KEY TECHNOLOGY INC
SC 13G/A, 1998-02-17
SPECIAL INDUSTRY MACHINERY (NO METALWORKING MACHINERY)
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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

             ACQUISITION STATEMENT FOR SECURITIES PURCHASED PURSUANT
                          TO SECTION 13 OF THE 1934 ACT

                                  SCHEDULE 13G/A

                    Under the Securities Exchange Act of 1934
                               (Amendment No. 4)*

                              Key Technology, Inc.
                                (Name of Issuer)

                          Common Stock, $0.01 par value
                         (Title of Class of Securities)

                                   493143 10 1
                                 (CUSIP Number)


* The remainder of this cover page shall be filled out for a reporting  person's
initial filing on this form with respect to the subject class of securities, and
for any  subsequent  amendment  containing  information  which  would  alter the
disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the  Securities  Exchange  Act of
1934 ("Act") or otherwise  subject to the liabilities of that section of the Act
but  shall be  subject  to all other  provisions  of the Act  (however,  see the
Notes).

CUSIP No. 493143 10 1



<PAGE>


Item 1:  Name of reporting person; S.S. or I.R.S. identification no. of 
         above person:

                  Thomas C. Madsen; ###-##-####

Item 2:  Check the appropriate box if a member of a group:

                  (a)      [ ]
                  (b)      [ ]

Item 3:  SEC use only:

Item 4:  Citizenship or place of organization:

                  United States of America

Number of shares beneficially owned by each reporting person with:

Item 5:  Sole voting power:

                  514,571 (including 17,750 shares subject to an exercisable
                  option)

Item 6:  Shared voting power:

                  0

Item 7:  Sole dispositive power:

                  514,571 (including 17,750 shares subject to an exercisable
                  option)

Item 8:  Shared dispositive power:

                  0

Item 9: Aggregate amount beneficially owned by each reporting person:

                  514,571

Item 10: Check box if the aggregate amount in row (9) excludes certain shares:

                  N/A

Item 11: Percent of class represented by amount in row 9:

                  10.9%

Item 12: Type of reporting person:

                  IN


<PAGE>


Item 1(a)                  Name of Issuer:

                           Key Technology, Inc.


Item 1(b)                  Address of Issuer's Principal Executive Offices:

                           150 Avery Street
                           Walla Walla, WA 99362


Item 2(a)                  Name of Person Filing:

                           Thomas C. Madsen


Item 2(b)                  Address of Principal Business Office, or, if none, 
                           Residence:

                           150 Avery Street
                           Walla Walla, WA 99362


Item 2(c)                  Citizenship:

                           United States of America


Item 2(d)                  Title of Class of Securities:

                           Common Stock


Item 2(e)                  CUSIP Number:

                           493143 10 1


Item 3   If this statement is filed pursuant to Rules 13d-1(b) or 13d-2(b), 
         check whether the person filing is a:

                           Not applicable



<PAGE>


Item 4   Ownership.

                           The following information is as of December 31, 1997:

                           (a) Amount Beneficially Owned:

                               514,571 shares

                           (b) Percent of Class:

                               The shares represent 10.9 percent of the class

                           (c) Number of shares as to which such person has:

                               (i)   Sole power to vote or to direct the vote:
                                     514,571(including 17,750 shares subject to
                                     an exercisable option)

                               (ii)  Shared power to vote or to direct the 
                                     vote:  0

                               (iii) Sole power to dispose or to direct the
                                     disposition  of:  514,571 (including 17,750
                                     shares subject to an exercisable option)

                               (iv)  Shared power to dispose or to direct the
                                     disposition of:  0


Item 5   Ownership of Five Percent or Less of a Class:

                           Not applicable


Item 6   Ownership of More Than Five Percent on Behalf of Another Person:

                           Not applicable


Item 7   Identification and Classification of the Subsidiary which Acquired the
         Security Being Reported on by the Parent Holding Company:

                           Not applicable

<PAGE>
Item 8 Identification and Classification of Members of the Group:

                           Not applicable


Item 9   Notice of Dissolution of Group:

                           Not applicable


Item 10  Certification:

                           Not applicable


                                    SIGNATURE

         After reasonable  inquiry and to the best of my knowledge and belief, I
         certify  that the  information  set  forth in this  statement  is true,
         complete, and correct.


                                          February 13, 1998

                                          /s/ Thomas C. Madsen
                                          ------------------------------
                                          Thomas C. Madsen


ATTENTION: Intentional misstatements or omissions of fact constitute federal
           criminal violations (See 18 USC Section 1001)



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