Document:

EXHIBIT 10.19

                        CONFIDENTIAL TREATMENT REQUESTED

                         EXECUTIVE EMPLOYMENT AGREEMENT

                                 GARY W. GRIFFIN

         THIS AGREEMENT is made and entered into as of the 1st day of December,
1999, by and between Shuffle Master, Inc., a Minnesota corporation (the
"Company"), and Gary W. Griffin (the "Employee").

                                    RECITALS

         A.       The Company is in the business of developing, manufacturing,
                  distributing and otherwise commercializing gaming equipment,
                  games, and operating systems for gaming equipment and related
                  products and services throughout the United States and in
                  Canada and other countries (the "Business").

         B.       Company and Employee want to create an at-will employment
                  relationship that protects the Company with appropriate
                  confidentiality and non-compete covenants and rewards the
                  Employee with a severance package for performing his
                  obligations for the full term of this contract or such shorter
                  term as may be created by his earlier termination by the
                  Company or its successors without just cause.

         C.       The Company and employee desire that Employee be employed by
                  the Company on the terms and conditions of this Agreement.

                                    AGREEMENT

         In consideration of the mutual promises contained herein, Employee and
the Company agree as follows:

         1. EMPLOYMENT. The Company hereby employs Employee as its Secretary,
Treasurer/Chief Financial Officer. Employee shall perform the duties of those
positions and shall perform such other related duties as the Company may direct
from time to time. Employee's employment with the Company is for a term of one
year, but may be terminated earlier in accordance with the provisions of this
Agreement.

<PAGE>

         2. SALARY AND BENEFITS. Employee shall be paid an annual base salary of
One Hundred Fifty-six Thousand and No/100 Dollars ($156,000.00), paid in the
same intervals as other employees of the Company. If the Employee is employed
with the Company through October 31, 2000, Employee will be eligible to receive
an executive bonus in accordance with the terms and conditions of the executive
bonus program authorized by the Board of Directors of the Company, as set forth
on Exhibit A attached hereto. Employee will receive a stock option grant to
purchase 25,000 shares of the Company's common stock in accordance with and
subject to the terms and conditions imposed by the Board of Directors at its
November 4th, 1999 meeting and the 1993 Employee Stock Option Plan. Employee's
salary is set on the expectation (except for vacation days and holidays) that on
average at least 40 hours per week of Employee's time will be devoted to
Employees duties hereunder. The Company agrees to provide Employee with the
benefits it provides its executive team. Employee will not, however, be eligible
to participate in the Company's non-executive bonus program.

         3. OUTSIDE CONSULTING. Employee shall devote Employee's full time and
best efforts to the Company. Employee may render consulting services to other
businesses from time to time only if Employee meets all of the following
requirements:

         (a)      the consulting services do not interfere in any manner with
                  the Employee's ability to fulfill all of his duties and
                  obligations to the Company;

         (b)      the consulting services are not rendered to any business which
                  may compete with the Company in any area of the Business;

         (c)      the consulting services do not relate to any products or
                  services which form part of the Business.

                                       2
<PAGE>

         4. NON-COMPETITION. In consideration of the provisions of this
agreement and the severance benefits for which Employee is eligible pursuant to
Section 6, Employee shall not, while employed by the Company or its successor,
and for one (1) year thereafter:

         (a)      directly or indirectly own, manage, operate, participate in,
                  consult with or work for any business which is engaged in the
                  Business anywhere in the United States or Canada.

         (b)      either alone or in conjunction with any other person,
                  partnership or business, directly or indirectly, solicit or
                  divert or attempt to solicit or divert any of the employees or
                  agents of the Company or its affiliates to work for or
                  represent any competitor of the Company or its affiliates or
                  to call upon any of the customers of the Company or its
                  affiliates.

         5. CONFIDENTIALITY; INVENTIONS.

         (a)      Employee shall fully and promptly disclose to the Company all
                  inventions, discoveries, software and writings that Employee
                  may make, conceive, discover, develop or reduce to practice
                  either solely or jointly with others during Employee's
                  employment with the Company, whether or not during usual
                  working hours. Employee agrees that all such inventions,
                  discoveries, software and writing shall be and remain the sole
                  and exclusive property of the Company, and Employee hereby
                  agrees to assign, and hereby assigns all of Employee's right,
                  title and interest in and to any such inventions, discoveries,
                  software and writings to the Company. Employee agrees to keep
                  complete records of such inventions, discoveries, software and
                  writings, which records shall be and remain the sole property
                  of the Company, and to execute and deliver, either during or
                  after Employee's employment with the Company, such documents
                  as the Company shall deem necessary or desirable to obtain
                  such letters patent, utility models, inventor's certificates,
                  copyrights, trademarks or other appropriate legal rights of
                  the United States and foreign countries as the Company may, in
                  its sole discretion, elect, and to vest title thereto in the
                  Company, its successors, assigns, or nominees.

         (b)      "Inventions," as used herein, shall include inventions,
                  discoveries, improvements, ideas and conceptions, developments
                  and designs, whether or not patentable, tested, reduced to
                  practice, subject to copyright or other rights or forms of
                  protection, or relating to data processing, communications,
                  computer software systems, programs and procedures.

         (c)      Employee understands that all copyrightable work that Employee
                  may create while employed by the Company is a "work made for
                  hire," and that the Company is the owner of the copyright
                  therein. Employee hereby assigns all right, title and interest
                  to the copyright therein to the Company.

                                       3
<PAGE>

         (d)      Employee has no inventions, improvements, discoveries,
                  software or writings useful to the Company or its subsidiaries
                  or affiliates in the normal course of business, which were
                  conceived, made or written prior to the date of this
                  Agreement.

         (e)      Employee will not publish or otherwise disclose, either during
                  or after Employee's employment with the Company, any
                  unpublished or proprietary or confidential information or
                  secret relating to the Company, the Business, the Company's
                  operations or the Company's products or services. Employee
                  will not publish or otherwise disclose proprietary or
                  confidential information of others to which Employee has had
                  access or obtained knowledge in the course of Employee's
                  employment with the Company. Upon termination of Employee's
                  employment with the Company, Employee will not, without the
                  prior written consent of the Company, retain or take with
                  Employee any drawing, writing or other record in any form or
                  nature which relates to any of the foregoing.

         (f)      Employee understands that Employee's employment with the
                  Company creates a relationship of trust and confidence between
                  Employee and the Company. Employee understands that Employee
                  may encounter information in the performance of Employee's
                  duties that is confidential to the Company or its customers.
                  Employee agrees to maintain in confidence all information
                  pertaining to the Business or the Company to which Employee
                  has access including, but not limited to, information relating
                  to the Company's products, inventions, trade secrets, know
                  how, systems, formulas, processes, compositions, customer
                  information and lists, research projects, data processing and
                  computer software techniques, programs and systems, costs,
                  sales volume or strategy, pricing, profitability, plans,
                  marketing strategy, expansion or acquisition or divestiture
                  plans or strategy and information of similar nature received
                  from others with whom the Company does business. Employee
                  agrees not to use, communicate or disclose or authorize any
                  other person to use, communicate or disclose such information
                  orally, in writing, or by publication, either during
                  employee's employment with the Company or thereafter except as
                  expressly authorized in writing by the Company unless and
                  until such information becomes generally known in the relevant
                  trade to which it relates without fault on employee's part, or
                  as required by law.

                                       4
<PAGE>

         6. SEVERANCE BENEFITS. In the event this Agreement is terminated under
Section 7, during the one (1) year period immediately following Employee's last
day of employment, Employee will receive the following benefits:

         (a)      Employee will be paid an annual salary in the amount of One
                  Hundred Fifty-Six Thousand Dollars plus twelve (12) times the
                  average "deemed monthly bonus" received over the thirty-six
                  (36) months preceding termination. The deemed monthly bonus
                  amounts to be included in the average shall equal one twelfth
                  (1/12) of the annual bonus received by the Employee (or which
                  would have been received if the Employee worked the full
                  fiscal year in which he was terminated pursuant to Section 7)
                  in each fiscal year in which each such month in the thirty-six
                  (36) month period falls. To the extent that the above
                  calculation includes bonus amounts for a fiscal year not ended
                  at time of Employee's termination, the average deemed monthly
                  bonus will be determined as of the end of the month following
                  the Employee's last day of employment and the deemed monthly
                  bonus for the then current fiscal year will be based on the
                  Company's actual year-to-date EBT as of the end of such month
                  compared to the budgeted year-to-date EBT as of the end of
                  such month. If actual EBT equals or exceeds budgeted EBT, the
                  Employee's deemed monthly bonus amount for that fiscal year
                  shall equal 1/12 of the Employee's bonus target (50% of
                  salary). Employee will be paid this salary over the one (1)
                  year period immediately following his last date of employment,
                  at the same time as other Employees of the Company. In
                  addition, during the period of severance payments the Employee
                  shall continue to receive all of the Company's employee
                  benefits, if eligible, and if not eligible for health
                  benefits, the Company shall pay the COBRA premiums for
                  continuation coverage during the period of severance payments.
                  This will be Employee's sole remedy for termination without
                  just cause prior to the end of the term set forth in Section
                  1.

         (b)      Any stock option previously granted to the Employee (not
                  already exercisable and vested) will become exercisable and
                  all stock options will become fully vested on the first day
                  immediately following Employee's last day of employment.
                  Employee will be entitled to exercise said options during the
                  eighteen (18) month period following Employee's last day of
                  employment, in accordance with the terms of the Company's
                  stock option plan as amended from time to time (including
                  limitations on exercise not inconsistent with this paragraph),
                  unless during such eighteen (18) month period there is a sale
                  or merger of the Company that constitutes a change in control
                  as defined in the Company's stock option plan. In the event of
                  such a change in control Employee will reasonably

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<PAGE>

                  cooperate with the Company, and exercise his stock options in
                  a way as to not hinder the progress or closing of the sale or
                  merger transaction, and in no event later than three (3)
                  months following the closing.

         7. EARLY TERMINATION BY COMPANY WITHOUT JUST CAUSE. Employee's
employment by the Company is "at will"; the Company may terminate this Agreement
at any time either with or without just cause. Further, in the event the Company
is sold or merged with another company during the term hereof, the successor
company may terminate Employee's employment on 30 days' notice or refrain from
offering employment to Employee on these terms and in a similar capacity, in
which case Employee shall be considered to have been terminated without just
cause. Notwithstanding any such termination by either the Company or its
successor, Employee will remain bound under the covenants not to compete and
confidentiality obligations of Sections 4 and 5 of this Agreement and the
Severance Benefits provided under Section 6 will remain in full force and
effect.

         8. EARLY TERMINATION BY COMPANY FOR JUST CAUSE. The Company may
terminate Employee for just cause. In the event the Company terminates the
Employee for just cause, the Employee will remain bound under the covenant not
to compete and confidentiality obligations contained in Sections 4 and 5 and
will not be entitled to any of the severance benefits provided under Section 6.
Termination for "just cause" shall include, but not be limited to:

         (a)      chronic inattention to duty;

         (b)      dishonesty as to a matter which is materially injurious to the
                  Company;

         (c)      the commission of a willful act or omission intended to
                  materially injure the business of the Company;

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<PAGE>

         (d)      a violation of any material provision of this Agreement,
                  including, in particular, the provisions of Sections 4 and 5
                  hereof; or

         (e)      a determination in good faith by the vote of a majority of the
                  Company's board of directors that the Employee has failed to
                  make a good faith effort to perform his duties as assigned by
                  the Company's CEO or Board of Directors;

provided, that if the Company desires to terminate Employee for the reasons
stated in subsection 8(f), it shall first give Employee written notice of such
intention, stating the specific reasons for the termination, and Employee shall
have 30 days from the date of receipt of such notice to cure the alleged
wrongdoing to the reasonable satisfaction of the Company; provided further, that
the provisions of subsection (f) shall be inapplicable following a sale of the
Company or a change in control.

         9. EARLY TERMINATION BY EMPLOYEE. In the event Employee voluntarily
terminates his employment with the Company (or its successor) prior to December
1, 2000, Employee will remain bound under the confidentiality and non-compete
obligation of Sections 4 and 5 and will not be entitled to receive any of the
severance benefits provided under Section 6. Voluntary termination means any
termination by the Employee without just cause. Just cause is defined as a
material breach of a substantial provision of this Agreement by the Employer.
Voluntary termination includes a termination caused by the death of Employee or
by the disability of Employee for more than six (6) months. In the event a
voluntary termination occurs due to the death or disability of Employee, in
addition to any other benefits to which Employee is entitled under this
Agreement, Employee will receive the full benefits under Section 6(b) of this
Agreement.

                                       7
<PAGE>

         10. NO CONFLICTING AGREEMENTS. Employee has the right to enter into
this Agreement, and hereby confirms Employee has no contractual or other
impediments to the performance of Employee's obligations including, without
limitation, any non-competition or similar agreement in favor of any other
person or entity.

         11. COMPANY POLICIES. During the term of Employee's employment,
Employee shall engage in no activity or employment which may conflict with the
interest of the Company, and Employee shall comply with all policies and
procedures of the Company including, without limitation, all policies and
procedures pertaining to ethics.

         12. INDEPENDENT COVENANTS. The covenants on the part of the Employee
contained in Sections 4 and 5 hereof shall be construed as agreements
independent of any other provision in this Agreement; it is agreed that the
relief for any claim or cause of action of the Employee against the Company,
whether predicated on this Agreement or otherwise, shall be measured in damages
and shall not constitute a defense to enforcement by the Company of those
covenants.

         13. INJUNCTIVE RELIEF; ATTORNEYS' FEES. In recognition of the
irreparable harm that a violation by Employee of any of the covenants contained
in Sections 4 and 5 hereof would cause the Company, the Employee agrees that, in
addition to any other relief afforded by law, an injunction (both temporary and
permanent) against such violation or violations may be issued against him or her
and every other person and entity concerned thereby, it being the understanding
of the parties that both damages and an injunction shall be proper modes of
relief and are not to be considered alternative remedies. Employee consents to
the issuance of such injunction relief without the posting of a bond or other
security. In the event of any such

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<PAGE>

violation, THE EMPLOYEE AGREES TO PAY THE COSTS, EXPENSES AND REASONABLE
ATTORNEYS' FEES INCURRED BY THE COMPANY IN PURSUING ANY OF ITS RIGHTS WITH
RESPECT TO SUCH VIOLATIONS, IN ADDITION TO THE ACTUAL DAMAGES SUSTAINED BY THE
COMPANY AS A RESULT THEREOF.

         14. NOTICE. Any notice sent by registered mail to the last known
address of the party to whom such notice is to be given shall satisfy the
requirements of notice in this Agreement.

         15. ENTIRE AGREEMENT. This Agreement is the entire agreement of the
parties hereto concerning the subject matter hereof and supersedes and replaces
any oral or written existing agreements between the Company and the Employee
relating generally to the same subject matter. Company and Employee hereby
acknowledge that there are no agreements or understandings of any nature, oral
or written, regarding Employee's employment, apart from this Agreement.

         16. SEVERABILITY. It is further agreed and understood by the parties
hereto that if any provision of this Agreement should be determined by a court
to be unenforceable in whole or in part, it shall be deemed modified to the
minimum extent necessary to make it reasonable and enforceable under the
circumstances.

         17. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Minnesota, without giving effect to the
principles of conflicts of laws thereof.

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<PAGE>

         18. HEIRS, SUCCESSORS AND ASSIGNS. The terms, conditions, and covenants
hereof shall extend to, be binding upon, and inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors and
assigns.

         19. LIMITATION ON PAYMENTS.

         (a)      Anything in this Agreement to the contrary notwithstanding, in
                  the event that qualified independent certified public
                  accountants retained by the Company for the purpose (the
                  "Auditors") determine that any payment or distribution by the
                  Company to or for the benefit of the Employee, whether paid or
                  payable (or distributed or distributable) pursuant to the
                  terms of this Agreement or otherwise (a "Payment"), would be
                  nondeductible by the Company for federal income tax purposes
                  because of section 280G of the Internal Revenue Code of 1954,
                  as amended (the "Code"), then the aggregate present value of
                  the amounts payable or distributable to or for the benefit of
                  the Employee pursuant to this Agreement (the "Agreement
                  Payments") shall be reduced (but not below zero) to the
                  Reduced Amount. The "Reduced Amount" shall be an amount
                  expressed in present value which maximizes the aggregate
                  present value of Agreement Payments without causing any
                  Payment to be nondeductible by the Company because of section
                  280G of the Code.

         (b)      If the Auditors determine that any Payment would be
                  nondeductible by the Company because of section 280G of the
                  Code, then the Company shall promptly give the Employee notice
                  to that effect and a copy of the detailed calculation thereof
                  and of the Reduced Amount, and the Employee may then elect, in
                  Employee's sole discretion, which and how much of the
                  Agreement Payments shall be eliminated or reduced (as long as
                  after such election the aggregate present value of the
                  Agreement Payments equals the Reduced Amount) and shall advise
                  the Company in writing of his election within 10 days of his
                  receipt of notice. If no such election is made by the Employee
                  within such 10-day period, then the Company may elect which
                  and how much of the Agreement Payments shall be eliminated or
                  reduced (as long as after such election the aggregate present
                  value of the Agreement Payments equals the Reduced Amount) and
                  shall notify the Employee promptly of such election. Present
                  values shall be determined in accordance with section 280G(d)
                  (4) of the Code. All determinations made by the Auditors under
                  this section shall be binding upon the Company and the
                  Employee and shall be made within 60 days of the Employee's
                  termination of employment with the Company.

         (c)      As a result of the uncertainty in the application of section
                  280G of the Code at the time of the initial determination by
                  the Auditors hereunder, it is possible that Agreement Payments
                  will have been made by the Company which should not

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<PAGE>

                  have been made (an "Overpayment") or that additional Agreement
                  Payments which will not have been made by the Company could
                  have been made (an "Underpayment"). In the event that the
                  Auditors, based upon the assertion of a deficiency by the
                  Internal Revenue Service against the Company or the Employee
                  which the Auditors believe has a high probability of success,
                  determine that an Overpayment has been made, such Overpayment
                  shall be treated for all purposes as a loan to the Employee
                  which Employee shall repay to the Company, together with
                  interest at the applicable federal rate provided for in
                  section 7872(f)(2) of the Code; provided, however, that no
                  amount shall be payable by the Employee to the Company if and
                  to the extent that such payment would not reduce the amount
                  which is subject to taxation under section 4999 of the Code.
                  In the event that the Auditors determine that an Underpayment
                  has occurred, such Underpayment shall promptly be paid by the
                  Company to or for the benefit of the Employee, together with
                  interest at the applicable federal rate provided for in
                  Section 7872(f)(2)(A) of the Code.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day, month and year first above written.

EMPLOYER:                                   EMPLOYEE:

SHUFFLE MASTER, INC.

By /s/ Joseph J. Lahti                      /s/ Gary W. Griffin
   -----------------------------------      -----------------------------------
    Its  President and CEO                  Gary W. Griffin
        ------------------------------

                                       11
<PAGE>

                                    EXHIBIT A

         Employee may earn a percentage of Employee's base salary as a bonus
during fiscal year 2000, which will vary depending on the percentage of targeted
income before taxes (REDACTED; CONFIDENTIAL TREATMENT REQUESTED) earned by the
Company:

COMPANY EARNINGS AS %
OF TARGETED INCOME
BEFORE TAXES                BONUS
------------                -----

a.       Less than 90%      0

b.       90%                $62,400.00 (40% of base salary)

c.       90% - 100%         $62,400.00 + $1,560 for each increase of one percent
                            (1%) over ninety percent (90%)

d.       100%               $78,000.00 (50% of base salary)

e.       100% - 120%        $78,000.00 + $780 for each increase of one percent
                            over 100%

f.       120%               $93,600.00 (60% of base salary)

g.       over 120%          60% of base salary plus an additional 1% of base
                            salary for each increase of one percent over 120%.

         For example, if the Company earns 100% of its targeted income before
taxes during fiscal 2000, Employee would be paid a performance bonus of
$78,000.00 ($156,000.00 x 50%). If the Company earns 90% of its targeted income
before taxes during fiscal 2000, Employee would be paid a performance bonus of
$62,400.00 ($156,000.00 x 40%). If the Company earns 120% of its targeted income
before taxes, then Employee's performance bonus would be $93,600.00 ($156,000.00
x 60%). If the Company earns more than 120% of its targeted income before taxes,
Employee's performance bonus would further increase by an amount equal to one
percent (1%) of his base salary for each percent by which the percentage
increase in income before taxes exceeds 120% of the target. In no event shall
the amount of the bonus exceed twice his annual base salary.

                                       1WARRANT TO PURCHASE SHARES OF COMMON STOCK OF
                              KEY TECHNOLOGY, INC.

                                CUSIP 493143 11 9
                                      -----------

            This certifies that                            , the registered
                                --------------------------
holder (the "Holder") is entitled to purchase from Key Technology, Inc., an
Oregon corporation (the "Company"),         fully paid and nonassessable shares
                                    -------
of the Company's Common Stock, subject to adjustment as provided herein, at any
time or from time to time up to and including 5:00 p.m. (Pacific Time) on
July 11, 2005, such date being referred to herein as the "Expiration Date," upon
surrender to the Company's Transfer Agent (or at such other location as the
Company may advise the Holder in writing) of this Warrant properly endorsed with
the Form of Subscription attached hereto duly filled in and signed and upon
payment of the purchase price for the number of shares for which this Warrant is
being exercised times a per-share purchase price of $15.00 per share (referred
to herein as the stock purchase price). The per-share stock purchase price and
the number of shares purchasable hereunder are subject to adjustment as provided
herein.

            This Warrant is subject to the following terms and conditions:

      1.    Exercise; Issuance of Certificates; Payment for Shares.
            ------------------------------------------------------

            1.1    This Warrant is exercisable at the option of the holder of
record hereof, at any time or from time to time, up to the Expiration Date, for
all or any part of the shares of Common Stock which may be purchased hereunder.
Shares of Common Stock purchased under this Warrant shall be issued to the
Holder hereof as the record owner of such shares as of the close of business on
the date on which this Warrant shall have been surrendered, properly endorsed,
together with the completed Subscription Form attached hereto and payment for
such shares. Certificates for the shares of Common Stock so purchased shall be
delivered to the Holder hereof by the Company at the Company's expense within a
reasonable time after this Warrant has been so exercised. In case of a purchase
of less than all the shares which may be purchased under this Warrant, the
Company shall cancel this Warrant and execute and deliver a new Warrant or
Warrants of like tenor for the balance of the shares purchasable under the
Warrant surrendered upon such purchase to the Holder hereof within a reasonable
time. Each stock certificate so delivered shall be in such denominations of
Common Stock as may be requested by the Holder hereof and shall be registered in
the name of such Holder.

            1.2    Net Issue Exercise. Notwithstanding any provisions herein to
                   ------------------
the contrary, if the fair market value of one share of the Company's Common
Stock is greater than the stock purchase price (at the date of calculation as
set forth below), in lieu of exercising this Warrant for cash, the Holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by surrender of this Warrant at the
principal office of the company together with the properly endorsed Subscription
Form and notice of such election in which event the Company shall issue to the
Holder a number of shares of Common Stock computed using the following formula:

<PAGE>

                                   X = Y (A-B)
                                       -------
                                          A

            Where X =   the number of shares of Common Stock to be issued to
                        the Holder

                  Y =   the  number of shares  of Common  Stock  purchasable
                        under the  Warrant  or, if only a portion of the Warrant
                        is being  exercised,  the portion of the  Warrant  being
                        cancelled (at the date of such calculation)

                  A =   the  Closing  Price  (as  defined  in  the  Warrant
                        Agreement) of one share of the  Company's  Common Stock,
                        as applicable (at the date of such calculation)

                  B =   Exercise Price (as defined in the Warrant Agreement)
                        (as adjusted to the date of such calculation)

      2.    Shares to be Fully Paid; Reservation of Shares.
            ----------------------------------------------

            The Company covenants and agrees that all shares of Common Stock
which may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable and free from all preemptive rights of any shareholder and free of
all taxes, liens and charges with respect to the issue thereof. The Company
further covenants and agrees that during the period within which the rights
represented by this Warrant may be exercised, a sufficient number of shares of
authorized but unissued Common Stock will be reserved to provide for the
exercise of the rights represented by this Warrant. The Company will take all
such action as may be necessary to assure that such shares may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Company's Common
Stock or this Warrant may be listed.

      3.    Adjustment of Stock Purchase Price and Number of Shares.
            -------------------------------------------------------

            In case the Company shall at any time split or subdivide its
outstanding shares of Common Stock into a greater number of shares, the stock
purchase price in effect immediately prior to such subdivisions shall be
proportionately reduced, and conversely, in case the outstanding shares of the
Common Stock of the Company shall be combined into a smaller number of shares,
the stock purchase price in effect immediately prior to such combination shall
be proportionately increased. Upon each adjustment of the stock purchase price,
the Holder of this Warrant shall thereafter be entitled to purchase, at the
stock purchase price resulting from such adjustment, the number of shares
obtained by multiplying the stock purchase price in effect immediately prior to
such adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment, and dividing the product thereof by the stock purchase
price resulting from such adjustment.

            Upon any adjustment of the stock purchase price or any increase or
decrease in the number of shares purchasable upon the exercise of this Warrant,
the Company shall give

                                       2
<PAGE>

written notice thereof, by first-class mail, postage prepaid, addressed to the
registered Holder of this Warrant at the address of such Holder as shown on the
books of the Company. The notice shall be signed by the Company's President or
Chief Financial Officer and shall state the stock purchase price resulting from
such adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.

      4.    Notice of Certain Events.
            ------------------------

            If at any time:

                 (a)    the Company shall declare any dividend upon its Common
Stock payable in stock or make any special dividend or other distribution to the
holders of its Common Stock;

                 (b)    there shall be any capital reorganization or
reclassification of the capital stock of the Company; or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation; or

                 (c)    there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;

then, in any one or more of said cases, the Company shall give, by first-class
mail, postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown on the books of the Company (i) at least 10 days' prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, or winding up, at least
10 days' prior written notice of the date when the same shall take place. Any
notice given in accordance with the foregoing clause (i) shall also specify, in
the case of any such dividend, distribution or subscription rights, the date on
which a shareholder shall be entitled thereto. Any notice given in accordance
with the foregoing clause (ii) shall also specify the date on which shareholders
shall be entitled to exchange their shares for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, winding up, conversion or public offering, as
the case may be.

      5.    No Voting or Dividend Rights.
            ----------------------------

            Nothing contained in this Warrant shall be construed as conferring
upon the Holder hereof the right to vote or to consent to receive notice as a
shareholder of the Company or any other matters or any rights whatsoever as a
shareholder of the Company. No dividends or interest shall be payable or accrued
in respect of this Warrant or the interest represented hereby or the shares
purchasable hereunder until, and only to the extent that, this Warrant shall
have been exercised.

                                       3
<PAGE>

      6.    Fractional Shares.
            -----------------

            No fractional shares shall be issued upon exercise of this Warrant.
The Company shall, in lieu of issuing any fractional share, pay the holder
entitled to such fraction a sum in cash equal to such fraction multiplied by the
then fair market value per share.

      7.    Right of Redemption.
            -------------------

            The Holder shall at all times prior to the Expiration Date and
except to the extent exercised have the right to require the Company to redeem
this Warrant for cash at a price equal to $10.00 for each whole share of Company
Common Stock that may be purchased under this Warrant. Upon any surrender for
redemption, any fractional share interests represented by this Warrant will be
redeemed for cash. To exercise this right of redemption, the Holder shall
surrender this Warrant, properly endorsed, to the Company's Transfer Agent,
together with the completed form of redemption notice attached hereto.

      8.    Warrant Agreement.
            -----------------

            This Warrant Certificate is subject to all of the terms, provisions
and conditions of the Warrant Agreement, dated as of July 12, 2000 (the "Warrant
Agreement"), between the Company and the Warrant Agent, to all of which terms,
provisions and conditions the registered holder of this Warrant Certificate
consents by acceptance hereof. The Warrant Agreement is incorporated herein by
reference and made a part hereof and reference is made to the Warrant Agreement
for a full description of the rights, limitations of rights, obligations, duties
and immunities of the Warrant Agent, the Company and the holders of the Warrant
Certificates. Copies of the Warrant Agreement are available for inspection at
the stock transfer office of the Warrant Agent or may be obtained upon written
request addressed to the Company.

            IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized, this       day of
                                                          -----
            , 2000.
-----------

                                    KEY TECHNOLOGY, INC.

                                    By
                                       -----------------------
                                          Thomas C. Madsen
                                          President

004002\00131\353984 V001

                                       4
<PAGE>

                        [Reverse of Warrant Certificate]

                                SUBSCRIPTION FORM

                   To Be Executed by the Registered Holder
                   in Order to Exercise or Redeem Warrants

(Check One)

            [ ] The undersigned Registered Holder hereby irrevocably elects to
purchase           Warrant Shares represented by this Warrant Certificate, and
         ---------
requests that certificates for such securities shall be issued in the name of

            [ ] The undersigned Registered Holder, pursuant to Section 5.2
Warrant Agreement dated as of by and between Key Technology, Inc. (the
"Company") and ChaseMellon Shareholder Services, L.L.C (the "Warrant
Agreement"), hereby irrevocably elects to exchange          Warrants represented
                                                   --------
by this Warrant Certificate for such number of Warrant Shares as are obtained by
applying the provisions of Section 5.2 of the Warrant Agreement, and requests
that certificates for such securities shall be issued in the name of

            [ ] The undersigned Registered Holder, pursuant to Section 16.1 of
the Warrant Agreement and Section 7 of the Warrant Certificate, hereby
irrevocably (i) elects to have       Warrants redeemed by the Company for cash
                               -----
at a price of $10.00 for each whole share of Company Common Stock that may be
purchased under the portion of the Warrant being redeemed, (ii) surrenders such
Warrants and all right, title and interest therein and (iii)directs that
promptly after the Company's receipt of this notice the cash amount deliverable
upon exercise of this redemption right be delivered to the address specified
below. The undersigned also hereby represents, warrants, and certifies that the
undersigned (a) has marketable and unencumbered title to such Warrants, free and
clear of the rights of or interest of any other person or entity, (b) has the
full right, power and authority to surrender for redemption such Warrants as
provided herein and (c) has obtained the consent or approval of all persons or
entities, if any, having the right to consult or approve such surrender for
redemption.

          PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

          ---------------------------------------------------------
          ---------------------------------------------------------
          ---------------------------------------------------------
          ---------------------------------------------------------
                   [please print or type name and address]

<PAGE>

and be delivered to

          ---------------------------------------------------------
          ---------------------------------------------------------
          ---------------------------------------------------------
          ---------------------------------------------------------
                   [please print or type name and address]

and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.

The undersigned represents that the exercise of the within Warrant was solicited
by a member of the National Association of Securities Dealers, Inc. Specify the
name of the NASD member below. If not solicited by an NASD member, please write
"unsolicited" in the space below.

                                    ------------------------------------
                                    (Name of NASD Member)

Dated:                              X
      -----------------------         -------------------------------------

                                      -------------------------------------

                                      -------------------------------------
                                      Address

                                      -------------------------------------
                                      Taxpayer Identification Number

                                      -------------------------------------
                                      Signature Guaranteed

                                      -------------------------------------

<PAGE>

                                   ASSIGNMENT

                   To Be Executed by the Registered Holder
                           in Order to Assign Warrants

FOR VALUE RECEIVED,                                                 hereby
                    -----------------------------------------------
sells, assigns and transfers unto

          PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

          ---------------------------------------------------------
          ---------------------------------------------------------
          ---------------------------------------------------------
          ---------------------------------------------------------
                   [please print or type name and address]

                        of the Warrants represented by this Warrant
-----------------------
Certificate, and hereby irrevocably constitutes and appoints
                                                             -----------------

------------------------------------------------------------------------------
Attorney to transfer this Warrant Certificate on the books of the Company,  with
full power of substitution in the premises.

Dated:                                X
      ---------------------------       -------------------------------------

                                          Signature Guaranteed

                                        -------------------------------------

THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE
GUARANTEED BY A MEMBER OF THE MEDALLION STAMP PROGRAM.

004002\00131\353981 V001

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