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UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-K

/x/ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended May 31, 2001

OR

/ /TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934For the transition period from  to
.

Commission
File Number:000-27863

METRON TECHNOLOGY N.V.(Exact name of registrant as specified in its charter)

The Netherlands

98-0180010(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)


1350 Old Bayshore Highway
Suite 210
Burlingame, California 94010(Address of principal executive offices)

Registrant's
telephone number, including area code:(650) 401-4600

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common shares, par value $0.96 NLG per share

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 / /

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10-K.
/x/

The
aggregate market value of voting stock held by non-affiliates of the registrant, based on the last sale price of the Common Shares on July 31, 2001 as reported
by the Nasdaq National Market, was approximately $39,459,000. Shares held by each officer and director of the registrant and by each person who owns 5 percent or more of the outstanding Common
Shares have been excluded from this computation in that such persons may be deemed to be affiliates of the registrant. This determination of affiliate status for this purpose is not necessarily a
conclusive determination for other purposes.

The
number of outstanding shares of the registrant's Common Shares, $0.96 NLG par value, as of July 31, 2001 was 12,821,164.

DOCUMENTS INCORPORATED BY REFERENCE

Exhibit 24.1,
and Current Report on Form 8-K, filed with the Commission on March 2, 2001, are incorporated by reference into Part IV of this
report.

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PART I

ITEM 1. BUSINESS

Overview

Metron Technology N.V. is a holding company organized under the laws of The Netherlands in 1975. We are a leading global provider of marketing, sales, service
and support solutions to semiconductor materials and equipment suppliers and semiconductor manufacturers.

On
behalf of semiconductor materials and equipment suppliers, which we refer to as our principals, we provide a broad range of materials and equipment to leading semiconductor
manufacturers such as Advanced Micro Devices, Chartered Semiconductor Manufacturing, IBM, Infineon, Intel, Lucent, Motorola, NEC Electronics, Philips, Samsung, ST Microelectronics and UMC. We also
provide semiconductor manufacturers with the ability to outsource a wide variety of fab operations and support services. 'Fab' is the name commonly given to silicon wafer fabrication facilities. Our
operations and support services include servicing a wide variety of fab equipment, materials management, parts cleaning, cleanroom services and facility maintenance.

Our
principals are both independent companies that have developed emerging technologies and divisions of larger companies that have other primary products and markets and include
Cabot Microelectronics, Ecosys (a division of ATMI), Entegris, FSI, Gigaphoton (formerly Komatsu), Pall, Schumacher (a division of Air Products), SDI, Seiko Instruments, Sigmameltec and Zeiss. Our
materials offerings include an extensive array of over 10,000 items, including fluid and gas handling components, high purity chemicals and cleanroom products. Our equipment offerings include
equipment for cleaning wafers; for microlithography, the part of the fabrication process during which an image is projected on to a wafer by passing light through a photomask, which is a
high-purity quartz or glass plate used as the stencil in semiconductor device fabrication to create an integrated circuit design pattern on a semiconductor wafer; for metrology, the
measurement and inspection of the wafer during the fabrication process; for photomask inspection and repair, the inspection and repair, if necessary, of the glass or quartz photomasks used during the
microlithography process; and for inspection and defect characterization, the process by which silicon wafers are inspected during and after fabrication.

Industry Background

The manufacture of semiconductors requires a wide array of equipment and materials. The semiconductor capital equipment industry consists of equipment for
wafer manufacture and processing and equipment for assembly, packaging and testing of semiconductors. The high cost of equipment development and the desire of semiconductor manufacturers to buy
products from financially and technically strong suppliers have led to consolidation among equipment manufacturers. At the same time, the long-term growth prospects of the industry
continue to attract small players with new technologies to fill product niches. In addition, some suppliers to the industry are divisions of larger companies which have other primary products and
markets.

The
semiconductor materials market provides the wide variety of consumable and manufacturing materials that are required by semiconductor manufacturers, including fluid and gas
handling components, high purity chemicals and cleanroom products. Rapid changes in technology have led to the creation and emergence of newer semiconductor materials manufacturers that offer
innovative products. The materials industry is more fragmented and less cyclical than the equipment industry, in part because demand for semiconductor materials is driven more by the volume of
semiconductors produced than by industry capacity and expectations of future revenue growth. The lower barriers to entry in this industry also attract new competitors.

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As semiconductors continually become smaller and more complex, the number of manufacturing steps increases, which requires more complex and costly semiconductor equipment. The complex
manufacturing process also entails the use of a large variety of materials from many sources. In addition, the high capital cost of fabs, which can now exceed $2.0 billion, requires that fabs
quickly reach and maintain optimal productivity levels in order to maximize their return on investment. This also necessitates around-the-clock manufacturing, which in turn
requires that spare parts, materials and service be delivered quickly and on short notice.

The
semiconductor industry has evolved into a global industry as semiconductor manufacturers are increasingly operating fabs in multiple locations throughout the world in proximity to
their customers. The requirement for the rapid ramp-up of new facilities and new products has led semiconductor manufacturers increasingly to standardize all aspects of their operations
and to require that their suppliers do the same. We believe that in order to ensure standardization, semiconductor manufacturers are increasingly seeking materials and equipment suppliers that offer a
comprehensive and cost-effective global procurement solution to their materials, equipment and service needs.

Semiconductor
equipment and materials suppliers and semiconductor manufacturers are increasingly focusing on their core competencies and outsourcing other aspects of their operations
to third parties. The increasing complexity of semiconductors and related capital investment, combined with long-term pricing pressures, have led semiconductor manufacturers to
increasingly focus on design, development and manufacturing and outsource to third parties equipment service, materials management, cleanroom services and facility maintenance, as well as other
similar services. We believe that outsourcing enables these companies to increase fab productivity in a cost-effective manner. In addition, semiconductor equipment and materials suppliers
often focus on product development and manufacturing and outsource to third parties the marketing, sale, installation, service and support of their products. In particular, smaller semiconductor
equipment and materials manufacturers that cannot afford to invest the time or the capital resources required to build a global infrastructure, and divisions of larger companies whose main focus is on
other products or markets, often benefit from outsourcing. Outsourcing enables these companies to reduce their time to market, financial risk and marketing investment while maintaining the ability to
compete with often larger companies with established infrastructures.

Providers
of outsourcing services to the semiconductor industry are able to take advantage of operational efficiencies owing to their ability to offer products and services from
multiple suppliers and leverage their infrastructure costs over a larger revenue base. There are a large number of generally smaller companies that provide outsourcing services, including regional,
privately-held companies that focus on a portion of, or a specific geographic market in, the semiconductor manufacturing industry. We believe that semiconductor equipment and materials
manufacturers and semiconductor manufacturers are increasingly seeking an international services and support company that offers a comprehensive global solution.

The Metron Solution

We are a leading global provider of marketing, sales, service and support solutions to semiconductor materials and equipment suppliers and semiconductor
manufacturers. We provide an important link between semiconductor manufacturers and our principals. We provide semiconductor manufacturers, who otherwise might be required to purchase materials and
equipment from a range of suppliers worldwide, with the ability to purchase their materials and equipment through a single supplier and the ability to outsource equipment service, materials
management, cleanroom services and facility maintenance. These services enable our customers to:



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We
also provide timely and comprehensive marketing, sales, installation, service and support for materials and equipment manufacturers, enabling our principals to:



Strategy

We believe Metron markets and sells a wider range of materials, equipment, spare parts, service and support solutions to the semiconductor industry than any
other independent provider of these products and services. Our goal is to be the leading global provider of marketing, sales, service and support solutions to semiconductor materials and equipment
suppliers and semiconductor manufacturers. The key elements of our strategy include:



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Products and Services

We are organized into two worldwide operating divisions, materials and equipment. In fiscal 1999, 2000 and 2001, sales by our equipment division accounted for
approximately 55.7%, 50.2% and 50.7% of our
revenue, respectively, and sales by our materials division accounted for approximately 44.3%, 49.8% and 49.3% of our revenue, respectively.

We
operate under a series of agreements with our principals. These agreements generally give us the exclusive right to market, sell and support particular products in specific
geographic regions. The agreements with our principals are typically cancelable without cause with notice periods that range from 30 days to two years. In addition to maintaining appropriate
inventories of materials and spare parts, we sometimes purchase equipment for demonstration purposes which may be installed in a customer's fab for evaluation purposes or at one of our facilities.

Product
selection is critical to our success. We evaluate a large number of product opportunities, relatively few of which we ultimately add to our product offerings. In our
evaluation of new product lines, we thoroughly review numerous factors, including the product line's current and projected revenue stream and market share, whether the product line is sufficiently
developed for its targeted market segment, whether distribution arrangements for the product line are currently in place, the prospective principal's anticipated ability to offer innovative and
advanced products, the history and stability of the prospective principal and our ability to market, sell and provide a consistent level of service and support for the product line.

Materials

Our materials business includes the marketing and sale of an extensive array of over 10,000 items, including fluid and gas handling components, high purity
chemicals and cleanroom products, to semiconductor manufacturers, manufacturers of semiconductor equipment and, to a lesser extent, customers in other industries, such as pharmaceuticals and
petroleum. As of May 31, 2001, our

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materials division represented over 115 principals. The table below lists the business units in our materials division, the types of products sold and the largest principals within each business unit:

|Business Unit          |  | Types of Products                                                                      |  | Largest Principals
|---------------------- |  | -------------------------------------------------------------------------------------- |  | ------------------
|Gas and fluid handling |  | Valves, fittings and other components for ultrapure applications                       |  | Entegris          
|                       |  | High end filtration products and systems
Stainless steel control valves and regulators |  | Pall Tescom       
|Wafer management       |  | Pellicles                                                                              |  | MLI               
|Device handling        |  | Vacuum release chip trays                                                              |  | Gelpak            
|                       |  | Quartz components                                                                      |  | MGI Products      
|Cleanroom products     |  | Latex gloves                                                                           |  | Omni Sales        
|                       |  | Face masks                                                                             |  | Tecnol            
|                       |  | Wipers and swabs                                                                       |  | Texwipe           

We
believe the materials business is particularly well-suited to benefit from our global infrastructure because addressable markets are more fragmented, there are a large
number of individual products and average transaction sizes are generally smaller than in the equipment business. As a result, we believe that many companies are often unable to
cost-effectively provide materials, service and support globally in order to meet semiconductor manufacturer requirements and can benefit from Metron's ability to distribute their products
through our international sales and marketing organization. Similarly, by working with Metron, a customer can increase sales by improving fab productivity while reducing inventory, warehousing and
other costs. For some of our customers' fabs in the United States, including Motorola and Philips, our materials division has primary responsibility for the operation of the customer's
on-site warehouse of materials and components we sell. Our experience, infrastructure and systems in the United States enable us to maintain a highly reliable materials inventory
management and order processing system, which allows us to increase the speed of order fulfillment and provide other value-added services to both customers and principals. We plan to expand our
activities in this area to other parts of the world to provide more comprehensive support to more of our customers.

Equipment

Our equipment business includes the marketing and sale of equipment, including products for cleaning, coating, developing and etching; detection, measurement
and quality control tools; equipment used in the manufacture, fault diagnosis and repair of the masks used to create the complex patterning of semiconductors; and automatic wafer handling, particle
counting and cleanroom monitoring equipment. The equipment division also markets specialized containers of high purity chemicals that are used in the chemical vapor deposition and diffusion phases of
semiconductor wafer processing. As

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of May 31, 2001, our equipment division represented over 40 principals. The table below lists the largest products by revenue in the equipment division and the principals for those products:

Types of Products

PrincipalsWafer cleaning tools

FSIHigh purity wafer processing chemicals

SchumacherPhoto-lithography processing tools

FSI
SigmameltecEnvironmental gas cleaning systems

ATMIWafer characterization and diagnostic tools

SDI
ZeissPhotomask inspection and repair tools

Seiko Instruments


Particularly
in the equipment business, we believe our competitive advantage is generally greater in product areas that are not served by one of the large globally integrated
manufacturers. We have sought, and expect to continue to seek, relationships with non-United States principals seeking to penetrate the United States market and other markets outside their
home territories.

Service and Spare Parts

We believe that as semiconductor manufacturers become increasingly sensitive to the costs of system downtime, they will direct their purchases to suppliers who
can offer comprehensive local installation, maintenance and repair service and spare parts. To meet these needs, we provide installation, maintenance, repair and service for the equipment we sell, and
we employ skilled service engineers in 20 offices located in approximately 14 countries. In some cases, our service engineers are located on-site at a semiconductor manufacturer's
facility. By continuing to maintain local offices in most major markets and staffing those offices with nationals fluent in local languages and customs, we are able to provide our principals and
customers with sales, service and support 24 hours a day, seven days a week where necessary. We also provide our customers with applications services and help them develop customized solutions
to technical problems.

Our
service personnel receive extensive initial and follow-up training internally and/or from the principals whose products they service. Our service personnel generally
receive the same training from our principals as the principal's own personnel and receive and maintain the same certification. We generally warrant the products we sell for a period of one year. If
we install the equipment in a customer's fab, we are generally responsible for the costs of the labor component of the warranty, and the principal is responsible for replacing parts which are under
warranty. After the warranty period has expired, we also offer service contracts or on-call service support for equipment that we have supplied.

We
also provide our customers with the spare parts required to maintain and repair the equipment we have supplied and to operate other systems in their fabs. We work with our
principals to maintain an inventory of mission-critical spare parts and materials close to our customers' sites so we can deliver the required parts in the shortest time possible. In some cases, we
are responsible for maintaining inventories at our customers' sites, and we plan to expand the service that we provide in this area.

Sales and Marketing

Our worldwide sales and marketing organization is an essential part of our strategy of maintaining close relationships with our principals and with our
semiconductor manufacturer customers. We provide timely and comprehensive marketing, sales, service and support for materials and equipment manufacturers, enabling these manufacturers to focus their
resources on technology and product development. As of May 31, 2001, we had approximately 290 sales and marketing employees in 42 offices in Asia (except Japan), Europe and the United States.
Through these sales and support offices,

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we maintain an important link between our principals and semiconductor manufacturers. Our sales and marketing organization identifies customer requirements, assists in product selection and monitors
each transaction through final sale, shipment and installation. We also employ approximately 415 highly-
skilled technical and engineering personnel around the world to support our sales and marketing organization and our customers. In Europe, we have approximately 253 support personnel in nine countries
located in thirteen offices as well as at several semiconductor manufacturers' facilities. In Asia, we have approximately 145 support personnel in five countries located in eight offices as well as at
several semiconductor manufacturers' facilities. In the United States, we have approximately 17 support personnel located in two states. With few exceptions, our employees around the world are fully
conversant in local languages and familiar with local business culture and practices.

We
offer comprehensive sales and marketing technical support services, including materials and equipment specification review from the initial sales effort through
on-going product improvement programs; demonstration of materials and equipment; tool installation, including customer site preparation and final system acceptance; on-going
customer support and process improvement; writing, editing, and improving operating and maintenance manuals; and customer training programs including maintenance training and on-site
operator training. Our ability to offer these extensive support services is due in part to extensive initial and follow-up training of our sales and marketing technical support personnel
both in-house and by the principals whose products we sell. We also conduct technical seminars, training sessions and user group meetings, and we own and operate a 720 square foot,
Class 100 cleanroom facility in Sunnyvale, California.

We
also employ applications engineers who work closely with our customers to solve particular customer problems and develop innovative processing solutions using particular equipment
supplied by our principals. In some cases, our customers' engineers have collaborated with our engineers to produce and publish technical papers. Application selling and application support is a key
part of our strategy to introduce and sell new technology into the semiconductor marketplace.

We
utilize a number of other marketing techniques that enable our principals to access new markets and semiconductor manufacturers. We seek to actively involve our principals in the
marketing and sales process and often conduct joint sales calls on existing and potential customers with representatives from our principals. We assign product managers to some of our principals to
provide particular attention to the marketing, service and support of specific product lines. We participate in various trade shows around the world, including Semicon Europa in Europe, Semicon Korea,
Semicon Singapore and Semicon Taiwan in Asia and Semicon Southwest and Semicon West in the United States.

Customers

We market semiconductor materials and equipment to most of the world's semiconductor manufacturers and to many suppliers to the semiconductor industry,
including semiconductor equipment manufacturers. In fiscal 2001, our 10 largest customers accounted for approximately 39% of our net revenue. We expect that sales to relatively few semiconductor
manufacturers will always account for a significant percentage of our revenue, although the relative revenue ranking of individual

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customers may change from period to period. The table below lists our 10 largest customers in fiscal 2001 based on revenue and the geographic regions where we support them:

Customer

LocationsSTMicroelectronics

France, Italy, Singapore, United Kingdom, United StatesIntel

Hong Kong, Ireland, Israel, Malaysia, United Kingdom, United StatesPhilips

The Netherlands, United Kingdom, United StatesInfineon

Germany, SingaporeChartered Semiconductor Manufacturing

SingaporeIBM

Germany, Singapore, The Netherlands, United Kingdom, United StatesTexas Instruments

Germany, United StatesAtmel

France, Germany, United Kingdom, United StatesTower Semiconductor

IsraelSeagate

Singapore, United Kingdom


Competition

The semiconductor industry is highly competitive. We face substantial competition on two distinct fronts: competition for product lines and competition for
customers.

Competition for Product Lines

For those semiconductor equipment and materials manufacturers who elect to sell through independent sales and distribution companies, we must compete with
other companies for the right to sell specific product lines. Some of these independent sales and distribution companies have long-standing collaborative business relationships with
semiconductor equipment and materials manufacturers which
are difficult to overcome. We believe that the most significant competition on this front comes from regional semiconductor equipment and materials distribution companies. Furthermore, many equipment
and materials manufacturers choose to sell directly to semiconductor manufacturers in some or all markets. In Europe and Asia, we compete with equipment and materials manufacturers who choose to sell
their products directly to semiconductor manufacturers, as well as with regional independent distribution companies such as Macrotron and Teltec in Europe and Hermes in Taiwan. In the United States,
we compete primarily with United States semiconductor equipment and materials manufacturers who choose to sell their products directly to semiconductor manufacturers.

We
believe that our competitive advantage is greater in product areas that are not served by one of the large globally-integrated equipment or materials manufacturers. We believe that
to compete effectively we must maintain a high level of investment in marketing, customer service and support in all of the markets in which we operate. Although we consider our global operations and
reputation to be significant competitive advantages, we cannot be certain that we will have sufficient financial resources, technical expertise, or marketing, services and support capabilities to
continue to compete successfully on this front in the future.

Competition for Customers

We compete with established semiconductor equipment and materials manufacturers who sell directly to customers and with other independent sales and
distribution companies for orders from semiconductor manufacturers. Some of these competitors have greater name recognition in the

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territories they serve and have long-standing relationships with semiconductor manufacturers that may give them a competitive advantage. Other significant competitive factors in the
semiconductor equipment and materials market include product specifications and quality, product performance, product reliability, process repeatability, customer service and support, timeliness of
product delivery and of new product introductions, in addition to total cost of ownership and price. We anticipate that as we expand our product portfolio and expand into new markets, we will
encounter additional competition, and the competitive factors listed above, among others, might make it difficult for us to establish sales and distribution capability in new markets, such as Japan.
This competition, as well as the local political climate and local business practices, may limit our ability to successfully expand into new markets. We cannot be certain that we will continue to
compete successfully in the future.

Financial Information about Segments and Geographic Areas

See Note 15 to the Consolidated Financial Statements contained herein.

Employees

As of May 31, 2001, we had 974 full-time employees, including 214 in our materials division, 490 in our equipment division and 270 in
general administrative activities, including finance and accounting, sales administration, shipping and receiving and corporate management. Of our full-time employees, 173 are located in
the United States, 526 are located in Europe and 275 are located in Asia. None of our employees is covered by a collective bargaining arrangement. We consider our relationships with our employees to
be good.

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RISK FACTORS

Our business faces significant risks. These risks include those described below and may include additional risks and uncertainties not
presently known to us or that we currently believe are immaterial. If any of the events or circumstances described in the following risks occurs, our business, operating results or financial condition
could be materially adversely affected. These risks should be read in conjunction with the other information set forth in this report.

Risks related to Metron.

We are dependent on a few key principals for a majority of our revenue; therefore, the loss of or change in our relationship with one or more of our key principals could
seriously harm our business.

If, for any reason, any of our key principals were to materially reduce its business or terminate its relationship with us, the loss of the key principal would
have a material adverse effect on our business. In particular, if our commercial relationship with FSI or Entegris were to materially change or were terminated, (for example, as described in the
following paragraphs) our business would be significantly adversely affected due to the large percentage of our revenue generated by sales of these companies' products. For the year ended
May 31, 2001, 25% of our total revenue was generated from the sale of products manufactured by FSI, and 25% represented the sale of products manufactured by Entegris. For more information about
our relationships with FSI and Entegris, see also the risk titled "We are significantly controlled by FSI and Entegris, which may limit your ability to influence the outcome of director elections and
other shareholder matters." In each of our last three fiscal years, a majority of our revenue came from the sale of products from five or fewer of our principals, which is how we refer to the
semiconductor materials and equipment companies we represent. Although the principals that comprise our largest sources of revenue may change from period to period, we expect that revenue from the
sale of products of a relatively small number of principals will continue to account for a substantial portion of our revenue for at least the next five years.

On
January 8, 2001 we entered into an agreement with Entegris, Inc. to modify our existing distribution relationship. On February 13, 2001, we entered into a
transition agreement with Entegris whereby Entegris assumed direct sales responsibility for products from its Microelectronics Group in Europe beginning April 1, 2001, and in Asia beginning
May 1, 2001. We received revenue for orders received before the above dates and shipped within the 90 days following these dates. In addition, on March 1,
2001, we entered into a new distribution agreement with Entegris, under which we will continue to distribute Entegris' Fluid Handling Group product line in all regions in Europe, Asia, and parts of
the United States covered under the previous distribution agreements. The new distribution agreement will be in effect until August 31, 2005. Revenues from products for the Microelectronics
Group were as follows:

Fiscal Year Ended May 31,1999

2000

2001(in thousands)Revenues

$
18,255

$
51,420

$
75,245


All
of the semiconductor materials, equipment and products we market, sell, service and support are sold pursuant to agreements with our principals. These agreements are generally
cancelable at will, subject to notification periods that range from 30 days to two years. We generally do not sell competing products in the same market, and therefore the number of principals
we can represent at any one time is limited. It is likely that in the future some of our principals will terminate their relationships with us upon relatively short notice. If we lose a key principal,
we may not be able to find a replacement quickly, or at all. The loss of a key principal may cause us to lose customers and incur expenses

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associated with ending our agreement with that principal. We may lose principals for various reasons, including:



We
have lost other principals in the past. For example, after Ontrak was acquired by Lam Research in August 1997, we ceased marketing and selling Ontrak products in South Korea
in June 1998 and in Europe in September 1998. In March 1999, A.G. Associates was acquired by Steag. As a result of this acquisition, we ceased marketing and selling A.G.
Associates' products in September 1999. In July 1999, FSI sold its chemical management division to BOC Edwards. As a result of this divestiture, we no longer market and sell products of
this division. In October 1999, Applied Materials acquired Obsidian. As a result of the acquisition, Obsidian terminated its agreement with us.

The semiconductor industry is highly cyclical, and during its periodic downturns, our operating results will deteriorate.

The semiconductor industry is highly cyclical and historically has experienced periodic downturns, which often have resulted in decreased expenditures by
semiconductor manufacturers. These downturns generally have adversely affected the sales, gross profits and operating results of semiconductor materials and equipment suppliers. Our business depends
in large part on the procurement expenditures of semiconductor manufacturers, which, in turn, depend on the current and anticipated demand for semiconductors and products utilizing semiconductors. The
downturn in the semiconductor industry from mid-1996 until the end of 1998 had a material adverse effect on our operating results. In February 2001 we started to experience a
downturn in new orders as well as delays in shipment for existing orders. The continuation of the downturn for any extended period, or an increase in the number of shipment delays, would have a
materially adverse effect on our operating results.

If we are unable to successfully identify new products and enter into and implement arrangements with the suppliers of these products, our business will be seriously harmed.

To the extent we are unable to enter into relationships with principals who anticipate or respond adequately to technological developments or customer
requirements, we could suffer a loss of competitiveness. Such loss, or any significant delays in product development or introductions by these principals, could have a materially adverse effect on our
business. The semiconductor materials and equipment market is subject to rapid technological change, changing customer requirements and frequent new product introductions. Because of this, the life
cycle of products that we market and sell is difficult to determine. Our future success will depend to a significant extent on our principals' ability to keep pace with changes in the market and,
particularly because we generally do not carry competing product lines, on our ability to identify and obtain new product lines which achieve market success.

We face intense competition from companies with significantly greater financial, technical and marketing resources, which could adversely affect our ability to maintain or
increase sales.

We face intense competition on two distinct fronts: competition for product lines and competition for customers.

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If we are unable to compete successfully for product lines against independent sales and distribution companies that have greater financial resources, are more established or
have longer-standing relationships with semiconductor materials and equipment manufacturers, we will be unable to offer competitive products, which will negatively impact our
sales.

We
compete with independent sales and distribution companies for the right to sell specific product lines in specific territories. We believe that our most formidable competition
comes from regionally established semiconductor materials and equipment distribution companies. Some of these independent sales and distribution companies have substantially greater financial
resources to devote to a particular region than we do, are better established in particular regions than we are, have greater name recognition in their chosen markets than we have and have
long-standing collaborative business relationships with semiconductor materials and equipment manufacturers which are difficult to overcome. If we are unable to effectively compete with
sales and distribution companies to attract and retain principals, our business will be adversely affected.

If we are unable to compete for customers owing to our inability to provide sales, marketing and support services or particular product offerings, our ability to maintain or
increase sales will be adversely affected.

We
compete for orders from semiconductor manufacturers with established semiconductor materials and equipment manufacturers who sell directly to customers and with independent sales
and distribution companies and sales representatives. We believe that to compete effectively for customers we must maintain a high level of investment in marketing, customer service and support in all
of the markets in which we operate, and we may not have sufficient financial resources, technical expertise or marketing, services and support capabilities to continue to compete successfully in the
future. Some of our competitors have greater name recognition in the territories they serve and have long-standing relationships with semiconductor manufacturers that may give them an
advantage in attracting and retaining customers. Furthermore, we believe that once a semiconductor manufacturer has selected a particular product for a specific use from a vendor that is not one of
our principals, it may be difficult to achieve significant sales of a competing product to that customer unless there are compelling reasons for the customer to switch products, such as significant
performance or cost advantages.

We
anticipate that as we continue to diversify our product portfolio and expand into new markets for our principals' products, we will encounter additional competition for customers.
If we cannot continue to compete successfully for customers in the future, any such lack of success will have a significant negative impact on our business.

The management information systems that we currently use in our day-to-day operations are not integrated across country borders and need to be upgraded.
Upgrading them will be costly, and if the new system is not successfully implemented, our business may suffer material adverse consequences.

While our financial reporting management information system is integrated and operational, our current management information systems that we use to control
our day-to-day operations are not integrated across country borders. To accommodate growth in the past, we have had to hire additional people to compensate for the lack of a
fully-functional, integrated operations management information system. We are currently investing in a new operations management information system in order to maintain our current level of business
and accommodate any future growth. We went live with the first implementation of the new system in The Netherlands in April 2001, and in France in July 2001. We currently anticipate that
the total costs associated with the implementation of the new system will be approximately $8.0 to $10.0 million and that the system will be implemented over the next 24 to 36 months.
Any failure to successfully implement our new operations management information system may result in delayed growth, increased inefficiency due to a lack of centralized data, higher inventories,
increased expenses associated with employing additional employees, a loss of our

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investment in the new operations management information system and may have additional material adverse effects on our business.

We need to successfully manage the anticipated expansion in our operations or our business may suffer material adverse consequences.

To the extent we are unable to effectively manage future expansion and the system and procedural transitions required by expansion, our business and our
operating results could be seriously harmed. We have expanded our operations in the past and anticipate future expansion of our operations through acquisitions and otherwise. Our growth has placed and
will continue to place significant demands on our management, operational, financial and technical resources, as well as our accounting and control systems, as we work to integrate geographically
dispersed offices and administrative personnel, diverse service and maintenance operations and different accounting and financial systems. Our future operating results will depend on the ability of
our management and other employees to:



We
cannot predict whether these efforts will be successful or will occur in a timely or efficient manner. We may not be able to install adequate control systems in an efficient and
timely manner, and our current or planned operational systems, procedures and controls may not be adequate to support our future operations. The difficulties associated with installing and
implementing new systems, procedures and controls may place a significant burden on our management and our internal resources. Delays in the implementation of new systems or operational disruptions
when we transition to new systems would impair our ability to accurately forecast sales demand, manage our product inventory and record and report financial and management information on a timely and
accurate basis.

We may not be successful in any effort to penetrate Japan, which could limit our future growth.

We do not market and sell products to semiconductor manufacturers in Japan. However, approximately 20% of the world's production of semiconductors takes place
in Japan. Accordingly, to reach all of the world's major semiconductor markets, we will need to establish or acquire sales, marketing and/or service capabilities in Japan. Historically, it has been
difficult for non-Japanese companies to succeed in establishing themselves in Japan, and we believe that expanding our operations to Japan would be both expensive and
time-consuming and would place additional demands on our management. In addition, both FSI and Entegris have existing arrangements for the sale, service and support of their products in
Japan and have not indicated that they would modify these arrangements in the event that Metron establishes or acquires sales and marketing capabilities in Japan. We cannot predict whether any of our
efforts to penetrate the Japanese market will be successful. If we are not successful in our efforts to penetrate the Japanese market, our future growth may be limited.

14

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We expect continued downward pressure on the gross margins of the products we sell, and as a result, if we are unable to continue to decrease our operating expenses as a
percentage of sales, we will be unable to increase or maintain our operating margins.

Particularly during industry down cycles, pressure on the gross margins of the products we sell is intense and can adversely impact our financial performance.
We have experienced significant downward pressure on our gross margins mainly as a result of sales discounts offered by our competitors and pressure from our customers to reduce prices and from our
principals to reduce the discounts they provide to us. This, in turn, has put significant downward pressure on our operating margins. To maintain or increase our gross margins, we must develop and
maintain relationships with principals who introduce new products and product enhancements on a timely basis. As a result of continued pressure on gross margins, we must find ways to decrease our
selling, general, administrative and other expenses as a percentage of sales to increase or maintain our operating margins. If our principals cannot continue to innovate, if we cannot maintain our
relationships with innovating principals, or if we cannot successfully manage our selling, general, administrative and other expenses, our operating margins may decrease. If our operating margins
decline as a result of these factors, our business would be harmed.

Our employment costs in the short-term are to a large extent fixed, and therefore any cyclical revenue shortfall could adversely affect our operating results.

Our operating expense levels are based in significant part on our head count, which is generally driven by longer-term revenue goals. For a variety
of reasons, particularly the high cost and disruption of lay-offs and the costs of recruiting and training, our head count in the short-term is, to a large extent, fixed. In
addition, approximately half of our employees are in Europe, and the costs associated with any reductions of our labor force in Europe are high. Accordingly, we may be unable to reduce employment
costs in a timely manner to compensate for any cyclical revenue or gross margin shortfall, which could have a material adverse effect on our operating results.

We may bear inventory risk due to an inability to return products, and if we are unable to manage our inventory effectively, our operating results could be adversely affected.

We bear inventory risk because we generally take title to the products we sell when we receive them from our principals, and we cannot always return products
to the principal in the event the products are not sold. Our customers do not always purchase at the time or in the quantities we originally anticipated. For example, as a result of the industry
downturn in 1997 and 1998, we had excess inventory for which we booked reserves in both the United States and Asia. Typically, products cannot be returned to principals after they have been in our
inventory for a certain period of time; this time period varies depending on the product and the principal. In addition, although it is typical when a relationship with a principal terminates for that
principal to repurchase most of the inventory we have of that principal's products, it is possible under certain circumstances that a principal may be unable or unwilling to repurchase our inventory.
If we fail to manage our inventory and accumulate substantial product that cannot be returned, our operating results could be adversely affected. Furthermore, if a principal cannot provide refunds in
cash for the inventory we desire to return, we may be forced to dispose of inventory below cost, and this may have a material adverse effect on our financial results.

Our revenue and operating results may fluctuate in future periods, which could adversely affect our share price.

In the past, we have experienced fluctuations in our quarterly and annual operating results and anticipate that these fluctuations will continue in the future
due to a variety of factors, many of which are outside our control. Fluctuations in our results could cause our share price to decline substantially. We believe that
period-to-period comparisons of our results of operations may not be meaningful, and

15

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you should not rely upon them as indicators of our future performance. Our sales in, and the operating results for, a particular quarter can vary significantly due to a variety of factors, including
those described elsewhere in this report and the following:



As
a result of the factors listed above, our future operating results are difficult to predict. Further, we base our current and future expense plans in significant part on our
expectations of our longer-term future revenue. As a result, we expect our expense levels to be relatively fixed in the short-run. A decline in revenue for a particular quarter
may disproportionately affect our net income in that quarter. If our revenue is below our projections, then our operating results will also be below expectations and, as we have in the past, we may
even have losses in the short-run. Any one of the factors listed above, or a combination thereof, could adversely affect our quarterly results of operations, and consequently may cause a
decline in our share price.

We depend on sales to a relatively small number of customers for a significant portion of our revenue, and if any of our large customers were to stop or reduce their purchasing
from us, this would materially and adversely affect our revenue.

A loss or a significant reduction or delay in sales to any of our major customers could materially and adversely affect our revenue. We depend on a small
number of customers for a substantial portion of our revenue. In fiscal 2001, our top ten customers accounted for an aggregate of 39% of our sales.

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Although a ranking by revenue of our largest customers will vary from period to period, we expect that revenue from a relatively small number of customers will account for a substantial portion of our
revenue in any accounting period for the foreseeable future. Consolidation in the semiconductor industry may result in increased customer concentration and the potential loss of customers as a result
of acquisitions. Unless we diversify and expand our customer base, our future success will significantly depend upon certain factors which are not within our control, including:



If
any of our largest customers were to stop or reduce their purchasing from us, our financial results could be adversely affected. A significant decrease in sales to a major customer
or the deferral or cancellation of any significant order would have a material adverse effect on our operating results.

Our sales cycle, particularly for equipment, is long and unpredictable, which could require us to incur high sales and marketing expenses with no assurance that a sale will
result.

Sales cycles for some of our products, particularly equipment, can run as long as 12 to 18 months. As a result, we may not recognize revenue from
efforts to sell particular products for extended periods of time, or at all. We believe that the length of the sales cycle may increase as some current and potential customers of our key principals
centralize purchasing decisions into one decision-making entity. We expect this may intensify the evaluation process and require us to make additional sales and marketing expenditures with no
assurance that a sale will result.

We have not yet developed a strategy to sell to our customers over the Internet, and if a competitor develops and implements an effective e-commerce strategy, we
may lose some of our customers, which would have a negative impact on our results of operations.

Although we have begun efforts to develop an e-commerce strategy, we have not implemented a process to sell to our customers over the Internet.
Because our principals grant us the right to sell their products only for specific territories and sales conducted over the Internet may occur anywhere around the globe, it is difficult to adopt
e-commerce practices in our industry. If our principals decide to directly distribute their products over the Internet, if our competitors develop a successful strategy for engaging in
e-commerce or if our customers require e-commerce capabilities which we are unable to provide, we may lose customers, which would have a negative impact on our revenue and on
our operating results.

Risks related to our international operations.

Economic difficulties in countries in which we sell our products can lead to a decrease in demand for our products and impair our financial results.

The volatility of general economic conditions and fluctuations in currency exchange and interest rates can lead to decreased demand in countries in which we
sell products. For example, in 1997 and 1998 many Asian countries experienced economic and financial difficulties. During this period, we experienced cancellation or delay of orders for our products
from customers in Asia, which adversely affected our results of operations. Moreover, any economic, banking or currency difficulties experienced by countries in which we have sales may lead to
economic instability in those countries. This in turn may result in the cancellation or delay of orders for our products from customers in those countries, thus adversely affecting our results of
operations.

17

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Most of our product sales are outside the United States, and currency fluctuations may impair our financial results.

While most of our international sales are denominated in United States dollars, some are denominated in various foreign currencies. To the extent that our
sales and operating expenses are denominated in foreign currencies, our operating results may be adversely affected by changes in exchange rates. For example, in the third quarter of fiscal 2001, we
recorded exchange losses of approximately $500,000. Given the number of currencies involved, the substantial volatility of currency exchange rates, and our constantly changing currency exposures, we
cannot predict the effect of exchange rate fluctuations on our future operating results. Although we engage in foreign currency hedging transactions from time to time, these hedging transactions can
be costly, and therefore, we do not attempt to cover all potential foreign currency exposures. These hedging techniques do not eliminate all of the effects of foreign currency fluctuations on
anticipated revenue.

In
addition, the transition period from legacy currencies to the euro currently is set to expire January 1, 2002. Our new operations management information system is designed
to accommodate the eventual elimination of the legacy currencies. If our new system is not successfully installed on a timely basis in those countries where our current systems cannot accommodate the
transition to the euro, this could have a material adverse effect on our business.

Risks related to investing in our common shares.

We are significantly controlled by FSI and Entegris, which may limit your ability to influence the outcome of director elections and other shareholder matters.

As of May 31, 2001, FSI owned 21.0% and Entegris owned 12.2% of our outstanding shares. By virtue of their share ownership and the fact that each holds
one of the five seats on our supervisory board, FSI and Entegris can exercise significant voting and management control over Metron. As a result, each of these shareholders has significant influence
over all matters requiring shareholder or supervisory board approval, including the election of directors and approval of significant corporate transactions, which may have the effect of delaying or
preventing a third party from acquiring control over us.

We may need to raise additional capital, and any inability to raise required funds could harm our business.

We expect that cash from operations and borrowings under our credit facilities will be sufficient to meet our working capital and capital expenditure needs for
the foreseeable future. However, we may need to raise additional capital to acquire or invest in complementary businesses. Further, if we issue additional equity securities, the ownership stakes of
our existing shareholders would be reduced, and the new equity securities may have rights, preferences or privileges senior to those of our existing common shares. If we cannot raise funds, if needed,
on acceptable terms, we may not be able to develop our business, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, all of which could seriously
harm our business and results of operations.

Our share price is volatile.

The trading price of our common shares is subject to wide fluctuations in response to various factors, some of which are beyond our control, including factors
discussed elsewhere in this report and the following:



18

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In
the past, securities class action litigation has often been brought against a company following periods of volatility in the market price of its securities. We may in the future be
the target of similar litigation. Securities litigation may result in substantial costs and divert management's attention and resources, which may seriously harm our business.

We do not intend to pay dividends.

We have never declared or paid any cash dividends on our capital shares. We currently intend to retain any future earnings for funding growth and, therefore,
do not expect to pay any dividends in the foreseeable future.

Risks related to being a Dutch company.

Our supervisory board has the authority to issue shares without shareholder approval, which may make it more difficult for a third party to acquire us.

As a Netherlands "Naamloze Vennootschap," or N.V., we are subject to requirements not generally applicable to
corporations organized in United States jurisdictions. Among other things, under Netherlands law the issuance of shares of a N.V. company must be approved by the shareholders unless the shareholders
have delegated the authority to issue shares to another corporate body. Our articles of
association provide that the shareholders have the authority to resolve to issue shares, common or preferred, and may designate the Metron board of supervisory directors as the corporate body with the
authority to adopt any resolution to issue shares, but this designation may not exceed a period of five years. Our articles also provide that as long as the supervisory board has the authority to
adopt a resolution to issue shares, the shareholders will not have this authority. Pursuant to the Metron articles, the supervisory board has the authority to adopt resolutions to issue shares until
five years from the November 19, 1999, deed of conversion from a B.V. to an N.V. and the related amendment of our articles of association. This authorization of the supervisory board may be
renewed by the shareholders from time to time. As a result, our supervisory board currently has the authority to issue common and preferred shares without shareholder approval.

The
issuance of preferred shares could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of the
outstanding shares of our share capital.

It may not be possible to enforce United States judgments against Netherlands corporations, directors and others.

Our articles provide that Metron has two separate boards of directors, a managing board and a supervisory board. One of our managing directors resides outside
of the United States. A significant percentage of our assets are located outside the United States. As a result, it may not be possible to effect service of process within the United States upon the
managing director who lives outside the United States. Furthermore, judgments of United States courts, including judgments against us, our directors or our officers predicated on the civil liability
provisions of the federal securities laws of the United States, are not directly enforceable in The Netherlands.

19

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Provisions of our charter documents and Dutch law could discourage potential acquisition proposals and could delay, deter or prevent a change in control.

Our articles of association and the applicable law of The Netherlands contain provisions that may be deemed to have anti-takeover effects. These
provisions may delay, defer or prevent a takeover attempt that a shareholder might consider in the best interest of our shareholders. For example, our articles may be amended only pursuant to a
proposal of the supervisory board followed by a resolution of a general meeting of shareholders. To amend our articles requires that at a general meeting of shareholders, (1) more than half of
the issued share capital is represented and (2) the resolution to amend the articles is supported by a two-thirds majority of the valid votes cast. This supermajority voting
requirement may have the effect of discouraging a third party from acquiring a majority of the outstanding Metron shares. In addition, these provisions could have a negative impact on our stock
price. Furthermore, some United States tax laws may discourage third parties from accumulating significant blocks of our common shares.

Special Note Regarding Forward-Looking Statements

Some of the statements under the captions "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and
"Business" and elsewhere in this report are "forward-looking statements." These statements involve known and unknown risks, uncertainties, and other factors that may cause our, or our industry's,
actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by the
forward-looking statements. These factors are listed under "Risk Factors" and elsewhere in this report.

In
some cases, you can identify forward-looking statements by terminology such as "expects," "anticipates," "intends," "may," "should," "plans," "believes," "seeks," "estimates,"
"could," "would" or the negative of such terms or other comparable terminology.

Although
we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or
achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these statements. We are under no duty to update any of the forward-looking
statements after the date of this report to conform these statements to actual results.

ITEM 2. PROPERTIES

Our corporate headquarters are located in Burlingame, California. The head of our global materials division is based in Austin, Texas, and the head of our
global equipment division is based in the United Kingdom. We own our 30,000 square foot facility in Livingston, Scotland, 18,000 square foot facility in Aschheim, Germany, 16,300 square foot facility
in Glenrothes, Scotland and our 6,500 square foot facility in Almere, The Netherlands. In addition, we lease space for marketing and customer service and support purposes in 42 locations worldwide. We
operate a 720 square foot, Class 100 cleanroom in our leased facility in Sunnyvale, California.

ITEM 3. LEGAL PROCEEDINGS

We are not a party to any material pending legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered
by this report.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Company's Common Shares, 0.96 NLG par value per share, have been traded on the Nasdaq National Market ("Nasdaq-NMM") under the symbol "MTCH"
since our initial public offering on November 19, 1999. The following table sets forth the high and low sales prices, as reported by Nasdaq-NMM, for the periods indicated.

High

LowFiscal 2000First Quarter


N/A


N/ASecond Quarter

$
17.50

$
15.06Third Quarter


25.94


14.88Fourth Quarter


36.00


10.75Fiscal 2001First Quarter


14.50


6.88Second Quarter


13.94


6.13Third Quarter


8.00


3.50Fourth Quarter


8.20


3.91


There
were approximately 54 shareholder accounts of record on July 31, 2001, and the number of beneficial shareholders was estimated to be 2,608.

Dividends

The Company has not paid dividends on its common shares and currently does not plan to pay any cash dividends in the foreseeable future.

Certain Dutch tax consequences of holding Metron common shares

General.The following is a summary of the material anticipated Dutch tax consequences of the holding of common shares
in Metron Technology N.V. ("Shares") by non-Dutch resident individuals and corporate entities. This summary does not purport to be an exhaustive discussion or analysis of all relevant tax
matters related to the holding of Shares. In particular, this summary does not address the tax consequences under any non-Dutch tax laws, nor does it address the tax position of a holder
of Shares to which a special tax regime is applicable or any other special circumstances that may apply to any individual holder. Accordingly, a holder of Shares should consult his, her or its own tax
advisors regarding the tax consequences of the holding of Shares. This summary is based on the tax laws of The Netherlands as in effect on August 1, 2001 and is subject to changes in such laws
which changes may have retroactive effect. Metron expressly disclaims any responsibility to update this summary for changes in facts or laws occurring subsequent to the date of the filing of this
Form 10-K. This summary represents the views of Metron as to the interpretation of existing Dutch tax law and, accordingly, no assurance can be given that the tax authorities or
courts in The Netherlands will agree with the summary below. This summary addresses the Dutch tax consequences to a holder of Shares who or which is not, nor deemed to be, a resident of The
Netherlands for purposes of the relevant tax laws (a "non-resident shareholder"). Under Dutch tax law, residence is determined with reference to the facts and circumstances and to several
fictions of law. This summary does not address taxes imposed by The Netherlands and its political subdivisions, other than dividend withholding tax, income tax, corporate income tax, and gift and
inheritance tax.

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Dutch dividend withholding tax.To the extent that Metron distributes dividends, such dividends will, in principle, be
subject to Dutch dividend withholding tax at a rate of 25%. For this purpose, dividends include, among other things, dividends in cash or in kind, constructive dividends, repayments of
paid-in capital not recognized for Dutch tax purposes and liquidation proceeds in excess of paid-in capital as recognized for Dutch tax purposes. Stock dividends are subject to
dividend withholding tax unless distributed out of Metron's paid-in share premium as recognized for Dutch tax purposes. With respect to non-resident corporate shareholders, or
shareholders that are treated as corporate taxpayers for Dutch tax purposes which have a permanent establishment or permanent representative in The Netherlands to which the Shares are attributable, no
withholding is required in connection with distributions to such shareholders, provided that The Netherlands participation exemption applies with respect to their respective holding of the Shares. A
non-resident shareholder may be eligible for a reduction or a refund of Dutch dividend withholding tax pursuant to the EU Parent-Subsidiary Directive or a tax convention in effect between
the country of residence of the non-resident shareholder and The Netherlands. The Netherlands has concluded such a convention with the United States, the Convention between the Kingdom of
The Netherlands and the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (the "Treaty"), which became effective as of
January 1, 1994. A holder of Shares can only claim the benefits of the Treaty only if such holder is a resident of the United States as defined in the Treaty and if such holder's entitlement to
such benefits is not limited by the limitations on benefits provisions of Article 26 of the Treaty. Under the Treaty, dividends paid by Metron to a holder of Shares who or
which is entitled to the benefits of the Treaty, are generally eligible for a reduction of The Netherlands statutory rate of withholding tax of 25%, to 15%. The withholding tax rate will be reduced to
5% if the beneficial owner is a qualifying United States resident company that directly holds at least 10% of the voting power of Metron. The Treaty provides for a complete exemption for dividends
received by exempt pension funds and exempt organizations as defined therein.

No
dividend withholding tax is due with regard to the part of a dividend, which is considered excessive pursuant to a transitional regime effective as of January 1, 2001
through December 31, 2005 and which, accordingly, is subject to the additional corporate income tax, as described below, provided that the shareholder is a resident of The Netherlands, The
Netherlands Antilles or Aruba, an EU-member state, or a jurisdiction with which The Netherlands has concluded a tax treaty.

The
corporate income tax payable by Metron will be increased by 20% of the difference between the total amount of dividends paid in a calendar year and the highest of the following
amounts:

The
temporary additional corporate income tax is not levied to the extent that the total profit distributions during the period from January 1, 2001 up to and including
December 31, 2005 are in excess of the balance of the assets, liabilities and provisions, calculated on the basis of fair market value, reduced by the paid-in capital at the end of
the book year that ended prior to January 1, 2001.

The
temporary additional corporate income tax will be decreased proportionally to the extent that the shares have been held for a period of three years by shareholders that have an
interest of at least 5% at the time of the dividend payment. The three years period is deemed to be satisfied for shareholders owning at least 5% on September 14, 1999. A requirement is,
however, that the relevant shareholder is a resident of The Netherlands, The Netherlands Antilles or Aruba, an EU-member state, or a jurisdiction that has concluded a tax treaty with The
Netherlands.

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The Ministry of Finance announced in a press release of April 27, 2001 that new legislation will be proposed in order to counteract "dividend stripping". The new legislation is
said to have retroactive effect from April 27, 2001. It was made public that pursuant to the proposal, which has not been made public itself, a refund or credit of dividend withholding tax will
only be granted to the beneficial owner of the dividends. The criteria to establish beneficial ownership are said to be significantly more stringent than before in order to effectively counter
"dividend stripping" transactions.

Dutch income tax and corporate income tax.A non-resident shareholder will not be subject to Dutch income
tax or corporate income tax with respect to dividends or capital gains derived from the Shares, provided that (a) the non-resident shareholder does not have an enterprise or an
interest in an enterprise that is, in whole or in part, carried on through a permanent establishment or permanent representative in The Netherlands and to which permanent establishment or permanent
representative the Shares are attributable, or in the event that the non-resident shareholder does have such a permanent establishment or permanent representative in The Netherlands to
which the Shares are attributable, the Dutch participation exemption applies to such Shares and (b) neither the non-resident shareholder nor his/her spouse, registered partner,
other persons sharing his/her household or certain of their relatives by blood or marriage in the direct line (including foster children) have a substantial interest or a deemed substantial interest
in the share capital of Metron or, in the event that the non-resident shareholder or one or more of the other persons referred to does have such an interest, the substantial interest(s)
form(s) part of the assets of an enterprise; and (c) if the non-resident shareholder is an individual, such shareholder does not carry out and has not carried out employment
activities with which the holding of the Shares is connected; and (d) if the not-resident shareholder is an individual, his activities in The Netherlands with respect to the Shares
do not exceed normal, active asset management. In general terms, a substantial interest in the share capital of Metron does not exist if the non-resident shareholder, his/her spouse,
registered partner, other persons sharing his/her household or certain of their relatives by blood or marriage in the direct line (including foster children), do not hold alone or together, directly
or indirectly, the ownership of, or an option to acquire, shares representing 5% or more of the total issued and outstanding capital, or the issued and outstanding capital of any class of shares of
Metron, or profit sharing rights representing an entitlement to at least 5% of the annual profit of Metron or of the proceeds upon the liquidation of Metron. The substantial interest tax rate for
individuals is 25%. The tax rate for corporate shareholders is 35%. A holder of Shares entitled to the benefits of the Treaty will be protected under the Treaty from Dutch taxation on income or
capital gains derived from a substantial interest in the share capital of Metron.

Dutch gift and inheritance tax.A gift or inheritance of Shares from a holder of Shares who is not a resident nor
deemed to be a resident of The Netherlands, will not be subject to Dutch gift and inheritance tax, provided that the non-resident shareholder does not have an enterprise or an interest in
an enterprise that is, in whole or in part, carried on through a permanent establishment or a permanent representative in The Netherlands to which the Shares are attributable and, in case of a gift of
Shares by an individual who at the date of the gift was neither resident nor deemed to be resident in The Netherlands, such individual will not die within 180 days after the date of the gift,
while being resident or deemed to be resident in The Netherlands.

As
of January 1, 2001, the Dutch net wealth tax has been abolished.

HOLDERS
OF SHARES ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS ABOUT THE DUTCH TAX CONSEQUENCES TO SUCH SPECIFIC HOLDER OF THE HOLDING OF SHARES.

ITEM 6. SELECTED FINANCIAL DATA

The tables that follow present portions of our consolidated financial statements and are not complete. You should read the following selected consolidated
financial data in conjunction with our

23

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Consolidated Financial Statements and the related Notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Annual Report on
Form 10-K. The consolidated statement of operations data for the years ended May 31, 1999, 2000 and 2001, and the consolidated balance sheet data as of May 31, 2000
and 2001, are derived from and are qualified in their entirety by our Consolidated Financial Statements that have been audited by KPMG LLP, independent auditors, and are included elsewhere in this
Annual Report on Form 10-K. The consolidated statement of operations data for the years ended May 31, 1997 and 1998, and the consolidated balance sheet data as of
May 31, 1997 and 1998 are derived from our audited consolidated financial statements which do not appear elsewhere in this report. In March 2000, Metron Technology (United
Kingdom) Ltd., a wholly owned subsidiary of the Company, acquired all the common shares of Shieldcare Ltd., a company incorporated in Scotland. In November 2000, the Company
acquired all the common shares of Intec Technology (S) Pte. Ltd., a company incorporated in Singapore. Both these acquisitions have been accounted for as purchases. Accordingly, the
consolidated statement of operations data includes the results of operations for our purchase acquisitions from the acquisition date. The historical results presented below are not necessarily
indicative of the results to be expected for any future fiscal year.

|                                                                                   |                                                                                                     | Fiscal Year Ended May 31, |  
|---------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | ------------------------- | -
|
|
|Consolidated Statement of Operations Data:                                         |                                                                                                     |                           |  
|                                                                                   | Net revenue                                                                                         |                           | $
|                                                                                   | Operating income (loss)                                                                             |                           | $
|                                                                                   | Cumulative effect of change in accounting principle                                                 |                           | $
|                                                                                   | Net income (loss)                                                                                   |                           | $
|                                                                                   | Basic earnings (loss) per common share Before cumulative effect of change in accounting principle   |                           | $
|                                                                                   | Cumulative effect of change in accounting principle                                                 |                           | $
|                                                                                   | Basic earnings (loss) per common share                                                              |                           | $
|                                                                                   | Diluted earnings (loss) per common share Before cumulative effect of change in accounting principle |                           | $
|                                                                                   | Cumulative effect of change in accounting principle                                                 |                           | $
|                                                                                   | Diluted earnings (loss) per common share                                                            |                           | $
|Pro forma amounts assuming change in accounting principle is applied retroactively |                                                                                                     |                           |  
|                                                                                   | Net income (loss) (a)                                                                               |                           |  
|                                                                                   | Basic earnings (loss) per common share (a)                                                          |                           |  
|                                                                                   | Diluted earnings (loss) per common share (a)                                                        |                           |  
|                                                                                   | Shares used for basic earnings (loss) per common share calculation                                  |                           |  
|                                                                                   | Shares used for diluted earnings (loss) per common share calculation                                |                           |  

---

24

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|                                 |                            | May 31,
|-------------------------------- | -------------------------- | -------
|
|
|Consolidated Balance Sheet Data: |                            |        
|                                 | Cash and cash equivalents  |        
|                                 | Total assets               |        
|                                 | Long-term debt             |        
|                                 | Total shareholders' equity |        

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information in this Management's Discussion and Analysis of Financial Condition and Results of Operations, except for the historical information, contains
forward-looking statements. These statements are subject to risks and uncertainties. You should not place undue reliance on these forward-looking statements as actual results could differ materially.
We do not assume any obligation to
publicly release the results of any revision or updates to these forward-looking statements to reflect future events or unanticipated occurrences. This discussion and analysis should be read in
conjunction with our Consolidated Financial Statements and the related Notes, which are included elsewhere in this report. This discussion of fiscal 1999, 2000 and 2001 refers to the fiscal years
which ended on May 31 of each year.

Overview

Metron Technology N.V. is a holding company organized under the laws of The Netherlands. Through our various operating subsidiaries, we are a leading global
provider of marketing, sales, service and support solutions to semiconductor materials and equipment suppliers and semiconductor manufacturers. We operate in Europe, Asia (except Japan) and the United
States. We were founded in Europe in 1975 by our two corporate shareholders, who together own approximately 33% of our shares, and by certain of our current and former management. In 1995, we
reorganized Metron to combine three Asian companies as a reorganization under common control, and purchased Transpacific Technology Corporation ("TTC") and its subsidiaries. TTC was founded in
California in 1982 as a semiconductor equipment manufacturers' representative company and expanded into the distribution business in 1990. In July 1998, we acquired T.A. Kyser Co., which we
refer to as Kyser, in a transaction accounted for as a pooling of interests. Founded in 1977, Kyser markets and sells materials in nine states within the United States, principally to the
semiconductor industry. In March 2000 we acquired Shieldcare Ltd., a company incorporated in Scotland, in a transaction accounted for as a purchase. Shieldcare is an authorized supplier
of critical parts cleaning services to major OEM and device manufacturing companies worldwide. The company also operates as an authorized re-manufacturer of physical vapor deposition
("PVD") equipment for a well-known supplier of automated systems for chemical vapor deposition ("CVD"). Effective November 17, 2000 we completed our acquisition of all the
outstanding shares of Intec Technology (S) Pte. Ltd., a privately held company incorporated in Singapore. The transaction was accounted for as a purchase, and the results of operations
of Intec were included in our consolidated financial statements from December 1, 2000. Intec is a distributor of cleanroom products, and a manufacturer of cleanroom garments, and sells these
products in Singapore and Malaysia.

We
derive our revenue from sales of materials, equipment, service and spare parts to the semiconductor industry, as well as from commissions on sales of equipment and materials. We
recognize revenue for most of an equipment sale and all other product sales upon the shipment of goods to customers. We defer the portion of our equipment revenue associated with our installation and
warranty obligations. We recognize installation revenue upon technical acceptance of the equipment by the customer's fab personnel, and we amortize the deferred warranty revenue over the applicable
warranty period. We recognize service revenue in the periods the services are rendered to customers.

25

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In each of our three fiscal years ended May 31, 2001, a majority of our revenue came from the sale of products from five or fewer of the semiconductor materials and equipment
companies we represent, who we refer to as our principals. In fiscal 2001, 24.5% of our total revenue was generated from the sale of products manufactured by FSI and 25.1% from the sale of products
manufactured by Entegris. In addition to representing our two largest sources of revenue, FSI and Entegris are also our two largest shareholders, holding 21.0% and 12.2%, respectively, of our
outstanding shares. Although the principals that comprise our largest sources of revenue may change from period to period, we expect that revenue from the sale of products of a relatively small number
of principals will continue to account for a substantial portion of our revenue for at least the next five years.

On
January 8, 2001 we entered into an agreement with Entegris to modify our existing distribution relationship. On February 13, 2001, we entered into a transition
agreement with Entegris whereby Entegris assumed direct sales responsibility for products from its Microelectronics Group in Europe beginning April 1, 2001, and in Asia beginning May 1,
2001. We received revenue for orders received before the above dates and shipped within the 90 days following these dates. In addition, on March 1, 2001, we entered into a new
distribution agreement with Entegris, under which we will continue to distribute Entegris' Fluid Handling Group product line in all regions in Europe, Asia, and parts of the United States covered
under the previous distribution agreements. The new distribution agreement will be in effect until August 31, 2005. Revenues from products for the Microelectronics Group were as follows:

|         |  | Fiscal Year Ended May 31,
|-------- |  | -------------------------
|
|
|Revenues |  | $                        

As
consideration for modifying the existing distribution agreement, Entegris transferred 1,125,000 shares of the Metron common shares it owned to us, and agreed to make cash payments
totaling $1,750,000 over a 15-month period. We will record a gain on the modification of $8,365,000. This gain will be recognized on a straight-line basis as other operating
income over the period from the date of the modification, February 13, 2001 until August 31, 2002, which represents the remaining effective term of the original agreement. The common
shares transferred by Entegris represented $6,615,000 of the
gain, which was equal to their fair market value on February 13, 2001. In addition, during the fiscal quarter ending August 31, 2001, Entegris will repurchase, at cost, our remaining
saleable inventory of Microelectronics Group products. At May 31, 2001, the cost of this inventory was approximately $4,082,000.

26

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We operate in all areas of the world in which there is a significant semiconductor industry, except Japan. The following tables show our sales in Europe, Asia and the United States in
dollars and as a percentage of net revenue for each of the three fiscal years ended May 31, 1999, 2000 and 2001:

|            |               | Fiscal Year Ended May 31,
|----------- | ------------- | -------------------------
|
|
|Net revenue |               |                          
|            | Europe        |                          
|            | Asia          |                          
|            | United States |                          
|            |               |                          
|            |               | Total net revenue        
|            |               |                          

|            |               | Fiscal Year Ended May 31, |     
|----------- | ------------- | ------------------------- | ----
|
|
|Net revenue |               |                           |     
|            | Europe        |                           | 49.0
|            | Asia          |                           | 27.2
|            | United States |                           | 23.8
|            |               |                           |     
|            |               | Total net revenue         |     
|            |               |                           |     

We
are organized into two worldwide operating divisions, equipment and materials. Our equipment division derives the majority of its revenue from the sale of capital equipment. The
remainder of the division's revenue comes from service, which includes the installation, maintenance and repair of semiconductor equipment, spare part sales and commissions. With the acquisition of
Shieldcare, we added new revenue categories; refurbished equipment sales and revenue from the cleaning of shields used in the manufacturing of semiconductors. Our equipment sales represent products
that support various production activities for the manufacture of semiconductors. The sales of the equipment division principally represent a small number of high-dollar value transactions
for which the products are generally shipped directly to the customer by the manufacturer. As a result, our equipment sales are significantly affected by the pattern of capital spending by customers,
the timing of customer orders and the timing of product shipments by the equipment manufacturer.

Our
materials division derives the majority of its revenue from sales of materials and components. The remainder of the division's revenue comes from commissions. The materials and
components we sell are used both in the production of semiconductors and in the building and maintenance of semiconductor equipment and manufacturing facilities. Materials include products such as
wafer surface preparation materials, fluid-handling components such as fittings, valves and tubing, and disposable cleanroom clothing. Sales of these products tend to be less cyclical than sales of
semiconductor equipment and generally offer higher gross margins.

Results of Operations

Beginning in the second half of 1996, as the result of excess capacity and significant price erosion, especially for memory chips, semiconductor industry
growth slowed significantly. This slowdown caused semiconductor manufacturers to exercise caution in making capital equipment purchasing decisions. Some semiconductor manufacturers reduced or delayed
the expansion or construction of facilities. This directly affected the sales of semiconductor capital equipment and, to a lesser extent, the sales of materials. As a result of the slowdown, we
experienced order cancellations, delays in booking new orders and delays in shipping orders to customers, all of which contributed to the reductions in our

27

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revenue in fiscal 1998 and 1999. We believe that, despite short-term slowdowns, the semiconductor industry has long-term growth opportunities. As a result, we believe we must
maintain our infrastructure, even during periodic slowdowns, in order to continue to serve our customers and to be in a position to take advantage of long-term growth opportunities.
Accordingly, we did not reduce our operating expenses sufficiently to prevent us from recording an operating loss in fiscal 1999. During the fourth quarter of fiscal 1999 the semiconductor industry
began to recover from the slowdown. The recovery continued through fiscal 2001, and we returned to profitability. However, in the fourth quarter of fiscal 2001, we began to experience order
cancellations, delays in booking new orders and delays in shipping orders to customers. We currently expect that revenues for the first quarter of fiscal 2002 will be substantially below our revenues
in the fourth quarter of fiscal 2001.

The
following table summarizes our historical results of operations as a percentage of net revenue for the fiscal years indicated. The historical financial data for fiscal 1999, 2000
and 2001 were derived from, and should be read in conjunction with, our audited Consolidated Financial Statements and the related Notes included elsewhere in this report.

|                                                     |  | Fiscal Year Ended May 31, |  
|---------------------------------------------------- |  | ------------------------- | -
|
|Net revenue                                          |  | 100.0                     | %
|Cost of revenue                                      |  | 82.8                      |  
|                                                     |  |                           |  
|Gross margin                                         |  | 17.2                      |  
|Selling, general, administrative, and other expenses |  | 19.0                      |  
|Other operating income, net of associated costs      |  |                          |  
|Restructuring and merger costs                       |  | 1.1                       |  
|                                                     |  |                           |  
|Operating margin                                     |  | (2.9)                     | %
|                                                     |  |                           |  

The
following table shows our materials division and equipment division revenue as a percent of net revenue, together with the related gross margins:

|              |                    | Fiscal Year Ended May 31, |     
|------------- | ------------------ | ------------------------- | ----
|
|Net revenue   |                    |                           |     
|              | Equipment division |                           | 55.7
|              | Materials division |                           | 44.3
|Gross margins |                    |                           |     
|              | Equipment division |                           | 14.9
|              | Materials division |                           | 20.1

Net Revenue

Equipment division.The equipment division's net revenue in fiscal 2001 was $262.2 million up
$92.8 million or 54.8% from $169.4 million in fiscal 2000. Net revenue in fiscal 2000 was up $42.0 million or 33.0% from fiscal 1999. In the third and fourth quarters of fiscal
1999, as the industry began to emerge from its prolonged downturn, revenue grew sequentially by 16.2% and 6.4%, respectively. Equipment division revenue continued to grow during fiscal 2000 and 2001
in all geographic regions with particularly strong growth in Europe and the United States. Shieldcare revenues represented $3.0 million and $12.4 million of the $42.0 million and
$92.8 million increase for fiscal 2000 and 2001, respectively.

Materials division.The materials division's net revenue in fiscal 2001 was $255.2 million, up
$87.0 million or 51.8% from $168.2 million in fiscal 2000. Net revenue in fiscal 2000 was up

28

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$67.0 million or 66.2% from fiscal 1999. Revenue grew sequentially from the two year low in the first quarter of fiscal 1999, when the industry began to emerge from its prolonged downturn, and
continued to grow through fiscal 2001 in all geographic regions.

Gross Margins

Equipment division.Gross margins in the equipment division declined by 80 basis points in fiscal 2001. The decline was
due primarily to the smaller proportion represented by spare parts revenues in fiscal 2001 and to the start-up costs of our new parts cleaning facilities in Israel and Singapore. The
increase in the equipment division's gross margins in fiscal 2000 over fiscal 1999 was primarily due to the improvement in spare parts margins, and by the acquisition of Shieldcare in the fourth
quarter.

Materials division.Gross margins in the materials division in fiscal 2001 were essentially unchanged from fiscal 2000.
The improvement in the materials division's gross margin in fiscal 2000 was principally due to the higher proportion of division revenue represented by commission sales. Margins for material sales in
fiscal 2001 were flat when compared to fiscal 2000 and fiscal 1999.

Selling, General, Administrative and Other (SG&A) Expenses.SG&A expenses in fiscal 2001 were $69.6 million, up
$20.6 million or 42.1% from fiscal 2000. In fiscal 2000 SG&A expenses were $49.0 million, up $5.6 million or 12.9% from fiscal 1999. Our acquisition of Shieldcare accounted for
$0.5 million and $1.6 million of the increase in fiscal 2000 and 2001, respectively, while the acquisition of Intec accounted for an additional $0.9 million in fiscal 2001.

SG&A
expenses consist principally of salaries and other employment-related costs, travel and entertainment, occupancy, communications and computer-related expense, trade show and
professional services, depreciation and amortization of acquisition goodwill. Our SG&A expenses are a function principally of our total headcount. Over 60% of SG&A expenses consist of salaries and
other employment-related costs.

The
increases in SG&A expenses in both fiscal 2001 and 2000 were primarily due to increases in headcount, travel and incentive plans. In addition, in fiscal 2001, we increased our
allowance for doubtful accounts as a result of the increase in the level of our accounts receivable, the proportion of our accounts receivable which were not being paid in accordance with agreed terms
and the deteriorating short-term outlook for the industry.

Restructuring and merger costs.The following table summarizes the restructuring and merger costs we incurred in the
years indicated.

|                    |                                | Fiscal Year Ended May 31,
|------------------- | ------------------------------ | -------------------------
|
|
|Restructuring costs |                                | $                        
|Merger costs        |                                |                          
|                    |                                |                          
|                    | Restructuring and merger costs |                          
|                    |                                |                          

Restructuring
costs represent primarily severance costs associated with the implementation of our new organizational structure and other reductions in headcount. During fiscal 1998,
we began the transition from our organizational structure based on individual Metron subsidiaries in each country to a global organization built around our product lines in order to improve our
service to our principals and customers. This organizational change allowed us to eliminate several positions in both fiscal 1998 and fiscal 1999 that had been duplicated under the previous geographic
organization. The restructuring costs incurred of $856,000 in fiscal 1999 represents the termination costs of 51 employees, most of whom worked in the equipment division. In February 1999, we
entered into an early retirement

29

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agreement with one of our managing directors in connection with the termination of his employment agreement. To cover the entire cost of the early retirement agreement, we recorded a
pre-tax charge of $979,000 in fiscal 1999.

All
the merger costs we incurred, primarily professional fees, were in connection with the acquisition of Kyser. The merger costs we incurred in connection with the acquisitions of
Shieldcare and Intec are included in the carrying values associated with those companies.

Other Income (Expense).The following table summarizes the components of other income (expense).

|                                   |  | Fiscal Year Ended May 31, |     
|---------------------------------- |  | ------------------------- | ----
|
|
|Foreign exchange gain (loss)       |  | $                         | 211 
|Interest income                    |  |                           | 438 
|Interest expense                   |  |                           | (913
|Loss on the sale of joint ventures |  |                           | (140
|Miscellaneous income               |  |                           | 7   
|                                   |  |                           |     
|Other income (expense)             |  | $                         | (397
|                                   |  |                           |     

In
the third quarter of fiscal 2001, we had an exchange loss of $544,000, which was primarily the result of the sudden and significant appreciation of the euro against the United
States dollar in December 2000. We engage in limited hedging activities to reduce our exposure to exchange risks arising from fluctuations in foreign currency, but because hedging activities
can be costly, we do not attempt to cover all potential foreign currency exposures. During the three-year period ended May 31, 2001, we entered into contracts to hedge firm purchase
commitments, to hedge the maturities of foreign currency denominated liabilities with foreign currency denominated assets and to hedge differences existing between foreign currency assets and
liabilities. The currencies in which we purchase forward exchange contracts have numerous market makers to provide ample depth and liquidity for our hedging activities.

Interest
income represents primarily earnings on our available cash balances. The decrease in fiscal 2001 represents utilization of our short-term investments for
operating needs, and the acquisition of Shieldcare during fiscal 2000. The increase in fiscal 2000 represents primarily interest earned from the investment of our initial public offering net proceeds
in short-term investments. The decrease in our interest income in fiscal 1999 is a result of lower average cash balances and of declining interest rates.

Interest
expense for fiscal 2001 decreased primarily due to a reduction of interest rates. Our interest expense for fiscal 2000 increased primarily as the result of increased
borrowings to support the increased working capital requirements associated with higher revenues.

Other
income for fiscal 2001 consisted of various miscellaneous non-operating income. In fiscal 2000 other income consisted of various miscellaneous income, and the
proceeds from the exercise and sale of stock warrants held in a non-related principal.

Provision for Income Taxes.In fiscal 2001, our effective income rate was 42.8%. The effective rate was higher than The
Netherlands statutory tax rate of 35%, primarily because of higher tax rates in countries other than The Netherlands where we do business, and non-deductible losses in Asia.

In
fiscal 2000, our effective income tax rate was 38.0%. The rate was higher than The Netherlands statutory tax rate primarily due to an additional assessment in Germany stemming from
the restructuring in fiscal 1997 of our German subsidiary's Italian branch, and an increase in goodwill

30

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amortization, a non-deductible expense, which resulted from our acquisition of Shieldcare. The effective income tax rate in fiscal 1999 was a benefit of 32.8% on a pretax loss of
approximately $6.7 million.

Liquidity and Capital Resources

We define liquidity as our ability to generate resources to pay our current obligations and to finance our growth during periods of business expansion. Our
principal requirement for capital is for working capital to finance receivables and inventories. Until we completed our initial public offering in late November 1999, our principal sources of
liquidity were cash flow from operations and bank borrowings. Our working capital, current assets less current liabilities, at May 31, 2001 was $55.1 million compared to
$54.4 million at May 31, 2000. Our current ratio, current assets divided by current liabilities, was 1.4 at May 31, 2001 and 1.5 at May 31, 2000.

Operating Activities.

Cash flows generated by operating activities in fiscal 2001 were $5.2 million, which represents an $11.0 million improvement from fiscal 2000.
Net income plus non-cash items included in net income
totaled $21.2 million in fiscal 2001, an increase of $8.5 million from fiscal 2000. Changes in assets and liabilities absorbed $16.0 million in fiscal 2001; changes in accounts
receivable and inventories offset by increases in payables absorbed $32.4 million, reflecting higher sales in fiscal 2001 and the fact that our customers generally do not pay us as promptly as
we are required to pay our suppliers. The comparable amounts in fiscal 2000 were: changes in assets and liabilities $18.5 million; changes in accounts receivable and inventories offset by
increases in payables $23.5 million.

Cash
flows used for operating activities in fiscal 1999 were $3.0 million, and were largely due to Metron's net loss of $4.5 million. In fiscal 1999, the net total of
items included in net loss which did not affect operating cash flows increased to $4.8 million from $4.1 million in 1998. The increase was principally due to increases in reserve
provisions as a result of additional reserves against inventory purchased for customers in Asia who subsequently deferred or canceled their orders, and a reserve against a receivable from a customer
in Europe who filed for bankruptcy. The net effect of changes in assets and liabilities in fiscal 1999 was approximately $3.2 million. A significant reduction in receivables caused by the
reduction in revenue was offset by reductions in accounts payable and amounts due to affiliates. The decline in equipment revenue in fiscal 1999 also caused a significant reduction in the amounts
deferred for installation and warranty.

Investing Activities.

Our capital expenditures for property, plant and equipment totaled $9.6 million for fiscal 2001, up from $3.5 million for the same period in
fiscal 2000. We spent approximately $4.4 million in fiscal 2001 to build our new parts cleaning facilities in Singapore and Israel, and we invested $2.6 million in our new operations
management information system. We invested $1.0 million for an approximately 20% interest in Advanced Stainless Technologies, Inc., a manufacturer of polished stainless steel tubes and
fittings for ultra high purity systems. We estimate that our total capital expenditures in fiscal 2002 will be approximately $7.0 million, of which $4.0 million represents the cost of a
fourth parts cleaning facility, and $2.6 million pertains to our new operations management information system. We estimate that the total costs of the new management information system will be
$8.0 to $10.0 million over an approximately 24 to 30 month period. At May 31, 2001, we had commitments to spend approximately $100 million for the purchase of equipment,
materials and spare parts for resale.

In
fiscal 2000, we invested $33.4 million from the proceeds of our initial public offering to purchase short investments, and received $30.1 million from the sale of
those investments. We invested $9.7 million of net cash to acquire all the common shares of Shieldcare Ltd., and invested $0.7 million in Abeto GmbH. Abeto was established in
September 1999 as a spin-off from Infineon Technologies

31

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AG to provide outsource services in the reclaim and refurbishment of packaging materials for the semiconductor industry. Our capital expenditures for property, plant and equipment totaled
$3.5 million for fiscal 2000 representing expenditures for leasehold improvements, computer and communications equipment.

During
fiscal 1999, through our wholly-owned subsidiary Metron Technology (United Kingdom) Ltd. we formed MAP, a joint venture with WS Atkins Plc., a publicly traded provider
of engineering and facilities maintenance services around the world. MAP makes available the services of both joint venturers to the semiconductor industry and coordinates the supply of services from
others. These services include the design and engineering of manufacturing facilities changes, facilities management and comprehensive technical support. Our capital expenditures for property, plant
and equipment totaled $1.4 million for fiscal 1999. In February 1999, we sold our interests in these joint ventures to FSI for $2.5 million.

Financing Activities.

In fiscal 2001, the Company received $1.4 million from employees for the purchase of approximately 80,000 common shares through its employee stock
purchase plan, and 171,000 common shares from the exercise of stock options, and related tax benefits. We increased our credit facilities to keep pace with increased revenues, and increased our
short-term borrowings by $6.2 million. In fiscal 2000 we completed our initial public offering with the issuance of 2,862,500 common shares, and received net proceeds of
$33.3 million. In fiscal 2000, we also received $1.1 million from the exercise of stock options by our employees. During the fiscal 1999, we satisfied our funding requirements
principally from internally generated funds and our various borrowing facilities. In fiscal 1999, we repurchased common shares from two employee shareholders for a total of $1.2 million.

We
do not anticipate that we will need to raise additional capital to permit us to conduct our operations in the ordinary course of business. However, we may need to raise additional
capital for significant acquisitions or other extraordinary transactions. We do not currently have any specific plans, agreements or commitments related to any such transaction and are not currently
engaged in any negotiations related to any such transaction. We have no plans to pay any dividends on our common shares and intend to retain all of our future profits to fund future growth. Our future
growth, including potential acquisitions, may require additional external financing, and from time to time we may need to raise additional funds through public or private sales of equity and/or
additional borrowings. If we are unable to obtain this additional funding, we might have to curtail our expansion plans. The issuance of additional equity or debt securities convertible into equity
could result in dilution to our existing shareholders.

The
following table summarizes our material borrowing facilities as of May 31, 2001:

|Lender                 |  | U.S. $
Equivalent
Facility
Amount |        | Amount
Currently
Outstanding |   | Amount
Available |  | Recent
Interest
Rate |       
|---------------------- |  | --------------------------------- | ------ | ---------------------------- | - | ---------------- |  | -------------------- | ------
|
|Compass Bank           |  | $                                 | 15,000 |                              | $ | 14,652           |  | $                    | 348   
|Royal Bank of Scotland |  |                                   | 4,192  |                              |   | 1,163            |  |                      | 3,029 
|ING Bank               |  |                                   | 2,748  |                              |   | 2,748            |  |                      |      
|All Others             |  |                                   | 10,145 |                              |   | 1,923            |  |                      | 8,222 
|                       |  |                                   |        |                              |   |                  |  |                      |       
|Total                  |  | $                                 | 32,085 |                              | $ | 20,486           |  | $                    | 11,599
|                       |  |                                   |        |                              |   |                  |  |                      |       

32

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A significant portion of our business is conducted outside of the United States through our foreign subsidiaries. While most of our international sales are
denominated in United States dollars, some are denominated in various foreign currencies. To the extent that our sales and operating expenses are denominated in foreign currencies, our operating
results may be adversely affected by changes in exchange rates. Owing to the number of currencies involved, the substantial volatility of currency exchange rates, and our constantly changing currency
exposures, we cannot predict the effect of exchange rate fluctuations on our future operating results. Although we engage in foreign currency hedging transactions from time to time, these hedging
transactions can be costly, and therefore, we do not attempt to cover all potential foreign currency exposures. These hedging techniques do not eliminate all of the effects of foreign currency
fluctuations on anticipated revenue.

In
addition, the transition period from legacy currencies to the euro currently is set to expire January 1, 2002. Our new operations management information system is designed
to accommodate the eventual elimination of the legacy currencies. We began implementing the conversion to the euro in fiscal 2002, and expect to complete the conversion prior to the expiration
deadline.



At May 31, 2001 we had aggregate forward exchange contracts in various currencies as follows:

|Contract
Amount
US $ |           | Buy |                  | Sell |                | Weighted
Average
Exchange
Rate |          | Fair Value |   | Expiration Date
|-------------------- | --------- | --- | ---------------- | ---- | -------------- | ------------------------------ | -------- | ---------- | - | ---------------
|$                    | 1,300,000 |     | Japanese Yen     |      |               |                                | 113.11   |            | $ | 41,000         
|$                    | 1,450,000 |     | Deutsch Mark     |      |               |                                | 2.23     |            |   | 33,000         
|$                    | 1,941,000 |     | Euro             |      |               |                                | 1.17     |            |   | (4,000         
|$                    | 2,644,000 |     | Singapore Dollar |      |               |                                | 1.80     |            |   |               
|$                    | 2,843,000 |     | British Pound    |      |               |                                | 1.42     |            |   | (11,000        
|$                    | 3,100,000 |     | Italian Lira     |      |               |                                | 2,257.29 |            |   | 3,000          
|$                    | 3,700,000 |     |                 |      | Israeli Shekel |                                | 4.24     |            |   | 2,000          
|$                    | 6,685,000 |     | French Franc     |      |               |                                | 7.74     |            |   | (74,000        
|                     |           |     |                  |      |                |                                |          |            |   |                
|                     |           |     |                  |      |                |                                |          |            | $ | (10,000        
|                     |           |     |                  |      |                |                                |          |            |   |                

The
interest rate on the building mortgage with the Royal Bank of Scotland plc comprises a variable LIBOR rate, a fixed rate of 1.5%, and a regulatory bank charge. In May 1996
the Company entered into an interest rate swap, expiring June 2001, to convert the variable LIBOR portion of the interest rate to a fixed interest rate of 7.72%. The interest rates at
May 31, 2000, and 2001 for the mortgage were 7.77% and 6.81%, respectively, while the interest rate for the swap was 9.24% for both years. At May 31, 2001, the principal amount for the
interest rate swap was $624,000 and its estimated fair value was a liability of $13,000.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See information/discussion appearing under the subcaption "Market Risk" of Management's Discussion and Analysis of Financial Condition and Results of
Operations in Item 7.

33

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

|                                                                                |  | Page
Number
|------------------------------------------------------------------------------- |  | -----------
|Independent Auditors' Report                                                    |  | 35         
|Consolidated Statements of Operations                                           |  | 36         
|Consolidated Balance Sheets                                                     |  | 37         
|Consolidated Statements of Cash Flows                                           |  | 38         
|Consolidated Statements of Shareholders' Equity and Comprehensive Income (Loss) |  | 39         
|Notes to Consolidated Financial Statements                                      |  | 40         

34

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INDEPENDENT AUDITORS' REPORT

The
Board of Directors and Shareholders
Metron Technology N.V.:

We
have audited the accompanying consolidated balance sheets of Metron Technology N.V. and subsidiaries as of May 31, 2001 and 2000, and the related consolidated statements of
operations, shareholders' equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended May 31, 2001. These consolidated financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Metron Technology N.V. and subsidiaries as
of May 31, 2001 and 2000, and the results of their operations and their cash flows for each of the years in the three-year period ended May 31, 2001 in conformity with
accounting principles generally accepted in the United States of America.

KPMG
LLP

Mountain
View, California
July 12, 2001

35

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METRON TECHNOLOGY N.V. CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share data)

|                                                                                   |                                                            | Years ended May 31, |        
|---------------------------------------------------------------------------------- | ---------------------------------------------------------- | ------------------- | -------
|
|Net revenue                                                                        |                                                            | $                   | 228,618
|Cost of revenue                                                                    |                                                            |                     | 189,295
|                                                                                   |                                                            |                     |        
|Gross profit                                                                       |                                                            |                     | 39,323 
|Selling, general, administrative, and other expenses                               |                                                            |                     | 43,391 
|Other operating income, net of associated costs                                    |                                                            |                     |       
|Restructuring and merger costs                                                     |                                                            |                     | 2,550  
|                                                                                   |                                                            |                     |        
|Operating income (loss)                                                            |                                                            |                     | (6,618 
|Equity in net income (loss) of joint ventures                                      |                                                            |                     | 267    
|Other income (expense), net                                                        |                                                            |                     | (397   
|                                                                                   |                                                            |                     |        
|Income (loss) before income taxes                                                  |                                                            |                     | (6,748 
|Income tax expense (benefit)                                                       |                                                            |                     | (2,214 
|                                                                                   |                                                            |                     |        
|Net income (loss) before cumulative effect of change in accounting principle       |                                                            |                     | (4,534 
|Cumulative effect of change in accounting principle                                |                                                            |                     |       
|                                                                                   |                                                            |                     |        
|Net income (loss)                                                                  |                                                            | $                   | (4,534 
|                                                                                   |                                                            |                     |        
|Basic earnings (loss) per common share                                             |                                                            |                     |        
|                                                                                   | Before cumulative effect of change in accounting principle |                     | $      
|                                                                                   | Cumulative effect of change in accounting principle        |                     |        
|                                                                                   |                                                            |                     |        
|                                                                                   | Basic earnings (loss) per common share                     |                     | $      
|                                                                                   |                                                            |                     |        
|Diluted earnings (loss) per common share                                           |                                                            |                     |        
|                                                                                   | Before cumulative effect of change in accounting principle |                     | $      
|                                                                                   | Cumulative effect of change in accounting principle        |                     |        
|                                                                                   |                                                            |                     |        
|                                                                                   | Diluted earnings (loss) per common share                   |                     | $      
|                                                                                   |                                                            |                     |        
|Pro forma amounts assuming change in accounting principle is applied retroactively |                                                            |                     |        
|                                                                                   | Net income (loss)                                          |                     | $      
|                                                                                   |                                                            |                     |        
|                                                                                   | Basic earnings (loss) per common share                     |                     | $      
|                                                                                   |                                                            |                     |        
|                                                                                   | Diluted earnings (loss) per common share                   |                     | $      
|                                                                                   |                                                            |                     |        

The
accompanying Notes are an integral part of the Consolidated Financial Statements.

36

---

METRON TECHNOLOGY N.V. CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except share and per share data)

|                                                 |                                                                                                                                                                                                                      | May 31,                                    |      
|------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | -----
|
|ASSETS                                           |                                                                                                                                                                                                                      |                                            |      
|                                                 | Cash and cash equivalents                                                                                                                                                                                            |                                            | $    
|                                                 | Short-term investments                                                                                                                                                                                               |                                            |      
|                                                 | Accounts receivable, net of allowance for doubtful accounts of $685, and $2,861, respectively                                                                                                                        |                                            |      
|                                                 | Loan to officer/shareholder                                                                                                                                                                                          |                                            |      
|                                                 | Inventories, net                                                                                                                                                                                                     |                                            |      
|                                                 | Prepaid expenses and other current assets                                                                                                                                                                            |                                            |      
|                                                 |                                                                                                                                                                                                                      |                                            |      
|                                                 |                                                                                                                                                                                                                      | Total current assets                       |      
|                                                 | Property, plant, and equipment, net                                                                                                                                                                                  |                                            |      
|                                                 | Intangible assets, net                                                                                                                                                                                               |                                            |      
|                                                 | Long term investments                                                                                                                                                                                                |                                            |      
|                                                 | Other assets                                                                                                                                                                                                         |                                            |      
|                                                 |                                                                                                                                                                                                                      |                                            |      
|                                                 |                                                                                                                                                                                                                      | Total Assets                               |      
|                                                 |                                                                                                                                                                                                                      |                                            |      
|LIABILITIES AND SHAREHOLDERS' EQUITY             |                                                                                                                                                                                                                      |                                            |      
|                                                 | Accounts payable                                                                                                                                                                                                     |                                            | $    
|                                                 | Amounts due to affiliates                                                                                                                                                                                            |                                            |      
|                                                 | Accrued wages and employee-related expenses                                                                                                                                                                          |                                            |      
|                                                 | Deferred revenue for installation and warranty                                                                                                                                                                       |                                            |      
|                                                 | Deferred income                                                                                                                                                                                                      |                                            |      
|                                                 | Short term borrowings and current portion of long-term debt                                                                                                                                                          |                                            |      
|                                                 | Amounts payable to shareholders                                                                                                                                                                                      |                                            |      
|                                                 | Other current liabilities                                                                                                                                                                                            |                                            |      
|                                                 |                                                                                                                                                                                                                      |                                            |      
|                                                 |                                                                                                                                                                                                                      | Total current liabilities                  |      
|Long-term debt, excluding current portion        |                                                                                                                                                                                                                      |                                            | 1,227
|Deferred credits and other long-term liabilities |                                                                                                                                                                                                                      |                                            | 2,253
|                                                 |                                                                                                                                                                                                                      |                                            |      
|                                                 |                                                                                                                                                                                                                      | Total liabilities                          |      
|                                                 |                                                                                                                                                                                                                      |                                            |      
|Commitments                                      |                                                                                                                                                                                                                      |                                            |     
|Shareholders' Equity:                            |                                                                                                                                                                                                                      |                                            |      
|                                                 | Preferred shares, par value NLG 0.96; Authorized: 10,000,000 shares; Issued and outstanding: none                                                                                                                    |                                            |      
|                                                 | Common shares and additional paid-in capital, par value NLG 0.96; Authorized: 40,000,000 shares; Issued: 13,469,895 and 14,195,787 shares, respectively; Outstanding: 13,188,888 and 12,789,780 shares,
respectively |                                            |      
|                                                 | Retained earnings                                                                                                                                                                                                    |                                            |      
|                                                 | Accumulative other comprehensive loss                                                                                                                                                                                |                                            |      
|                                                 | Treasury shares; 281,007 and 1,706,007 shares                                                                                                                                                                        |                                            |      
|                                                 |                                                                                                                                                                                                                      |                                            |      
|                                                 |                                                                                                                                                                                                                      | Total shareholders' equity                 |      
|                                                 |                                                                                                                                                                                                                      |                                            |      
|                                                 |                                                                                                                                                                                                                      | Total Liabilities and Shareholders' Equity |      
|                                                 |                                                                                                                                                                                                                      |                                            |      

The
accompanying Notes are an integral part of the Consolidated Financial Statements.

37

---

METRON TECHNOLOGY N.V. CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

|                                                             |                                                                                                    | Years ended May 31,                                             |                                               
|------------------------------------------------------------ | -------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ----------------------------------------------
|
|Cash flows from operating activities:                        |                                                                                                    |                                                                 |                                               
|                                                             | Net income (loss)                                                                                  |                                                                 | $                                             
|                                                             | Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |                                                                 |                                               
|                                                             |                                                                                                    | Cumulative effect of accounting change                          |                                               
|                                                             |                                                                                                    | Depreciation and amortization                                   |                                               
|                                                             |                                                                                                    | Provision for inventory valuation and doubtful accounts         |                                               
|                                                             |                                                                                                    | Other operating income, net of associated costs                 |                                               
|                                                             |                                                                                                    | Deferred income taxes                                           |                                               
|                                                             |                                                                                                    | Amortization of deferred compensation expense                   |                                               
|                                                             |                                                                                                    | Equity in net (income) loss of joint ventures                   |                                               
|                                                             |                                                                                                    | Gain on sale of stock warrant                                   |                                               
|                                                             |                                                                                                    | Loss (gain) on disposition of assets                            |                                               
|                                                             |                                                                                                    | Changes in assets and liabilities:                              |                                               
|                                                             |                                                                                                    |                                                                 | Accounts receivable                           
|                                                             |                                                                                                    |                                                                 | Loan to officer/shareholder                   
|                                                             |                                                                                                    |                                                                 | Inventories                                   
|                                                             |                                                                                                    |                                                                 | Prepaid expenses and other current assets     
|                                                             |                                                                                                    |                                                                 | Accounts payable                              
|                                                             |                                                                                                    |                                                                 | Amounts due to affiliates                     
|                                                             |                                                                                                    |                                                                 | Accrued wages and employee-related expenses   
|                                                             |                                                                                                    |                                                                 | Deferred revenue for installation and warranty
|                                                             |                                                                                                    |                                                                 | Deferred income                               
|                                                             |                                                                                                    |                                                                 | Other current liabilities                     
|                                                             |                                                                                                    |                                                                 |                                               
|                                                             |                                                                                                    |                                                                 |                                               
|                                                             |                                                                                                    |                                                                 |                                               
|Cash flows from investing activities:                        |                                                                                                    |                                                                 |                                               
|                                                             |                                                                                                    | Purchases of short-term investments                             |                                               
|                                                             |                                                                                                    | Proceeds from sale of short-term investments                    |                                               
|                                                             |                                                                                                    | Additions to property, plant, and equipment                     |                                               
|                                                             |                                                                                                    | Proceeds from the sale of property, plant, and equipment        |                                               
|                                                             |                                                                                                    | Proceeds from the sale stock warrant                            |                                               
|                                                             |                                                                                                    | Additions to long-term investments                              |                                               
|                                                             |                                                                                                    | Net cash received in conjunction with the acquisition of Intec  |                                               
|                                                             |                                                                                                    | Proceeds from the sale of equity investment in joint ventures   |                                               
|                                                             |                                                                                                    | Payment for the acquisition of Shieldcare, net of cash acquired |                                               
|                                                             |                                                                                                    | Other assets                                                    |                                               
|                                                             |                                                                                                    | Deferred credits and other long-term liabilities                |                                               
|                                                             |                                                                                                    |                                                                 |                                               
|                                                             |                                                                                                    |                                                                 |                                               
|                                                             |                                                                                                    |                                                                 |                                               
|Cash flows from financing activities:                        |                                                                                                    |                                                                 |                                               
|                                                             |                                                                                                    | Increase in short-term borrowings                               |                                               
|                                                             |                                                                                                    | Proceeds from issuance of long-term debt                        |                                               
|                                                             |                                                                                                    | Principal payments on long-term debt                            |                                               
|                                                             |                                                                                                    | Amounts payable to shareholders                                 |                                               
|                                                             |                                                                                                    | Principal payments on indebtedness to officer and shareholder   |                                               
|                                                             |                                                                                                    | Purchase of treasury stock                                      |                                               
|                                                             |                                                                                                    | Proceeds from issuance of common and treasury shares            |                                               
|                                                             |                                                                                                    |                                                                 |                                               
|                                                             |                                                                                                    |                                                                 |                                               
|                                                             |                                                                                                    |                                                                 |                                               
|Effect of exchange rate changes on cash and cash equivalents |                                                                                                    |                                                                 | (699                                          
|                                                             |                                                                                                    |                                                                 |                                               
|Net change in cash and cash equivalents                      |                                                                                                    |                                                                 | 214                                           
|Beginning cash and cash equivalents                          |                                                                                                    |                                                                 | 10,387                                        
|                                                             |                                                                                                    |                                                                 |                                               
|Ending cash and cash equivalents                             |                                                                                                    | $                                                               | 10,601                                        
|                                                             |                                                                                                    |                                                                 |                                               

The accompanying Notes are an integral part of the Consolidated Financial Statements.

38

---



METRON TECHNOLOGY N.V. CONSOLIDATED  STATEMENTS OF SHAREHOLDERS' EQUITY  AND COMPREHENSIVE INCOME (LOSS)  (In thousands)

|                                                                                         |                         | Common Shares and Additional Paid-in Capital |       |   |        |        |    |        |   |   |        |   |   |      |  
|---------------------------------------------------------------------------------------- | ----------------------- | -------------------------------------------- | ----- | - | ------ | ------ | -- | ------ | - | - | ------ | - | - | ---- | -
|
|
|
|Balances at May 31, 1998                                                                 |                         | 10,368                                       |       | $ | 3,177  |        | $  | 35,559 |   | $ | (2,405 | ) | $ | (7   | )
|Net loss                                                                                 |                         |                                              |       |   |        |        |    | (4,534 | ) |   |        |   |   |      |  
|Foreign translation adjustment                                                           |                         |                                              |       |   |        |        |    |        |   |   | (725   | ) |   |      |  
|Amortization of deferred compensation                                                    |                         |                                              |       |   |        |        |    |        |   |   |        |   |   |      |  
|Release of rights under
Buy-Sell Agreement                                               |                         |                                              |       |   | 27     |        |    |        |   |   |        |   |   |      |  
|Purchase of treasury shares                                                              |                         | (266                                         | )     |   | (189   | )      |    | (839   | ) |   |        |   |   | (124 | )
|Issuance of shares:                                                                      |                         |                                              |       |   |        |        |    |        |   |   |        |   |   |      |  
|                                                                                         |                         | Stock option exercises                       |       | 2 |        |        | 15 |        |   |   |        |   |   |      |  
|                                                                                         |                         |                                              |       |   |        |        |    |        |   |   |        |   |   |      |  
|Balances at May 31, 1999                                                                 |                         | 10,104                                       |       |   | 3,030  |        |    | 30,186 |   |   | (3,130 | ) |   | (131 | )
|                                                                                         |                         |                                              |       |   |        |        |    |        |   |   |        |   |   |      |  
|Net income                                                                               |                         |                                              |       |   |        |        |    | 7,752  |   |   |        |   |   |      |  
|Foreign translation adjustment                                                           |                         |                                              |       |   |        |        |    |        |   |   | (1,679 | ) |   |      |  
|Release of rights under
Buy-Sell Agreement                                               |                         |                                              |       |   | 1,973  |        |    |        |   |   |        |   |   |      |  
|Issuance of shares:                                                                      |                         |                                              |       |   |        |        |    |        |   |   |        |   |   |      |  
|                                                                                         | Initial public offering |                                              | 2,863 |   |        | 33,406 |    |        |   |   |        |   |   |      |  
|                                                                                         | Stock option exercises  |                                              | 222   |   |        | 1,108  |    |        |   |   |        |   |   |      |  
|                                                                                         |                         |                                              |       |   |        |        |    |        |   |   |        |   |   |      |  
|Balances at May 31, 2000                                                                 |                         | 13,189                                       |       |   | 39,517 |        |    | 37,938 |   |   | (4,809 | ) |   | (131 | )
|                                                                                         |                         |                                              |       |   |        |        |    |        |   |   |        |   |   |      |  
|Net income                                                                               |                         |                                              |       |   |        |        |    | 11,510 |   |   |        |   |   |      |  
|Foreign translation adjustment                                                           |                         |                                              |       |   |        |        |    |        |   |   | (2,618 | ) |   |      |  
|Receipt of treasury shares on modification of distribution agreement                     |                         | (1,125                                       | )     |   | (6,154 | )      |    |        |   |   |        |   |   | (461 | )
|Issuance of shares:                                                                      |                         |                                              |       |   |        |        |    |        |   |   |        |   |   |      |  
|Acquisition of Intec                                                                     |                         | 475                                          |       |   | 3,938  |        |    |        |   |   |        |   |   |      |  
|Stock option exercises and employee stock purchase plan, including related tax benefits) |                         | 251                                          |       |   | 1,413  |        |    |        |   |   |        |   |   |      |  
|                                                                                         |                         |                                              |       |   |        |        |    |        |   |   |        |   |   |      |  
|Balances at May 31, 2001                                                                 |                         | 12,790                                       |       | $ | 38,714 |        | $  | 49,448 |   | $ | (7,427 | ) | $ | (592 | )
|                                                                                         |                         |                                              |       |   |        |        |    |        |   |   |        |   |   |      |  

The accompanying Notes are an integral part of the Consolidated Financial Statements.

39

---

METRON TECHNOLOGY N.V. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Metron Technology N.V. ("Metron" or the "Company") is a holding company organized under the laws of The Netherlands. Metron and its subsidiaries are engaged in
the marketing, sale and service of semiconductor equipment and materials support in Europe, Asia (except Japan) and the United States. The majority of Metron's revenue is derived from sales of
materials and equipment. The Company's principal subsidiaries include: Metron Technology (Deutschland) GmbH, Metron Technology (United Kingdom) Ltd., Metron Technology (France) EurL, Metron
Technology (Italy) S.r.l., Metron Technology (Benelux) B.V., Metron Technology (Israel) Ltd., Metron Technology (Asia) Ltd., Metron Technology (Hong Kong) Ltd., T.A. Kyser Co. (a
Nevada corporation), and Metron Technology Distribution Corporation (a California corporation).

In
July 1998, the Company issued common shares in exchange for substantially all of the outstanding capital stock of T.A. Kyser Co ("Kyser"), which was engaged in the marketing
and sale of semiconductor materials. The transaction has been treated as a pooling of interests.

The
consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") applicable in the United States of America. Certain prior
period items have been reclassified to conform with the current year format. Conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Future results may
differ from these estimates.



The consolidated financial statements include the accounts of the Company and all its subsidiaries. All significant intercompany balances and transactions have
been eliminated.



The Company's revenues consist primarily of product revenues generated from the sale of equipment and materials, and revenues associated with the provision of
services. Revenue is recognized in accordance with SEC Staff Accounting Bulletin No. 101,Revenue Recognition in Financial Statements("SAB 101"), which was adopted by the Company as of June 1, 2000. Materials and other product sales are generally recognized on the shipment of goods to customers. Most equipment sales
are recorded as "multiple element" transactions in which the portion of the sale represented by future installation and warranty services is deferred, and only the residual amount of the sale
representing the equipment itself is recognized upon shipment to the customer. Installation revenue is recognized upon completion of the installation and the customer's acknowledgement that the
equipment is available for production use. Warranty revenue is recognized ratably over the applicable warranty period. Generally, the Company warrants products sold to customers to be free from
defects in material and workmanship for up to two years. Service revenue is recognized in the periods in which the services are rendered to customers.

In
the majority of transactions involving installation and warranty services, a portion of the sale is not due and payable until the earlier of a defined payment date or the
completion of the installation, whichever comes first. Some transactions do not, however, include a defined payment date and in those cases, the Company defers the greater of the fair value of
installation and warranty revenue or the portion of the sale that was not due and payable until after installation is complete. At June 1, 2000, $1,724,000 of previously recognized revenue from
transactions without a defined payment date, net of $259,000 applicable taxes, was deferred. This amount has been recorded as the cumulative effect of a

40

---

change in accounting principle. Revenue of $1,724,000, which was deferred as part of the cumulative effect was recognized in the fiscal year ended May 31, 2001.



Other comprehensive income (loss) consists of revenues, expenses, gains, and losses that are not included in net income, but rather are recorded directly in
shareholders' equity. For the fiscal years ended May 31, 1999, 2000, and 2001, the Company had one item of other comprehensive loss related to the foreign currency translation adjustment.



Basic earnings per common share are based on the weighted-average number of common shares outstanding in each year. Diluted earnings per common share reflect
the potential dilution that could occur if dilutive securities were exercised into common shares. For all years presented the reported net income (loss) was used in the computation of basic and
diluted earnings per common share.

A
reconciliation of the shares used in the computation follows:

|                                                                     |  | Year ended May 31,
|-------------------------------------------------------------------- |  | ------------------
|
|
|Shares used for basic earnings (loss) per common share calculation   |  | 10,325            
|Shares used for stock options having a dilutive effect               |  |                  
|                                                                     |  |                   
|Shares used for diluted earnings (loss) per common share calculation |  | 10,325            
|                                                                     |  |                   

Securities
excluded from diluted earnings per share for fiscal years 1999, 2000 and 2001, as their effect was anti-dilutive, amounted to 1,944,348, 574,800, and 1,158,632
options to purchase the Company's
common shares with a weighted-average exercise price of $5.41, $17.03, and $8.20, respectively. Excluded securities could potentially dilute basic earnings per share in the future.



Cash equivalents are short-term, highly liquid investments with original maturities of three months or less from the date of purchase.



The Company classifies all of its short-term investments as available-for-sale securities. These securities mature within
one year, and consist primarily of municipal and money market fund securities. The securities are reported at fair value with net unrealized gains or losses reported as other comprehensive income in
shareholders' equity. To date unrealized gains or losses have been insignificant. Realized gains and losses are recorded based on specific identification.



Inventories consist primarily of purchased products and are stated at the lower of cost (first-in, first-out basis) or net realizable
value. Provision is made for slow-moving and obsolete items.



Metron Technology N.V., Metron Technology (Asia) Ltd., and Metron Technology (Hong Kong) Ltd. maintain their books in their respective local
currencies, but their functional currency is the United States dollar. Accordingly, the gains and losses from the re-measurement of these financial

41

---

statements into United States dollars are included in the consolidated results of operations. The functional currency for each of the Company's other subsidiaries is the applicable local currency. The
translation from foreign currencies to United States dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense
accounts using an average exchange rate during the period. Translation gains or losses are included in "Cumulative other comprehensive loss" within shareholders' equity.



The carrying value of the Company's consolidated financial instruments, including cash and cash equivalents, short-term investments, accounts
receivable, accounts payable and debt approximates fair value. Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents,
short-term investments, and accounts receivable.

The
Company sells its products and services principally to leading well established semiconductor companies. Credit risk is concentrated in North America, Europe and Asia. The Company
performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral from its customers. The Company has experienced write-offs of accounts
receivable, and based on an ongoing evaluation of its accounts receivable collectibility and customer creditworthiness, believes it has adequately provided for potential losses, which have been within
management's expectations.

The
Company attempts to reduce its exposure arising from foreign currency fluctuations by matching the maturities of foreign currency assets and liabilities, mainly accounts
receivable and accounts payable. Metron enters into forward exchange contracts that are designated to hedge differences existing between foreign currency assets and liabilities. Any gains or losses on
these contracts are recognized in the income statement, and generally offset the resulting gains and losses on the related balance sheet items. Metron also uses forward exchange contracts that are
designated to hedge firm purchase commitments. Any unrealized gains or losses are deferred and realized gains or losses adjust the carrying basis of assets acquired, principally inventory.

The
Company will adopt in its fiscal year ending May 31, 2002, SFAS 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS 137
and SFAS 138. Historically, the Company has engage in limited hedging activities to reduce the exposure to exchange risks arising from fluctuations in foreign currency, but has not entered into
derivatives contracts either to hedge non-currency risks or for speculative purposes. Accordingly, the Company does not expect adoption of the new standard to affect its consolidated
financial statements.



Property, plant, and equipment are recorded at cost. Depreciation and amortization is determined primarily by the straight-line method over the
estimated useful life of the related asset, while leasehold improvements are depreciated over the lesser of the estimated useful life or the lease term, as follows:

Buildings and leasehold improvements

1050 yearsMachinery, equipment, vehicles and fixtures

317 years


Land
is not depreciated. Gains and losses on disposals are included in income at amounts equal to the difference between the net book value of the disposed assets and the proceeds
received upon disposal. Repair and maintenance costs are capitalized only if they extend the useful life of the related asset. The Company reviews the carrying value of these assets for impairment
whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from estimated future cash flows expected to result from its use and disposition. Where
undiscounted expected cash flows are less than the carrying value, an impairment loss is recognized for the difference between the estimated

42

---

fair value and the carrying value of an asset. No impairment of property, plant, and equipment has been recognized as of May 31, 2001.



Intangible assets consist primarily of goodwill, representing the excess of the purchase price paid over the fair value of net assets acquired in business
combinations. Goodwill is amortized in selling, general, administrative, and other expenses over a 10-year period, using the straight-line method. Amortization of goodwill was
$423,000, $617,000 and $1,201,000 for the fiscal years ended May 31, 1999, 2000 and 2001, respectively. The Company periodically reviews intangible assets for recoverability using an
undiscounted cash flow approach to assess if there is impairment. If the undiscounted cash flows are less than the carrying value, impairment is measured by the excess of the carrying value over the
undiscounted cash flows.



The Company uses the equity method to account for its investments in Advanced Stainless Technologies ("AST") and Metron Atkins Partnership Limited ("MAP"),
because it has the ability to exercise significant influence over the operating and financial policies of these companies. The Company does not, however, exercise control over either AST or MAP. The
Company uses the cost method to account for its investment in Abeto GmbH, and has no influence on its operating and financial policies.



The Company uses the asset and liability method of accounting for income taxes. Under this method deferred income taxes are provided to reflect the net tax
effects of differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes and of operating loss and tax credit carryforwards.

Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.



The Company uses the intrinsic value-based method to account for employee stock-based compensation plans. The Company has adopted the disclosure requirements
of Statement of Financial Accounting Standards No. 123"Accounting for Stock-Based Compensation" ("SFAS 123").

2.  ACQUISITIONS

On March 3, 2000 Metron Technology (United Kingdom) Limited, a wholly owned subsidiary of the Company, acquired all the common shares of Shieldcare
Limited, a privately held company incorporated in Scotland. Shieldcare is an authorized supplier of critical parts cleaning services to major OEM and device manufacturing companies worldwide.
Shieldcare also operates as an authorized
re-manufacturer of physical vapor deposition (PVD) equipment for a well-known supplier of automated systems for chemical vapor deposition (CVD). Metron intends to use the
assets acquired in the transaction to continue the operations of Shieldcare.

All
of Shieldcare's common shares and cash were acquired for cash, including transaction costs, of approximately $10,133,000. The transaction has been accounted for as a purchase, and
accordingly, the results of operations of Shieldcare have been included in the Company's consolidated financial

43

---

statements from March 3, 2000. The excess of the purchase price over the fair value of the net identifiable assets acquired of $7,804,000 has been recorded as goodwill and is being amortized on
a straight-line basis over 10 years.

Effective
November 17, 2000, the Company acquired all the common shares of Intec Technology (S) Pte. Ltd., a privately held company incorporated in Singapore.
Intec is a supplier of cleanroom products and manufactures cleanroom garments in Singapore and Malaysia. Metron intends to use the assets acquired in the transaction to continue the operations of
Intec. The transaction was accounted for as a purchase, and Intec's results of operations are included in the Company's consolidated financial statements from December 1, 2000.

As
consideration for the acquisition, Metron issued 475,000 shares of the Company's common shares at an average share price of $8.29 and paid transaction costs of $300,000 for a total
consideration of approximately $4,238,000. The excess of the purchase price over the approximately $3,132,000 fair value of the net identifiable assets acquired was recorded as goodwill and will be
amortized on a straight-line basis over 10 years.

The
following unaudited pro forma financial information presents the combined results of the operations of these acquisitions and the Company as if the acquisitions had occurred as of
the beginning of fiscal year 2000, after giving effect for the amortization of goodwill. The pro forma financial information does not necessarily reflect the results of operations that would have
occurred had the acquisitions and the Company constituted a single entity during the past two fiscal years.

Years ended May 31,2000

2001(unaudited)(Dollars in thousands, except per share amounts)Net revenue

$
342,493

$
525,936Net income

$
6,883

$
12,337Earnings per common shareBasic

$
0.59

$
0.93Diluted

$
0.53

$
0.89


3.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

May 31,2000

2001(Dollars in thousands)Land

$
838

$
838Buildings and leasehold improvements


5,588


7,100Machinery, equipment, vehicles, and fixtures


15,624


18,997Construction in progress





2,87822,050


29,813Less accumulated depreciation and amortization


11,797


13,756Net property, plant and equipment

$
10,253

$
16,057


Depreciation
expense relating to property, plant and equipment for the years ended May 31, 1999, 2000, and 2001 was $2,617,000, $2,129,000, and $3,477,000, respectively.

44

---

4.  LONG-TERM INVESTMENTS

The Company's long-term investments were as follows:

May 31,2000

2001(Dollars in thousands)MAP

$
139

$
25AST





929Abeto GmbH


688


699Long-term investments

$
827

$
1,653


During
fiscal year 1999, Metron Technology (United Kingdom) Ltd., a wholly owned subsidiary of the Company and WS Atkins Plc. formed a 50/50 joint venture Metron Atkins
Partnership Limited ("MAP"). MAP provides services to the semiconductor industry including but not limited to design and engineering of manufacturing facilities, facilities management, and
comprehensive technical support.

During
May 2000 the Company acquired an approximately 16% interest in Abeto GmbH. Abeto was established in September 1999 as a spin-off from Infineon
Technologies AG to provide outsource services in the reclaim and refurbishment of packaging materials for the semiconductor industry.

During
August 2000 the Company acquired an approximately 20% interest in Advanced Stainless Technologies, Inc. ("AST"). AST is a manufacturer of polished stainless steel
tubes and fittings for ultra high purity systems.

Condensed
combined financial information for the unconsolidated investments accounted for under the equity method were as follows:

May 31,2000

2001(Dollars in thousands)Total assets

$
505

$
3,895Total liabilities


(227
)

(2,219
)Total shareholders' equity


278


1,676Other shareholders' share of equity


(139
)

(722
)Investment in MAP and AST

$
139

$
954


Year ended May 31,1999

2000

2001(Dollars in thousands)Operating income (loss)

$
1,605

$
(556
)
$
(596
)Net income (loss)

$
705

$
(412
)
$
(584
)Metron's share of net income (loss)

$
319

$
(206
)
$
(185
)Amortization of goodwill and other intangible items


(52
)




Equity in net income (loss) of equity investments

$
267

$
(206
)
$
(185
)


45

---

5.  SHORT-TERM BORROWINGS AND DEBT

Short-term borrowings consist of the following:

May 31,2000

2001(Dollars in thousands)Lines of credit

$
8,276

$
14,652Short-term credit facilities


4,617


4,489Current portion of long-term debt


247


366Short-term borrowings and current portion of long-term debt

$
13,140

$
19,507


One
of the Company's subsidiaries has a line of credit facility with a bank, which provides for borrowings not to exceed $15,000,000. Specific assets of the subsidiary collateralize
the line of credit. The interest rate for the line of credit is 2% above LIBOR and was 6.06% at May 31, 2001. The line of credit is also subject to the maintenance of certain financial ratios
and minimum levels of tangible net worth. The Company has guaranteed the credit facility.

The
Company and its subsidiaries have short-term credit facilities in various currencies with a number of banks. Weighted average interest rates on the outstanding
facilities at May 31, 2000, and 2001 were 6.3% and 4.6%, respectively. Certain assets of subsidiaries of the Company collateralize the facilities. At May 31, 2001, the total amount
available and unutilized under the Company's short-term borrowings was approximately $11,599,000. The Company and its subsidiaries have guaranteed certain short-term credit
facilities.

Long-term
debt consists of the following:

May 312000

2001(Dollars in thousands)Building mortgage with The Royal Bank of Scotland plc with an interest rate of 9.24% until June 2001, and thereafter at LIBOR plus 1.5% per annum until maturity. Principal and interest are payable in quarterly installments
through April 2006. The mortgage is also subject to the maintenance of certain financial ratios and minimum levels of tangible net worth.

$
773

$
624Note payable to shareholder for purchase of retired treasury shares. The note has an interest rate of 6.65%, payable in annual installments until July 2002, and is collateralized by an ESOP bond.


186


124Various notes maturing through August 2006; interest rates ranging from 3.4% to 9.6%


577


6591,536


1,407Less current portions:Note payable to shareholder


62


62Long-term debt


247


366Long-term debt

$
1,227

$
979


Future
fiscal year ("FY") annual maturities of long-term debt are as follows: FY2002, $428,000; FY2003, $348,000; FY2004, $239,000; FY2005, $205,000, FY2006, $130,000 and
thereafter, $57,000.

46

---

6.  MODIFICATION OF DISTRIBUTION AGREEMENT

On January 8, 2001 the Company and Entegris, Inc. ("Entegris"), one of the Company's principals and shareholders, entered into an agreement to
modify their existing distribution relationship. On February 13, 2001, the Company entered into a transition agreement whereby Entegris assumed direct sales responsibility for products from its
Microelectronics Group in Europe beginning April 1, 2001, and in Asia beginning May 1, 2001. The Company will receive revenue for orders received before the above dates and shipped
within the 90 days following these dates. In addition, on March 1, 2001, the companies entered into a new distribution agreement, under which Metron will continue to distribute products
from Entegris' Fluid Handling Group in all regions in Europe, Asia, and parts of the United States covered under the previous distribution agreements. The new distribution agreement will be in effect
until August 31, 2005. Revenue from products distributed for the Microelectronics Group under the previous distribution agreement were as follows:

Year Ended May 31,1999

2000

2001(Dollars in thousands)Revenue

$
18,255

$
51,420

$
75,245


As
consideration for modifying the existing distribution agreement, Entegris transferred 1,125,000 shares of the Metron common shares that it owned to Metron, and agreed to make cash
payments totaling $1,750,000 over a 15-month period. As a result of the modification, Metron will record a total gain of $8,365,000 in other operating income on a straight-line
basis from the date of the modification, February 13, 2001 until August 31, 2002, the remaining effective term of the original agreement. The common shares transferred by Entegris
represented $6,615,000 of the gain, which was equal to their fair market value on February 13, 2001. In addition, during the fiscal quarter ending August 31, 2001, Entegris will
repurchase, at cost, Metron's remaining saleable inventory of Microelectronics Group products. At May 31, 2001, the cost of this inventory approximated $4,082,000.

7.  RESTRUCTURING AND MERGER COSTS

The following table summarizes the restructuring and merger costs incurred for fiscal years 1999, 2000, and 2001.

Year ended May 31,1999

2000

2001(Dollars in thousands)Restructuring costs

$
1,835

$


$
Merger costs (primarily professional fees) associated with the acquisition of T.A. Kyser


715





Restructuring and merger costs

$
2,550

$


$



Restructuring
costs are comprised primarily of severance costs and the early retirement agreement ("ERA") associated with the implementation of the Company's new organizational
structure and other reductions in headcount. Metron completed its transition from an organizational structure based on geography to a global organization built around the Company's product lines in
fiscal 1999. The cost that pertains to the change in the organization in fiscal 1999 was approximately $856,000, and represents the termination costs of 51 employees, most of whom worked in the
equipment division.

In
February 1999, in connection with the termination of his lifetime employment agreement, the Company entered into an early retirement agreement ("the ERA") with one of its
managing directors. To cover the entire cost of the ERA, the Company recorded a pre-tax charge of $979,000 in fiscal year 1999. Under the terms of the ERA, the Managing Director resigned
from his employment, and the

47

---

Company agreed to pay him a portion of his salary for the years remaining until he would have been eligible to retire under the terms of his employment agreement. The Company also agreed to provide
him with certain other benefits. The present value of remaining obligation discounted at an interest rate of 6.0% is $504,000 at May 31, 2001 of which $115,000, the current portion, is included
in amounts
payable to shareholders. The remainder is included in deferred credits and other long-term liabilities. The salary portion of the ERA is payable monthly until March 2005.

8.  RELATED PARTIES

At May 31, 2001, two of Metron's shareholders, FSI International, Inc. ("FSI") and Entegris, owned approximately 21.0%, and 12.2%, respectively
of the outstanding shares of the Company. The Company purchases goods from these shareholders and their subsidiaries for resale in the normal course of business under terms and conditions similar to
those with unrelated vendors. For the years ended May 31, 1999, 2000, and 2001 such purchases totaled approximately $65,300,000, $103,700,000, $191,358,000, respectively. At May 31,
2000, and 2001, amounts payable to these affiliates were $38,372,000 and $28,913,000, respectively. In addition, the Company received commissions from these affiliates for sales made to certain Asian
customers. For the year ended May 31, 1999 such commissions totaled approximately $7,000. No commissions were received in fiscal 2000 and 2001. At May 31, 2000, and 2001, amounts
receivable from these affiliates were $199,000 and $561,000, respectively.

9.  INCOME TAXES

The domestic and foreign components of income (loss) before taxes for each year ended May 31 are as follows:

Years ended May 31,1999

2000

2001(Dollars in thousands)The Netherlands

$
(792
)
$
1,791

$
531Other countries:Germany


(2,937
)

845


7,449Singapore


400


2,045


4,580Italy


(493
)

1,870


2,811France


(2,283
)

2,090


2,258United States


700


1,809


2,634United Kingdom


553


1,304


760Taiwan


(257
)

1,056


629All other countries


(1,639
)

(314
)

1,026Income (loss) before income taxes

$
(6,748
)
$
12,496

$
22,678


48

---

The
components of income tax expense (benefit) for each year ended May 31 are as follows:

Years ended May 31,1999

2000

2001(Dollars in thousands)Current:The Netherlands

$
(207
)
$
617

$
278Other countries:Germany


(171
)

(30
)

3,010United States


(129
)

751


1,650Italy


27


762


1,372Singapore


247


730


1,370France


(751
)

812


1,029United Kingdom


(132
)

538


852Taiwan


1


293


441All other countries


57


560


435Current tax


(1,058
)

5,033


10,437Deferred:The Netherlands








(78
)Other countries:Germany


(1,557
)

796


585United States


552


89


(535
)United Kingdom


(44
)




(274
)Taiwan





(16
)

(253
)Singapore


(318
)

(276
)

(189
)France


225


(459
)

(140
)All other countries


(14
)

(423
)

150Deferred tax


(1,156
)

(289
)

(734
)Total income taxes

$
(2,214
)
$
4,744

$
9,703


At
May 31, 2001, the Company had $4,683,000 in net operating loss carryforwards, primarily in Korea, which represented approximately $1,407,000 of tax benefit, which may be
carried forward for periods ranging from 5 years to indefinitely.

49

---

Significant components of the Company's deferred tax assets and liabilities are set forth below.

May 31,2000

2001(Dollars in thousands)Deferred tax assets (included in Other current assets and Other assets):Deferred revenue for installation and warranty

$
464

$
602Deferred income





1,185Account receivable and inventory provisions


1,122


1,330Unrealized foreign currency losses


115


Accruals deductible when paid


2,138


2,180Net operating loss carryforwards and other items


1,992


1,4075,831


6,704Less valuation allowance


1,673


1,8934,158


4,811Deferred tax liabilities primarily depreciation of property, plant, and equipment


289


208Net deferred tax assets recorded in consolidated balance sheets

$
3,869

$
4,603


Management
has established a valuation allowance for the portion of deferred tax assets for which realization is uncertain. Management believes that it is more likely than not that
the results of future operations will generate sufficient taxable income to realize net deferred tax assets. The net change in the valuation allowance for the years ended May 31, 1999, 2000,
and 2001 was an increase (decrease) of $250,000, ($833,000), and $220,000, respectively.

Differences
between the statutory income tax rate of The Netherlands and the Company's effective income tax rate are reconciled as follows:

Years ended May 31,1999

2000

2001Statutory income tax rate

(35.0
)%
35.0
%
35.0
%Increase (decrease) in taxes resulting from:Tax rate differential in other countries

(6.5
)
(3.2
)
2.8Current year net operating losses for which no benefit is recognized

17.0

4.5

1.8Utilization of prior year net operating losses for which no benefit was previously recognized

(2.3
)
(6.0
)
(0.3
)Prior taxes assessed in current year



2.6

(0.3
)Amortization of goodwill

2.5

1.9

1.4All other

(8.5
)
3.2

2.4Effective income tax rate

(32.8
)%
38.0
%
42.8
%


10. CAPITAL STOCK



On November 17, 1999, the Company amended its Articles of Association to convert from a B.V. to an N.V. under the laws of The Netherlands, to increase
the number of authorized preferred shares from 1,500,000 to 10,000,000 and the number of authorized common shares from 23,500,000 to

50

---

40,000,000 and to remove the mandatory reserve of $7,000,000 created in connection with the Buy-Sell Agreement.



With the 1995 acquisition of Transpacific Technology Corporation, the Company and five shareholder-employees of the Company entered into an Amended and
Restated Buy and Sell Agreement (the "Buy-Sell Agreement"). The Buy-Sell Agreement provided for the repurchase under certain circumstances of the outstanding shares and options
of the five shareholder-employees. The Buy-Sell Agreement terminated with the completion of the Company's initial public offering.



In July 1998 and May 1999, under the terms of the Buy-Sell Agreement, two former employees exercised certain of their put rights,
which required the Company to repurchase 265,801 common shares for approximately $1,152,000. In February 2001, as partial consideration for modifying the existing distribution agreement,
Entegris transferred 1,125,000 shares of the Metron common shares it owned to Metron. The fair market value on February 13, 2001 of the common shares transferred by Entegris was $6,615,000.



In fiscal 1996 the Company established an Employee Stock Option Plan to award options to managing directors and employees, and in fiscal 1997 established a
Supervisory Directors' Stock Option Plan to award options to supervisory directors. In fiscal 2000 the shareholders approved the amendment of the
Employee Stock Option Plan to increase the aggregate number of common shares authorized for issuance by 1,000,000 shares, the two plans now authorize the grants of options to purchase up to 3,975,000
common shares (3,750,000 shares for managing directors and employees and 225,000 for supervisory directors). The plans require that the exercise price of options be the fair value of the common shares
at the grant date. Options generally vest over a four-year period, and are exercisable in installments beginning one year after the grant date.

The
following pro forma information has been prepared as if the Company had accounted for its stock options using the fair value accounting method established by SFAS No. 123.
Additional compensation expense arising from the application of SFAS 123 has been estimated using the Black-

51

---

Scholes option valuation method from the date of grant. For purposes of the pro forma disclosures below, additional compensation cost is amortized to expense over the options' vesting period.

Years Ended May 31,1999

2000

2001(Dollars in thousands, except per share data)Net income (loss):As reported

$
(4,534
)
$
7,752

$
11,510Pro forma(a)

$
(4,822
)
$
5,932

$
8,612Earnings (loss) per common shareBasicAs reported

$
(0.44
)
$
0.66

$
0.87Pro forma

$
(0.47
)
$
0.51

$
0.65DilutedAs reported

$
(0.44
)
$
0.60

$
0.83Pro forma

$
(0.47
)
$
0.46

$
0.62


---

There
were approximately 1,063,341 and 101,250 shares available for future employee awards and supervisory director awards, respectively, at May 31, 2001. The following table
summarizes award activity for the fiscal years listed:

|                                   |  | 1999      |   | 2000 |      | 2001
|---------------------------------- |  | --------- | - | ---- | ---- | ----
|
|Outstanding, beginning of year     |  | 1,669,998 |   | $    | 4.67 |     
|Stock options granted              |  | 446,250   |   | $    | 7.83 |     
|Stock options exercised            |  | (2,200    | ) | $    | 7.00 |     
|Awards canceled                    |  | (169,700  | ) | $    | 5.46 |     
|                                   |  |           |   |      |      |     
|Outstanding, end of year           |  | 1,944,348 |   | $    | 5.41 |     
|                                   |  |           |   |      |      |     
|Options exercisable at end of year |  | 1,128,602 |   | $    | 3.91 |     
|                                   |  |           |   |      |      |     

52

---

Summary
information concerning outstanding and exercisable options as of May 31, 2001 is as follows:

|Range of
Exercise Prices |  | Number
Outstanding |  | Weighted
Average
Remaining
Contractual
Life |  | Weighted
Average
Exercise
Price |       | Number
Exercisable |           | Weighted
Average
Exercise
Price
|------------------------ |  | ------------------ |  | ------------------------------------------- |  | ------------------------------- | ----- | ------------------ | --------- | -------------------------------
|$2.78  $2.78            |  | 622,448            |  | 4.1 yrs                                     |  | $                               | 2.78  |                    | 622,448   |                                
|$6.06  $8.88            |  | 964,021            |  | 7.0 yrs                                     |  | $                               | 7.36  |                    | 509,157   |                                
|$9.19  $12.00           |  | 272,550            |  | 9.1 yrs                                     |  | $                               | 10.80 |                    | 29,997    |                                
|$15.94  $19.25          |  | 470,700            |  | 8.5 yrs                                     |  | $                               | 16.04 |                    | 132,065   |                                
|$29.63  $29.63          |  | 40,000             |  | 8.8 yrs                                     |  | $                               | 29.63 |                    | 10,000    |                                
|                         |  |                    |  |                                             |  |                                 |       |                    |           |                                
|                         |  | 2,369,719          |  |                                             |  |                                 |       |                    | 1,303,667 |                                
|                         |  |                    |  |                                             |  |                                 |       |                    |           |                                

All
options issued during the past three years have an exercise price equal to the fair value of the common shares on the date of grant. The following weighted average fair values of
options granted have been determined using the Black-Scholes option valuation method.

|                                |  | Years Ended May 31
|------------------------------- |  | ------------------
|
|Options granted                 |  |                   
|Weighted average exercise price |  | $                 
|Weighted average fair value     |  | $                 

11. EMPLOYEE BENEFITS

Most employees of the Company are covered by one of several defined contribution retirement plans. Contributions are generally based on the participant's
compensation. The amount of pension expense charged to operating expenses for defined contribution plans was $1,140,000 in fiscal 1999, $862,000 in fiscal 2000, and $1,070,000 in fiscal 2001.

In
October 1999, the Company adopted the 1999 Employee Stock Purchase Plan (plan). A total of 300,000 common shares have been reserved for issuance under the plan. The plan
qualifies as an employee stock purchase plan within the meaning of Section 423 of the Internal Revenue Code of the United States of America. The price of common shares purchased under the plan
is equal to 85% of the lower of the fair market value of the common shares on the commencement date of each offering period or the fair market value of the common shares on the relevant purchase date.

Kyser
has an employee stock ownership plan ("ESOP") for its employees. Upon the acquisition of Kyser, all Kyser shares held by the ESOP were exchanged for shares of the Company. In
July 2001, the IRS approved the dissolution of the ESOP, and Kyser is in the process of distributing the shares held by the ESOP to their beneficial owners.

53

---

12. FINANCIAL INSTRUMENTS

The carrying value of the Company's financial instruments approximate fair value. At May 31, 2001 the Company had aggregate forward exchange contracts
in various currencies as follows:

|Contract
Amount
US $ |           | Buy |                  | Sell |                | Weighted
Average
Exchange
Rate |          | Asset/(Liability) |   | Expiration Date
|-------------------- | --------- | --- | ---------------- | ---- | -------------- | ------------------------------ | -------- | ----------------- | - | ---------------
|$                    | 1,300,000 |     | Japanese Yen     |      |               |                                | 113.11   |                   | $ | 41,000         
|$                    | 1,450,000 |     | Deutsch Mark     |      |               |                                | 2.23     |                   |   | 33,000         
|$                    | 1,941,000 |     | Euro             |      |               |                                | 1.17     |                   |   | (4,000         
|$                    | 2,644,000 |     | Singapore Dollar |      |               |                                | 1.80     |                   |   |               
|$                    | 2,843,000 |     | British Pound    |      |               |                                | 1.42     |                   |   | (11,000        
|$                    | 3,100,000 |     | Italian Lira     |      |               |                                | 2,257.29 |                   |   | 3,000          
|$                    | 3,700,000 |     |                 |      | Israeli Shekel |                                | 4.24     |                   |   | 2,000          
|$                    | 6,685,000 |     | French Franc     |      |               |                                | 7.74     |                   |   | (74,000        
|                     |           |     |                  |      |                |                                |          |                   |   |                
|                     |           |     |                  |      |                |                                |          |                   | $ | (10,000        
|                     |           |     |                  |      |                |                                |          |                   |   |                

The
interest rate for the building mortgage with the Royal Bank of Scotland plc comprises a variable LIBOR rate, a fixed rate of 1.5%, and a regulatory bank charge. In May 1996
the Company entered into an interest rate swap, expiring June 2001, to convert the variable LIBOR portion of the interest rate to a fixed interest rate of 7.72%. The interest rates at
May 31, 2000, and 2001 for the mortgage were 7.77% and 6.81%, respectively, while the interest rate for the swap was 9.24% for both years. At May 31, 2001, the principal amount for the
interest rate swap was $624,000 and its estimated fair value was a liability of $13,000.

13. COMMITMENTS

At May 31, 2001, Metron was committed to spending approximately $99,868,000, principally to purchase equipment, materials, and spare parts for resale.

The
Company and its subsidiaries lease certain facilities and equipment under various operating lease agreements. Future minimum payments under operating leases that have initial or
remaining noncancelable lease terms of one year or more consist of the following at May 31, 2001.

Fiscal Year

(Dollars in
thousands)2002

$
4,2832003


3,3252004


2,7052005


1,8232006


1,424Thereafter


2,275Total minimum lease payments

$
15,835


54

---

The
Company's rental expense for operating leases for the fiscal years ended May 31, 1999, 2000, and 2001, was $3,330,000, $3,107,000, and $4,276,000, respectively.

14. ADDITIONAL SALES INFORMATION AND CONCENTRATION OF RISK

In fiscal 1999 and 2001, no individual customer represented sales of 10% or more of net revenue. In fiscal 2000 sales to one customer represented 10.5% of net
revenues.

A
large portion of the Company's sales is made to a number of major publicly owned corporations. There is a concentration of credit risk in accounts receivable from these customers.
Metron performs ongoing credit evaluations of its customers and generally does not require collateral. Although the credit risk associated with nonpayment from these customers is affected by
conditions or occurrences within their industry, accounts receivable from these customers were substantially current at May 31, 2001. The Company believes that there is no significant credit
risk with respect to these receivables.

15. SEGMENT AND GEOGRAPHIC DATA

The Company operates predominantly in the semiconductor industry. This involves the marketing, sales, and service of semiconductor manufacturing and test
equipment and materials. Reportable segments are based on the way the Company is organized, reporting responsibilities to the chief operating officer, and on the nature of the products offered to
customers. Reportable segments are the equipment division (which includes certain specialized process chemicals, and spare part sales, and equipment service), the materials division (which includes
components used in construction and maintenance), and other which includes finance, administration and corporate functions.

The
accounting policies of the segments are the same as those described in Note 1 Summary of Significant Accounting Policies. Segment operating results are measured based on
income (loss) before tax, adjusted if necessary, for certain segment specific items. There are no inter-segment sales. Identifiable assets are the Company's assets that are identified with classes of
similar products or operations in each geographic region. Corporate assets include primarily cash, equity investments and property, plant and equipment for the Company's administrative headquarters.

55

---





|                        |                                   | Equipment
Division |   | Materials
Division |  | Other |         | Total |  
|----------------------- | --------------------------------- | ------------------ | - | ------------------ |  | ----- | ------- | ----- | -
|
|Year ended May 31, 1999 |                                   |                    |   |                    |  |       |         |       |  
|                        | Net revenue                       |                    | $ | 127,420            |  | $     | 101,198 |       | $
|                        | Depreciation expense              |                    | $ | 794                |  | $     | 475     |       | $
|                        | Interest income                   |                    | $ |                   |  | $     |        |       | $
|                        | Interest expense                  |                    | $ |                   |  | $     |        |       | $
|                        | Income (loss) before income taxes |                    | $ | 3,161              |  | $     | 8,384   |       | $
|                        | Total assets                      |                    | $ | 35,424             |  | $     | 48,635  |       | $
|                        | Capital expenditures              |                    | $ | 409                |  | $     | 341     |       | $
|Year ended May 31, 2000 |                                   |                    |   |                    |  |       |         |       |  
|                        | Net revenue                       |                    | $ | 169,388            |  | $     | 168,163 |       | $
|                        | Depreciation expense              |                    | $ | 547                |  | $     | 744     |       | $
|                        | Interest income                   |                    | $ |                   |  | $     |        |       | $
|                        | Interest expense                  |                    | $ |                   |  | $     |        |       | $
|                        | Income (loss) before income taxes |                    | $ | 11,872             |  | $     | 16,890  |       | $
|                        | Total assets                      |                    | $ | 94,894             |  | $     | 69,254  |       | $
|                        | Capital expenditures              |                    | $ | 1,252              |  | $     | 1,013   |       | $
|Year ended May 31, 2001 |                                   |                    |   |                    |  |       |         |       |  
|                        | Net revenues                      |                    | $ | 262,220            |  | $     | 255,221 |       | $
|                        | Depreciation expense              |                    | $ | 1,788              |  | $     | 740     |       | $
|                        | Interest income                   |                    | $ |                   |  | $     |        |       | $
|                        | Interest expense                  |                    | $ |                   |  | $     |        |       | $
|                        | Income (loss) before income taxes |                    | $ | 14,910             |  | $     | 25,872  |       | $
|                        | Total assets                      |                    | $ | 80,542             |  | $     | 89,699  |       | $
|                        | Capital expenditures              |                    | $ | 3,804              |  | $     | 1,418   |       | $

56

---



|                  |                 | Years ended May 31,
|----------------- | --------------- | -------------------
|
|
|Net revenue:      |                 |                    
|                  | United States   |                    
|                  | Germany         |                    
|                  | United Kingdom  |                    
|                  | Singapore       |                    
|                  | Hong Kong       |                    
|                  | France          |                    
|                  | The Netherlands |                    
|                  | Other nations   |                    
|                  |                 |                    
|Geographic totals |                 | $                  
|                  |                 |                    

|                  |                 | May 31,
|----------------- | --------------- | -------
|
|
|Total assets:     |                 |        
|                  | United States   |        
|                  | United Kingdom  |        
|                  | Germany         |        
|                  | Singapore       |        
|                  | France          |        
|                  | Hong Kong       |        
|                  | The Netherlands |        
|                  | Other nations   |        
|                  |                 |        
|Geographic totals |                 | $      
|                  |                 |        

57

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16. SUPPLEMENTAL FINANCIAL INFORMATION

|                                |                                      | May 31,
|------------------------------- | ------------------------------------ | -------
|
|
|Other current liabilities:      |                                      |        
|                                | Customer prepayments                 |        
|                                | Accrued taxes including income taxes |        
|                                | Other                                |        
|                                |                                      |        
|Total other current liabilities |                                      | $      
|                                |                                      |        

|                        |                                | Years ended May 31, |     
|----------------------- | ------------------------------ | ------------------- | ----
|
|
|Other income (expense): |                                |                     |     
|                        | Foreign exchange gain (loss)   |                     | $   
|                        | Interest income                |                     |     
|                        | Interest expense               |                     |     
|                        | Loss on sale of joint ventures |                     |     
|                        | Miscellaneous income           |                     |     
|                        |                                |                     |     
|Other income (expense)  |                                | $                   | (397
|                        |                                |                     |     

|                                    |                       |                                                                                 |  | Years ended May 31,
|----------------------------------- | --------------------- | ------------------------------------------------------------------------------- |  | -------------------
|
|
|Supplemental cash flow information: |                       |                                                                                 |  |                    
|                                    | Cash payments for:    |                                                                                 |  |                    
|                                    |                       | Interest                                                                        |  | $                  
|                                    |                       | Income taxes                                                                    |  | $                  
|                                    | Noncash transactions: |                                                                                 |  |                    
|                                    |                       | Common stock issued for purchase of Intec                                       |  | $                  
|                                    |                       | Treasury stock received from Entegris on modification of distribution agreement |  | $                  

58

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17. QUARTERLY FINANCIAL DATA (UNAUDITED)

Amounts have been restated for the first, second, and third quarters for the year ended May 31, 2001 due to the retroactive application of SAB 101.

|                        |                                                     | First                                                      |   | Second  |       | Third |         | Fourth
|----------------------- | --------------------------------------------------- | ---------------------------------------------------------- | - | ------- | ----- | ----- | ------- | ------
|
|Year ended May 31, 2000 |                                                     |                                                            |   |         |       |       |         |       
|                        | Net revenue                                         |                                                            | $ | 69,473  |       | $     | 74,163  |       
|                        | Operating income                                    |                                                            | $ | 1,652   |       | $     | 2,081   |       
|                        | Net income                                          |                                                            | $ | 903     |       | $     | 1,486   |       
|                        | Basic earnings per share                            |                                                            | $ | 0.09    |       | $     | 0.14    |       
|                        | Diluted earnings per share                          |                                                            | $ | 0.08    |       | $     | 0.13    |       
|Year ended May 31, 2001 |                                                     |                                                            |   |         |       |       |         |       
|                        | Net revenue                                         |                                                            | $ | 119,038 |       | $     | 139,492 |       
|                        | Operating income                                    |                                                            | $ | 4,161   |       | $     | 6,874   |       
|                        | Cumulative effect of change in accounting principle |                                                            | $ | 1,465   |       | $     |        |       
|                        | Net income                                          |                                                            | $ | 885     |       | $     | 3,799   |       
|                        | Basic earnings (loss) per common share              |                                                            |   |         |       |       |         |       
|                        |                                                     | Before cumulative effect of change in accounting principle |   | $       | 0.18  |       | $       | 0.28  
|                        |                                                     | Cumulative effect of change in accounting principle        |   | $       | (0.11 | )     | $       |      
|                        |                                                     | Basic earnings per common share                            |   | $       | 0.07  |       | $       | 0.28  
|                        | Diluted earnings (loss) per common share            |                                                            |   |         |       |       |         |       
|                        |                                                     | Before cumulative effect of change in accounting principle |   | $       | 0.17  |       | $       | 0.27  
|                        |                                                     | Cumulative effect of change in accounting principle        |   | $       | (0.11 | )     | $       |      
|                        |                                                     | Diluted earnings per common share                          |   | $       | 0.06  |       | $       | 0.27  

18. RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998 the Financial Accounting Standards Board ("FASB") issued SFAS 133, "Accounting for Derivative Instruments and Hedging Activities."
The new standard establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It
requires companies to record derivatives on the balance sheet as assets or liabilities, measured at fair value. Accounting for changes in the values of those derivatives depends on the intended use of
the derivatives and whether they qualify for hedge accounting. SFAS 133, as amended by SFAS 137 and SFAS 138, is effective for fiscal years beginning after June 15, 2000.
Historically, the Company has engaged in limited hedging activities to reduce its exposure to exchange risks arising from fluctuations in foreign currency, but has not entered into derivatives
contracts either to hedge non-currency risks or for speculative purposes. Accordingly, the Company does not expect adoption of the new standard to affect its consolidated financial
statements.

In
July 2001, the FASB issued SFAS 141, "Business Combinations," and SFAS 142, "Goodwill and Other Intangible Assets." SFAS 141 requires that the purchase
method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001.
SFAS 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price
allocable to an assembled workforce may not be accounted for separately. SFAS 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the provisions of SFAS 142. SFAS 142 will also require that intangible assets with definite useful lives be amortized
over their respective estimated useful lives to their estimated residual values, and reviewed

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for impairment in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."

The
Company is required to adopt the provisions of SFAS 141 immediately and SFAS 142 on June 1, 2002. Furthermore, goodwill and intangible assets determined to
have an indefinite useful life that are acquired in a purchase business combination completed after June 30, 2001 will not be amortized, but will continue to be evaluated for impairment.
Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be amortized prior to the adoption of SFAS 142.

SFAS 141
will require, upon adoption of SFAS 142, the Company to evaluate its existing intangible assets and goodwill that were acquired in a prior purchase business
combination, and to make any necessary reclassifications in order to conform with the new criteria in SFAS 141 for recognition apart from goodwill. Upon adoption of SFAS 142, the Company
will be required to reassess the useful lives and residual values of all intangible assets acquired in purchase business combinations, and make any necessary amortization period adjustments by the end
of the first interim period after adoption. In addition, to the extent an intangible asset is identified as having an indefinite useful life, the Company will be required to test the intangible asset
for impairment in accordance with the provisions of SFAS 142 within the first year of adoption. Any impairment loss will be measured as of the date of adoption and recognized as the cumulative
effect of a change in accounting principle in the first interim period.

In
connection with the transitional goodwill impairment evaluation, SFAS 142 will require the Company to perform an assessment of whether there is an indication that goodwill
is impaired as of the date of adoption. To accomplish this the Company must identify its reporting units and determine the carrying value of each reporting unit by assigning the assets and
liabilities, including the existing goodwill and intangible assets, to those reporting units as of the date of adoption. The Company will then have up to six months from the date of adoption to
determine the fair value of each reporting unit and compare it to the reporting unit's carrying amount. To the extent a reporting unit's carrying amount exceeds its fair
value, an indication exists that the reporting unit's goodwill may be impaired and the Company must perform the second step of the transitional impairment test.

In
the second step, the Company must compare the implied fair value of the reporting unit's goodwill, determined by allocating the reporting unit's fair value to all of its assets
(recognized and unrecognized) and liabilities (in a manner similar to a purchase price allocation) to its carrying amount, both of which would be measured as of the date of adoption. This second step
is required to be completed as soon as possible, but no later than the end of the year of adoption. Any transitional impairment loss will be recognized as the cumulative effect of an accounting change
in the Company's consolidated income statement.

As
of the date of adoption, the Company expects to have approximately $8,292,000 of unamortized goodwill, which will be subject to the transition provisions of SFAS 141 and
142. Amortization expense related to goodwill is $618,000 and $1,259,000 for the years ended May 31, 2000 and 2001, respectively.

Because
of the extensive effort needed to comply with adopting SFAS 141 and 142, it is not practicable to reasonably estimate the impact of adopting these statements on the
Company's consolidated financial statements at the date of this report, including whether any transitional impairment losses will be required to be recognized as the cumulative effect of a change in
accounting principle.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Supervisory and Managing Directors

The following tables set forth, as of May 31, 2001, certain information with respect to the supervisory directors and managing directors of Metron:

Supervisory Board

|Name               |  | Age |  | Position            
|------------------ |  | --- |  | --------------------
|Robert R. Anderson |  | 63  |  | Supervisory Director
|James E. Dauwalter |  | 49  |  | Supervisory Director
|Joel A. Elftmann   |  | 61  |  | Supervisory Director
|Bruce M. Jaffe     |  | 57  |  | Supervisory Director
|Sho Nakanuma       |  | 69  |  | Supervisory Director

Managing Board

|Name                          |  | Age |  | Position                                                              
|----------------------------- |  | --- |  | ----------------------------------------------------------------------
|Edward D. Segal               |  | 61  |  | President, Chief Executive Officer and Managing Director              
|Gregory M. Claeys             |  | 51  |  | Vice President, Materials Division and Managing Director              
|Peter V. Leigh                |  | 56  |  | Vice President, Finance, Chief Financial Officer and Managing Director
|J. Christopher Levett-Prinsep |  | 54  |  | Executive Vice President, Field Operations and Managing Director      
|Keith Reidy                   |  | 44  |  | Vice President, Marketing and Managing Director                       

The
general meeting of shareholders appoints the supervisory directors and at all times has the power to suspend or dismiss any supervisory director. Under Dutch law, current
employees of the Company cannot serve as supervisory directors. A resolution to appoint a supervisory director can only be passed upon recommendation by the supervisory board. Under the Metron
articles, each member of the supervisory board holds office for a one-year term following that member's election as a member of the supervisory board, or until that member's earlier
resignation, death or removal by a decision of a general meeting. However, a member of the supervisory board elected not at the general meeting of shareholders but at an extraordinary meeting of
shareholders serves until the next general meeting of shareholders or until that member's earlier resignation, death or removal by a decision of the general meeting. Each member of the supervisory
board holds office until that member's resignation, death or removal by a decision of a general meeting of shareholders. In addition, each supervisory director is required to resign as of the date of
the general meeting of shareholders held in the year in which that director attains to age of 72. A shareholders' resolution to suspend or dismiss a supervisory director must be adopted by a
two-thirds majority of the valid votes cast representing more than half of the issued share capital.

Robert
R. Anderson has been a supervisory director of Metron since November 1995. Mr. Anderson was most recently Chairman of the Board and Chief Executive Officer of
Yield Dynamics, Inc., (YDI) a semiconductor yield management software start-up company. He became a director of YDI in August 1997 and Chairman and Chief Executive Officer in
October 1998. Mr. Anderson was Chairman of the Board of Silicon Valley Research, a semiconductor design

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automation software company, from January 1994 and served as Chief Executive Officer from April 1994 until July 1995 and from December 1996 until October 1997 and as
Chief Financial Officer from September 1994 to November 1995. Mr. Anderson co-founded KLA Instruments Corporation, now KLA-Tencor Corporation, a supplier
of equipment for semiconductor process control, in 1975 and served in various capacities including Chief Operating Officer, Chief Financial Officer, Vice Chairman and Chairman. Mr. Anderson
also serves as a director of Applied Science & Technology Inc., a supplier of systems components for the semiconductor industry.

James
E. Dauwalter has been a supervisory director of Metron since November 1995 and was a managing director from June 1979 until November 1995.
Mr. Dauwalter is President of Entegris, Inc. which is a principal and a large minority shareholder of Metron. Mr. Dauwalter joined Fluoroware Inc., now part of Entegris, in
1973. Mr. Dauwalter also serves as a director of Nippon Fluoroware K.K., Fluoroware-Valqua Japan K.K. and Fluoroware Southeast Asia PTE Ltd.

Joel
A. Elftmann, a co-founder of Metron, has been a supervisory director since November 1995 and was a managing director from October 1975 until
November 1995. Mr. Elftmann is Chairman of the Board of FSI International, Inc., a principal and a large minority shareholder of Metron. Mr. Elftmann is also a
co-founder of FSI and has served as a director of FSI since 1973 and as Chairman of the Board since August 1983. From August 1983 to August 1989, and from
May 1991 until the present, Mr. Elftmann also has served as Chief Executive Officer of FSI. From 1977 to August 1983, from May 1991 until January 1998 and from
August 1999 to the present, Mr. Elftmann has served as President of FSI. Mr. Elftmann also serves as a director of Veeco, Inc. Mr. Elftmann is a Director Emeritus
member of the Board of Directors of Semiconductor Equipment & Materials International, a trade association for suppliers to the semiconductor industry.

Bruce
M. Jaffe has been a supervisory director of Metron since November 2000. Mr. Jaffe is currently a private investor and consultant, and has been a director of
Pemstar, Inc., a Minnesota-based global contract electronics manufacturer, since August 2000. Mr. Jaffe served as Senior Vice President and Chief Financial Officer of Bell
Microproducts, Inc., a California-based distributor of mass storage and computer products, from 1997 to 1999. From 1967 to 1996, Mr. Jaffe was employed by Bell Industries, a
California-based distributor of electronic components, where he held several management positions, most recently as President, Chief Operating Officer and a member of the Board of Directors. From 1965
to 1967, Mr. Jaffe was employed as an accountant by Price Waterhouse & Co. (now PricewaterhouseCoopers). Mr. Jaffe holds a B.S. degree in Business from the University of Southern
California and is a certified public accountant. Mr. Jaffe currently serves on the board of advisors for the University of Southern California School of Business.

Sho
Nakanuma has been a supervisory director of Metron since November 1999. Mr. Nakanuma has been Chairman of the Board of Directors of Ando Electric Company in Japan
since June 1997. From 1988 to 1997, Mr. Nakanuma served as President of Ando Electric Company. From 1984 to 1986, Mr. Nakanuma served as President of NEC Electronics Inc.
in the United States. From 1985 to 1988, Mr. Nakanuma served as a member of the Board of Directors of NEC Corporation in Japan. Mr. Nakanuma is a member of the Board of Directors of
Semiconductor Equipment and Materials Internationals in the United States. Mr. Nakanuma holds a B.S. degree in Chemical Engineering from Kyoto University and a Ph.D. in Engineering from Tokyo
University.

Edward
D. Segal has been a managing director of Metron since November 1995. He joined Metron as President and Chief Executive Officer in July 1995. Prior to joining
Metron, Mr. Segal served as President and Chief Executive Officer of Transpacific Technology Corporation, a company that he founded in 1982. Mr. Segal is a member of the Board of
Directors of Semiconductor Equipment & Materials International, a trade association for suppliers to the semiconductor industry. Mr. Segal holds a B.S. degree in Metallurgical
Engineering from Rensselaer Polytechnic Institute.

62

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Gregory M. Claeys has been a managing director and served as Vice President, Materials Division of Metron since November 2000. He joined Metron as the Company's Vice President,
Fluid Handling Products, in July 1998 as a result of the merger between Metron and T.A. Kyser Co. ("Kyser"). From 1993 to 1998, Mr. Claeys served as President of Kyser. Mr. Claeys
holds a B.A. degree in Marketing from Texas A&M University.

Peter
V. Leigh has served as Vice President, Finance and Chief Financial Officer of Metron since November 1995 and has been a managing director of Metron since
November 1996. From 1992 to 1995 Mr. Leigh served as Vice President, Finance and Chief Financial Officer of Sequus Pharmaceuticals, a publicly-traded bio-pharmaceutical firm.
From 1982 until 1992, Mr. Leigh served as Corporate Controller of Bio-Rad Laboratories, a publicly-traded multi-national manufacturer and marketer of analytical chemistry,
diagnostic and semiconductor metrology equipment and materials. Mr. Leigh holds a B.A. degree from the University of Oxford and a M.B.A. degree from the Harvard Business School.

J.
Christopher Levett-Prinsep has been a managing director of Metron since July 1983 and has served as managing director of Metron's United Kingdom subsidiary, of which he was
the founder and first employee, since 1978. Mr. Levett-Prinsep served as President of Metron's European Operations from August 1994 until December 1997, when he became Executive
Vice President, Equipment Division, and in October 2000, he became Executive Vice President, Field Operations. Mr. Levett-Prinsep holds an Ordinary Certificate in Technology from
Coventry Technical College and an Advanced Certificate from Wednesbury College of Technology.

Keith
Reidy has served as Vice President, Marketing since March 1999 and has been a managing director of Metron since April 1999. Mr. Reidy has also served as
Director, Product of Development and Director, U.S. Representative Organization. Prior to joining Metron in July 1995, Mr. Reidy served as the Vice President, Sales of Transpacific
Technology. Mr. Reidy holds a B.S. degree in engineering from the University of California, Davis and a M.S. in engineering from Purdue University.

There
is no family relationship among any of the Company's directors and executive officers.

There
are no pending or contemplated legal proceedings adverse to the Company on the part of any of the Company's directors or its executive officers.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act") requires the Company's directors and executive officers, and persons who own more
than ten percent of a registered class of the Company's equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of Common Shares and other equity
securities of the Company. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

To
the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the
fiscal year ended May 31, 2001, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with.

ITEM 11. EXECUTIVE COMPENSATION

Compensation of Supervisory Directors

Each supervisory director of the Company receives a per meeting fee of $1,000 (plus $500 for each committee meeting attended by committee members on a separate
day). In the fiscal year ended May 31, 2001, the maximum total compensation paid to non-employee supervisory directors was $8,300.

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The members of the Supervisory Board of Directors are also eligible for reimbursement for expenses incurred in connection with attendance at Board meetings in accordance with Company policy.

Each
supervisory director of the Company also receives stock option grants under the 1997 Supervisory Directors' Stock Option Plan (the "Directors' Plan"). Only
non-employee supervisory directors of the
Company or affiliates of such directors (as defined in the Internal Revenue Code, as amended, the "Code") are eligible to receive options under the Directors' Plan. Options granted under the
Directors' Plan are intended by the Company not to qualify as incentive stock options under the Code.

Option
grants under the Directors' Plan are non-discretionary. On April 13, 1997, each supervisory director was automatically granted an option to purchase 15,000
Common Shares from the Directors' Plan. Subsequently, each person elected or appointed for the first time to serve as a supervisory director is granted an option to purchase 15,000 Common Shares from
the Directors' Plan. In addition, on the date of each Annual Meeting, each member of the Company's Supervisory Board of Directors who has served as a director for at least six months and who is
reelected at such Annual Meeting is automatically granted an option to purchase 3,750 Common Shares under the Directors' Plan. The exercise price of options granted under the Directors' Plan is 100%
of the fair market value of the Common Shares subject to the option on the date of the option grant. Options granted under the Directors' Plan may not be exercised until the date upon which such
optionee, or the affiliate of such optionee, has provided one year of continuous service as a director following the date of such option grant. Options vest at a rate of 25% one year after grant date
and 25% each year thereafter in accordance with the terms of the grant. The term of options granted under the Directors' Plan is ten years. In the event of a merger of the Company with or into another
corporation or a consolidation, acquisition of assets or other change-in-control transaction involving the Company, the vesting of each option will accelerate and the option
will terminate if not exercised prior to the consummation of the transaction, unless the Company is the surviving entity or, if the Company is not the surviving entity, the option is assumed or an
equivalent option is substituted by the successor corporation.

During
the fiscal 2001, the Company granted options covering 30,000 shares to the supervisory directors of the Company, at an exercise price per share of $7.38. The fair market value
of such Common Shares on the date of grant was $7.38 per share (based on the closing sales price reported on the Nasdaq National Market for the date of grant). As of July 31, 2001, no options
had been exercised under the Directors' Plan.

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Compensation of Managing Directors

The following table shows for the fiscal years ended May 31, 1999, 2000, and 2001 compensation awarded or paid to, or earned by, the Company's Chief
Executive Officer and its other four most highly compensated managing directors (the "Named Executive Officers"):

Summary Compensation Table

|                              |                                                                        | Annual Compensation |          
|----------------------------- | ---------------------------------------------------------------------- | ------------------- | ---------
|
|Edward D. Segal               |                                                                        | 2001                |          
|                              | President and Chief Executive Officer and Managing Director            |                     | 2000
1999
|Gregory M. Claeys             |                                                                        | 2001                |          
|                              | Vice President, Materials Division and Managing Director               |                     | 2000
1999
|Peter V. Leigh                |                                                                        | 2001                |          
|                              | Vice President, Finance, Chief Financial Officer and Managing Director |                     | 2000
1999
|J. Christopher Levett-Prinsep |                                                                        | 2001                |          
|                              | Executive Vice President, Field Operations and Managing Director       |                     | 2000
1999
|Keith Reidy                   |                                                                        | 2001                |          
|                              | Vice President, Marketing and Managing Director                        |                     | 2000
1999

---

65

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Stock Option Grants And Exercises

The Company grants options to its executive officers under its Amended and Restated Employee Stock Option Plan. As of July 31, 2001, options to purchase
a total of 2,702,127 shares were outstanding under the Option Plan and options to purchase 607,183 shares remained available for grant thereunder.

The
following tables show, for the fiscal year ended May 31, 2001, certain information regarding options granted to, exercised by, and held at year-end by, the
Named Executive Officers:

OPTION/SAR GRANTS IN FISCAL 2001

|                                 |  | Individual Grants |  |     |   |   |       |  |           | 
|-------------------------------- |  | ----------------- |  | --- | - | - | ----- |  | --------- | 
|
|
|
|
|
|
|Edward D. Segal(4)               |  | 50,000            |  | 9.6 | % | $ | 10.75 |  | June 2010 | 
|Gregory M. Claeys                |  |                  |  |    |   |   |      |  |          | 
|Peter V. Leigh(5)                |  | 25,000            |  | 4.8 | % | $ | 10.75 |  | June 2010 | 
|J. Christopher Levett-Prinsep(6) |  | 25,000            |  | 4.8 | % | $ | 10.75 |  | June 2010 | 
|Keith Reidy(7)                   |  | 25,000            |  | 4.8 | % | $ | 10.75 |  | June 2010 | 

---

66

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Aggregated Option/SAR Exercises in Last Fiscal Year, and Fiscal Year-End Option/SAR Values

|                              |  |        |  |   |         | Number of
Securities
Underlying
Unexercised
Options/SARs at
Fiscal Year-End (#) |         |  |         | 
|----------------------------- |  | ------ |  | - | ------- | ------------------------------------------------------------------------------- | ------- |  | ------- | 
|
|
|
|Edward D. Segal               |  | 50,000 |  | $ | 170,200 |                                                                                 | 375,948 |  | 125,000 | 
|Gregory M. Claeys             |  |       |  |   |        |                                                                                 |        |  | 110,000 | 
|Peter V. Leigh                |  | 31,000 |  | $ | 140,530 |                                                                                 | 59,000  |  | 50,000  | 
|J. Christopher Levett-Prinsep |  | 25,000 |  | $ | 223,925 |                                                                                 | 65,000  |  | 50,000  | 
|Keith Reidy                   |  | 35,000 |  | $ | 278,376 |                                                                                 | 55,000  |  | 50,000  | 

---

Employment Agreements and Termination of Employment Arrangements

Each of the Named Executive Officers is employed pursuant to an employment contract with a subsidiary of Metron which is incorporated in his country of
residence.

Edward
D. Segal is employed pursuant to an employment contract entered into in September 1999 with Metron Technology Corporation, a California corporation and wholly-owned
subsidiary of the Company ("MTC"), and with the Company. The employment contract provides that Mr. Segal will serve as a managing director of the Company and as the Company's President and
Chief Executive Officer at an annual salary of not less than $295,000. The agreement also provides for Mr. Segal's participation in an annual incentive compensation plan approved by the
Supervisory Board and for other usual and customary benefits. The Company and MTC agreed to indemnify Mr. Segal against any liability to which he may be subject for judgments, settlements,
penalties, fees and expenses of defense, including attorney's fees, bonds and costs of investigation, arising out of or in any way related to acts or omissions as a member of the Managing Board, or an
executive officer, or in any other capacity in which services are rendered to the Company or MTC and its subsidiaries. However, Mr. Segal would not be entitled to indemnification under this
agreement under certain circumstances, including if indemnification is expressly prohibited under applicable law or if indemnification is expressly prohibited by Metron's Articles or MTC's charter. If
Mr. Segal's employment is terminated by MTC without cause or by Mr. Segal for good reason or due to disability, in exchange for Mr. Segal's signing a release of all claims, he
will continue to receive his base salary for a period of 12 months in addition to other customary benefits.

Peter
V. Leigh is employed pursuant to an employment contract entered into in September 1999 with MTC and with the Company. The employment contract provides that
Mr. Leigh will serve as a managing director of the Company and as the Company's Vice President, Finance and Chief Financial Officer at an annual salary of not less than $180,000. The agreement
also provides for Mr. Leigh's participation in an annual incentive compensation plan approved by the Supervisory Board and for other usual and customary benefits. The Company and MTC agreed to
indemnify Mr. Leigh against any liability to which he may be subject for judgments, settlements, penalties, fees and expenses of defense, including attorney's fees, bonds and costs of
investigation, arising out of or in any way related to acts or omissions as a member of the Managing Board, or an executive officer, or in any other capacity in which services are rendered to the
Company or MTC and its subsidiaries. However, Mr. Leigh would
not be entitled to indemnification under this agreement under specified circumstances including if indemnification is expressly prohibited under applicable law or prohibited by Metron's

67

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Articles or MTC's charter. If Mr. Leigh's employment is terminated by MTC without cause or by Mr. Leigh for good reason or due to disability, in exchange for Mr. Leigh's signing a
release of all claims, he will continue to receive his final base salary for a period of 12 months in addition to other customary benefits.

J.
Christopher Levett-Prinsep is employed by Metron Technology (U.K.) Ltd. pursuant to an employment contract entered into in May 1996. The employment contract provides
that Mr. Levett-Prinsep will serve as a managing director of the Company and of Metron Technology (U.K.) Ltd. and as President of the Company's European Operations at an annual salary of
not less than £103,000, or approximately $173,000. The agreement also provides for Mr. Levett-Prinsep's participation in an annual incentive compensation plan approved by the
Supervisory Board and for other usual and customary benefits. The employment contract may be terminated by either party on 12 months' notice.

Keith
Reidy is employed by MTC pursuant to an employment contract entered into in September 1999 with MTC and with the Company. The employment contract provides that
Mr. Reidy will serve as a managing director and as Vice President, Marketing of the Company at an annual salary of not less than $200,000. The agreement also provides for Mr. Reidy's
participation in an annual incentive compensation plan approved by the Supervisory Board, and for other usual and customary benefits. The Company and MTC agreed to indemnify Mr. Reidy against
any liability to which he may be subject for judgments, settlements, penalties, fees and expenses of defense, including attorney's fees, bonds and costs of investigation, arising out of or in any way
related to acts or omissions as a member of the Managing Board, or an executive officer, or in any other capacity in which services are rendered to the Company or MTC and its subsidiaries. However,
Mr. Reidy would not be entitled to indemnification under this agreement under specified circumstances, including if indemnification is expressly prohibited under applicable law or prohibited by
Metron's Articles or MTC's charter. If Mr. Reidy's employment is terminated by MTC without cause or by Mr. Reidy for good reason or due to disability, in exchange for Mr. Reidy's
signing a release of all claims, he will continue to receive his base salary for a period of 12 months in addition to other customary benefits.

Gregory
M. Claeys is employed pursuant to an employment contract entered into in July 1998 with Kyser, MTC and the Company. The employment contract provides that
Mr. Claeys will serves as President of Kyser at an annual salary of not less than $170,000. The agreement also provided for the Company's grant of an option to purchase 90,000 Common Shares to
Mr. Claeys upon execution of the contract. Under the agreement, Mr. Claeys participates in an annual incentive compensation plan approved by the Supervisory Board and an incentive
compensation plan for employees of Kyser and to which he may have been subject for judgments, settlements, penalties, fees and expenses of defense, including attorney's fees, bonds and costs of
investigation, arising out of or in any way related to acts or omissions as an employee, officer, director or agent in which services are rendered to Kyser. However, Mr. Claeys would not be
entitled to indemnification under this agreement under specified
circumstances, including if indemnification is expressly prohibited under applicable law or prohibited by Kyser's charter.

Compensation Committee Interlocks and Insider Participation

The Company's compensation committee consists of Messrs. Anderson, Dauwalter, Elftmann, Jaffe and Nakanuma.

None
of the current members of the Company's compensation committee is an officer or employee of the Company. Mr. Elftmann is Chairman of the Board and Chief Executive Officer
of FSI International, Inc., one of the Company's principals and shareholders. Mr. Dauwalter is Executive Vice President of Fluoroware, a wholly-owned subsidiary of Entegris, Inc.,
one of the Company's principals and shareholders. See "Certain Transactions" for a more detailed description of the relationship between the Company and each of FSI and Entegris.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the ownership of the Company's Common Shares as of July 31, 2001 by: (i) each
supervisory director; (ii) each managing director named in the Summary Compensation Table; (iii) all managing directors and supervisory directors of the Company as a group; and
(iv) all those known by the Company to be beneficial owners of more than five percent of its Common Shares. Unless otherwise indicated, to our knowledge, all persons listed below have sole
voting and investment power with respect to their Common Shares, except to the extent authority is shared by spouses under applicable law. Unless otherwise noted, the address of each shareholder is
c/o Metron Technology N.V., 1350 Old Bayshore Highway, Suite 210, Burlingame, California 94010.

|Name and Address                                                             |                                      | Common Shares as of
July 31, 2001 |  | Total Shares
Beneficially Owned (1) |  | Percentage |  
|---------------------------------------------------------------------------- | ------------------------------------ | --------------------------------- |  | ----------------------------------- |  | ---------- | -
|Entegris, Inc.(2)                                                            |                                      | 1,565,687                         |  | 1,586,314                           |  | 12.4       | %
|                                                                             | 3500 Lyman Boulevard                 |                                   |  |                                     |  |            |  
|                                                                             | Chaska, MN 55318                     |                                   |  |                                     |  |            |  
|FSI International, Inc.(3)                                                   |                                      | 2,690,687                         |  | 2,711,314                           |  | 21.1       | %
|                                                                             | 322 Hazeltime Drive                  |                                   |  |                                     |  |            |  
|                                                                             | Chaska, MN 55318                     |                                   |  |                                     |  |            |  
|Principal Life Insurance Co.(4)                                              |                                      | 1,546,446                         |  | 1,546,446                           |  | 12.1       | %
|                                                                             | 711 High Street
Des Moines, IA 50392 |                                   |  |                                     |  |            |  
|Joel A. Elftmann(5)                                                          |                                      | 2,690,687                         |  | 2,711,314                           |  | 21.1       | %
|James E. Dauwalter(6)                                                        |                                      | 1,565,687                         |  | 1,586,314                           |  | 12.4       | %
|Robert R. Anderson(7)                                                        |                                      | 42,237                            |  | 62,864                              |  | *          |  
|Sho Nakanuma(8)                                                              |                                      | 0                                 |  | 3,750                               |  | *          |  
|Bruce M. Jaffe(9)                                                            |                                      | 2,000                             |  | 2,000                               |  | *          |  
|Edward D. Segal(10)                                                          |                                      | 626,798                           |  | 1,057,122                           |  | 8.2        | %
|C. Garry Hendricks                                                           |                                      | 657,585                           |  | 657,585                             |  | 5.1        | %
|J. Christopher Levett-Prinsep(11)                                            |                                      | 468,861                           |  | 551,928                             |  | 4.3        | %
|Keith Reidy(12)                                                              |                                      | 74,856                            |  | 147,923                             |  | 1.2        | %
|Peter V. Leigh(13)                                                           |                                      | 31,000                            |  | 108,067                             |  | *          |  
|Gregory M. Claeys(14)                                                        |                                      | 65,968                            |  | 135,734                             |  | 1.1        | %
|All supervisory directors and managing directors as a group (10 persons)(15) |                                      | 5,567,506                         |  | 5,911,843                           |  | 49.7       | %

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Transactions

Transactions with FSI

As of May 31, 2001, FSI International, Inc. ("FSI") held approximately 21.0% of the Company's outstanding shares. In fiscal 2000 and 2001,
products from FSI accounted for 25.0% and 24.5% of the Company's revenue, respectively. In addition, Mr. Elftmann, a supervisory director of the Company, is Chairman of the Board of FSI.

Distribution Agreement.In March 1998, the Company and FSI entered into a distribution agreement which has been
amended to reflect FSI's sale of its chemical management division in July 1999. Pursuant to the terms of this agreement, FSI and the Company agreed that, with some exceptions, the Company would
distribute some of FSI's products and related spare parts in specific countries primarily in Europe and Asia. Either party may terminate the agreement by providing at least 12 months prior
written notice.

Pursuant
to the distribution agreement, FSI sells products to the Company and the Company receives from FSI discounts ranging from 5% to 20% of the net sales price. The exact
percentage

70

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varies depending on the product. For some products, the discounts may be renegotiated at the request of FSI if FSI's ownership of the Company drops below 25%. In cases where customers receive
discounts off of the net sales price, the discounts are generally divided between FSI and the Company. The actual terms vary depending on product, location and the extent of the discount.

Other Agreements.FSI is also party to an investor rights agreement which grants FSI registration rights pursuant to
the shares it owns. As a supervisory director of the Company, Mr. Elftmann receives yearly option grants. In connection with Mr. Elftmann's service as the Chairman of the Board of FSI,
he has entered into an agreement with FSI pursuant to which he agrees to exercise his options to purchase common shares of the Company at the request of FSI, to vote the shares received upon exercise
of the options as directed by FSI and to hold title to these shares only as a nominee for FSI, without any beneficial right, ownership, or interest in the shares. In addition, Mr. Elftmann
agreed to convey title to the option (if this is permitted by its terms) and any shares received upon exercise of the option to FSI or to sell the shares and remit the proceeds to FSI upon FSI's
request.

Transactions with Entegris

As of May 31, 2001, Entegris, Inc. ("Entegris") held approximately 12.2% of the Company's outstanding shares, and in fiscal 2000 and 2001,
products from Entegris accounted for 25.8% and 25.1% of the Company's revenue, respectively. In addition, Mr. Dauwalter, a supervisory director of the Company, is President and Chief Operating
Officer of Entegris.

Distribution Agreements.On January 8, 2001 the Company and Entegris entered into an agreement to modify their
existing distribution relationship. Pursuant to that agreement, Entegris agreed to transfer to the Company 1,125,000 common shares of Metron and make cash payments totaling $1.75 million to the
Company over a 15-month period. On February 13, 2001, the Company and Entegris entered into a transition agreement whereby Entegris assumed direct sales responsibility for products
from its Microelectronics Group in Europe beginning April 1, 2001, and in Asia beginning May 1, 2001. Pursuant to the transition agreement, Metron will receive revenue (either in the
form of a 10% sales commission or a discount off the sales list price, which ranges from 5% to 40% depending on the product) for orders received before the above dates and shipped within the
90 days following these dates. In addition, on March 1, 2001, the Company and Entegris entered into a new distribution agreement, under which the Company will continue to distribute
Entegris' Fluid Handling Group product line in all regions in Europe, Asia, and parts of the United States covered under the previous distribution agreements. The distribution agreement will continue
until August 31, 2005 and renew automatically for successive five-year terms. The parties may terminate the agreement early under certain circumstances or, with 12 months
notice, at the end of the then-current term. Pursuant to the distribution agreement, Entegris has agreed to sell products to the Company at a 10% to 40% discount from the published list
price, depending on the product. If Entegris asks the Company to act as a manufacturer's sales representative, Entegris will provide the Company with a commission structure for those sales.

Other Agreements.Entegris is also party to an investor rights agreement which grants Entegris registration rights
pursuant to the shares it owns. As a supervisory director of the Company,
Mr. Dauwalter receives yearly option grants. In connection with Mr. Dauwalter's service as the Executive Vice President of Fluoroware, he has entered into an agreement with Fluoroware
pursuant to which he agrees to exercise his options to purchase common shares of the Company at the request of Fluoroware, to vote the shares received upon exercise of the options as directed by
Fluoroware and to hold title to these shares only as a nominee for Fluoroware, without any beneficial right, ownership, or interest in the shares. In addition, Mr. Dauwalter agreed to convey
title to the option (if this is permitted by its terms) and any shares received upon exercise of the option to Fluoroware or to sell the shares and remit the proceeds to Fluoroware upon the request of
Fluoroware.

71

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Indebtedness of Management

In July 1995, Edward D. Segal, President and Chief Executive Officer entered into a Tax Indemnification Agreement (the "Tax Indemnification Agreement")
with the Company as part of its acquisition of Transpacific Technology Corporation. At the time of the acquisition and until it completed its initial public offering in November 1999, the
Company was a "controlled foreign corporation" under Subpart F of the US Internal Revenue Code ("Subpart F"), and as a "US person" Mr. Segal was liable for personal income tax on income imputed
to him under Subpart F. Under the agreement, the Company provided cash advances to Mr. Segal for taxes due for Subpart F income. Advances under the Tax Indemnification Agreement totaled
$265,000 of which $160,000 was forgiven by the Company in fiscal 2001. Repayment of a portion of the advances is required beginning with the first sale of shares owned by Mr. Segal as of the
July 1995 acquisition date after a tax year for which Mr. Segal received an advance. The amount of the repayment is determined by reference to the tax which Mr. Segal does not pay
as a result of the step-up in basis created by the payment of income taxes on his imputed Subpart F income.

Indemnity Agreements

See "Employment Agreements and Termination of Employment Arrangements" for a description of indemnification provisions contained in agreements with Named
Executive Officers.

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PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

1.  Financial Statements

The Financial Statements required by this item, with the report of independent auditors, are submitted in a separate section beginning on page 34 of this
report.

2.  Financial Statement Schedules

The financial statement schedule "Schedule IIValuation and Qualifying Accounts" is filed as part of this Report and should be read in
conjunction with the consolidated financial statements.

All
other schedules for which provisions are made in the applicable accounting regulation of the Securities and Exchange Commission have been omitted because the information required
to be set forth therein is not applicable or is shown in the Financial Statements or notes thereto.

3.  Exhibits

The following exhibits are filed herewith or incorporated by reference:

|Exhibit
Number |      | Description of Document                                                                                                                                                                                           
|-------------- | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1            | (i)  | Agreement and Plan of Merger and Reorganization among Metron Technology B.V., Metron Acquisition Sub, Inc. and T.A. Kyser Co., dated June 12, 1998                                                                
|2.2            | (ii) | Agreement for the acquisition of the whole of the issued share capital of Shieldcare Limited                                                                                                                      
|2.3            | (i)  | Amendment to Agreement and Plan of Merger and Reorganization among Metron Technology B.V., Metron Acquisition Sub, Inc. and T.A. Kyser Co., dated July 13, 1998                                                   
|2.4            | (i)  | Joinder Agreement among certain stockholders of T.A. Kyser Co, Metron Technology B.V. and Metron Acquisition Sub, Inc. dated July 13, 1998                                                                        
|3.1            | (i)  | Articles of Association of the Registrant and translation thereof                                                                                                                                                 
|4.1            | (i)  | Reference is made to Exhibits 3.1, 10.23, 10.24 and 10.26                                                                                                                                                         
|4.2            | (i)  | Specimen Common Share Certificate                                                                                                                                                                                 
|10.1           | (i)  | 1997 Supervisory Directors' Stock Option Plan                                                                                                                                                                     
|10.2           | (i)  | Form of 1997 Supervisory Directors' Stock Option Agreement                                                                                                                                                        
|10.3           | (i)  | Amended and Restated Metron Technology N.V. Employee Stock Option Plan                                                                                                                                            
|10.4           | (i)  | Form of Metron Technology N.V. Employee Stock Option Agreement (for employees in countries other than the United States and the United Kingdom)                                                                   
|10.5           | (i)  | Form of Metron Technology N.V. Employee Stock Option Agreement (for employees in the United States)                                                                                                               
|10.6           | (i)  | Form of Metron Technology N.V. Employee Stock Option Agreement (for employees in the United Kingdom)                                                                                                              
|10.7           | (i)  | Aufhebungs und Ruhestandsvertrag (Cancellation and Early Retirement Agreement) between Metron Technology (Deutschland) GmbH, Metron Technology B.V. and Udo Jaensch dated February 2, 1999 and translation
thereof
|10.8           | (i)  | Share Purchase Agreement (CME) between FSI International, Inc. and Metron Technology B.V. dated February 27, 1999                                                                                                 
|10.9           | (i)  | Share Purchase Agreement (CMK) between FSI International, Inc. and Metron Technology B.V. dated February 27, 1999                                                                                                 
|10.10          | (i)  | Agreement to Terminate Joint Venture Agreements and Distribution Agreement between FSI International, Inc. and Metron Technology B.V. dated May 18, 1999                                                          

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|10.11 | (i) | FSI/Metron Distribution Agreement dated March 31, 1998 between FSI International, Inc. and Metron Technology B.V.                                                                                                                                                                   
|----- | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.12 | (i) | Distribution Agreement dated July 6, 1995 between Fluoroware, Inc. (now a wholly-owned subsidiary of Entegris, Inc.) and Metron Semiconductors Europa B.V. (now Metron Technology N.V.)                                                                                             
|10.13 | (i) | U.S. Stocking Distributor Five-Year Agreement as of September 1, 1997 between Fluoroware, Inc. and Kyser Company                                                                                                                                                                    
|10.14 | (i) | Form of Employment Agreement among Metron Technology B.V., Metron Technology Corporation and Edward D. Segal, Michael A. Grandinetti, Peter V. Leigh and Keith Reidy                                                                                                                
|10.15 | (i) | Managing Director Service Agreement between Metron Technology (U.K.) Ltd. and John Christopher Levett-Prinsep dated May 1, 1996.                                                                                                                                                    
|10.16 | (i) | Employment Agreement dated July 13, 1998 among T.A. Kyser Co., Metron Technology Corporation, Metron Technology B.V. and Garry Hendricks                                                                                                                                            
|10.17 | (i) | Metron Technology Employee Stock Purchase Plan                                                                                                                                                                                                                                      
|10.18 | (i) | T.A. Kyser Co. Employee Stock Ownership Trust as amended and restated March 17, 1997                                                                                                                                                                                                
|10.19 | (i) | Amendment No. 1 dated July 13, 1998 to the T.A. Kyser Co. Employee Stock Ownership Trust                                                                                                                                                                                            
|10.20 | (i) | T.A. Kyser Co. Employee Stock Ownership Plan as amended and restated March 17, 1997                                                                                                                                                                                                 
|10.21 | (i) | Amendment No. 1 dated June 12, 1998 to the T.A. Kyser Co. Employee Stock Ownership Plan                                                                                                                                                                                             
|10.22 | (i) | Amendment No. 2 dated July 13, 1998 to the T.A. Kyser Co. Employee Stock Ownership Plan                                                                                                                                                                                             
|10.23 | (i) | Investors Rights Agreement dated July 6, 1995 among Metron Semiconductors Europa B.V. and the Investors as defined therein                                                                                                                                                          
|10.24 | (i) | Accession Agreement dated October 15, 1998 among Metron Technology B.V., the Original Parties as defined therein, Segal Investments, L.P., M. Segal, N. Segal, M. Segal as trustee of the Matthew Dean Segal 1997 Trust and
N. Segal as trustee of the Matthew Dean Segal 1997 Trust
|10.25 | (i) | Confirmation Agreement dated October 15, 1998 among Metron Technology B.V. and the Investors as defined in the Investor Rights Agreement of July 6, 1995                                                                                                                            
|10.26 | (i) | Accession Agreement dated July 13, 1998 among Metron Technology B.V., the Stockholders and the Signing Stockholders as defined therein                                                                                                                                              
|10.27 | (i) | Consent Agreement dated July 13, 1998 among Metron Technology B.V. and the Investors as defined therein                                                                                                                                                                             
|10.28 | (i) | Incentive Compensation Plan for Edward D. Segal FY2000                                                                                                                                                                                                                              
|10.29 | (i) | Incentive Compensation Plan for Michael A. Grandinetti FY2000                                                                                                                                                                                                                       
|10.30 | (i) | Incentive Compensation Plan for Peter V. Leigh FY2000                                                                                                                                                                                                                               
|10.31 | (i) | Incentive Compensation Plan for J. Christopher Levett-Prinsep FY2000                                                                                                                                                                                                                
|10.32 | (i) | Incentive Compensation Plan for Keith Reidy FY2000                                                                                                                                                                                                                                  
|10.33 | (i) | Amended and Restated Buy and Sell Agreement among Metron Technology B.V. and the Significant Shareholders as defined therein, as of July 6, 1995.                                                                                                                                   
|10.34 | (i) | Form of Indemnification Agreement among Metron Technology B.V. and the Investors as defined therein                                                                                                                                                                                 
|10.35 | (i) | Employment Agreement dated September 1, 1999 among Metron Technology B.V., Metron Technology Corporation and Edward D. Segal                                                                                                                                                        
|10.36 | (i) | Employment Agreement dated September 1, 1999 among Metron Technology B.V., Metron Technology Corporation and Michael A. Grandinetti                                                                                                                                                 
|10.37 | (i) | Employment Agreement dated September 1, 1999 among Metron Technology B.V., Metron Technology Corporation and Peter V. Leigh                                                                                                                                                         

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|10.38 | (i)   | Employment Agreement dated September 1, 1999 among Metron Technology B.V., Metron Technology Corporation and Keith Reidy                                                                                    
|----- | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.39 | (iv)  | Tax Indemnification Agreement dated July 6, 1995 among Metron Technology B.V., Metron Technology Corporation and Edward D. Segal                                                                            
|10.40 | (v)   | Stock Purchase Agreement, dated as of November 17, 2000, among Metron Technology N.V. and Cher Lew Hiong James, Chia Chiap Heng Basil, Cher Lew Kwang Francis and Elite Star Enterprises Pte. Ltd.          
|10.41 | (vi)  | Agreement, dated as of January 8, 2001, by and among Entegris, Inc., a Minnesota corporation, Fluoroware, Inc., a Minnesota corporation, and Metron Technology N.V., a Netherlands corporation.             
|10.42 | (vi)  | Transition Agreement, dated as of February 13, 2001, by and among Entegris, Inc., a Minnesota corporation, Fluoroware, Inc., a Minnesota corporation, and Metron Technology N.V., a Netherlands corporation.
|10.43 | (vi)  | Letter Agreement, dated February 23, 2001, by and among Entegris, Inc., a Minnesota corporation, Fluoroware, Inc., a Minnesota corporation, and Metron Technology N.V., a Netherlands corporation.          
|10.44 | (vi)  | Worldwide Stocking Distributor Agreement, dated March 1, 2001, between Entegris, Inc. and Metron Technology N.V.                                                                                            
|21.1  | (i)   | List of Subsidiaries of the Registrant                                                                                                                                                                      
|23.1  |       | Consent of KPMG LLP, independent auditors                                                                                                                                                                   
|24.1  | (iii) | Power of Attorney                                                                                                                                                                                           
|99.1  | (ii)  | Press Release, dated as of March 3, 2000, entitled "Metron Technology Acquires Critical Parts Cleaning Business"                                                                                            

---

The
following Report on Form 8-K was filed during the quarter ended May 31, 2001: Report on Form 8-K, filed March 2, 2001,
pertaining to events surrounding the Entegris distribution agreement.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Burlingame, State of California, on August 27, 2001.

| |  | METRON TECHNOLOGY N.V.
| |  | ----------------------
| |  | By:                   
| |  | By:                   

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Metron Technology N.V.  Schedule IIValuation and Qualifying Accounts

|Description                   |                          | Balance at
Beginning of
Period  |  | Charged to
Costs and
Expenses |       | Charged to
Other
Accounts |   | Deduction |  | Balance at
End of
Period
|----------------------------- | ------------------------ | ------------------------------- |  | ----------------------------- | ----- | ------------------------- | - | --------- |  | ------------------------
|
|
|
|Deducted from asset accounts: |                          |                                 |  |                               |       |                           |   |           |  |                         
|                              | Year ended May 31, 1999: |                                 |  |                               |       |                           |   |           |  |                         
|                              |                          | Allowance for doubtful accounts |  | $                             | 815   |                           |   | 1,029     |  | $                       
|                              |                          |                                 |  |                               |       |                           |   |           |  |                         
|                              |                          | Inventory valuation allowance   |  | $                             | 4,325 |                           | $ | 1,752     |  | $                       
|                              |                          |                                 |  |                               |       |                           |   |           |  |                         
|Deducted from asset accounts: |                          |                                 |  |                               |       |                           |   |           |  |                         
|                              | Year ended May 31, 2000: |                                 |  |                               |       |                           |   |           |  |                         
|                              |                          | Allowance for doubtful accounts |  | $                             | 1,312 |                           | $ | 388       |  | $                       
|                              |                          |                                 |  |                               |       |                           |   |           |  |                         
|                              |                          | Inventory valuation allowance   |  | $                             | 6,007 |                           | $ | 1,560     |  | $                       
|                              |                          |                                 |  |                               |       |                           |   |           |  |                         
|Deducted from asset accounts: |                          |                                 |  |                               |       |                           |   |           |  |                         
|                              | Year ended May 31, 2001: |                                 |  |                               |       |                           |   |           |  |                         
|                              |                          | Allowance for doubtful accounts |  | $                             | 685   |                           | $ | 2,400     |  | $                       
|                              |                          |                                 |  |                               |       |                           |   |           |  |                         
|                              |                          | Inventory valuation allowance   |  | $                             | 5,111 |                           | $ | 4,932     |  | $                       
|                              |                          |                                 |  |                               |       |                           |   |           |  |                         

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