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                                                                   Exhibit 10.26


                              EMPLOYMENT AGREEMENT

     This Agreement is entered into by and between August Technology Corporation
("August Technology " or the "Company"), a Minnesota corporation, with its
principal place of business at 4900 West 78th Street, Bloomington, Minnesota
55435, and Thomas Verburgt of 5310 Elmridge Circle, Excelsior, Minnesota 55331
USA ("Employee").

     WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

     WHEREAS, Employee acknowledges and agrees that he has and will continue to
have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

     WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, August
Technology and Employee agree as follows:

     1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective March 1, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

     2. TERM OF EMPLOYMENT. August Technology shall continue to employ Employee
for an indefinite duration until his/her employment is terminated in accordance
with Paragraph 8 of this Agreement.

     3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

     4. COMPENSATION. August Technology shall pay Employee a gross annual salary
as set forth in Exhibit A as "Base Salary", less appropriate payroll deductions.
Employee may also receive incentive compensation in accordance with the Annual
Incentive Plan, as issued and as may change from time to time by the Company, or
any other similar plan authorized by the Board of Directors. Employee's
compensation may be periodically increased or adjusted as authorized by the
Board of Directors in the case of the Chief Executive Officer, or, in the case
of all others, as recommended by the Chief Executive Officer and approved by the
Board of Directors.

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     5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

     6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

     7. STOCK OPTIONS. At the discretion of August Technology, Employee may be
granted stock options from time to time, which options shall be subject to the
terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

     8. TERMINATION. Employee's employment under this Agreement may be
terminated:

          (a)  At any time upon mutual written agreement of the parties;

          (b)  By either Employee or August Technology at any time, with or
               without cause, upon thirty (30) days' written notice to the
               other;

          (c)  By August Technology immediately upon notice to Employee for
               cause which shall be defined as:

               (i)  Employee's material failure or neglect, or refusal to
                    perform, the duties and responsibilities of his/her position
                    and/or the reasonable direction of the Board of Directors or
                    his/her superiors;

               (ii) Commission by Employee of any willful, intentional or
                    negligent act that has the effect of injuring the
                    reputation, business or performance of August Technology;

               (iii) Employee's conviction of a crime, or commission of any act
                    involving moral turpitude;

               (iv) Any material default or nonperformance of the terms of this
                    Agreement, or any violation of Paragraphs 10, 11, 12, 14
                    and/or 15 of this Employment Agreement; or

          (d)  Employee's employment will terminate immediately upon his/her
               death.


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     Upon Employee's resignation or termination under this Paragraph 8 for any
reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

     9. CHANGE IN CONTROL. If, within eighteen (18) months following a Change in
Control (as defined below), Employee's employment is terminated (as defined
below), then:

          (a)  Employee shall be paid his/her last Base Salary on a regular
               payroll cycle as of the effective date for the time period as set
               forth in Exhibit A as "Change In Control Severance Period" from
               the effective date of such termination;

          (b)  For the same Change In Control Severance Period from the
               effective date of such termination as set forth in Paragraph
               9(b), the Company shall, if Employee elects to continue group
               health or other group benefits as allowed under COBRA, make the
               COBRA payments for the Change In Control Severance Period;

          (c)  The right to exercise all unexpired and non-vested stock options
               in favor of Employee shall immediately vest and accelerate; and

          (d)  LIMITATION ON CHANGE OF CONTROL PAYMENTS. Employee shall not be
               entitled to receive any Change of Control Action, as defined
               below, which would constitute an "excess parachute payment" for
               purposes of Code Section 280G, or any successor provision, and
               the regulations thereunder. In the event any Change of Control
               Action payable to Employee would constitute an "excess parachute
               payment," then the acceleration of the exercisability of such
               stock options and the payments to such Participant pursuant to
               this Paragraph 9 shall be reduced to the largest extent or amount
               as will result in no portion of such payments being subject to
               the excise tax imposed by Section 4999 of the Code. For purposes
               of this Paragraph 9, a "Change of Control Action" shall mean any
               payment, benefit or transfer of property in the nature of
               compensation paid to or for the benefit of Employee



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               under any arrangement which is considered contingent on a Change
               of Control for purposes of Code Section 280G, including, without
               limitation, any and all salary, bonus, incentive, restricted
               stock, stock option, compensation or benefit plans, programs or
               other arrangements, and shall include benefits payable under this
               Agreement.

          (e)  "CHANGE OF CONTROL." For purposes of this Agreement, "Change of
               Control" shall mean any of the following events occurring after
               the date of this Agreement:

               (1)  A merger or consolidation to which the Company is a party,
                    an acquisition by the Company involving the issuance of the
                    Company's securities as consideration for the acquired
                    business, or any combination of fully closed and completed
                    mergers, consolidations or acquisitions during any
                    consecutive twenty-four (24) month period, if the
                    individuals and entities who were shareholders of the
                    Company immediately prior to the effective date of such
                    merger, consolidation, or acquisition (or prior to the
                    effective date of the first of a combination of such
                    transactions) have, immediately following the effective date
                    of such merger, consolidation or acquisition (or following
                    the effective date of the last of a combination of such
                    transactions), beneficial ownership (as defined in Rule
                    13d-3 under the Securities Exchange Act of 1934) of less
                    than fifty percent (50%) of the total combined voting power
                    of all classes of securities issued by the surviving
                    corporation for the election of directors of the surviving
                    corporation;

               (2)  The acquisition of direct or indirect beneficial ownership
                    (as defined in Rule 13d-3 under the Securities Exchange Act
                    of 1934) of securities of the Company by any person or
                    entity or by a group of associated persons or entities
                    acting in concert in one or a series of transactions, which
                    causes the aggregate beneficial ownership of such person,
                    entity or group to equal or exceed twenty percent (20%) or
                    more of the total combined voting power of all classes of
                    the Company's then issued and outstanding securities;

               (3)  The sale of the properties and assets of the Company
                    substantially as an entirety, to any person or entity which
                    is not a wholly-owned subsidiary of the Company;

               (4)  The stockholders of the Company approve any plan or proposal
                    for the liquidation of the Company; or

               (5)  A change in the composition of the Board of the Company at
                    any time during any consecutive twenty-four (24) month
                    period such that the "Continuity Directors" no longer
                    constitute at least a seventy percent



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                    (70%) majority of the Board. For purposes of this event,
                    "Continuity Directors" means (i) those members of the Board
                    who were directors at the beginning of such consecutive
                    twenty-four (24) month period or at the date of this
                    Agreement if this Agreement was entered into less than
                    twenty-four months prior to the change in composition of the
                    Board; and (ii) any new director whose election to the Board
                    of Directors or nominations for election to the Board of
                    Directors was approved by a vote of at least two-thirds
                    (2/3) of the directors identified in the immediately
                    preceding clause (i).

               (6)  The Company enters into a letter of intent, an agreement in
                    principle or a definitive agreement relating to an event
                    described in Paragraph 9(e)(1), 9(e)(2), 9(e)(3), 9(e)(4),
                    or 9(e)(5) that ultimately results in such a Change of
                    Control, or a tender or exchange offer or proxy contest is
                    commenced that ultimately results in an event described in
                    Paragraph 9(e)(2) or 9(e)(5).

          (f)  TERMINATION. For purposes of this Paragraph 9, "Termination"
               shall mean any of the following events occurring within eighteen
               (18) months after a Change of Control:

               (1)  The termination of Employee's employment by the Company for
                    any reason, with or without cause, except for termination
                    resulting from conduct by Employee constituting (a) a felony
                    involving moral turpitude under either federal law or the
                    law of the State of Minnesota, or (b) Employee's willful
                    failure to fulfill his/her employment duties with the
                    Company; provided, however, that for purposes of this clause
                    (c), an act or failure to act by Employee shall not be
                    "willful" unless it is done, or omitted to be done, in bad
                    faith and without any reasonable belief that Employee's
                    action or omission were in the best interests of the
                    Company; or

               (2)  The termination of employment with the Company by Employee
                    for Good Reason. Such termination shall be accomplished by,
                    and effective upon, Employee giving written notice to
                    Company of his/her decision to terminate. "Good Reason"
                    shall mean a good faith determination by Employee, in
                    Employee's sole and absolute judgment, that any one or more
                    of the following events has occurred, at any time during the
                    term of this Agreement or after a Change of Control;
                    provided, however, that such event shall not constitute
                    "Good Reason" if Employee has expressly consented to such
                    event in writing or if Employee fails to provide written
                    notice of his/her decision to terminate within sixty (60)
                    days of the occurrence of such event:


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                    (a)  A material change in Employee's reporting
                         responsibilities, titles or offices, or any removal of
                         Employee from or any failure to re-elect Employee to
                         any of such positions, which has the effect of
                         materially diminishing Employee's responsibility or
                         authority;

                    (b)  A reduction by the Company in Employee's base salary
                         (as increased from time to time);

                    (c)  A requirement imposed by the Company on Employee that
                         results in Employee being based at a location that is
                         outside of a twenty-five (25) mile radius of Employee's
                         prior job location;

                    (d)  Without the adoption of a replacement plan, program or
                         arrangement that provides benefits to Employee that are
                         equal to or greater than those benefits that are
                         discontinued or adversely affected:

                         i.   A failure by the Company to continue in effect,
                              within its maximum stated term, any pension,
                              bonus, incentive, stock ownership, stock purchase,
                              stock option, life insurance, health, accident,
                              disability, or any other employee compensation or
                              benefit plan, program or arrangement, in which
                              Employee is or has been participating;

                        ii.   The taking of any action by the Company that would
                              adversely affect Employee's participation or
                              materially reduce Employee's benefits under any of
                              such plans, programs or arrangements; or

                    (e)  Any action by the Company that would materially
                         adversely affect the physical conditions in or under
                         which Employee performs his/her employment duties; or

                    (f)  Any material breach by the Company of this Employment
                         Agreement between Employee and the Company.

                    Termination for "Good Reason" shall not include Employee's
               death or a termination for any reason other than the events
               specified in clauses (a) through (f) above.

     10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at all
times thereafter, Employee shall not directly or indirectly use or disclose any
trade secret, proprietary or confidential information of August


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Technology or any subsidiary for the benefit of any person or entity other than
August Technology or any subsidiary without prior written approval of August
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise, which is not public
information and which relates to August Technology or any subsidiary, or August
Technology's or any subsidiary's existing or reasonably foreseeable business,
including but not limited to information relating to research, development,
technology, manufacturing processes, purchasing and sales, information relating
to sales and other financial strategies, plans and/or goals, information
relating to proprietary rights and data, ideas, know-how, and/or trade secrets,
information regarding the identity and/or needs of clients or customers, client
or customer lists and other client or customer information, information
regarding active and inactive accounts of August Technology or any subsidiary,
and information relating to August Technology's or any subsidiary's methods of
operation.

     11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration of
his/her employment and continued employment, and in exchange for the severance
and Change of Control provisions as set forth in Paragraphs 8 and 9 of this
Employment Agreement, and the mutual covenants herein, Employee agrees that,
during his/her employment and for a period of one (1) year following his/her
voluntary or involuntary resignation or termination for any reason, the Employee
will not, on behalf of himself/herself or any other person or entity:

     (a)  Directly or indirectly solicit, on Employee's own behalf, or on behalf
          of another, any of August Technology's or any subsidiary's customers
          or potential customers with whom Employee or Employee's supervisees
          had contact, either directly or indirectly, within the twelve months
          immediately preceding Employee's resignation or termination of
          employment, for the purpose of providing, selling, or attempting to
          sell any products or services competing with those provided or sold by
          August Technology or any subsidiary, or clearly contemplated thereby
          due to research, development, engineering, applications, licensing, or
          other like projects in process, at the time of resignation or
          termination; or

     (b)  hire or attempt to hire, or influence or solicit, or attempt to
          influence or solicit, either directly or indirectly, any employee of
          August Technology or any subsidiary to leave or terminate his/her or
          her employment, or to work for any other person or entity.

     12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to all
of the benefits, profits, results and work product arising from or incident to
all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.

     Employee agrees to communicate promptly and fully to August Technology all
inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as


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provided in this Paragraph 12, Employee will and hereby does assign to August
Technology and/or its nominees all of the Employee's right, title and interest
in such inventions, discoveries, improvements or designs and all of his/her
right, title and interest in any patents, patent applications or copyrights
based thereon without obligation on the part of August Technology or any
subsidiary to make any further compensation, royalty or payment to Employee.
Employee further agrees to assist August Technology and/or its nominee (without
charge but at no expense to Employee) at any time and in every proper way to
obtain and maintain for its and/or their own benefit, patents for all such
inventions, discoveries and improvements and copyrights for all such designs.

     This Agreement does not obligate Employee to assign to August Technology
any invention, discovery, improvement or design for which no equipment,
supplies, facility or trade secret information of August Technology or any
subsidiary was used and which was developed entirely on Employee's own time, and
(1) which does not relate (a) directly to the business of August Technology or
any subsidiary, or (b) to August Technology's or any subsidiary's actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by Employee for August Technology or any subsidiary.

     13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A by
descriptive title are all of the Inventions, if any, in which Employee possesses
any right, title or interest prior to Employee's employment with August
Technology or execution of this Employment Agreement which are not subject to
the terms hereof.

     14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

     15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.

     16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate


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remedy. Employee agrees that August Technology and any subsidiary shall be
entitled, in addition to any other remedy it may have at law or in equity, to an
injunction, without the posting of a bond if allowed by applicable law or with
the posting of a minimal bond if required, enjoining or restraining Employee
from any violation or violations or threatened violation or violations of
Paragraphs 10, 11, 12, 14 and 15, and/or for specific performance of duties and
obligations under such paragraphs, and Employee hereby consents to the issuance
of such injunction. If any rights or restrictions contained in Paragraphs 10,
11, 12, 14 and 15 shall be deemed to be unenforceable by reason of the extent,
duration or geographic scope, or other provision thereof, the parties
contemplate that the Court shall reduce such extent, duration or geographic
scope or other provision and enforce Paragraphs 10, 11, 12, 14 and 15 in their
reduced form for all purposes in the manner contemplated by such Paragraphs.

     17. OTHER AGREEMENTS. By Employee's signature to this Agreement, Employee
warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from accepting employment with
August Technology and fully performing his/her duties and responsibilities as
described in this Agreement. Employee, by his/her signature to this Agreement,
further warrants that he/she has not taken and will not take any trade secret,
proprietary or confidential information of any former employer, and will not use
or disclose any such information to anyone in the performance of duties and
responsibilities under this Agreement.

     18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of August Technology.

     19. NOTICES. All notices and other communications to be given under this
Agreement shall be in writing and shall be deemed to be given when delivered
personally, or when mailed by registered or certified mail, addressed to the
party to whom such notice is intended to be given, at the last known address for
that party or at such other address as the party may specify by written notice.

     (a) In the case of August Technology, the notice shall be provided to:

                           General Counsel
                           August Technology Corporation
                           4900 West 78th Street
                           Bloomington, MN 55435

     (b) In the case of Employee, the notice shall be provided to:

                           Thomas Verburgt
                           5310 Elmridge Circle
                           Excelsior, MN 55331

     Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched


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on the registered date or that stamped on the certified mail receipt, and shall
be deemed received within the fifth business day thereafter, or when it is
actually received, whichever is sooner.

     20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are reasonable, shall survive his/her resignation from or
the termination of his/her employment, and shall apply to him/her whether
his/her resignation or termination from employment is voluntary or involuntary
and regardless of the reason for such resignation or termination.

     21. NONWAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

     22. GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

     23. PARAGRAPH HEADINGS. Paragraph headings are included in this Agreement
for convenience of reference only, and are not intended to be full or accurate
descriptions of the contents hereof.

     24. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

     25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                    AUGUST TECHNOLOGY CORPORATION

Dated:                 , 2002       By
      -----------------               ------------------------------------------
                                           Its
                                              ----------------------------------



Dated:                 , 2002       By
      -----------------               ------------------------------------------
                                           EMPLOYEE


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                                    EXHIBIT A

Employee's Name                     =       Thomas Verburgt

Employee's Title                    =       Chief Technology Officer

Manager                             =       Chief Executive Officer

Base Salary                         =       $160,000

Severance Period                    =       twelve (12) months

Change In Control Severance Period  =       eighteen (18) months

Exempted Inventions                 =
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Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP.   _______

                                    EMPLOYEE                  _______


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