---

---

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

FORM 10-K

ýANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended May 31, 2002

OR

oTRANSITION 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 0.44 EUR 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 ý        No o

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.
ý

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 June 18, 2002 as reported by
the Nasdaq National Market, was approximately $71,466,000. 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, 0.44 EUR par value, as of July 31, 2002 was 13,042,231.

DOCUMENTS INCORPORATED BY REFERENCE

None

---

---

---



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. More recently, under license from
the original equipment manufacturer (OEM), we began manufacturing several older types of equipment used in the fab, an activity that we refer to as the legacy (equipment) business.

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 externally sourced 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. Our legacy equipment includes sputtering or plasma vapor deposition (PVD) tools
originally developed by Varian Associates, and now manufactured under license from Novellus, and rapid thermal processing (RTP) tools originally developed by AG Associates. Sputtering or PVD is a
process in which a material which is a solid at room temperature is heated under vacuum conditions so that it becomes a gas, and is deposited in a thin layer on to a silicon wafer. RTP is a process in
which a silicon wafer is first heated and then cooled very rapidly in order to change the chemical structure of the materials deposited on its surface without damaging the wafer itself.

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.

2

---

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.

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 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. In the case of legacy equipment, the OEM often wants to concentrate its resources on the current generation of equipment and
wishes to outsource the manufacture, service and support of older tools to a company that can provide reliable support on a global basis.

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.

3

---

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:



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



We
also provide manufacturing services to OEM's that wish to outsource the manufacture, marketing, sales and service of older equipment.

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:



4

---



Products and Services

We are organized into two worldwide operating divisions, materials and equipment. In fiscal 2000, 2001 and 2002, sales by our equipment division accounted for
approximately 50.2%, 50.7% and 46.3% of our revenue, respectively, and sales by our materials division accounted for approximately 49.8%, 49.3% and 53.7% 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

5

---

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, 2002, our 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                         |  | Pall                  
|                       |  | Stainless steel control valves and regulators                    |  | Tescom                
|Wafer management       |  | Pellicles                                                        |  | MLI                   
|Chemicals              |  | Slurry                                                           |  | Cabot Microelectronics
|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; automatic wafer handling, particle counting
and cleanroom monitoring equipment.

6

---

The equipment division also markets specialized containers of high purity chemicals which are used in the chemical vapor deposition and diffusion phases of semiconductor wafer processing. As of
May 31, 2002, our equipment division represented over 40 principals. The table below lists the largest products in the equipment division and the principals for those products:

Types of Products

PrincipalsWafer cleaning tools

FSIMetrology inspection microscopes

ZeissWafer characterization and diagnostic tools

SDIPhotomask coating and developer tools

SigmameltecEnvironmental gas cleaning systems

ATMIHigh purity wafer processing chemicals

SchumacherPhoto-lithography processing tools

FSI


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.

Our
equipment business now includes the marketing and sale of legacy equipment that we manufacture under license from the original equipment manufacturer:

Types of Products

Licensed fromVarian sputtering (or PVD) equipment

NovellusAG Associates rapid thermal processing (RTP) equipment

Mattson


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 16 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 externally-sourced 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. In the case of legacy equipment, we are responsible for both parts and labor. 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

7

---

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 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, 2002, we had approximately 300 sales and marketing employees in 40 offices in Asia (except Japan), Europe and the United States.
Through these sales and support offices, 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 380 highly-skilled technical and engineering personnel around the
world to support our sales and marketing organization and our customers. In Europe, we have approximately 220 support personnel in nine
countries located in thirteen offices as well as at several semiconductor manufacturers' facilities. In Asia, we have approximately 140 support personnel in five countries located in eight offices as
well as at several semiconductor manufacturers' facilities. In the United States, we have approximately 20 support personnel located in eleven states. With few exceptions, our employees around the
world are fully conversant in local languages and familiar with the local business culture and local business 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. We operate two Class 100 cleanroom facilities,
720 square feet in Sunnyvale, California and 560 square feet in Austin, Texas, a 9,900 square foot, class 1,000 cleanroom facility in Glenrothes, Scotland, and a 5,750 square foot,
class 10,000 cleanroom facility in San Jose, 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.

8

---

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 2002, our 10 largest customers accounted for an aggregate of 41% of our sales. 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 customers may change from period to period. The table below lists in alphabetical order our 10 largest
customers in fiscal 2002 based on revenue and the geographic regions where we support them:

Customer

LocationsAMD

Germany, United Kingdom, United StatesChartered Semiconductor Manufacturing

SingaporeDupont

France, United StatesIBM

France, SingaporeInfineon

Germany, United KingdomIntel

Ireland, Israel, Malaysia, United Kingdom, United StatesPhilips

The Netherlands, France, Germany, United Kingdom, United StatesSeagate

Ireland, Singapore, United KingdomST Microelectronics

France, Italy, SingaporeTower Semiconductor

Israel


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. For
example, Cabot Microelectronics recently decided to assume the direct distribution of its products in Europe and Singapore; the effective date of the transition will be June 1, 2003. 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.

9

---

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 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, 2002, we had 928 full-time employees, including 245 in our materials division, 439 in our equipment division and 244 in general
administrative activities, including finance and accounting, sales administration, shipping and receiving and corporate management. Of our full-time employees, 187 are located in the
United States, 469 are located in Europe and 272 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.

10

---



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 Annual Report on Form 10-K.

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, 2002, 11.5% of our
total revenue was generated from the sale of products manufactured by FSI, 13.1% represented the sale of products manufactured by Entegris, and 17.1% represented the sale of products manufactured by
Cabot Microelectronics. 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.

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



We
have lost principals in the past. For example, 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

11

---

of this divestiture, we no longer market and sell these products. In October 1999, Applied Materials acquired Obsidian. As a result of the acquisition, Obsidian terminated its agreement with
us. In January 2001, we entered into an agreement with Entegris, Inc. to modify our existing distribution relationship, 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. In May 2002, by mutual agreement, we terminated our distributor agreement
with August Technology. In August 2002, Cabot Microelectronics advised us of its decision to assume the direct distribution of its products in Europe and Singapore; the effective date of the
transition will be June 1, 2003. Metron will continue to market Cabot Microelectronics products in Israel.

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.

We may not be able to meet certain covenants in or renew our credit facilities.

Our
building mortgage contained and certain of our credit facilities contain financial covenants that require us to meet and maintain certain minimum ratios. At May 31, 2002, we
were in violation of covenants to maintain a specified interest coverage ratio on our building mortgage and on one other credit facility. To resolve these issues, in June 2002, we repaid our
building mortgage, and, in July 2002, we repaid a portion of our borrowing on the credit facility to reduce our borrowing to the newly agreed lower facility limit. We intend to pursue
discussions with our lenders to further waive, modify or, possibly, eliminate, certain financial covenants in our credit facilities. However, we cannot give any assurance that the lenders will agree
to modify or eliminate such covenants or that we can comply with the covenants and meet the financial tests of our credit facilities, even if and as modified. We do not expect to meet the interest
coverage covenant on the reducedapproximately $1 millioncredit facility in The Netherlands at August 31, 2002. Our credit facilities are typically subject to
periodic, generally annual, review, and we cannot give any assurance that our lenders will agree to renew our facilities on terms acceptable to the Company, or at all. Lenders might base a decision
not to renew on general industry conditions without regard to our financial performance. A breach of a covenant in, or failure to renew, a credit facility could result in the lender demanding
repayment of the related indebtedness and could impair our ability to obtain additional access to our current or alternate credit facilities. Any such demand or impairment of our access to capital
could have a material adverse effect on our liquidity and financial condition.

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

12

---

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.

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 the globe and some of them 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, the current management information systems that we use to control our
day-to-day operations are not integrated across the globe. 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.

13

---

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, in France in July 2001, in Italy in October 2001, in the United Kingdom and Ireland in February 2002, and
in Germany in June 2002. We currently anticipate that the total costs associated with the implementation of the new system will be approximately $12.0 to $15.0 million and that the
system will be fully implemented over the next 24 to 30 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 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 21% of the world's production of semiconductors in 2001 took 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

14

---

successful. If we are not successful in our efforts to penetrate the Japanese market, our future growth may be limited.

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.

15

---

We believe that period-to-period comparisons of our results of operations may not be meaningful, and 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 Annual Report on Form 10-K 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

16

---

of our revenue. In fiscal 2002, our top ten customers accounted for an aggregate of 41% of our sales. 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 recently expanded our operations to include manufacturing, an activity of which we do not have significant experience. This new activity will require us to hire
managers and employees with different skills from those of our existing employees and to develop systems to manage processes of which we have no prior experience.

We
now manufacture, under license from the original equipment manufacturer, Varian sputtering (PVD) equipment, licensed from Novellus, and AG Associates rapid thermal processing (RTP)
equipment, licensed from Mattson. Prior to our entry into what is commonly called the legacy equipment business, we did not manufacture any equipment. With our entry into this business, we have had to
hire managers and other employees who have different skills from those of our existing employees. We have also had to install new systems to keep track of manufacturing inventories. As a consequence
of our lack of experience, our newly initiated manufacturing activity may incur unanticipated costs, and we may not realize the gross margins that we planned to in making the necessary investments. In
May 2002, we acquired certain assets of Advanced Stainless Technologies (AST), a Texas-based manufacturer of electro-polished stainless steel tube and fittings. We had no prior experience of
operating a plant such as AST's, and we may incur unexpected costs in connection with AST's business.

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

17

---

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.

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.

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, 2002, FSI owned 20.7%, and Entegris owned 12.0% of our outstanding shares. By virtue of their share ownership, FSI and Entegris can exercise significant voting
control over Metron. As a result, each of these shareholders has significant influence over all matters requiring shareholder approval, including the election of directors, 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
believe that our cash and cash equivalents, combined with currently available lines of credit and expected cash flows from operations, will be sufficient to meet our anticipated cash
needs for fiscal 2003 at current operating levels. However, if quarterly revenues increase materially, we will need to raise additional working capital from external sources to permit us to conduct
our operations in the ordinary course of business through fiscal 2003. While we currently expect to be able to raise additional working capital to support increased revenues, we cannot give any
assurance that additional financing will be available on terms acceptable to the Company, or at all. Our current lines of credit are typically subject to periodic, generally annual, review, and we
cannot give any assurance that our lenders will agree to renew these facilities on terms acceptable to the Company, or at all. Lenders might base a decision not to renew on general industry conditions
without regard to our financial performance. Our

18

---

forecast of the period of time through which our financial resources are expected to be adequate to support our operations is based on our expected cash flow from operations, which involves 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 our forecast, including the risks and uncertainties discussed in these "Risks Related to Metron."

We
also intend to seek additional financing during the next twelve months to meet the Company's working capital requirements for fiscal 2004. Any inability on our part to renew and
expand our existing credit facilities or to raise additional funds through public or private debt or equity financing or other sources could result in the Company not achieving its
longer-term business objectives. In addition, we may need to raise additional capital through public or private sales of equity and/or additional borrowings for significant acquisitions,
significant capital expenditures or other extraordinary transactions. If we cannot raise additional 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. The issuance of additional equity or
debt securities convertible into equity would result in a reduction of the ownership stakes of our existing shareholders, and the new equity securities may have rights, preferences and privileges that
are senior to those of our existing common shares.

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
Annual Report on Form 10-K and the following:



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 to fund our growth and, therefore, do not expect to pay any
dividends in the foreseeable future.

19

---

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 an N.V. 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. The shareholders may designate the
Company's Supervisory Board 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 unless such approval is required under the terms of our Nasdaq listing agreement.

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. A significant percentage of our assets are located 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.

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 Annual Report on Form 10-K 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,

20

---

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, including the factors described under Item 1BusinessRisk Factors and elsewhere in this Annual Report on Form 10-K.

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 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.

ITEM 2. PROPERTIES

Our corporate headquarters are located in Burlingame, California. The head of our global materials division is based in Austin, Texas. We own our 30,000 square
foot facility in Livingston, Scotland, 16,300 square foot facility in Glenrothes, Scotland and our 6,500 square foot facility in Almere, The Netherlands. We also own an 18,000 square foot facility in
Aschheim, Germany, which we are currently attempting to sell. In addition, we lease space for marketing and customer service and support purposes in 40 locations worldwide. We operate two
Class 100 cleanroom facilities, 720 square feet in Sunnyvale, California and 560 square feet in Austin, Texas, a 9,900 square foot, Class 1,000 cleanroom facility in
Glenrothes, Scotland, and a 5,750 square foot, Class 10,000 cleanroom facility in San Jose, 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 Annual Report on Form 10-K.

21

---



PART II

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

The Company's common shares, 0.44 EUR par value per share (previously 0.96 NLG), 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


3.91Fiscal 2002First Quarter


7.95


6.51Second Quarter


7.24


6.28Third Quarter


8.55


6.65Fourth Quarter


11.05


8.65


There
were approximately 81 shareholder accounts of record on July 31, 2002, and the number of beneficial shareholders was estimated to be 2,069.

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. by non-Dutch resident individuals and corporate entities. This summary addresses only dividend withholding tax, income tax, corporate income tax, and gift and
inheritance tax. It does not cover other taxes imposed by The Netherlands and/or its political subdivisions. Further this summary does not purport to be an exhaustive discussion or analysis of all
relevant tax matters related to the holding of our common 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 our common 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 our common shares should
consult his, her or its own tax advisors regarding the tax consequences of the holding of our common shares. This summary is based on the tax laws of The Netherlands as in effect on July, 26, 2002 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.

22

---

This
summary represents Metron's interpretation of existing Dutch tax law and, accordingly, no assurance can be given that the tax authorities or the courts in the Netherlands will agree
with the summary below. This summary addresses the Dutch tax consequences to a holder of our common shares who or which neither is nor is 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 both by reference to the relevant facts and circumstances and to several principles of
law.

Dutch Taxation Regarding Dividends.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, deemed dividends, 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 common 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 common 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 our common shares can 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 our common 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 any 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, under these
transitional rules, 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 in respect of taxes on income and capital gains.

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

23

---

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 common 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 in respect
of taxes on income and capital gains with The Netherlands.

On
July 9, 2002, a bill was adopted by the Dutch parliament introducing new legislation in order to counteract "dividend stripping". Parts of the new legislation relevant to the
description below will have retroactive effect from April 27, 2001. Pursuant to the new legislation, a reduction, credit or refund of dividend withholding tax is denied if the recipient of the
dividend is not the beneficial owner. The new legislation generally targets situations, commonly referred to as "dividend stripping", in which a shareholder retains its economic interest in shares,
but tries to reduce the withholding tax cost on dividends by a transaction with another party. The Dutch tax authorities will also apply the proposed
definition of beneficial ownership in the context of a tax treaty in respect of taxes on income and capital gains.

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 common shares, provided that:



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, common 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
maximum tax rate for corporate shareholders is 34.5%. A holder of common 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.

24

---

Dutch Gift And Inheritance Tax.A gift or inheritance of our common shares from a holder of our common 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, unless: (1) such shareholder, at the time of the gift has, or at the time of
death had, a business or an interest in a business that is or was, in whole or in part, carried on through a permanent establishment or a permanent representative in the Netherlands and to which
business or part thereof, as the case may be, the common shares are or were attributable; or (2) in the case of a gift of the common shares by an individual who at the date of the gift was
neither resident nor deemed to be resident of the Netherlands, such individual dies within 180 days after the date of the gift, while at the time of death being resident or deemed to be
resident of the Netherlands.

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

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

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with Item 7Management's Discussion and Analysis of Financial Condition and
Results of Operations and Item 8Financial Statements and Supplementary Data contained elsewhere in this Annual Report on Form 10-K. 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

25

---

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                                |                                                     |  

---

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

26

---

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 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, including the factors described
under Item 1BusinessRisk Factors and elsewhere in this Annual Report on Form 10-K. 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 Annual Report on Form 10-K. This discussion of fiscal 2000, 2001 and 2002 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 owned approximately 33% of our shares as of May 31, 2002, and by certain of our former management. In
1995, we reorganized Metron to combine three Asian companies as 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 equipment 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 have been 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. In March 2002, we purchased the AG Associates rapid thermal processing ("RTP") products from Mattson Technology. In May 2002, we acquired
certain assets of Advanced Stainless Technologies ("AST"), a small Texas-based manufacturer of electro-polished stainless steel tubing and fittings. The transaction has been accounted for as a
purchase.

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. In
general, 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, and, depending on the terms of the sale, we sometimes defer also a portion of the sales price attributable to the equipment. We recognize installation revenue,
and any deferred equipment 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.

27

---



In each of our three fiscal years ended May 31, 2002, 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 2002, 11.5% of our total revenue was generated from the sale of products manufactured by FSI, 13.1% from the sale of products
manufactured by Entegris and 17.1% from the sale of products manufactured by Cabot Microelectronics. In August 2002, Cabot Microelectronics advised us of its decision to assume the direct
distribution of its products in Europe and Singapore; the effective date of the transition will be June 1, 2003. Metron will continue to market Cabot Microelectronics products in Israel.

In
addition to representing two of our largest sources of revenue, FSI and Entegris are also our two largest shareholders, holding 20.7% and 12.0%, 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. Revenue from products distributed for the Microelectronics Group under the previous
distribution agreement for the years ended May 31, 2000, 2001 and 2002 were $51,420,000, $75,245,000 and $4,273,000, respectively.

As
consideration for modifying the existing distribution agreement, Entegris transferred 1,125,000 shares of the Metron common shares it owed 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. 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, 2000, 2001 and 2002:

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

28

---

|            |               | Year Ended May 31, |     
|----------- | ------------- | ------------------ | ----
|
|
|Net revenue |               |                    |     
|            | Europe        |                    | 48.9
|            | Asia          |                    | 29.0
|            | United States |                    | 22.1
|            |               |                    |     
|            |               | 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, and later of the AG Associates RTP products, we added new revenue categories; revenue from the cleaning of shields used in the manufacturing of semiconductors and revenue from the sale of
legacy equipment that we manufacture ourselves. 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. In the majority of cases where the equipment is externally sourced, i.e. is manufactured by one of our
principals, the equipment is 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, the timing of product shipments by the equipment manufacturer, and the timing of customer acceptances.

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 than externally sourced equipment.

Critical Accounting Policies and Estimates

Metron's discussion and analysis of its financial condition and results of operations is based on the Company's consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments
that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its
estimates, including those related to revenue recognition, allowance for doubtful accounts, inventories, goodwill and income taxes. Metron bases its estimates on historical experience and on various
other assumptions that we believe to be reasonable under the circumstances. Together these form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenue recognition.We recognize revenue in accordance with SEC Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements("SAB101"), which was adopted by the Company as of June 1, 2000. We have adopted specific and
detailed guidelines for recognizing revenue. Nevertheless, certain judgments affect the application of our revenue policy. Most equipment sales are recorded as "multiple element" transactions in which
the portion of the sale represented by the fair value of 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. In certain

29

---

circumstances, depending on the precise terms of the transaction, we also defer a portion of the residual amount attributable to the equipment itself. The installation and warranty revenue we defer
for each machine sold requires us to estimate the amount of time we expect it to take to install the equipment and to maintain the equipment during the warranty period. The estimated time is valued
using the fair value of our service rates in each country. We review the adequacy of our estimates periodically and revise them as necessary. We recognize deferred installation revenue, and deferred
equipment revenue, if any, when the customer accepts the equipment as production enabled in the fab. We recognize deferred warranty revenue ratably over the warranty period.

Valuation accounts.The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability
of its customers to make required payments. The estimate is based on our historical experience and our current assessment of the credit-worthiness of specific customers. The reserves are
re-evaluated and adjusted at each balance sheet date as additional information is received that impacts the amount reserved.

The
Company values its inventory at the lower of cost or market. The Company analyzes the composition of its inventory and identifies and evaluates slow-moving inventory to
determine if reserves are required. Estimated required reserves are based on past usage and on assumptions about future demand and market conditions.

Goodwill and intangibles.As a result of some of our business acquisitions, we have recorded approximately
$8.3 million in goodwill and other intangible assets. The determination of the value of such intangible assets requires us to make estimates and assumptions regarding future cash flows and the
lives of technology. During fiscal 2002, we amortized $1.3 million of goodwill. Statement of Financial Accounting Standards ("SFAS") No. 142,Goodwill and Other
Intangible Assetsbecame effective on June 1, 2002. Goodwill will no longer be amortized with the adoption of SFAS 142. In lieu of amortization, we are required
to perform an impairment review of our goodwill using a two step test. The initial step is to identify any potential impairment in the first half of fiscal 2003. The second step measures the
impairment loss, if any, and must be completed by the end of fiscal 2003. An impairment review of goodwill will be performed annually thereafter. We expect to complete our initial review during the
first six months of fiscal 2003. Until the review is completed, we will not know for certain whether or not we will need to record an impairment charge, or whether such charge, if any, will be
material.

Income taxes.As part of the process of preparing our consolidated financial statements, we are required to estimate our
income taxes in each of the jurisdictions in which we operate. This process may result in the recording of deferred tax assets which represent temporary differences between the tax bases of assets and
liabilities and financial statement amounts reported by each subsidiary, as well as operating loss and tax credit carryforwards. At each balance sheet date, we assess the recoverability of tax assets
based on our ability to carryback the temporary differences to recover taxes previously paid, if any, or our ability to generate sufficient future taxable income in the relevant tax jurisdiction. If
we determine the recoverability of the deferred tax asset is in doubt, we record a valuation allowance. We regularly update our estimate of future taxable income in each jurisdiction, and these
updates can result in changes in the valuation allowance.

Results of Operations

During the fourth quarter of fiscal 1999 the semiconductor industry began to recover from the slowdown that began in the second half of 1996. 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, all of which contributed to the significant reduction in our revenue in fiscal 2002. This directly affected the sales of semiconductor capital equipment and the sales of
materials. As a result of the decline in revenues, we

30

---

recorded operating losses during the second and third quarters of fiscal 2002. While operations were slightly positive in our fourth quarter, we experienced an operating loss for fiscal 2002 as a
whole. 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 2002. We expect that revenues for the first quarter of fiscal 2003 will be higher than our
revenues in the fourth quarter of fiscal 2002.

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 2000, 2001 and
2002 were derived from, and should be read in conjunction with, our audited Consolidated Financial Statements and the related Notes included elsewhere in this Annual Report on Form 10-K.

|                                                    |  | Fiscal Year Ended May 31, |  
|--------------------------------------------------- |  | ------------------------- | -
|
|Net revenue                                         |  | 100.0                     | %
|Cost of revenue                                     |  | 81.8                      |  
|                                                    |  |                           |  
|Gross margin                                        |  | 18.2                      |  
|Selling, general, administrative and other expenses |  | 14.5                      |  
|Other operating income, net of associated costs     |  |                          |  
|Restructuring and merger costs                      |  |                          |  
|                                                    |  |                           |  
|Operating margin (loss)                             |  | 3.7                       | %
|                                                    |  |                           |  

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 |                           | 50.2
|              | Materials division |                           | 49.8
|Gross margins |                    |                           |     
|              | Equipment division |                           | 15.6
|              | Materials division |                           | 20.9

Net Revenue

Equipment division.The equipment division's net revenue in fiscal 2002 was $107.6 million, down
$154.6 million, or 59.0%, from $262.2 million in fiscal 2001. Our fiscal 2001 equipment division revenue was up $92.8 million, or 54.8%, from $169.4 million in fiscal 2000.
Equipment division revenue grew during fiscal 2001 in all geographic regions, with particularly strong growth in Europe and the United States. However, in the fourth quarter of fiscal 2001 we began to
experience a severe slowdown. which continued until the third quarter of fiscal 2002. Despite a modest sequential increase in revenues in the fourth quarter of fiscal 2002, for the fiscal year as a
whole we experienced significant revenue reductions in all geographic regions, particularly in Europe.

Materials division.The materials division's net revenue in fiscal 2002 was $124.6 million, down
$130.6 million, or 51.2%, from $255.2 million in fiscal 2001. The materials division's net revenue in fiscal 2001 was up $87.0 million, or 51.8%, from $168.2 million in
fiscal 2000. Revenue grew sequentially from the two year low in the first quarter of fiscal 1999, when the industry began to

31

---

emerge from its prolonged downturn, and continued to grow through the third quarter of fiscal 2001 in all geographic regions. As with the equipment division, we experienced a severe slowdown
beginning with our fourth quarter of fiscal 2001 and continuing until the third quarter of fiscal 2002. Despite a 26% sequential increase in revenues in the fourth quarter of fiscal 2002, which were
only 1.4% below the revenues reported in the first quarter, for the fiscal year as a whole we experienced significant revenue reductions in all geographic regions, particularly in Europe.

Gross Margins

Equipment division.Gross margins in the equipment division increased by 490 basis points in fiscal 2002. Margins improved in
all revenue categories, with the majority of the increase coming from service and spare parts. Service margins improved as a result of the recognition of installation revenues deferred from earlier
periods. Commissions, which have no associated cost of goods sold, also contributed to the margin improvement because they represented a higher proportion of division revenue in fiscal 2002 than in
fiscal 2001. Equipment division gross margins for fiscal 2001 declined by 80 basis points when compared to fiscal 2000. The decline was due primarily to the smaller proportion of sales represented by
spare parts revenues in fiscal 2001 and to the start-up costs of new parts cleaning facilities in Israel and Singapore.

Materials division.Gross margins in the materials division declined 110 basis points in fiscal 2002. While product margins
remained essentially flat, warehousing costs increased on a relative basis, which, coupled with a reduction in commission revenue, resulted in lower overall margins. Gross margins in the materials
division in fiscal 2001 were essentially unchanged from fiscal 2000.

Selling, General, Administrative and Other (SG&A) Expenses.SG&A expenses in fiscal 2002 were $52.4 million, down
$17.2 million, or 24.7%, from fiscal 2001. SG&A expenses in fiscal 2001 were $69.6 million, up $20.6 million, or 42.1%, from fiscal 2000. Our acquisition of Intec accounted for
$0.9 million and $0.5 million of SG&A in fiscal 2001 and 2002, respectively.

SG&A
expenses consist principally of salaries and other employment-related costs, occupancy costs, travel and entertainment, 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. Almost 60% of our operating expenses consist of
salaries and other employment-related costs.

The
decrease in SG&A expense in fiscal 2002 was due principally to lower personnel expenses amounting to $11.5 million, which includes incentive plans and bonuses, and lower
travel and entertainment expense amounting to $2.5 million. In the fourth quarter, we succeeded in substantially reducing the amount of receivables that were over 90 days. Consequently,
we reduced our provision for doubtful accounts by $1.1 million. The increase in SG&A expenses in fiscal 2001 was primarily due to increases in headcount, travel and incentive plan expense. 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 costs.Restructuring costs of $1.1 million incurred during fiscal 2002 comprise termination costs of
$0.7 million for a reduction in head count of 56 employees and abandonment of a lease amounting to $0.4 million. Of the reduction in headcount totaling 56 employees, 27 worked in the
equipment division, 17 in the materials division and 12 in finance and administration. Restructuring costs of $0.4 million incurred during fiscal 2002 represent the costs of an abandoned
leasehold in the United States. This cost represents the estimated difference between the total discounted future sublease income and our lease commitments relating to this space. The charge is an
estimate and may be adjusted if we obtain a sublease for the space and the actual sublease income is significantly

32

---

different from the estimate. If we are not successful in subleasing our unused office space, we may be required to take an additional charge for the balance of the future lease cost. At
May 31, 2002, no liability remained for the termination costs, and the liability pertaining to the abandoned leasehold was approximately $0.4 million.

Other Operating Income, Net of Associated Costs.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. On March 1, 2001, we entered into a new distribution agreement with Entegris,
under which we 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.

As
consideration for modifying the existing distribution agreement, Entegris transferred 1,125,000 of the Metron common shares it owed to us and agreed to make cash payments totaling
$1.75 million over a 15-month period. The total gain of $8.4 million is being 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 $6.6 million of the gain, which was equal to their fair market value on February 13, 2001.

Loss From Impairment of Investment.During fiscal 2002, we recorded a loss of $1.1 million for an estimated "other
than temporary" impairment in the value of our investments in Advanced Stainless Technologies, Inc. ("AST"), and Abeto GmbH ("Abeto"). $0.4 million of the loss was recorded against
our equity investment in AST, a Texas-based manufacturer of specialty stainless steel tubing. The remainder of the loss pertained to Abeto, an investment we made in May 2000. 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 the fourth quarter of fiscal year 2002, we assessed Abeto's ability to continue as a going concern without additional financial support, and in the fourth quarter, as a result of our
assessment, we recorded an impairment loss of $0.7 million.



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

|                             |  | Year Ended May 31, |       
|---------------------------- |  | ------------------ | ------
|
|
|Foreign exchange gain (loss) |  | $                  | 443   
|Interest income              |  |                    | 1,008 
|Interest expense             |  |                    | (1,760
|Other income                 |  |                    | 574   
|                             |  |                    |       
|Other income (expense)       |  | $                  | 265   
|                             |  |                    |       

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, 2002, 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

33

---

exchange contracts have numerous market makers to provide ample depth and liquidity for our hedging activities. In the third quarter of fiscal 2001, we had an exchange loss of $0.5 million,
which was primarily the result of the sudden and significant appreciation of the euro against the United States dollar in December 2000.

Interest
income represents primarily earnings on our available cash balances. The decrease in our interest income in fiscal 2002 is a result of lower average cash balances and of
declining interest rates. The decrease in fiscal 2001 represents utilization of our short-term investments for acquisitions and capital expenditures. Interest income for fiscal 2000
represents primarily interest earned from the investment of the proceeds from our initial public offering in short-term investments.

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 2002 and 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 2002, our effective income tax rate was a benefit of 31.9%. The effective rate was
lower than The Netherlands' statutory tax rate of 35%, primarily because of non-deductible losses in Asia, and tax losses in Asia for which we recorded a valuation allowance, which
eliminates any benefit to our effective tax rate.

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 amortization, a non-deductible expense, which resulted from our acquisition of
Shieldcare.

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, and to a lesser extent to fund major capital expenditures such as parts cleaning facilities.

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, 2002 was $50.1 million compared to $55.1 million at May 31, 2001. Our current ratio, current assets divided by current
liabilities, was 1.6 at May 31, 2002 and 1.4 at May 31, 2001.

Operating Activities.

Cash flows generated by operating activities in fiscal 2002 were $1.6 million, which represents a $3.5 million decline from fiscal 2001. Our net
loss plus non-cash items included in net loss totaled $(4.2) million in fiscal 2002, a decrease of $22.1 million from fiscal 2001. Changes in assets and liabilities due to a
substantial decrease in receivables, the reduction of inventories, partially offset by the reductions in payables generated $5.8 million in cash. The cash generated by changes in assets and
liabilities more than offset the net loss plus non-cash items.

34

---

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 $17.9 million in fiscal 2001, an increase of $6.8 million from fiscal 2000. Changes in assets and liabilities absorbed
$12.8 million in fiscal 2001; changes in receivables and inventories offset by increases in payables absorbed $29.1 million, reflecting higher sales in fiscal 2001 and the fact that our
customers generally did 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 $17.0 million; changes in
receivables and inventories offset by increases in payables $23.5 million.

Investing Activities.

Our capital expenditures for property, plant and equipment totaled $12.2 million for fiscal 2002, up from $9.6 million for the same period in fiscal
2001. We spent approximately $2.9 million in fiscal 2002
to build our new parts cleaning facility in The Netherlands and to improve our facility in Scotland, and we invested $5.1 million in our new operations management information system. We
estimate that our total capital expenditures in fiscal 2003 will be approximately $4.0 million, of which $1.0 million pertains to our new operations management information system. We
estimate that the total costs of the new management information system will be $12.0 to $15.0 million over an approximately 24 to 30 month period.

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. (AST), a Texas-based manufacturer of electro-polished stainless steel tubes
and fittings for ultra high purity systems.

In
fiscal 2000, we invested $33.4 million from the proceeds of our initial public offering to purchase short-term 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 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.

Financing Activities.

Equity.In fiscal 2002, we received $1.0 million from employees for the purchase of approximately 76,000 common shares
through our employee stock purchase plan, and approximately 160,000 common shares from the exercise of stock options. In fiscal 2001, the Company received $1.4 million from employees for the
purchase of approximately 79,000 common shares through its employee stock purchase plan, and 171,000 common shares from the exercise of stock options and related tax benefits. 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.

Debt.In fiscal 2002, we increased our long-term debt by $1.5 million, principally as a result of the
acquisition of the assets of AST. In fiscal 2001, we increased our credit facilities to keep pace with increased revenues, and increased our short-term borrowings by $6.2 million.

Current and future position.As of May 31, 2002, the Company had $19.9 million of cash and cash equivalents and
$20.2 million of short-term borrowings under its various lines of credit. We believe that

35

---

these funds, combined with currently available lines of credit and expected cash flows from operations, will be sufficient to meet the Company's cash needs for fiscal 2003 at current operating
levels. However, if quarterly revenues increase materially, we will need to raise additional working capital from external sources to permit us to conduct our operations in the ordinary course of
business through fiscal 2003. While we currently expect to be able to raise additional working capital to support increased revenues, we cannot give any assurance that additional financing will be
available on terms acceptable to the Company, or at all. Our current lines of credit are typically subject to periodic, generally annual, review, and we cannot give any assurance that our lenders will
agree to renew these facilities on terms acceptable to the Company, or at all. Lenders might base a decision not to renew on general industry conditions without regard to our financial performance. In
the event that our current lenders decide not to renew our current facilities, we believe that we would have access to alternate sources to enable us to meet the Company's cash needs for fiscal 2003.
As of May 31, 2002, we were in violation of covenants to maintain specified interest coverage ratios on our building mortgage and on a small credit facility in The Netherlands. To resolve these
issues, in June 2002, we repaid our building mortgage, and, in July 2002, we repaid a portion of our borrowing on the credit facility to reduce our borrowing to the newly agreed lower facility
limit. With the exception of the reducedapproximately $1 millioncredit facility in The Netherlands, as to which we do not expect to meet the interest coverage covenant
at August 31, 2002, we believe that we will be able to renew our various lines of credit as they expire, and expand them as necessary. Certain of our credit facilities contain other covenants
that require us to meet or maintain certain minimum ratios, but we expect to meet all such other financial covenants. In addition, our ability to generate our anticipated cash flow from operations is
subject to the risks and uncertainties discussed under Item I. Part 1Risks Related to Metron. This includes, in particular, our dependence upon a few key principals and a
relatively small number of customers for a majority of our revenue, variations in the amount of time it takes for us to sell our products and collect accounts receivable and in the timing of customer
orders and risks associated with the semiconductor industry and its periodic downturns.

We
also intend to seek additional financing during the next twelve months to meet the Company's working capital requirements for fiscal 2004. Any inability on our part to renew and
expand our existing credit facilities or to raise additional funds through public or private debt or equity financing or other sources could result in the Company not achieving its
longer-term business objectives.

We
may need to raise additional capital through public or private sales of equity and/or additional borrowings for significant acquisitions, significant capital expenditures or other
extraordinary transactions. We do not currently have any specific plans, agreements or commitments related to any such significant 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. If we cannot raise additional 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. The issuance of additional equity or debt securities convertible into equity could result in dilution to our existing shareholders. In
July 2002, in order to give ourselves additional financing flexibility, we filed a shelf registration statement covering up to $15 million of common shares.

Our
forecast of the period of time through which our financial resources are expected to be adequate to support our operations is a forward-looking statement. This statement involves
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 Item I. Part 1Risks Related
to Metron and elsewhere in this Annual Report on Form 10-K.

36

---

The
following table summarizes our contractual cash obligations as of May 31, 2002:

|                                                                  |  | Payments Due By Period
|----------------------------------------------------------------- |  | ----------------------
|
|
|Long-term debt including current portion                          |  | $                     
|Short-term borrowing obligations                                  |  |                       
|Operating lease obligations                                       |  |                       
|Commercial commitments                                            |  |                       
|Deferred credits and other long-term liabilities                  |  |                       
|                                                                  |  |                       
|Total contractual obligations and commercial commitments for cash |  | $                     
|                                                                  |  |                       

Transactions with related parties:

Two of Metron's shareholders, FSI and Entegris, own approximately 20.7%, and 12.0%, respectively of the outstanding shares of the Company as of May 31,
2002. 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, 2000, 2001, and 2002 such purchases totaled approximately $103.7 million, $191.4 million, and $24.4 million, respectively. At May 31, 2001, and
2002, amounts payable to these affiliates were $28.9 million and $5.8 million, respectively. At May 31, 2001, and 2002, amounts receivable from these affiliates were
$0.6 million and $0.2 million, respectively.

In
July 1995, an officer/Managing Director of Metron entered into a Tax Indemnification Agreement ("TIA") 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, Metron was a "controlled foreign corporation" under Subpart F of the US Internal
Revenue Code ("Subpart F"), and as a "US person" the officer/director was liable for personal income tax on income imputed to him under Subpart F. Under the agreement, the Company has provided cash
advances for taxes due for Subpart F income that totaled $0.3 million. Under the TIA, the officer/Managing Director is required to repay these advances only to the extent that he benefits from
the increase in the tax basis of his holding of Metron stock. Accordingly, in fiscal 2001, the Company recorded a reserve of $0.2 million against these advances. Repayment of a portion of the
advances is required beginning with the first sale of shares owned by the officer/director.

In
conjunction with the acquisition of T.A. Kyser Co., we assumed a note from a shareholder for purchase of retired treasury shares. The note had a remaining balance of
$0.1 million at May 31, 2002, an annual interest rate of 6.65% and was paid in July 2002.

37

---

Bank Borrowing Facilities

The following table summarizes our material borrowing facilities as of May 31, 2002:

|Lender                 |  | U.S. $
Equivalent
Facility Amount |        | Amount
Currently
Outstanding |   | Amount
Available |  | Recent
Interest
Rate |      
|---------------------- |  | --------------------------------- | ------ | ---------------------------- | - | ---------------- |  | -------------------- | -----
|
|Compass Bank           |  | $                                 | 10,000 |                              | $ | 9,184            |  | $                    | 816  
|Royal Bank of Scotland |  |                                   | 3,416  |                              |   | 3,416            |  |                      |     
|Deutsche Bank          |  |                                   | 4,793  |                              |   | 4,538            |  |                      | 255  
|ING Bank               |  |                                   | 2,127  |                              |   | 1,212            |  |                      | 915  
|All Others             |  |                                   | 3,488  |                              |   | 2,173            |  |                      | 1,315
|                       |  |                                   |        |                              |   |                  |  |                      |      
|Total                  |  | $                                 | 23,824 |                              | $ | 20,523           |  | $                    | 3,301
|                       |  |                                   |        |                              |   |                  |  |                      |      

In
June 2002, the Company's Singapore subsidiary obtained an additional $2.5 million revolving credit facility with an interest rate based on the bank prime rate plus
0.25%. As of July 2002, the ING Bank facility has been reduced to the equivalent of 1.0 million EUROS or $0.9 million US Dollars.

Effect of Currency Exchange Rate Fluctuations and Exchange Rate Risk Management

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.

Market Risk

At May 31, 2002, we had aggregate forward exchange contracts in various currencies as follows:

|Currency         |  | Amount Bought US $000 |  | Amount Sold US $000 |  | Weighted Average
Contract Rate |  | Fair Value
US $000 |     | Expiration Date
|---------------- |  | --------------------- |  | ------------------- |  | ------------------------------ |  | ------------------ | --- | ---------------
|Euro             |  | 5,619                 |  | 1,667               |  | 0.91                           |  | $                  | 109 |                
|Israeli Shekel   |  |                      |  | 4,572               |  | 4.27                           |  |                    | 711 |                
|Japanese Yen     |  | 7,769                 |  |                    |  | 123.67                         |  |                    | 65  |                
|Singapore Dollar |  | 1,261                 |  |                    |  | 1.78                           |  |                    | (3  | )              
|                 |  |                       |  |                     |  |                                |  |                    |     |                
|                 |  |                       |  |                     |  |                                |  | $                  | 882 |                
|                 |  |                       |  |                     |  |                                |  |                    |     |                

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.

38

---



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

|                                                                                |  | Page
Number
|------------------------------------------------------------------------------- |  | -----------
|Independent Accountants' Report (May 31, 2002PricewaterhouseCoopers LLP)       |  | 40         
|Independent Auditors' Report (May 31, 2001 and 2000KPMG LLP)                   |  | 41         
|Consolidated Statements of Operations                                           |  | 42         
|Consolidated Balance Sheets                                                     |  | 43         
|Consolidated Statements of Cash Flows                                           |  | 44         
|Consolidated Statements of Shareholders' Equity and Comprehensive Income (Loss) |  | 45         
|Notes to Consolidated Financial Statements                                      |  | 46         

39

---

INDEPENDENT ACCOUNTANTS' REPORT

To
the Board of Directors and Shareholders of Metron Technology N.V.

In
our opinion, the accompanying consolidated balance sheet as of May 31, 2002 and the related consolidated statement of operations, of shareholders' equity and comprehensive
income (loss) and of cash flows, present fairly, in all material respects, the financial position of Metron Technology N.V. and its subsidiaries at May 31, 2002, and the results of their
operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial
statement schedule under Item 14(a)(2) presents fairly, in all material respects, the information set forth therein for the year ended May 31, 2002 when read in conjunction with the related
consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audit. We conducted our audit of these statements in accordance with auditing standards generally accepted in the United States of
America, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

PricewaterhouseCoopers
LLP

San
Jose, California
July 8, 2002

40

---

INDEPENDENT AUDITORS' REPORT

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

We
have audited the accompanying consolidated balance sheet of Metron Technology N.V. and subsidiaries as of May 31, 2001, and the related consolidated statements of operations,
shareholders' equity and comprehensive income, and cash flows for each of the years in the two-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 the results of their operations and their cash flows for each of the years in the two-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

41

---

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

|                                                                                   |                                                            | Year ended May 31, |        
|---------------------------------------------------------------------------------- | ---------------------------------------------------------- | ------------------ | -------
|
|Net revenue                                                                        |                                                            | $                  | 337,551
|Cost of revenue                                                                    |                                                            |                    | 276,085
|                                                                                   |                                                            |                    |        
|Gross profit                                                                       |                                                            |                    | 61,466 
|Selling, general, administrative and other expenses                                |                                                            |                    | 49,029 
|Other operating income, net of associated costs                                    |                                                            |                    |       
|Restructuring and merger costs                                                     |                                                            |                    |       
|                                                                                   |                                                            |                    |        
|Operating income (loss)                                                            |                                                            |                    | 12,437 
|Equity in net loss of joint ventures                                               |                                                            |                    | (206   
|Loss from impairment from investments                                              |                                                            |                    |       
|Other income (expense), net                                                        |                                                            |                    | 265    
|                                                                                   |                                                            |                    |        
|Income (loss) before income taxes                                                  |                                                            |                    | 12,496 
|Income tax expense (benefit)                                                       |                                                            |                    | 4,744  
|                                                                                   |                                                            |                    |        
|Net income (loss) before cumulative effect of change in accounting principle       |                                                            |                    | 7,752  
|Cumulative effect of change in accounting principle                                |                                                            |                    |       
|                                                                                   |                                                            |                    |        
|Net income (loss)                                                                  |                                                            | $                  | 7,752  
|                                                                                   |                                                            |                    |        
|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                   |                    | $      
|                                                                                   |                                                            |                    |        
|Weighted average number of shares                                                  |                                                            |                    |        
|                                                                                   | Basic                                                      |                    |        
|                                                                                   | Diluted                                                    |                    |        

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

42

---

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

|                                     |                                                                                                 | May 31,                                                                                                                                                                                                            |                                           
|------------------------------------ | ----------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------
|
|ASSETS                               |                                                                                                 |                                                                                                                                                                                                                    |                                           
|                                     | Cash and cash equivalents                                                                       |                                                                                                                                                                                                                    | $                                         
|                                     | Accounts receivable, net of allowance for doubtful accounts of $2,861, and $1,786, respectively |                                                                                                                                                                                                                    |                                           
|                                     | Loan to officer/shareholder                                                                     |                                                                                                                                                                                                                    |                                           
|                                     | Inventories, net                                                                                |                                                                                                                                                                                                                    |                                           
|                                     | Prepaid expenses and other current assets                                                       |                                                                                                                                                                                                                    |                                           
|                                     |                                                                                                 |                                                                                                                                                                                                                    |                                           
|                                     |                                                                                                 |                                                                                                                                                                                                                    | Total current assets                      
|                                     | Property, plant and equipment, net                                                              |                                                                                                                                                                                                                    |                                           
|                                     | Intangible assets, net                                                                          |                                                                                                                                                                                                                    |                                           
|                                     | Other assets                                                                                    |                                                                                                                                                                                                                    |                                           
|                                     |                                                                                                 |                                                                                                                                                                                                                    |                                           
|                                     |                                                                                                 |                                                                                                                                                                                                                    | Total Assets                              
|                                     |                                                                                                 |                                                                                                                                                                                                                    |                                           
|LIABILITIES AND SHAREHOLDERS' EQUITY |                                                                                                 |                                                                                                                                                                                                                    |                                           
|                                     | Accounts payable                                                                                |                                                                                                                                                                                                                    | $                                         
|                                     | Amounts due to affiliates                                                                       |                                                                                                                                                                                                                    |                                           
|                                     | Accrued wages and employee-related expenses                                                     |                                                                                                                                                                                                                    |                                           
|                                     | Deferred revenue                                                                                |                                                                                                                                                                                                                    |                                           
|                                     | 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                                                       |                                                                                                                                                                                                                    |                                           
|                                     | Other long-term liabilities                                                                     |                                                                                                                                                                                                                    |                                           
|                                     |                                                                                                 |                                                                                                                                                                                                                    |                                           
|                                     |                                                                                                 |                                                                                                                                                                                                                    | Total liabilities                         
|                                     |                                                                                                 |                                                                                                                                                                                                                    |                                           
|                                     | Commitments (Note 13)                                                                           |                                                                                                                                                                                                                    |                                           
|                                     | Shareholders' equity:                                                                           |                                                                                                                                                                                                                    |                                           
|                                     |                                                                                                 | Preferred shares, par value EUR 0.44; Authorized: 10,000,000 shares; Issued and outstanding: none                                                                                                                  |                                           
|                                     |                                                                                                 | Common shares and additional paid-in capital, par value EUR 0.44;
Authorized: 40,000,000 shares
Issued: 14,195,787 and 14,431,238 shares, respectively
Outstanding: 12,789,780 and 13,025,231 shares, respectively |                                           
|                                     |                                                                                                 | Retained earnings                                                                                                                                                                                                  |                                           
|                                     |                                                                                                 | Cumulative other comprehensive loss                                                                                                                                                                                |                                           
|                                     |                                                                                                 | Treasury shares; 1,406,007 shares                                                                                                                                                                                  |                                           
|                                     |                                                                                                 |                                                                                                                                                                                                                    |                                           
|                                     |                                                                                                 |                                                                                                                                                                                                                    | Total shareholders' equity                
|                                     |                                                                                                 |                                                                                                                                                                                                                    |                                           
|                                     |                                                                                                 |                                                                                                                                                                                                                    | Total liabilities and shareholders' equity
|                                     |                                                                                                 |                                                                                                                                                                                                                    |                                           

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

43

---

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

|                                                             |                                                                                                    | Year 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 doubtful accounts                                 |                                            
|                                                             |                                                                                                    | Gain on modification of Entegris distribution agreement         |                                            
|                                                             |                                                                                                    | Deferred income taxes                                           |                                            
|                                                             |                                                                                                    | Loss from impairment of investments                             |                                            
|                                                             |                                                                                                    | Other                                                           |                                            
|                                                             |                                                                                                    | Changes in assets and liabilities, net of acquisitions:         |                                            
|                                                             |                                                                                                    |                                                                 | 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                           
|                                                             |                                                                                                    |                                                                 | Deferred income                            
|                                                             |                                                                                                    |                                                                 | Other 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 of stock warrant                         |                                            
|                                                             |                                                                                                    | Additions to long-term investments                              |                                            
|                                                             |                                                                                                    | Net cash received in conjunction with the acquisition of Intec  |                                            
|                                                             |                                                                                                    | Payment for the acquisition of Shieldcare, net of cash acquired |                                            
|                                                             |                                                                                                    | Other assets                                                    |                                            
|                                                             |                                                                                                    | Other long-term liabilities                                     |                                            
|                                                             |                                                                                                    |                                                                 |                                            
|                                                             |                                                                                                    |                                                                 |                                            
|                                                             |                                                                                                    |                                                                 |                                            
|Cash flows from financing activities:                        |                                                                                                    |                                                                 |                                            
|                                                             |                                                                                                    | Net increase in short-term borrowings                           |                                            
|                                                             |                                                                                                    | Proceeds from issuance of long-term debt                        |                                            
|                                                             |                                                                                                    | Principal payments on long-term debt                            |                                            
|                                                             |                                                                                                    | Principal payments on indebtedness to officer and shareholder   |                                            
|                                                             |                                                                                                    | Proceeds from issuance of common shares                         |                                            
|                                                             |                                                                                                    |                                                                 |                                            
|                                                             |                                                                                                    |                                                                 |                                            
|                                                             |                                                                                                    |                                                                 |                                            
|Effect of exchange rate changes on cash and cash equivalents |                                                                                                    |                                                                 | (845                                       
|                                                             |                                                                                                    |                                                                 |                                            
|Net change in cash and cash equivalents                      |                                                                                                    |                                                                 | 12,310                                     
|Beginning cash and cash equivalents                          |                                                                                                    |                                                                 | 10,601                                     
|                                                             |                                                                                                    |                                                                 |                                            
|Ending cash and cash equivalents                             |                                                                                                    | $                                                               | 22,911                                     
|                                                             |                                                                                                    |                                                                 |                                            

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

44

---

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, 1999                                                                |                         | 10,104                                       |       | $ | 3,030  |        | $ | 30,186 |   | $ | (3,130 | ) | $
|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 | ) |  
|                                                                                        |                         |                                              |       |   |        |        |   |        |   |   |        |   |  
|Net income                                                                              |                         |                                              |       |   |        |        |   | 11,510 |   |   |        |   |  
|Foreign translation adjustment                                                          |                         |                                              |       |   |        |        |   |        |   |   | (2,618 | ) |  
|Receipt of treasury shares on modification of distribution agreement                    |                         | (1,125                                       | )     |   | (6,154 | )      |   |        |   |   |        |   |  
|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 | ) |  
|                                                                                        |                         |                                              |       |   |        |        |   |        |   |   |        |   |  
|Net loss                                                                                |                         |                                              |       |   |        |        |   | (2,768 | ) |   |        |   |  
|Foreign translation adjustment                                                          |                         |                                              |       |   |        |        |   |        |   |   | 1,663  |   |  
|Unrealized gain from foreign currency froward contracts                                 |                         |                                              |       |   |        |        |   |        |   |   | 296    |   |  
|Stock option exercises and employee stock purchase plan                                 |                         | 235                                          |       |   | 1,035  |        |   |        |   |   |        |   |  
|                                                                                        |                         |                                              |       |   |        |        |   |        |   |   |        |   |  
|Balances at May 31, 2002                                                                |                         | 13,025                                       |       | $ | 39,749 |        | $ | 46,680 |   | $ | (5,468 | ) | $
|                                                                                        |                         |                                              |       |   |        |        |   |        |   |   |        |   |  

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

45

---

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, sales, service and provision of support solutions to semiconductor materials and equipment suppliers and semiconductor manufacturers in Europe, Asia (except Japan) and the United
States. The majority of Metron's revenue is derived from sales of materials and equipment.

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 presentation. 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 of its subsidiaries. All significant intercompany balances and transactions have
been eliminated. Assets and liabilities of
the Company's foreign subsidiaries are translated to the US Dollar at the current year end exchange rates, while income and expenses are translated at the average exchange rates for the period.



The Company's revenue consists 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 SAB101, 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. In certain circumstances, depending on the precise terms of the transaction, a portion of
the residual amount attributable to the equipment itself is deferred. Installation revenue and deferred equipment revenue, if any, 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. Revenue from service agreements is recognized ratably over the agreement period, while revenue from service without a
service agreement is recognized in the periods in which the services are rendered to customers.

As
the result of the adoption of SAB 101, 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 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.



Cumulative 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

46

---

fiscal years ended May 31, 2000, and 2001, the Company had one item of cumulative other comprehensive loss related to its foreign currency translation adjustment. For the fiscal year ended
May 31, 2002, the Company had two items: a foreign currency translation adjustment; and an unrealized gain from foreign currency forward contracts.



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   |  | 11,675            
|Shares used for stock options having a dilutive effect               |  | 1,221             
|                                                                     |  |                   
|Shares used for diluted earnings (loss) per common share calculation |  | 12,896            
|                                                                     |  |                   

The
share equivalents excluded from diluted earnings per share for fiscal years 2000, 2001 and 2002, because their effect was anti-dilutive, amounted to 574,800, 1,158,632
and 945,574, respectively. These amounts represent options to purchase the Company's common shares and have a weighted-average exercise price of $17.03, $8.20 and $13.45, 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.



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



On June 1, 2001, the Company adopted Statement of Financial Accounting Standard No. 133,Accounting for Derivative
Instruments and Hedging Activities("SFAS 133"). SFAS 133 requires that all derivatives be recorded on the balance sheet at fair value. Changes in the fair value
of derivatives that do not qualify, or are not effective as hedges, must be recognized currently in earnings. Upon adoption, the Company recorded an immaterial cumulative transition adjustment to
earnings reflecting the difference between the fair value amortization of forward contract time value, rather than the straight line amortization under SFAS 52. The immaterial cumulative
transition adjustment to Cumulative Other Comprehensive Income (Loss) of $41,000 for the year ended May 31, 2002, reflects the fair value of forward contracts hedging inventory purchases that
were previously held off the balance sheet.



The Company generally acquires and sells products internationally in U.S. dollars. Occasional purchases are made in foreign currency, and Metron operates
subsidiaries internationally generating

47

---

additional foreign currency exchange risk. Metron continues its policy of limited hedging forecasted and actual foreign currency risk with forward contracts that expire within 12 months.
Derivatives are employed to eliminate, reduce or transfer selected foreign currency risks that can be confidently identified and quantified. The fair value of derivatives hedging
non-functional currency monetary assets and liabilities are recorded on the balance sheet at fair value and recognized currently in earnings. In accordance with SFAS 133, hedges of
anticipated transactions that are designated and documented at
inception as Cash Flow Hedges are evaluated for effectiveness, excluding time value, at least quarterly. As the critical terms of the forward contract and the underlying (transaction) are matched at
inception, forward contract effectiveness is calculated by comparing the change in value of the anticipated transaction to the spot to spot change in value of the related forward contracts, with the
effective portion of the hedge accumulated in Other Comprehensive Income (OCI). Any residual change in fair value of the instruments, including time value excluded from effectiveness testing, are
recognized immediately in Other Income and Expense. An immaterial amount of time value and no ineffectiveness were recognized in the year ended May 31, 2002.



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, does not require 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.



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 yearsComputers and software

37 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

48

---

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 fair value and the carrying value of an asset. No impairment of property, plant, and
equipment has been recognized in fiscal 2000, 2001 or 2002.



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
$617,000, $1,201,000 and $1,314,000 for the fiscal years ended May 31, 2000, 2001 and 2002, respectively.

The
Company will adopt the provisions of SFAS 142,Goodwill and Other Intangible Assetson June 1, 2002. In the future,
goodwill and intangible assets determined to have an indefinite useful life that are acquired in a purchase business combination will not be amortized, but will be evaluated for impairment at least
annually. Upon adoption of SFAS 142, the Company is required to evaluate its existing intangible assets and goodwill that were acquired in a prior purchase business combinations and make any
necessary reclassifications in order to conform with the new criteria in SFAS 141,Business Combinations,for recognition apart from goodwill.

As
of June 1, 2002, the Company has approximately $8,292,000 of unamortized goodwill, which will be subject to the transition provisions of SFAS 141 and SFAS 142.
Under the transition provisions of SFAS 142, the Company is 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, the quarter ending August 31, 2002. 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 interim
period of the 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.

The
Company expects to complete its initial review during the first six months of fiscal 2003. Until the review is completed, the Company will not know for certain whether or not the
Company will need to record an impairment charge or whether such charge, if any, will be material.

49

---



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 final 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
SFAS 123,Accounting for Stock Based Compensation.

2.    ACQUISITIONS

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 uses 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 was being
amortized on a straight-line basis over 10 years. Amortization of goodwill will cease on June 1, 2002 upon adoption of SFAS 142.

The
following unaudited pro forma financial information presents the combined results of the operations of the acquisition of Intec and the Company as if the acquisition 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.

Year 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


In
March 2002, the Company bought inventory and certain other assets of to the AG Associates RTP product line from Mattson Technologies. The value of the inventory was
approximately $3,170,000.

50

---

In
May 2002, the Company acquired certain assets and assumed certain liabilities of Advanced Stainless Technologies ("AST"). AST is a manufacturer of electro-polished stainless
steel tubing and fittings. The transaction has been accounted for as a purchase, and AST's results of operations are included in the Company's consolidated financial statements from May 1,
2002. As consideration for the assets acquired, Metron assumed certain debt of AST amounting to $1,500,000 and contributed its 20% equity interest, which the Company held prior to the acquisition.
Metron agreed to pay additional consideration of up to $1,200,000 in the form of the Company's common shares, if certain performance milestones are achieved over the next two fiscal years. The fair
value of the net assets acquired was approximately $2,500,000. The excess of the fair value of the net assets over the consideration was approximately $404,000, has been recorded as a current
liability until the amount of contingent consideration to be paid is determined.

3.    PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

May 31,2001

2002(Dollars in thousands)Land

$
838

$
838Buildings and leasehold improvements


7,100


11,934Machinery, equipment, vehicles and fixtures


14,631


16,882Computers and software


4,366


10,969Construction in progress


2,878


2,21429,813


42,837Less accumulated depreciation and amortization


13,756


17,353Net property, plant and equipment

$
16,057

$
25,484


Depreciation
expense relating to property, plant and equipment for the years ended May 31, 2000, 2001 and 2002 was $2,129,000, $3,477,000 and $3,745,000, respectively.

4.    LONG-TERM INVESTMENTS

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

May 31,2001

2002(Dollars in thousands)MAP

$
25

$
14AST


929


Abeto GmbH


699


Long-term investments

$
1,653

$
14


Metron
Technology (United Kingdom) Ltd., a wholly owned subsidiary of the Company, and WS Atkins Plc. own a 50/50 joint venture, Metron Atkins Partnership Limited ("MAP"). MAP was
founded to provide services to the semiconductor industry, including but not limited to design and engineering of manufacturing facilities, facilities management and comprehensive technical support,
but it is not currently active.

51

---

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 fiscal 2002, the Company assessed Abeto's ability to
continue as a going concern without additional financial support. As a result of its assessment, the Company recorded an impairment loss of $699,000.

During
August 2000, the Company acquired an approximately 20% interest in Advanced Stainless Technologies, Inc. ("AST"). During fiscal 2002, we recorded a loss of $538,000
against our investment in AST. Of this loss, we recognized the estimated "other than temporary" impairment in the value of our investment of $401,000. In April 2002, we acquired certain assets
and assumed certain liabilities of AST.
The transaction was accounted for as a purchase, and our equity interest was contributed as part of the acquisition. (See Note 2)

5.    BORROWINGS AND DEBT

Short-term borrowings consist of the following:

May 31,2001

2002(Dollars in thousands)Lines of credit

$
14,652

$
9,184Short-term credit facilities


4,489


10,212Current portion of long-term debt


366


836Short-term borrowings and current portion of long-term debt

$
19,507

$
20,232


One
of the Company's subsidiaries has a line of credit facility with a bank that provides for borrowings not to exceed $10,000,000. Specific assets of the subsidiary collateralize the
line of credit that expires on October 1, 2002. The interest rate for the line of credit is 2% above LIBOR and was 3.84% at May 31, 2002. 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.

As
of May 31, 2002, the Company had $19.9 million of cash and cash equivalents and $20.2 million of short-term borrowings under its various lines of
credit. In June 2002, the Company's Singapore subsidiary obtained an additional $2,500,000 revolving credit facility with an interest rate based on the bank prime rate plus 0.25%. Management
believes these funds, combined with available lines of credit and expected cash flows from operations, will be sufficient to meet the Company's cash needs for fiscal 2003 at current operating levels.
The Company intends to renew its various lines of credit as they
expire, and will be seeking additional financing during the next twelve months to meet its cash requirements for fiscal 2003 if the Company's quarterly revenues increase significantly and for
fiscal 2004. However, there can be no assurance that the Company will be able to renew existing financing or obtain new financing on terms favorable to the Company, or at all. Failure to renew
existing financing or raise additional funds through public or private debt or equity financing or other sources may result in the Company not achieving its longer-term business
objectives.

Weighted
average interest rates on the outstanding facilities for fiscal years 2001 and 2002 were 4.6% and 4.5%, respectively. Certain assets of subsidiaries of the Company collateralize
the facilities. At May 31, 2002, the total amount available and unutilized under the Company's short-term borrowings was approximately $3,301,000. The Company and its subsidiaries
have guaranteed certain short-term credit facilities.

52

---

At May 31, 2002, the Company was in violation of covenants to maintain a specified interest coverage ratio on a building mortgage and a $2,100,000 credit facility of which
$1,200,000 was outstanding at year end. In June 2002, the Company repaid the building mortgage. The Company was unable to obtain a waiver from the provider of a credit facility in the
Netherlands, and by agreement with the lender, the Company subsequently reduced the level of borrowings to meet a new lower limit on the facility of approximately $1,000,000. The credit facility has
an interest coverage covenant that the Company does not expect to meet at August 31, 2002.

Long-term
debt consists of the following:

May 31,2001

2002(Dollars in thousands)Note payable to an individual in conjunction with the acquisition of AST with an interest rate based on a bank prime rate determined quarterly (4.75% at May 31, 2002). Quarterly payments of interest only commence September
2002 through June 2004. Quarterly payments of principal and interest commence September 2004 until paid in June 2006

$


$
1,500Building mortgage with The Royal Bank of Scotland plc with an interest rate at LIBOR plus 1.5% per annum until maturity (7.7% at May 31, 2002). Principal and interest are payable quarterly through April 2006. The mortgage
was repaid in its entirety in June 2002.

$
624

$
524Note 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.


124


62Various notes maturing through August 2006; interest rates range from 2.6% to 8.6%


659


6031,407


2,689Less current portions:Note payable to shareholder


62


62Long-term debt


366


836Long-term debt

$
979

$
1,791


Future
fiscal year ("FY") annual maturities of long-term debt are as follows: FY2003, $898,000; FY2004, $145,000; FY2005, $671,000, FY2006, $788,000 and FY2007, $187,000.

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 received 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

53

---

the previous distribution agreement for the years ended May 31, 2000, 2001 and 2002 were $51,420,000, $75,245,000 and $4,273,000, respectively.

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.

7.    RESTRUCTURING AND MERGER COSTS

Restructuring costs of $1,083,000 incurred during fiscal 2002 comprise termination costs of $651,000 and abandonment of a lease amounting to $432,000. During
fiscal 2002, we incurred $651,000 in termination costs for a reduction in headcount totaling 56 employees, 27 of whom worked in the equipment division, 17 in the materials division and 12 in finance
and administration.

Restructuring
costs of $432,000 incurred during fiscal 2002 represent the costs of an abandoned leasehold in the United States. This cost represents the estimated difference between the
total discounted future sublease income and our lease commitments relating to this space. The charge is an estimate and may be adjusted if we obtain a sublease for the space and the actual sublease
income is significantly different from the estimate. If we are not successful in subleasing our unused office space, we may be required to take an additional charge for the balance of the future lease
cost. At May 31, 2002, no liability remained for the termination costs, and the liability pertaining to the abandoned leasehold was approximately $404,000.

8.    RELATED PARTIES

Two of Metron's shareholders, FSI International, Inc. ("FSI") and Entegris, own approximately 20.7%, and 12.0%, 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, 2000, 2001 and 2002 such purchases totaled approximately $103,700,000, $191,358,000 and $24,433,000, respectively. At May 31, 2001 and 2002, amounts payable
to these affiliates were $28,913,000 and $5,788,000, respectively. At May 31, 2001 and 2002, amounts receivable from these affiliates were $561,000 and $164,000, respectively.

In
July 1995, an officer/Managing Director of Metron entered into a Tax Indemnification Agreement ("TIA") 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, Metron was a "controlled foreign corporation" under Subpart F of the US Internal
Revenue Code ("Subpart F"), and as a "US person" the officer/director was liable for personal income tax on income imputed to him under Subpart F. Under the agreement, the Company has provided cash
advances for taxes due for Subpart F income that totaled $270,000 as of May 31, 2002. Under the TIA, the officer/Managing Director is required to repay these advances only to the extent that he
benefits from the increase in the tax basis of his holding of Metron stock. Accordingly, in fiscal 2001, the Company recorded an allowance of $160,000 against these advances. Repayment of a portion of
the advances is required beginning with the first sale of shares owned by the officer/director.

In
conjunction with the acquisition of T.A. Kyser Co., the Company assumed a note from a shareholder for purchase of retired treasury shares. The note had a remaining balance of $62,000
at May 31, 2002, an annual interest rate of 6.65% and was paid in July 2002.

54

---

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 31,2000

2001

2002(Dollars in thousands)The Netherlands

$
1,791

$
531

$
154Other countries:Hong Kong


716


231


2,619Singapore


2,045


4,580


1,401Israel


16


932


1,274Germany


845


7,449


537Italy


1,870


2,811


(63
)France


2,090


2,258


(1,234
)United Kingdom


1,304


760


(2,808
)United States


1,809


2,634


(5,082
)All other countries


10


492


(862
)Income (loss) before income taxes

$
12,496

$
22,678

$
(4,064
)


55

---

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

Years ended May 31,2000

2001

2002(Dollars in thousands)Current:The Netherlands

$
617

$
278

$
365Other countries:Israel


501


296


1,074Singapore


730


1,370


Taiwan


293


441


61Germany


(30
)

3,010


34Italy


762


1,372


(11
)United Kingdom


538


852


(13
)France


812


1,029


(600
)United States


751


1,650


(1,587
)All other countries


59


139


134Current tax


5,033


10,437


(543
)Deferred:The Netherlands





(78
)

62Other countries:Singapore


(276
)

(189
)

398Germany


796


585


243France


(459
)

(140
)

219Taiwan


(16
)

(253
)

(230
)United States


89


(535
)

(300
)United Kingdom





(274
)

(534
)Israel


(495
)

51


(612
)All other countries


72


99


1Deferred tax


(289
)

(734
)

(753
)Total income taxes

$
4,744

$
9,703

$
(1,296
)


56

---

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

May 31,2001

2002(Dollars in thousands)Deferred tax assets (included in Other current assets and Other assets):Deferred revenue for installation and warranty

$
602

$
421Deferred income


1,185


320Account receivable and inventory provisions


1,330


1,281Accruals deductible when paid


2,180


2,108Net operating loss carryforwards and other items


1,407


3,1916,704


7,321Less valuation allowance


1,893


1,7954,811


5,526Deferred tax liabilities primarily depreciation of property, plant, and equipment


208


261Net deferred tax assets recorded in consolidated balance sheets

$
4,603

$
5,265


At
May 31, 2002, the Company had $6,923,000 in net operating loss carryforwards, primarily in Korea, which represented approximately $3,191,000 of tax benefit. Some of these
benefits will begin to expire in 2007, others, depending on jurisdiction, will carryforward indefinitely.

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, 2000, 2001, and
2002 was an increase (decrease) of ($833,000), $220,000 and $(98,000) 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 31,2000

2001

2002Statutory income tax rate

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

(3.2
)
2.8

(6.8
)Current year net operating losses for which no benefit is recognized

4.5

1.8

(0.6
)Utilization of prior year net operating losses for which no benefit was previously recognized

(6.0
)
(0.3
)
7.7Prior year taxes assessed in current year

2.6

(0.3
)
(2.7
)Amortization of goodwill

1.9

1.4

5.6All other

3.2

2.4

(0.1
)Effective income tax rate

38.0
%
42.8
%
(31.9
)%


57

---

10.  CAPITAL STOCK



In July 1998 and May 1999, 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 then 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. (See Note 6)



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 2001 and 2002, 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 for each year; the two plans are now authorized to grant options to purchase up to 4,975,000 common shares (4,750,000
shares for Managing Directors and employees and 225,000 for Supervisory Directors). The plans require that the exercise price of options be not less than 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 and expire after 10 years if not exercised.

There
were approximately 907,625 and 82,500 shares available for future employee awards and Supervisory Director awards, respectively, at May 31, 2002. The following table
summarizes award activity for the fiscal years listed:

|                                   |  | 2000      |   | 2001 |       | 2002
|---------------------------------- |  | --------- | - | ---- | ----- | ----
|
|Outstanding, beginning of year     |  | 1,944,348 |   | $    | 5.41  |     
|Stock options granted              |  | 693,000   |   | $    | 15.73 |     
|Stock options exercised            |  | (222,127  | ) | $    | 4.99  |     
|Awards canceled                    |  | (131,852  | ) | $    | 8.15  |     
|                                   |  |           |   |      |       |     
|Outstanding, end of year           |  | 2,283,369 |   | $    | 8.43  |     
|                                   |  |           |   |      |       |     
|Options exercisable at end of year |  | 1,206,699 |   | $    | 4.44  |     
|                                   |  |           |   |      |       |     

Summary
information concerning outstanding and exercisable options as of May 31, 2002 was 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

499,948

3.1 yrs

$
2.78

499,948

$
2.78$6.06  $8.88

2,128,241

7.7 yrs

$
7.22

669,659

$
7.43$10.37  $12.00

290,187

8.0 yrs

$
10.81

92,784

$
10.93$15.94  $19.00

426,250

6.7 yrs

$
16.01

230,096

$
16.01$19.01  $29.63

40,000

7.8 yrs

$
29.63

20,000

$
29.633,384,626






1,512,487


58

---

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, stock options |  | $                  
|Weighted average fair value, ESPP          |  | $                  

The
Company has an employee stock purchase plan ("ESPP") for the benefit of U.S. and international employees. The U.S. plan is qualified under Section 423 of the Internal Revenue
Code. Under the ESPP, substantially all employees may purchase the Company's common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value at the
beginning or end of each six-month offering period. Stock purchases under the ESPP are limited to 5 percent of an employee's eligible compensation, in any plan year. Shares issued
under the ESPP were approximately 79,000 and 76,000 for fiscal 2001 and 2002, respectively. At May 31, 2002, there were approximately 145,000 shares reserved for future issuance under
the ESPP.

The
following pro-forma information has been prepared as if the Company had accounted for its stock options and ESPP using the fair value accounting method established by
SFAS 123. Additional compensation expense arising from the application of SFAS 123 has been estimated using the Black-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 31,2000

2001

2002(Dollars in thousands, except per share data)Net income (loss):As reported

$
7,752

$
11,510

$
(2,768
)Pro forma(a) (b)

$
5,755

$
8,446

$
(5,570
)Earnings (loss) per common shareBasicAs reported

$
0.66

$
0.87

$
(0.22
)Pro forma

$
0.49

$
0.64

$
(0.43
)DilutedAs reported

$
0.60

$
0.83

$
(0.22
)Pro forma

$
0.45

$
0.61

$
(0.43
)


---

59

---



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 $862,000 in fiscal 2000, $1,070,000 in fiscal 2001 and $1,096,000 in fiscal 2002.

Kyser
previously had 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 in October and November 2001, Kyser distributed the shares held by the ESOP to their beneficial owners.

12.  FINANCIAL INSTRUMENTS

The carrying value of the Company's financial instruments approximate fair value. At May 31, 2002, the Company had aggregate forward exchange contracts in
various currencies as follows:

|Currency         |  | Amount Bought US $000 |  | Amount Sold US $000 |  | Weighted Average
Contract Rate |  | Fair Value US $000 |     | Expiration Date
|---------------- |  | --------------------- |  | ------------------- |  | ------------------------------ |  | ------------------ | --- | ---------------
|Euro             |  | 5,619                 |  | 1,667               |  | 0.91                           |  | $                  | 109 |                
|Israeli Shekel   |  |                      |  | 4,572               |  | 4.27                           |  |                    | 711 |                
|Japanese Yen     |  | 7,769                 |  |                    |  | 123.67                         |  |                    | 65  |                
|Singapore Dollar |  | 1,261                 |  |                    |  | 1.78                           |  |                    | (3  | )              
|                 |  |                       |  |                     |  |                                |  |                    |     |                
|                 |  |                       |  |                     |  |                                |  | $                  | 882 |                
|                 |  |                       |  |                     |  |                                |  |                    |     |                

13.  COMMITMENTS

At May 31, 2002, Metron was committed to spend approximately $39,177,000, 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 consisted of the following at May 31, 2002.

Fiscal Year

(Dollars in
thousands)2003

$
5,1542004


3,7592005


2,5522006


1,9392007


1,265Thereafter


2,682Total minimum lease payments

$
17,351


The
Company's rental expense for operating leases for the fiscal years ended May 31, 2000, 2001 and 2002, was $3,107,000, $4,276,000 and, $5,025,000, respectively.

60

---



14.  ADDITIONAL SALES INFORMATION AND CONCENTRATION OF RISK

In fiscal 2001 and 2002, 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. Credit risk associated with nonpayment from these customers is affected by conditions or
occurrences within their industry. 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. Metron provides marketing, sales, service and support solutions to semiconductor materials and
equipment suppliers and semiconductor manufacturers. Reportable segments are based on the way the Company is organized, reporting responsibilities to the chief executive officer and on the nature of
the products offered to customers. Reportable segments are the equipment division, which includes certain specialized process chemicals, spare part sales, equipment and parts cleaning service; the
materials division, which includes components used in construction and maintenance; and other, which includes finance, administration and corporate functions.

Segment
operating results are measured based on net 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, short and long term investments
and assets related to the administrative headquarters of the Company.

61

---

Segment information

|                        |                                       | Equipment
Division |   | Materials
Division |  | Other |         | Total |  
|----------------------- | ------------------------------------- | ------------------ | - | ------------------ |  | ----- | ------- | ----- | -
|
|Year ended May 31, 2000 |                                       |                    |   |                    |  |       |         |       |  
|                        | Net revenue                           |                    | $ | 169,388            |  | $     | 168,163 |       | $
|                        | Depreciation and amortization 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 and amortization 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   |       | $
|Year ended May 31, 2002 |                                       |                    |   |                    |  |       |         |       |  
|                        | Net revenues                          |                    | $ | 107,611            |  | $     | 124,629 |       | $
|                        | Depreciation and amortization expense |                    | $ | 2,909              |  | $     | 1,031   |       | $
|                        | Interest income                       |                    | $ |                   |  | $     |        |       | $
|                        | Interest expense                      |                    | $ |                   |  | $     |        |       | $
|                        | Income (loss) before income taxes     |                    | $ | 4,193              |  | $     | 4,001   |       | $
|                        | Total assets                          |                    | $ | 67,492             |  | $     | 71,017  |       | $
|                        | Capital expenditures                  |                    | $ | 3,215              |  | $     | 2,504   |       | $

62

---

Geographic information

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

|                  |  | May 31,
|----------------- |  | -------
|
|
|Fixed assets:     |  |        
|The Netherlands   |  | $      
|United Kingdom    |  |        
|Singapore         |  |        
|United States     |  |        
|Other nations     |  |        
|                  |  |        
|Geographic totals |  | $      
|                  |  |        

16.  SUPPLEMENTAL FINANCIAL INFORMATION

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

|                 |  | Year ended May 31,
|---------------- |  | ------------------
|
|
|Net revenue:     |  |                   
|Product revenue  |  | $                 
|Service revenues |  |                   
|                 |  |                   
|Net revenue      |  | $                 
|                 |  |                   

63

---

|                        |                              | Year ended May 31, |    
|----------------------- | ---------------------------- | ------------------ | ---
|
|
|Other income (expense): |                              |                    |    
|                        | Foreign exchange gain (loss) |                    | $  
|                        | Interest income              |                    |    
|                        | Interest expense             |                    |    
|                        | Miscellaneous income         |                    |    
|                        |                              |                    |    
|Other income (expense)  |                              | $                  | 265
|                        |                              |                    |    

|                                    |                       | 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
|                                    |                       | Contribution of residual equity interest for the acquisition of AST assets     

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, 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 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 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   |  
|Year ended May 31, 2002 |                                                     |                                                            |   |         |       |       |         |        |  
|                        | Net revenue                                         |                                                            | $ | 74,373  |       | $     | 55,165  |        | $
|                        | Operating income (loss)                             |                                                            | $ | 1,165   |       | $     | (1,504  | )      | $
|                        | Net income (loss)                                   |                                                            | $ | 702     |       | $     | (1,550  | )      | $
|                        | Basic earnings (loss) per share                     |                                                            | $ | 0.05    |       | $     | (0.12   | )      | $
|                        | Diluted earnings (loss) per share                   |                                                            | $ | 0.05    |       | $     | (0.12   | )      | $

64

---

18.  RECENT ACCOUNTING PRONOUNCEMENTS

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. SFAS 141 also specifies the criteria that intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from
goodwill. SFAS 141 notes, however, that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS 142 requires 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.

The
Company was 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.

In
October 2001, the FASB issued SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets.
SFAS No. 144 supersedes SFAS No. 121,Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of. SFAS No. 144 applies to all long-lived assets (including discontinued operations) and consequently amends APB No. 30, Reporting the Results of
OperationsReporting the Effects of Disposal of a Division of a Business. SFAS No. 144 develops one accounting model for long-lived assets that are to be disposed of by
sale and requires the measurement to be at the lower of book value or fair value, less the cost to sell the assets. Additionally, SFAS No. 144 expands the scope of discontinued operations to
include all components of an entity with operations that (1) can be distinguished from the rest of the entity and (2) will be eliminated from the ongoing operations of the entity in a
disposal transaction. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001. The provisions of SFAS No. 144 are not expected to have a significant impact on
the Company's financial position or operating results.

In
June 2002, the FASB issued SFAS 146,Accounting for Exit or Disposal Activities. SFAS 146 addresses significant
issues regarding the recognition, measurement and reporting of costs that are associated with exit and disposal activities, including restructuring activities that are currently accounted for under
EITF No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)."
SFAS 146 also includes costs related to terminating a contract that is not a capital lease and termination benefits that employees who are involuntarily terminated receive under the terms of a
one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation contract. SFAS 146 will be effective for exit or disposal activities
that are initiated after December 31, 2002 and early application is encouraged. SFAS 146 will be adopted during the third quarter ending February 28, 2003. The provisions of EITF
No. 94-3 will continue to apply for an exit activity initiated under an exit plan that met the criteria of EITF No. 94-3 prior to the adoption of SFAS 146.
The effect on adoption of SFAS 146 will change on a prospective basis the timing of when restructuring charges are recorded from a commitment date approach to when the liability is incurred.

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

Our Current Report on Form 8-K filed with the Commission on September 14, 2001 is incorporated herein by reference.

65

---



PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Supervisory and Managing Directors

The following tables set forth, as of May 31, 2002, certain information with respect to the Supervisory Directors and Managing Directors of Metron:

Supervisory Board

|Name               |  | Age |  | Position            
|------------------ |  | --- |  | --------------------
|Robert R. Anderson |  | 64  |  | Supervisory Director
|James E. Dauwalter |  | 50  |  | Supervisory Director
|Joel A. Elftmann   |  | 62  |  | Supervisory Director
|Bruce M. Jaffe     |  | 58  |  | Supervisory Director
|Sho Nakanuma       |  | 70  |  | Supervisory 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 Netherlands 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 reaches the 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. From October 1998 through October 2000, Mr. Anderson was Chairman of the
Board and from October 1998 through April 2000 Chief Executive Officer of Yield Dynamics, Inc., (YDI) a semiconductor yield management software company. Mr. Anderson was
Chairman of the Board of Silicon Valley Research, a semiconductor design 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, until his retirement in 1999, served in various capacities
including Chief Operating Officer, Chief Financial Officer, Vice Chairman and Chairman. Mr. Anderson also serves as a director of MKS
Instruments, Inc., a manufacturer of systems components for the semiconductor industry, Trikon Technologies, Inc., a manufacturer of semiconductor process equipment, and Aehr Test
Systems, Inc., a manufacturer of semiconductor test and burn-in equipment. Mr. Anderson is a member of the Board of Trustees of Bentley College.

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 the Chief Executive Officer 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

66

---

Fluoroware K.K., Fluoroware-Valqua Japan K.K., Fluoroware Southeast Asia PTE Ltd., and the Community Bank of Chaska.

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. He currently serves as President of I-Tech Products LLC, a custom manufacturer of components and sub assemblies for the semiconductor industry. Mr. Elftmann
was previously the Chairman of the Board of FSI International, Inc., a principal and a large minority shareholder of Metron. Mr. Elftmann was a co-founder of FSI and served
as a director of FSI from 1973 until January 2002. During that period he served at various times as President, CEO and Chairman of the Board. Mr. Elftmann also serves as a director of
Veeco, Inc. Mr. Elftmann is a Director Emeritus and past Chairman 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 LLP). 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. From 1997 to 2001, Mr. Nakanuma served as Chairman of the Board of Directors of Ando Electric
Company in Japan. 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 International 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.

Managing Board

|Name              |  | Age |  | Position                                                                
|----------------- |  | --- |  | ------------------------------------------------------------------------
|Edward D. Segal   |  | 62  |  | Chief Executive Officer and Managing Director                           
|Dennis R. Riccio  |  | 51  |  | President, Chief Operating Officer and Managing Director (designate)    
|Gregory M. Claeys |  | 52  |  | Vice President, Materials Division and Managing Director                
|Peter V. Leigh    |  | 57  |  | Vice President, Finance, Chief Financial Officer and Managing Director  
|Keith E. Reidy    |  | 45  |  | Vice President, Global Fab Solutions and Equipment and Managing Director

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

67

---

Equipment & Materials International, a trade association for suppliers to the semiconductor industry. Mr. Segal was a recipient of SEMI's prestigious Bob Graham Award in 2002, given for
marketing contributions to the semiconductor materials and equipment industry. Mr. Segal holds a B.S. degree in Metallurgical Engineering from Rensselaer Polytechnic Institute.

Dennis
R. Riccio has served as President and Chief Operating Officer since January 2002. Mr. Riccio served as Senior Vice President, Global Customer Operations, for Asyst
Technologies, Inc from
August 1998 to December 2001. From January 1997 to August 1998, he served as President of USA Operations of Novellus Systems, Inc., a semiconductor equipment
manufacturer. From 1989 to January 1997, he held various senior management positions at Applied Materials, Inc. Mr. Riccio holds a B.S. degree in Public Administration from the
University of Arizona. Mr. Riccio will be nominated for election as a Managing Director at the October 2002 General Meeting of Shareholders.

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 an M.B.A. degree from the Harvard Business School.

Keith
E. Reidy has served as Vice President, Global Fab Solutions and Equipment since April 2002. He had 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 Development and Director, U.S. Representative Organization. Prior to joining
Metron in July 1995, Mr. Reidy served as 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, 2002, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with.

68

---

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). 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. In
the fiscal year ended May 31, 2002, the total compensation and expenses paid to non-employee Supervisory Directors was $38,781.71.

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 then in office 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 year 2002, the Company granted options covering 18,750 shares to the Supervisory Directors of the Company, at an exercise price per share of $6.84. The fair market
value of such Common Shares on the date of grant was $6.84 per share (based on the closing sales price reported on the Nasdaq National Market for the date of grant). As of June 30, 2002, no
options had been exercised under the Directors' Plan.

69

---

Compensation of Managing Directors

The following table shows for the fiscal years ended May 31, 2000, 2001 and 2002 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
Chief Executive Officer and Managing Director                         |  | 2002
2001
2000      | 
|Dennis R. Riccio
President, Chief Operating Officer and Managing Director (designate) |  | 2002                | 
|Gregory M. Claeys
Vice President, Materials Division and Managing Director            |  | 2002
2001
2000      | 
|Peter V. Leigh
Vice President, Finance, Chief Financial Officer and Managing Director |  | 2002
2001
2000      | 
|Keith E. Reidy
Vice President, Marketing and Managing Director                        |  | 2002
2001
2000      | 

---

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, 2002, options to purchase a
total of 3,832,119 shares were

70

---

outstanding under the Option Plan and options to purchase 300,632 shares remained available for grant thereunder.

The
following tables show, for the fiscal year ended May 31, 2002, certain information regarding options granted to, exercised by, and held at year-end by, the Named
Executive Officers:

OPTION/SAR GRANTS IN FISCAL 2002

|                     |  | Individual Grants |  |         |    |    |           |  |                         | 
|-------------------- |  | ----------------- |  | ------- | -- | -- | --------- |  | ----------------------- | 
|
|
|
|
|
|
|Edward D. Segal(4)   |  | 20,000
100,000    |  | 1.4
7.0 | %% | $$ | 7.45
7.00 |  | June 2011
December 2011 | 
|Dennis R. Riccio(5)  |  | 300,000           |  | 21.1    | %  | $  | 7.10      |  | January 2012            | 
|Gregory M. Claeys(6) |  | 6,250
45,000      |  | 0.4
3.2 | %% | $$ | 7.45
7.00 |  | June 2011
December 2011 | 
|Peter V. Leigh(7)    |  | 14,063
45,000     |  | 1.0
3.2 | %% | $$ | 7.45
7.00 |  | June 2011
December 2011 | 
|Keith E. Reidy(8)    |  | 14,063
45,000     |  | 1.0
3.2 | %% | $$ | 7.45
7.00 |  | June 2011
December 2011 | 

---

71

---



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   |  | 20,500 |  | $ | 135,490 |                                                                                 | 443,572 |  | 183,876 | 
|Dennis R. Riccio  |  |       |  |   |        |                                                                                 | 18,750  |  | 281,250 | 
|Gregory M. Claeys |  |       |  |   |        |                                                                                 | 99,607  |  | 61,643  | 
|Peter V. Leigh    |  |       |  |   |        |                                                                                 | 89,446  |  | 78,617  | 
|Keith E. Reidy    |  | 17,000 |  | $ | 127,670 |                                                                                 | 68,446  |  | 78,617  | 

---

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. As a consequence of the fact that the Company was reporting operating losses, all Named Executive Officers agreed to accept a 10% reduction in their current base salaries effective
October 1, 2001 for an indefinite period. The reductions remained in effect as of the end of fiscal year 2002.

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.

Dennis
R. Riccio is employed pursuant to an employment contract entered into in November 2001 with MTC and with the Company. The employment contract provides that
Mr. Riccio will serve as a Managing Director of the Company and as the Company's President and Chief Operating Officer at an annual salary of not less than $280,000. The agreement also provides
for Mr. Riccio'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. Riccio against any liability to which he may be subject for claims, damages, judgments, losses, liabilities, fees and expenses of defense, including attorney's fees, bonds and costs of
investigation, arising out of or in any way related

72

---

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. Riccio 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. Riccio's employment is terminated by MTC without cause or by Mr. Riccio for good reason or due to disability, in exchange for
Mr. Riccio'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.

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 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.

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 for other usual and customary benefits. The Company and MTC agree to indemnify Mr. Claeys 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 an employee, officer, director or
agent in which services are rendered to Kyser. However,

73

---

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 and Nakanuma.

None
of the current members of the Company's compensation committee is an officer or employee of the Company. Mr. Elftmann is President of I-Tech Products LLC and was
recently the Chairman of the Board of FSI International, Inc., one of the Company's principals and shareholders. Mr. Dauwalter is President 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.

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, 2002 by: (i) each
Supervisory Director and nominee for Supervisory Director; (ii) each Managing Director named in the Summary Compensation Table and the nominee for Managing Director; (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, 2002 |  | Total Shares
Beneficially Owned (1) |  | Percentage |  
|---------------------------------------------------------------------------- | -------------------- | --------------------------------- |  | ----------------------------------- |  | ---------- | -
|Entegris, Inc.(2)                                                            |                      | 1,565,687                         |  | 1,590,061                           |  | 12.2       | %
|                                                                             | 3500 Lyman Boulevard |                                   |  |                                     |  |            |  
|                                                                             | Chaska, MN 55318     |                                   |  |                                     |  |            |  
|FSI International, Inc.(3)                                                   |                      | 2,690,687                         |  | 2,715,061                           |  | 20.8       | %
|                                                                             | 322 Hazeltime Drive  |                                   |  |                                     |  |            |  
|                                                                             | Chaska, MN 55318     |                                   |  |                                     |  |            |  
|Joel A. Elftmann                                                             |                      | 0                                 |  | 0                                   |  |           |  
|James E. Dauwalter(4)                                                        |                      | 1,566,687                         |  | 1,591,061                           |  | 12.2       | %
|Robert R. Anderson(5)                                                        |                      | 42,237                            |  | 66,611                              |  | *          |  
|Sho Nakanuma(6)                                                              |                      | 0                                 |  | 8,438                               |  | *          |  
|Bruce M. Jaffe(7)                                                            |                      | 2,000                             |  | 5,750                               |  | *          |  
|Edward D. Segal(8)                                                           |                      | 596,298                           |  | 1,055,370                           |  | 8.1        | %
|Dennis R. Riccio(9)                                                          |                      | 10,000                            |  | 47,500                              |  | *          |  
|Keith E. Reidy(10)                                                           |                      | 72,856                            |  | 153,374                             |  | 1.2        | %
|Peter V. Leigh(11)                                                           |                      | 30,300                            |  | 131,818                             |  | 1.0        | %
|Gregory M. Claeys(12)                                                        |                      | 126,606                           |  | 239,496                             |  | 1.8        | %
|All Supervisory Directors and Managing Directors as a group (10 persons)(13) |                      | 2,446,984                         |  | 3,299,418                           |  | 25.3       | %

---

74

---



75

---

Equity Compensation Plan Information

The following table provides certain information with respect to all of the Company's equity compensation plans in effect as of May 31, 2002.

|Plan Category                                              |  | Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights
(a) |  | Weighted
Average Exercise
Price of
Outstanding
Options,
Warrants, and
Rights
(b) |      | Number of
Securities
Remaining
Available for
Future Issuance
(Excluding
Securities
Reflected in
Column (a)
(c) |          
|---------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------- | ---- | -------------------------------------------------------------------------------------------------------------- | ---------
|Equity compensation plans approved by security holders     |  | 3,384,626                                                                                       |  | $                                                                                | 8.24 |                                                                                                                | 1,134,862
|Equity compensation plans not approved by security holders |  |                                                                                                |  |                                                                                  |     |                                                                                                                |         
|Total                                                      |  | 3,384,626                                                                                       |  | $                                                                                | 8.24 |                                                                                                                | 1,134,862

---

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Transactions

Transactions with FSI

As of May 31, 2002, FSI International, Inc. ("FSI") held approximately 20.7% of the Company's outstanding shares. In fiscal and 2001 and 2002
products from FSI accounted for 25%, and 12% of the Company's revenue, respectively. In addition, Mr. Elftmann, a Supervisory Director of the Company, was Chairman of the Board of FSI until
January 2002.

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
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. The investor rights agreement terminates by its terms on November 19, 2002. As a Supervisory Director of the Company, Mr. Elftmann receives yearly option grants. 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.

76

---

Transactions with Entegris

As of May 31, 2002, Entegris, Inc. ("Entegris") held approximately 12.0% of the Company's outstanding shares, and in fiscal 2001 and 2002, products
from Entegris accounted for 25% and 13% 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 received 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. The investor rights agreement terminates by its terms on November 19, 2002. 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.

Indebtedness of Management

In July 1995, Edward D. Segal, President and Chief Executive Officer entered into a Tax Indemnification Agreement ("TIA") 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, Metron was a "controlled foreign corporation" under Subpart F of the
US Internal Revenue Code ("Subpart F"), and as a "US person" the officer/director was liable for personal income tax on income imputed to him under Subpart F. Under the agreement, the Company has
provided cash advances for taxes due for Subpart F income that totaled $270,000. Under the TIA, Mr. Segal is required to repay these advances only to the extent that he benefits from the
increase in the tax basis of his holding of Metron stock. Accordingly, in fiscal 2001, the Company recorded a reserve of $160,000 against these advances. Repayment of a portion of the advances is
required beginning with the first sale of shares owned by Mr. Segal.

77

---



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 39 of this Annual
Report on Form 10-K.

2.    Financial Statement Schedules

The financial statement schedule "Schedule IIValuation and Qualifying Accounts" is filed as part of this Annual Report on Form 10-K 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                                                          

78

---

|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                                                                                                                                                         

79

---

|10.38 | (i)   | Employment Agreement dated September 1, 1999 among Metron Technology B.V., Metron Technology Corporation and Keith Reidy                                                                                    
|----- | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.39 | (iii) | Tax Indemnification Agreement dated July 6, 1995 among Metron Technology B.V., Metron Technology Corporation and Edward D. Segal                                                                            
|10.40 | (iv)  | 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 | (v)   | 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 | (v)   | 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 | (v)   | 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 | (v)   | Worldwide Stocking Distributor Agreement, dated March 1, 2001, between Entegris, Inc. and Metron Technology N.V.                                                                                            
|10.45 |       | Employment Agreement dated November 1, 2001 among Metron Technology N.V., Metron Technology Corporation and Dennis Riccio                                                                                   
|16.1  | (vi)  | Letter, dated as of September 14, 2001, from KPMG LLP, the Registrant's former accountants, to the Securities and Exchange Commission.                                                                      
|21.1  | (i)   | List of Subsidiaries of the Registrant                                                                                                                                                                      
|23.1  |       | Consent of PricewaterhouseCoopers LLP, independent accountants                                                                                                                                              
|23.2  |       | Consent of KPMG LLP, independent auditors                                                                                                                                                                   
|24.1  |       | Power of Attorney (included on signature page)                                                                                                                                                              
|99.1  | (ii)  | Press Release, dated as of March 3, 2000, entitled "Metron Technology Acquires Critical Parts Cleaning Business"                                                                                            
|99.2  |       | Certification (not deemed filed)                                                                                                                                                                            

---

80

---



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 14, 2002.

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

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Edward D. Segal and Peter V. Leigh, and each or any
one of them, his true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all
capacities, to (i) act on, sign and file with the Securities and Exchange Commission this Annual Report on Form 10-K, (ii) act on, sign and file such certificates and
other documents as may be necessary or appropriate in connection therewith, and (iii) take any and all actions which may be necessary or appropriate to be done, as fully for all intents and
purposes as he or she might or could do in person, hereby approving, ratifying and confirming all that such agent,
proxy and attorney-in-fact or any of his or her substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant
to the requirements of the Securities Act of 1933, this Annual Report on Form 10-K has been signed by the following persons in the capacities and on the dates
indicated.

|Signature             |  | Title                |  | Date           
|--------------------- |  | -------------------- |  | ---------------
|                      |  |                      |  |                
|/s/ROBERT R. ANDERSON |  | Supervisory Director |  | August 14, 2002
|/s/JAMES E. DAUWALTER |  | Supervisory Director |  | August 14, 2002
|/s/JOEL A. ELFTMANN   |  | Supervisory Director |  | August 14, 2002
|/s/BRUCE M. JAFFE     |  | Supervisory Director |  | August 14, 2002
|                      |  |                      |  |                

81

---

|/s/SHO NAKANUMA    |  | Supervisory Director                                                                                                  |  | August 14, 2002
|------------------ |  | --------------------------------------------------------------------------------------------------------------------- |  | ---------------
|/s/EDWARD D. SEGAL |  | Chief Executive Officer and Managing Director(Principal Executive Officer)                                            |  | August 14, 2002
|/s/PETER V. LEIGH  |  | Vice President, Finance and Chief Financial Officer and Managing Director(Principal Financial and Accounting Officer) |  | August 14, 2002

82

---



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, 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     |  | $                       
|                              |                          |                                 |  |                               |       |                           |   |           |  |                         
|Deducted from asset accounts: |                          |                                 |  |                               |       |                           |   |           |  |                         
|                              | Year ended May 31, 2002: |                                 |  |                               |       |                           |   |           |  |                         
|                              |                          | Allowance for doubtful accounts |  | $                             | 2,861 |                           | $ | 789       |  | $                       
|                              |                          |                                 |  |                               |       |                           |   |           |  |                         
|                              |                          | Inventory valuation allowance   |  | $                             | 8,247 |                           | $ | 4,066     |  | $                       
|                              |                          |                                 |  |                               |       |                           |   |           |  |                         

83

---

QuickLinks