | ------- | ------------------------- | ------ | ----- | ------- | --- | ----- | -
|                                                      |                                                                                   |                                                                |                                                     |         | Six Months Ended June 30, |       
|                                                      |                                                                                   |                                                                |                                                     |         |                           |       
|                                                      |                                                                                   |                                                                |                                                     |         | 2002                      |        |       | 2001    |    
|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |       |         |    
|Cash flows from operating activities:                 |                                                                                   |                                                                |                                                     |         |                           |        |       |        
|                                                      | Net income (loss)                                                                 |                                                                | $                                                   | (4,234  | )                         |        | $     | 1,766   |    
|                                                      | Adjustments to reconcile net income (loss) to net cash from
operating activities: |                                                                |                                                     |         |                           |        |       |         |    
|                                                      |                                                                                   | Deferred income taxes                                          |                                                     |         | 896                       |        |       |         |    |      
|                                                      |                                                                                   | Depreciation and amortization                                  |                                                     |         | 681                       |        |       |         | 405 |      
|                                                      |                                                                                   | Amortization of deferred compensation related to stock options |                                                     |         | 31                        |        |       |         | 47  |      
|                                                      |                                                                                   | Provision for doubtful accounts                                |                                                     |         | 26                        |        |       |         | 114 |      
|                                                      |                                                                                   | Loss on disposition of assets                                  |                                                     |         |                          |        |       |         | 17  |      
|                                                      |                                                                                   | Issuance of stock options to nonemployees                      |                                                     |         |                          |        |       |         | 18  |      
|                                                      |                                                                                   | Changes in operating assets and liabilities:                   |                                                     |         |                           |        |       |         |     |      
|                                                      |                                                                                   |                                                                | Accounts receivable                                 |         |                           | 73     |       |         |     | (637  | )
|                                                      |                                                                                   |                                                                | Inventories                                         |         |                           | 721    |       |         |     | 259   |  
|                                                      |                                                                                   |                                                                | Prepaid expenses and other current assets           |         |                           | 1,129  |       |         |     | (322  | )
|                                                      |                                                                                   |                                                                | Accounts payable                                    |         |                           | 336    |       |         |     | (409  | )
|                                                      |                                                                                   |                                                                | Accrued compensation                                |         |                           | 57     |       |         |     | (265  | )
|                                                      |                                                                                   |                                                                | Accrued liabilities                                 |         |                           | (86    | )     |         |     | (351  | )
|                                                      |                                                                                   |                                                                | Customer deposits                                   |         |                           | (783   | )     |         |     | (183  | )
|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |      
|                                                      |                                                                                   |                                                                | Net cash provided by (used in) operating activities |         |                           | (1,153 | )     |         |     | 459   |  
|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |      
|                                                     
|Cash flows from investing activities:                 |                                                                                   |                                                                |                                                     |         |                           |        |       |        
|                                                      | Maturities of marketable securities                                               |                                                                |                                                     | 19,823  |                           |        |       | 31,712  |    
|                                                      | Purchases of marketable securities                                                |                                                                |                                                     | (16,487 | )                         |        |       | (28,816 | )  
|                                                      | Purchases of property and equipment                                               |                                                                |                                                     | (797    | )                         |        |       | (1,211  | )  
|                                                      | Investment in other assets                                                        |                                                                |                                                     | (546    | )                         |        |       | (110    | )  
|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |      
|                                                      |                                                                                   |                                                                | Net cash provided by investing activities           |         |                           | 1,993  |       |         |     | 1,575 |  
|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |      
|                                                     
|Cash flows from financing activities:                 |                                                                                   |                                                                |                                                     |         |                           |        |       |        
|                                                      | Net proceeds from issuances of common stock                                       |                                                                |                                                     | 1,043   |                           |        |       | 307     |    
|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |      
|                                                      |                                                                                   |                                                                | Net cash provided by financing activities           |         |                           | 1,043  |       |         |     | 307   |  
|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |      
|Effect of exchange rates on cash and cash equivalents |                                                                                   |                                                                |                                                    |         |                           |        | (6    | )      
|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |      
|Net increase in cash and cash equivalents             |                                                                                   |                                                                | 1,883                                               |         |                           |        | 2,335 |        
|Cash and cash equivalents at beginning of period      |                                                                                   |                                                                | 1,523                                               |         |                           |        | 3,103 |        
|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |      
|Cash and cash equivalents at end of period            |                                                                                   | $                                                              | 3,406                                               |         |                           | $      | 5,438 |        
|                                                      |                                                                                   |                                                                |                                                     |         |                           |        |      
|                                                     
|Supplemental cash flow information:                   |                                                                                   |                                                                |                                                     |         |                           |        |       |        
|                                                      | Cash refunds of (paid for) income taxes                                           |                                                                | $                                                   | 1,749   |                           |        | $     | (1,877  | )  

See accompanying notes to consolidated financial statements.

5



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AUGUST TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
(Unaudited)

Note 1  Basis of Presentation

The accompanying unaudited consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures, normally included
in consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America, have been
condensed or omitted pursuant to such rules and regulations. In the opinion
of the management of August Technology Corporation (the Company), all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included in the balance sheet at June 30,
2002, and the operating results and cash flows for the six months ended June
30, 2002 and 2001. The results of operations of the interim periods are not
necessarily indicative of the results of operations that may be expected for
any other period or for the year as a whole. These consolidated financial
statements and notes hereto should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the Companys
Annual Report on Form 10-K for the year ended December 31, 2001, filed with
the Securities and Exchange Commission on March 15, 2002.

The accompanying consolidated financial statements include the accounts
of August Technology Corporation and its subsidiaries (together, the
Company). All significant intercompany balances and transactions are
eliminated in Consolidation.

Certain prior year amounts have been reclassified to conform to the 2002
presentation.

Note 2  Pending Acquisition

On May 23, 2002, the Company entered into a definitive agreement (the
Agreement) with ASTI Holdings, Ltd. (ASTI) of Singapore to acquire
Semiconductor Technologies and Instruments, Inc. (STI) for a purchase price
of $26.1 million, consisting of $12 million cash, a $3 million six month note
to ASTI and $11.1 million in stock. The Company has requested changes in the
terms of the Agreement including a reduction in the purchase price. The
Company and ASTI are in the process of negotiating an amendment to the
Agreement.

There is no assurance that the Company and ASTI will agree upon an
amendment to the Agreement on terms acceptable to the Company. In the event
the Company and ASTI do not agree upon an amendment to the Agreement, the
Company believes it is entitled to terminate the Agreement without payment of
a $2.6 million break up fee (the Break up Fee), as outlined in the
Agreement. ASTI may dispute the Companys right to terminate the Agreement
and seek the Break up Fee or damages under the Agreement in an arbitration
proceeding or through litigation. In the event the Company fails to prevail
in any such dispute, resulting damage awards or the payment of the Break up
Fee and the write-off of $0.1 million of acquisition costs, on the balance
sheet as of June 30, 2002, may have a material effect on the Companys
financial condition. Whether or not the Company prevails, the legal expenses
involved in any such proceeding may be material.

6



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Note 3  Accounts Receivable

Accounts receivable consisted of the following:

|                                |                          |   |          |       |              |   |       |       | 
|------------------------------- | ------------------------ | - | -------- | ----- | ------------ | - | ----- | ----- | 
|                                |                          |   | June 30, |       | December 31,
|                                |                          |   | 2002     |       | 2001        
|                                |                          |   |          |       |             
|Billed receivables              |                          | $ | 4,331    |       |              | $ | 4,640 |      
|                               
|                               
|                               
|                               
|Unbilled receivables            |                          |   | 735      |       |              |   | 499   |      
|                                |                          |   |          |       |              |   |       |      
|                                |                          |   | 5,066    |       |              |   | 5,139 |      
|                               
|                               
|                               
|                               
|Allowance for doubtful accounts |                          |   | (428     | )     |              |   | (402  | )    
|                                |                          |   |          |       |              |   |       |      
|                                | Accounts receivable, net |   | $        | 4,638 |              |   | $     | 4,737 | 
|                                |                          |   |          |       |              |   |       |      

Note 4  Inventories

Inventories consisted of the following:

|                                               |             |   |          |       |              |   |       |       | 
|---------------------------------------------- | ----------- | - | -------- | ----- | ------------ | - | ----- | ----- | 
|                                               |             |   | June 30, |       | December 31,
|                                               |             |   | 2002     |       | 2001        
|                                               |             |   |          |       |             
|Raw materials                                  |             | $ | 3,076    |       |              | $ | 3,118 |      
|                                              
|                                              
|                                              
|                                              
|Work in process                                |             |   | 1,067    |       |              |   | 779   |      
|                                              
|                                              
|                                              
|                                              
|Finished goods                                 |             |   | 3,868    |       |              |   | 4,455 |      
|                                              
|                                              
|                                              
|                                              
|Inventories at customers under purchase orders |             |   | 652      |       |              |   | 1,032 |      
|                                               |             |   |          |       |              |   |       |      
|                                               | Inventories |   | $        | 8,663 |              |   | $     | 9,384 | 
|                                               |             |   |          |       |              |   |       |      

Inventories 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 as of June 30, 2002 or December 31, 2001.

Note 5  Investments

During the quarter ended June 30, 2002, the Company changed the
classification of all of its investments from held-to-maturity to
available-for-sale. The change in classification was due to the Companys
announcement of the pending acquisition of STI, which would require the sale
of a portion of the investments to fund the acquisition. Available-for-sale
investments are recorded at fair value. At June 30, 2002 the Company had
recorded a net unrealized gain of $40 as a component of other comprehensive
income.

Note 6  Other Assets

During the quarter ended June 30, 2002, the Company invested $500 in
Excelerate Technologies, Inc. in the form of a six month note receivable.
The note receivable bears interest at 8% and is convertible into preferred
stock of Excelerate Technologies.

7



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##### 



Note 7  Shareholders Equity

Changes in shareholders equity during the six months ended June 30,
2002 were as follows:

|                                                  |                                                                |                                     |        |    |        |  
|------------------------------------------------- | -------------------------------------------------------------- | ----------------------------------- | ------ | -- | ------ | -
|Shareholders equity balance at December 31, 2001 |                                                                | $                                   | 42,523 |   
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Issuances of common stock in conjunction with:                
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                | Exercises of employee stock options |        |    | 913    |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                | Employee stock purchase plan        |        |    | 130    |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Amortization of deferred compensation related to stock options |                                     |        | 31 |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Comprehensive loss:                                           
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                | Net loss                            |        |    | (4,234 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                | Other comprehensive income          |        |    | 43     |  
|                                                  |                                                                |                                     |        |   
|Shareholders equity balance at June 30, 2002     |                                                                | $                                   | 39,406 |   
|                                                  |                                                                |                                     |        |   

Note 8  Income Taxes

The Company has deferred tax assets, which have arisen primarily as a
result of operating losses, as well as other temporary differences between
book and tax accounting. Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes, requires the establishment of a valuation
allowance to reflect the likelihood of the realization of deferred tax
assets. As a result of operating losses during the previous twelve months,
anticipated operating losses for the remainder of 2002 and uncertainty as to
the extent and timing of profitability in future periods, the Company has
recorded a full valuation allowance of $3.0 million against its deferred tax
assets as of June 30, 2002, resulting in income tax expense of $687 for the
six months ended June 30, 2002.

Note 9  Net Income (Loss) Per Share

The components of basic and diluted net income (loss) per share are as
follows:

|                                |  |                                               |  |  |                             |   |                           |       |        |      |     |      |        |  |  |      |  |      |        |       |        |   |       |      |        |  |  |  |  | 
|------------------------------- |  | --------------------------------------------- |  |  | --------------------------- | - | ------------------------- | ----- | ------ | ---- | --- | ---- | ------ |  |  | ---- |  | ---- | ------ | ----- | ------ | - | ----- | ---- | ------ |  |  |  |  | 
|                                |  |                                               |  |  | Three Months Ended June 30, |   | Six Months Ended June, 30 |      
|                                |  |                                               |  |  |                             |   |                           |      
|                                |  |                                               |  |  |                             |   |                           | 2002  |        | 2001 |     |      |        |  |  | 2002 |  | 2001
|                                |  |                                               |  |  |                             |   |                           |       |        |      |     |      |        |  |  |      |  |     
|Net income (loss)               |  |                                               |  |  |                             | $ | (3,431                    | )     |        | $    | 617 |      |        |  |  |      |  | $    | (4,234 | )     |        | $ | 1,766 |     
|                               
|                               
|                               
|                               
|Weighted average common shares:
|                               
|                               
|                               
|                               
|                                |  | Basic                                         |  |  |                             |   |                           |       | 13,033 |      |     |      | 12,687 |  |  |      |  |      |        |       | 12,939 |   |       |      | 12,664 | 
|                               
|                               
|                               
|                               
|                                |  | Effect of dilutive stock options and warrants |  |  |                             |   |                           |       |       |      |     |      | 614    |  |  |      |  |      |        |       |       |   |       |      | 636    | 
|                                |  |                                               |  |  |                             |   |                           |       |        |      |     |      |        |  |  |      |  |      |        |       |        |   |       |     
|                                |  | Diluted                                       |  |  |                             |   |                           |       | 13,033 |      |     |      | 13,301 |  |  |      |  |      |        |       | 12,939 |   |       |      | 13,300 | 
|                                |  |                                               |  |  |                             |   |                           |       |        |      |     |      |        |  |  |      |  |      |        |       |        |   |       |     
|Net income (loss) per share:   
|                               
|                               
|                               
|                               
|                                |  | Basic                                         |  |  |                             |   | $                         | (0.26 | )      |      | $   | 0.05 |        |  |  |      |  |      | $      | (0.33 | )      |   | $     | 0.14 |       
|                               
|                               
|                               
|                               
|                                |  | Diluted                                       |  |  |                             |   |                           | $     | (0.26  | )    |     | $    | 0.05   |  |  |      |  |      |        | $     | (0.33  | ) |       | $    | 0.13   | 

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 three months ended June 30, 2002 and 2001 were 1,533
and 460, respectively, and for the six months ended June 30, 2002 and 2001
were 1,604 and 439, respectively.

8



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##### 



Note 10  Comprehensive Income (Loss)

Comprehensive income (loss) is defined as net income (loss) and other
changes in shareholders equity from transactions and other events from
sources other than shareholders. The components of and changes in other
comprehensive income (loss) are as follows:

|                                   |                                         |   |                             |    |                           |   |      |    |      |   |        |    |  |   |       |    |  
|---------------------------------- | --------------------------------------- | - | --------------------------- | -- | ------------------------- | - | ---- | -- | ---- | - | ------ | -- |  | - | ----- | -- | -
|                                   |                                         |   | Three Months Ended June 30, |    | Six Months Ended June 30,
|                                   |                                         |   |                             |    |                          
|                                   |                                         |   | 2002                        |    | 2001                      |   | 2002 |    | 2001
|                                   |                                         |   |                             |    |                           |   |      |    |     
|Net income (loss)                  |                                         | $ | (3,431                      | )  |                           | $ | 617  |    |      | $ | (4,234 | )  |  | $ | 1,766 |   
|Other comprehensive income (loss): |                                         |   |                             |    |                           |   |      |    |      |   |        |    |  |   |       |   
|                                   | Foreign currency translation adjustment |   |                             | 3  |                           |   |      | (8 | )    |   |        | 3  |  |   |       | (8 | )
|                                   | Net unrealized gains on investments     |   |                             | 40 |                           |   |      |   |      |   |        | 40 |  |   |       |   |  
|                                   |                                         |   |                             |    |                           |   |      |    |      |   |        |    |  |   |       |   
|Comprehensive income (loss)        |                                         | $ | (3,388                      | )  |                           | $ | 609  |    |      | $ | (4,191 | )  |  | $ | 1,758 |   
|                                   |                                         |   |                             |    |                           |   |      |    |      |   |        |    |  |   |       |   

Note 11  Subsequent Events

The Companys revolving credit line agreement expired on June 30, 2002
and the Company subsequently entered into a revolving credit line agreement
(the Credit Facility) with a bank on July 26, 2002 that expires in April
2004. The Credit Facility allows for borrowings of up to $5.0 million
subject to availability based on accounts receivable and inventory balances.
Interest is payable monthly at the 30-day LIBOR rate plus 2.25%. The Credit
Facility contains financial covenants which include levels of tangible net
worth, capital expenditures and default provisions, including provisions
related to non-payment of principal and interest, bankruptcy and default
under other debt agreements. There is no balance outstanding under the
Credit Facility as of the date of this report.

9



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##### 



|        |  |                                                                                      
|------- |  | -------------------------------------------------------------------------------------
|Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Factors That May Affect Future Results

Certain statements made in this Quarterly Report on Form 10-Q, as well as
oral statements made by us from time to time, which are prefaced with words
such as expects, anticipates, believes, projects, intends, plans
and similar words and other statements of similar sense, are forward-looking
statements. Our forward-looking statements generally relate to our growth
strategies, financial results, future financial projections, product
development activities and sales efforts. These forward-looking statements,
like any other forward-looking statements, involve risks and uncertainties
known and unknown, and may be affected by inaccurate assumptions, including,
among others, those discussed in the Cautionary Statements section of our
Annual Report on Form 10-K for the year ended December 31, 2001, as filed with
the Securities and Exchange Commission on March 15, 2002. The risks and
uncertainties could cause actual results to differ materially from those
projected or anticipated. We disclaim any obligation to subsequently revise
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.

Overview

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,
biomedical 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,
medical devices, 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, medical devices and throughout the communications
infrastructure in electrical, optical and wireless networks.

The following discussion of our financial condition and results of
operations should be read in conjunction with our audited consolidated
financial statements and notes thereto included in our Annual Report on Form
10-K for the year ended December 31, 2001, filed with the Securities and
Exchange Commission on March 15, 2002.

We continue to be in the midst of a significant downturn in both the
semiconductor and microelectronic markets. The downturn began early in 2001
and has been driven by deteriorating macro-economic conditions that have caused
a reduction in demand for semiconductor and microelectronic devices. This
reduction in demand has resulted in device manufacturers having excess capacity
and caused them to reduce their capital spending. In response to the ongoing
downturn, we are continuing our cost management program that began in March
2001. The program has included raw material cost reductions, reductions in
temporary and contract staff, work force reductions and decreases in
discretionary spending, compensation expenditures and overtime (the Cost
Cutting Programs). The current downturn, future business cycles, the timing
of new

10



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##### 



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 will impact future quarterly results.

Results of Operations

Net Revenues.Net revenues were $7.0 million and $12.5 million for the
three and six month periods ended June 30, 2002, compared to $10.2 million and
$21.1 million for the same periods in 2001, representing a decrease of $3.2
million, or 31.3%, and $8.6 million, or 40.7%, for the respective periods. The
decrease in net revenues was the result of fewer shipments of our NSX systems
due to the downturn discussed above. The decline in NSX revenues was partially
offset by revenues generated from sales of our 3Di systems, which began
shipping during the third quarter of 2001.

Gross Margin.Gross margins were 57.5% and 57.3% of net revenues for the
three and six month periods ended June 30, 2002, compared to 61.4% and 61.1% of
net revenues for the same periods in 2001. The decrease in gross margins was
primarily due to the decrease in the number of systems manufactured, which
resulted in lower manufacturing utilization and increased labor and overhead
costs per system sold.

Selling, General and Administrative Expenses.Selling, general and
administrative expenses consist primarily of employee salaries and related
benefits, travel expenses and occupancy related costs. Selling, general and
administrative expenses were $2.8 million and $5.7 million for the three and
six month periods ended June 30, 2002, compared to $3.1 million and $6.2
million for the same periods in 2001, representing a decrease of 7.8% and 9.4%
for the respective periods. As a percentage of net revenues, expenses were
40.6% and 45.3% for the three and six month periods ended June 30, 2002,
compared to 30.2% and 29.7% for the same periods in 2001. The decrease in
expense dollars was primarily due to the Cost Cutting Programs, partially
offset by an increase in depreciation expense related to assets capitalized
subsequent to the beginning of the second quarter of 2001 and expenses related
to opening our direct sales and service office in Taiwan during the second
quarter of 2001.

Research and Development Expenses.Research and development expenses
consist primarily of employee salaries and related benefits, and consulting
fees for individuals engaged in the research, design and development of new
products. Research and development expenses were $2.7 million and $4.9 million
for the three and six month periods ended June 30, 2002, compared to $2.2
million and $4.3 million for the same periods in 2001, representing an increase
of 25.4% and 12.1% for the respective periods. As a percentage of net
revenues, the expenses were 39.1% and 38.9% for the three and six month periods
ended June 30, 2002, compared to 21.4% and 20.6% for the same periods in 2001.
The increase in expenses was primarily due to the hiring of additional
engineers and the use of outside contractors to advance the development of new
and existing products in each of our product lines, partially offset by the
Cost Cutting Programs and a reduction in employee recruiting and relocation
costs due to hirings in the current year were made with fewer relocations and
minimal use of recruiting agencies.

Non-recurring Expenses.Non-recurring expenses for the three and six
month periods ended June 30, 2002 were $568,000 and included $184,000 of
employee severance costs and $384,000 of expenses related to the modification
of our distributor agreement, as a result of our decision to sell directly to
customers in Asia, except Japan and South Korea. Non-recurring expenses for
the three

11



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##### 



and six month periods ended June 30, 2001 were $432,000 and included
$84,000 of employee severance costs related to a reduction in work force
implemented in late April 2001 and $348,000 of expenses related to the
termination of our distributor agreement in Taiwan, as a result of our decision
to sell directly to customers in Taiwan.

Interest Income.Interest income was $174,000 and $382,000 for the three
and six month periods ended June 30, 2002, compared to $371,000 and $847,000
for the same periods in 2001. The decrease in interest income was due to lower
overall investment balances in 2002, due to the use of cash to fund operations
and acquire property and equipment, and lower rates of return earned on
investment balances.

Income Taxes.The provisions for income taxes were $1.5 million and $0.7
million for the three and six month periods ended June 30, 2002, compared to
$0.3 million and $0.9 million for the same periods in 2001. The provision for
income taxes recorded during the second quarter, rather than the recording of a
tax benefit on the pre-tax loss during the period, was due to the recording of
a full valuation allowance against deferred tax assets. Statement of Financial
Accounting Standards No. 109 Accounting for Income Taxes, requires the
establishment of a valuation allowance to reflect the likelihood of the
realization of deferred tax assets. As a result of operating losses during the
previous twelve months, anticipated operating losses for the remainder of 2002
and uncertainty as to the extent and timing of profitability in future periods,
we have recorded a full valuation allowance of $3.0 million against our
deferred tax assets as of June 30, 2002. The provision for the six months
ended June 30, 2002 is partially offset by the tax benefit recorded in the
first quarter of 2002.

Liquidity and Capital Resources

Cash and Cash Equivalents and Working Capital

During the six months ended June 30, 2002, working capital decreased to
$33.0 million as compared to $37.2 million at December 31, 2001. Working
capital decreased primarily due to the use of cash and cash equivalents and
short-term investments to fund operations, acquire property and equipment,
invest in other assets and the recording of a valuation allowance against our
current deferred tax assets. The decrease was partially offset by proceeds
received from issuances of common stock.

At June 30, 2002 our principal sources of liquidity consisted of $24.4
million of cash and cash equivalents and investments. Our revolving credit
line agreement expired in June 2002 and we have subsequently entered into a
revolving credit line agreement with a bank that expires in April 2004. This
agreement allows for borrowings of up to $5.0 million subject to availability
based on accounts receivable and inventory balances. Interest is payable
monthly at the 30-day LIBOR rate plus 2.25%. The agreement contains financial
covenants which include levels of tangible net worth, capital expenditures and
default provisions, including provisions related to non-payment of principal
and interest, bankruptcy and default under other debt agreements. Our
liquidity is affected by many factors, some of which are based on the normal
ongoing operations of our business, the possible acquisition of Semiconductor
Technologies and Instruments, Inc. (STI), as described below, 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 June 30, 2002. Although liquidity requirements will fluctuate based on
the timing and extent of these factors,

12



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##### 



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 twelve months.

Pending Acquisition

On May 23, 2002, we entered into a definitive agreement (the Agreement)
with ASTI Holdings, Ltd. (ASTI) of Singapore to acquire STI for a purchase
price of $26.1 million, consisting of $12 million cash, a $3 million six month
note to ASTI and $11.1 million in stock. We have requested changes in the
terms of the Agreement including a reduction in the purchase price. We are in
the process of negotiating an amendment to the Agreement with ASTI.

There is no assurance that we will agree upon an amendment to the
Agreement, with ASTI, on terms acceptable to us. In the event we do not agree
upon an amendment to the Agreement with ASTI, we believe we are entitled to
terminate the Agreement without payment of a $2.6 million break up fee (the
Break up Fee), as outlined in the Agreement. ASTI may dispute our right to
terminate the Agreement and seek the Break up Fee or damages under the
Agreement in an arbitration proceeding or through litigation. In the event we
fail to prevail in any such dispute, resulting damage awards or the payment of
the Break up Fee and the write-off of $0.1 million of acquisition costs, on the
balance sheet as of June 30, 2002, may have a material effect on our financial
condition. Whether or not we prevail, the legal expenses involved in any such
proceeding may be material.

Cash Flows

Net cash used in operating activities for the six months ended June 30,
2002 was $1.2 million, which resulted primarily from our net loss, partially
offset by non-cash charges and decreased prepaid expenses and other current
assets. Net cash provided by investing activities was $2.0 million, primarily
due to $3.3 million of net proceeds from maturities of investments partially
offset by $0.8 million of purchases of property and equipment. Net cash
provided by financing activities was $1.0 million from the proceeds received
from the exercises of stock options and the employee stock purchase plan.

Net cash provided by operating activities for the six months ended June
30, 2001 was $0.5 million , which resulted primarily from net income and
non-cash charges, partially offset by increased accounts receivable and
decreased accounts payable and accrued liabilities. Net cash provided by
investing activities was $1.6 million, primarily due to $2.9 million of net
proceeds from maturities of investments offset by the purchase of $1.2 million
of property and equipment. Net cash provided by financing activities was $0.3
million from the proceeds received from the exercises of stock options and the
employee stock purchase plan.

13



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##### 



|        |  |                                                           
|------- |  | ----------------------------------------------------------
|Item 3. |  | Qualitative and Quantitative Disclosures about Market Risk

Market Risk

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.

Interest Rate Risk

We are exposed to interest rate risk primarily from investments in cash
equivalents and short-term and long-term marketable debt securities (the
Investment Portfolio). The entire Investment Portfolio classification was
changed from held-to-maturity to available-for-sale and, accordingly, is
recorded on the balance sheet at fair market value, with unrealized gains or
losses excluded from earnings and included in Accumulated other comprehensive
income (loss) until realized. 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 percent change in interest rates is not expected to have a
material adverse effect on our near-term financial condition or results of
operations.

Credit Risk

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 June 30, 2002, 90% 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.

14



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##### 



PART II  OTHER INFORMATION

|        |  |                                                    
|------- |  | ---------------------------------------------------
|Item 4. |  | Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting of Shareholders on April 30, 2002 at
the Companys world headquarters at 4900 West 78th Street, Bloomington,
Minnesota. Of the 12,855,219 shares of Common Stock outstanding as of March 8,
2002 (the record date) 11,830,411 shares (92%) were present or represented by
proxy at the meeting.



|1. |  | The shareholders approved the Board of Directors recommendation
for setting the number of directors at seven. This proposal received
11,828,196 votes for and 1,065 votes against, with 1,150 votes
abstaining.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | The shareholders elected Linda Hall Whitman for Class II Director,
pursuant to the following votes:                                                                                                             

|                   |  |           |            |                |  |  |        | 
|------------------ |  | --------- | ---------- | -------------- |  |  | ------ | 
|                   |  | Votes For |            | Votes Withheld
|                   |  |           |            |               
|Linda Hall Whitman |  |           | 11,799,235 |                |  |  | 31,176 | 

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The terms of Jeff L. ODell and Michael Wright as Class I directors, and
James A. Bernards and Roger E. Gower, as Class III directors of the
Company, were not subject to reelection at this meeting and thus their
terms continued after the meeting. To focus their time and attention on
engineering projects, Mark R. Harless and Thomas C. Verburgt, resigned
from their positions as directors of the Company in Class I and II,
respectively, effective April 12, 2002. Sections 3.2 and 3.3 of the
current Bylaws grant to the Board of Directors the right to fill, by
majority vote, the vacancies resulting from the resignations of Mr.
Harless and Mr. Verburgt.



|3. |  | The shareholders approved an amendment to the Companys 2000
Employee Stock Purchase Plan to allow all employees of the Company and
its subsidiaries to participate including employees outside of the
United States. This proposal received 11,783,594 votes for and 9,717
votes against, with 37,100 votes abstaining.          
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|4. |  | The shareholders approved an amendment to the Companys 1997 Stock
Option Plan to clarify that all employees of the Company and its
subsidiaries are allowed to participate including employees outside of
the United States. This proposal received 11,621,359 votes for and
171,652 votes against, with 37,400 votes abstaining.

15



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##### 



|        |  |                                 
|------- |  | --------------------------------
|Item 6. |  | Exhibits and Reports on Form 8-K

(a)  Exhibits:

|     |  |                                                             
|---- |  | ------------------------------------------------------------
|10.1 |  | Amendment to the 1997 Stock Option Plan as of April 30, 2002

|     |  |                                                                        
|---- |  | -----------------------------------------------------------------------
|10.2 |  | Amendment to the 2000 Employee Stock Purchase Plan as of April 30, 2002

(b)  Reports on Form 8-K:

| |  |                                                                                                                                                                                                                                                        
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Current report on Form 8-K dated May 10, 2002,
filed May 13, 2002 and amended June 4, 2002
was filed pursuant to Item 5 (Other Events) to
report the press release announcing the
resignation of Thomas Velin as the Companys
Chief Financial Officer.

16



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##### 



SIGNATURES

Pursuant to the requirements 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.

|                      |  |                                                                            
|--------------------- |  | ---------------------------------------------------------------------------
|                      |  | AUGUST TECHNOLOGY CORPORATION                                              
|                      |  |                                                                            
|                      |  |                                                                            
|                      |  |                                                                            
|                      |  |                                                                            
|                      | 
|                      |  |                                                                            
|Date: August 14, 2002 |  | By: /s/ JEFF L. ODELL                                                     
|                      |  |                                                                            
|                      |  | Jeff L. ODell
Chief Executive Officer
(Principal Executive Officer)       
|                      |  |                                                                            
|                      |  |                                                                            
|                      |  |                                                                            
|                      |  |                                                                            
|Date: August 14, 2002 |  | By: /s/ SCOTT A. GABBARD                                                   
|                      |  |                                                                            
|                      |  | Scott A. Gabbard
Acting Chief Financial Officer and
Vice President, Finance

17



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##### 



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

EXHIBIT INDEX TO FORM 10-Q

|                                 |  |                               
|-------------------------------- |  | ------------------------------
|For Quarter Ended:
June 30, 2002 |  | Commission File No.: 000-30637



---



AUGUST TECHNOLOGY CORPORATION



---



|               |  |                                                                        
|-------------- |  | -----------------------------------------------------------------------
|Exhibit Number |  | Description                                                            
|               |  |                                                                        
|10.1           |  | Amendment to the 1997 Stock Option Plan as of April 30, 2002           
|               |  |                                                                        
|10.2           |  | Amendment to the 2000 Employee Stock Purchase Plan as of April 30, 2002

18