Employment Agreement

Employment Agreement

by Amtech Systems, Inc.
July 9th, 1997
                              EMPLOYMENT AGREEMENT
                              --------------------


         BY THIS EMPLOYMENT  AGREEMENT (the  "Agreement")  made and entered into
this 1st day of  July,  1997,  AMTECH  SYSTEMS,  INC.,  an  Arizona  corporation
("Employer"),  and JOHN R.  KRIEGER  ("Employee"),  state,  confirm and agree as
follows:


                                   I. RECITALS
                                      --------

         1.1 Employer is engaged in the business of manufacturing  and producing
for profit  equipment for the fabrication and handling of silicon  semiconductor
wafers   ("Systems")  and  further   improving   technologies  and  intellectual
properties  having  application  to  such  business   ("Employer's   Business").
Employer's  Business is conducted on a worldwide  basis.  All locations in which
material  portions  of  Employer's  Business  are,  or may  during  the  term of
Employee's  employment by Employer be,  conducted are  hereinafter  collectively
referred to as the "Market Area."

         1.2 Employer has acquired the assets of P.R.  Hoffman Machine  Products
Corporation  (the  "Assets"),  a company wholly owned by Employee and previously
engaged in a business  complementary to Employer's  Business ("PRH") pursuant to
an Asset Purchase  Agreement of even date herewith.  Henceforth,  the commercial
application of the Assets shall be considered a part of "Employer's Business".

         1.3 Employee has expertise in the business of manufacturing,  marketing
and  distributing  semiconductor  equipment and related  consumables used in the
lapping and polishing of silicon  semiconductor  wafers and has knowledge of and
personal  relationships  affecting  the  operations,  business  contacts,  trade
secrets,  potential  customers,  marketing  strategies  and  other  confidential
matters of critical significance to the commercial application of the Assets and
to Employer's future prospects (the "Trade  Secrets").  The aid or assistance by
Employee  to any  competitor  of  Employer  or direct  competition  of  Employee
respecting  Employer's  Business  within the Market  Area would  materially  and
irreparably injure Employer.

         1.4 Employer  desires to hire Employee,  and Employee desires to accept
such employment, on the terms and conditions hereinafter set forth.


                                 II. AGREEMENTS
                                     ----------

         2.1 Employment.  Employer hereby employs Employee,  and Employee hereby
accepts such employment from Employer,  on the terms and conditions set forth in
this Agreement.

         2.2 Term.  This  Agreement  will commence upon July 1, 1997 and it will
continue in effect for four (4) years from such date.

         2.3  Renewal  and  Review.   This  Agreement  shall  be  renewable  for
successive  one (1) year periods at the mutual  election of the Employee and the
Employer.   The  Board  of  Directors  of  the  Employer  (the  "Board")   shall
periodically,  at least annually, review the salary established in Paragraph 2.6
hereof and may,  in its  discretion,  increase  such  salary for any  subsequent
period in accordance  with the  Employee's  contributions  to the success of the
Employer.

         2.4  Duties.  During the term of this  Agreement,  the  Employee  shall
perform  such  services  for  Employer as shall from time to time be assigned to
Employee by the Board and the President of Employer, and shall devote all of his
time,  attention,  skill and  energies to the business of the Employer and shall
serve it  faithfully,  diligently  and to the best of his  ability.  The parties
agree that Employee  shall have  principal  responsibility  for the  management,
operation  and  marketing  of the  business  previously  conducted  by  PRH  and
exploitation of the Assets.  Employee shall be principally situated at Carlisle,
Pennsylvania,  the site of the  Assets,  for at least the first two years of the
term of this  Agreement;  provided  that  Employee  may be  required  to  travel
extensively  in  furtherance  of  Employer's   Business  and  Employee's  duties
hereunder.  The  parties  intend that  Employee  will  subsequently  relocate to
Employer's principal headquarters and transition to a central management role to
be determined by the mutual consent of Employer and Employee.  The parties agree
that  Employee  may  elect to  change  his  residence  and  place  of  principal
employment to within a reasonable  distance of Employer's Tempe,  Arizona office
after completion of the first two years of the term of this Agreement.

         2.5 Service as Board Member. If the Employee is elected or appointed as
a member of the Board of Employer or any of its  subsidiaries  during all or any
portion of the term of this Agreement, the Employee shall serve in such capacity
without additional compensation.

         2.6 Compensation.  Employee will receive the following compensation for
his services during his term of employment:

                  (a) Subject to the immediately following sentences,  a minimum
         gross base salary of $150,000 per year,  which,  after  withholding and
         other  required  deductions,  shall  be paid in equal  installments  in
         accordance  with the salary  payment  policies as may be established by
         Employer from time to time, but in no event shall such  installments be
         less than monthly.

                  (b) Participate in any group benefit plan, medical plan and/or
         other  benefit  plans,   either  currently  in  effect  or  as  may  be
         established  from time to time by the Board,  for which Employee may be
         eligible to participate.

                  (c) Receive such other  compensation  as may from time to time
         be granted to Employee by the Board, in its  discretion,  including any
         bonuses if approved by the Board.

         2.7 Expenses and  Miscellaneous  Benefits.  Upon receipt of  reasonably
detailed  receipts  and other  documentation  as  required  for  obtaining a tax
deduction  under the codes and  regulations of applicable tax authorities and as
may be requested by Employer,  Employer  will pay or reimburse  Employee for all
ordinary and necessary business expenses incurred or paid
                                        2

by Employee in  furtherance  of  Employer's  business,  all in  accordance  with
Employer's  policies and  procedures  of general  application.  Employee will be
permitted to take three (3) weeks of vacation annually during his first ten (10)
years of service with Employer,  and four (4) weeks thereafter.  Vacation during
any partial year shall be prorated.

         2.8 Termination.

                  (a) Death.  In the event of the  Employee's  death  during the
         term of this Agreement,  this Agreement  shall thereupon  terminate and
         Employer  shall pay to the Employee's  beneficiary  or estate,  as that
         term is  hereinafter  defined,  the pro rata portion of the  Employee's
         salary which was earned but unpaid at the date of the Employee's death.

                  As used herein,  the term  "beneficiary  or estate"  means the
         person or persons designated by the Employee in the last written notice
         delivered to the  Employer  during his  lifetime,  or in the absence of
         such written notice,  such person or persons designated by the Employee
         in his last  will and  testament  specifically  to  receive  Employee's
         benefits under the terms of this Agreement,  or, in the absence of both
         written notice and such a designation,  the Employee's  estate.  In the
         event that the Employee  should during his lifetime  designate a person
         or persons other than his wife as beneficiary or  beneficiaries in such
         written notice, such notice to be valid must contain the signed consent
         of the Employee's spouse.

                  (b)  Permanent  Disability.  In the event the Employee  should
         become  permanently  disabled during the term of this  Agreement,  then
         this Agreement shall  terminate.  For the purposes  hereof,  "permanent
         disability" shall mean that disability  resulting from injury,  disease
         or other cause,  whether mental or physical,  which  incapacitates  the
         Employee  from  performing  his  normal  duties as an  employee,  which
         appears to be  permanent  in nature and  contemplates  the  continuous,
         necessary  and   substantially   complete  loss  of  all   professional
         activities.  The determination of "permanent  disability" shall be made
         by a qualified  physician licensed to practice medicine in the state of
         Arizona and acceptable to Employer.

                  (c)  Temporary  Disability.  In the event the Employee  should
         become  disabled,  and such  disability  is not  permanent,  as defined
         above,  such  disabled  Employee  shall be entitled to his salary for a
         period of one-hundred  eighty (180) days. If such temporary  disability
         continues  longer than such one-hundred  eighty (180) day period,  then
         Employee  shall be deemed to have become  permanently  disabled for the
         purposes of this Agreement at the end of said ninety (90) day period.
                                        3

                  (d)  Voluntary   Withdrawal.   The  Employee  may  voluntarily
         terminate his  employment  hereunder by giving at least sixty (60) days
         prior written  notice to the Board of his  intention to withdraw.  Such
         notice  shall  specify the end of a calendar  month as the  termination
         date.

                  (e) Dismissal.  Employer may terminate  Employee's  employment
         under this  Agreement at any time with or without  cause (as defined in
         Section 2.9 hereof) by giving at least thirty (30) days written  notice
         to the  Employee  at his  address as listed on the  Employer's  records
         specifying the effective date of termination.

         2.9 Termination  for Cause.  This Agreement may be terminated for cause
by Employer.  "Cause" shall mean (i)  Employee's  wilful,  repeated or negligent
failure to perform his duties  hereunder  and to comply with any  reasonable  or
proper  direction  given by or on behalf of the Company's Board of Directors and
the  continuation of such failure  following  twenty (20) days written notice to
such effect,  (ii) Employee being guilty of serious  misconduct on the Company's
premises or  elsewhere,  whether  during the  performance  of his duties or not,
which is reasonably  likely to cause  material  damage to the  reputation of the
Company or render it materially  more  difficult for Employee to  satisfactorily
continue to perform his duties;  (iii) Employee being found guilty in a criminal
court of any  offense  of a nature  which is  reasonably  likely  to  materially
adversely  affect the  reputation of the Company or to materially  prejudice its
interests  if Employee  were to continue  to be  employed by the  Company;  (iv)
Employee's commission of any act of fraud, theft or any intentional tort against
the  Company,  or  (v)  Employee's  violation  of any  of  the  material  terms,
covenants, representations or warranties contained in this Agreement and failure
to correct such  violation  within twenty (20) days after written  notice by the
Company.  Upon any termination  under this Paragraph 2.9, Employee or Employee's
estate,  as the case may be, will be entitled to receive only that  compensation
due Employee through the date of termination.

         2.10  Termination  Other  than for Cause.  In the event  that  Employer
terminates  this  Agreement  without cause,  Employee will receive  $150,000 per
annum, net of withholding and other deductions  required by law, for the balance
of the remaining  contract,  payable at Employer's election either in a lump sum
or at the times such  salary  would have been  payable  were  Employee to remain
employed by Employer.

         2.11 Noncompetition.

                  (a) Employee agrees that, except in accordance with his duties
         under this Agreement on behalf of Employer, he will not during the term
         of this Agreement:

                           (i)  Participate  in, be employed in any capacity by,
                  serve as director, consultant, agent or representative for, or
                  have any interest,  directly or indirectly,  in any enterprise
                  which is engaged in the business of  distributing,  selling or
                  otherwise   trading  in  products   or   services   which  are
                  competitive to any products or services  distributed,  sold or
                  otherwise  traded in by  Employer  or any of its  subsidiaries
                  during the term of the Employee's employment with Employer, or
                                        4

                  which  are  competitive  to any  products  or  services  being
                  actively developed,  with the bona fide intent to market same,
                  by  Employer  or  its  subsidiaries  during  the  term  of the
                  Employee's employment with Employer.

                           (ii) In addition,  Employee  agrees that for a period
                  of seven  and  one-half  (7.5)  years  after  the date of this
                  Agreement  (unless Employer breaches this Agreement by failing
                  to pay to the  Employee  all  sums  due him  under  the  terms
                  hereof,  in  which  event  the  following  provisions  of this
                  Section 2.11(a) shall be inapplicable), Employee shall observe
                  the  covenants  set forth in this  Section  2.11 and shall not
                  own,   either   directly  or   indirectly  or  through  or  in
                  conjunction with one or more members of his spouse's family or
                  through any trust or other contractual arrangement,  a greater
                  than five  percent  (5%)  interest  in, or  otherwise  control
                  either directly or indirectly,  any partnership,  corporation,
                  or other entity which distributes,  sells, or otherwise trades
                  in products which are  competitive to any products or services
                  being developed,  distributed,  sold or otherwise traded in by
                  Employer  or  its  subsidiaries,   during  the  term  of  this
                  Agreement,  or being actively  developed by Employer or any of
                  Employer's subsidiaries during the term of this Agreement with
                  Employer  with a bona fide  intent to  market  same.  Employee
                  further   agrees,   for  such  five  year   period   following
                  termination, to refrain from directly or indirectly soliciting
                  Employer's  vendors,  customers or employees,  except that the
                  Employee  may  solicit  Employer's  vendors  or  customers  in
                  connection  with a business that does not compete  directly or
                  indirectly with that of Employer or its subsidiaries.

                  (b) Employee  hereby  agrees that damages and any other remedy
         available at law would be  inadequate  to redress or remedy any loss or
         damage  suffered  by  Employer  upon any  breach  of the  terms of this
         Section 2.11 by Employee,  and Employee therefore agrees that Employer,
         in addition to  recovering  on any claim for damages or  obtaining  any
         other  remedy  available  at law,  also may  enforce  the  terms of the
         Section 2.11 by injunction or specific performance,  and may obtain any
         other appropriate remedy available in equity.

         2.12  Assignment of Patents.  Employee shall disclose fully to Employer
any and all discoveries and any and all ideas,  concepts or inventions  relating
to  Employer's  Business  which he shall  conceive  or make during his period of
employment,  or during  the  period of six  months  after his  employment  shall
terminate,  which are in whole or in part the result of his work with  Employer.
Such  disclosure is to be made promptly after each such discovery or conception,
and each such discovery,  idea,  concept or invention will become and remain the
property of Employer, whether or not patent applications are filed thereon. Upon
request and at the expense of Employer,  Employee shall make application through
the patent  solicitors  of Employer for letters  patent of the United States and
any and all other  countries at the discretion of Employer on such  discoveries,
ideas and inventions,  and assign all such  applications to Employer,  or at its
order,  forthwith,  without  additional payment by Employer during his period of
employment and for reasonable  compensation  for time actually spent by Employee
at such work at the request of Employer after the termination of the employment.
Employee  shall give  Employer,  its attorneys and  solicitors,  all  reasonable
assistance in preparing and prosecuting such applications
                                        5

and, on the request of  Employer,  execute all papers and do all things that may
be  reasonably  necessary to protect the right of Employer and vest in it or its
assigns the  discoveries,  ideas or inventions,  applications and letters patent
herein contemplated.  Said cooperation shall also include all actions reasonably
necessary  to aid  Employer  in  the  defense  of its  rights  in the  event  of
litigation.

         2.13 Trade Secrets.

                  (a) In the  course  of  the  term  of  this  Agreement,  it is
         anticipated  that Employee shall have access to secret or  confidential
         technical and commercial  information,  records, data,  specifications,
         systems, methods, plans, designs,  policies,  inventions,  material and
         other knowledge ("Confidential Material"),  whether or not copyrighted,
         owned by Employer and its subsidiaries,  including  without  limitation
         all such  information  and  material  relating to the Assets.  Employee
         recognizes  and  acknowledges  that  included  within the  Confidential
         Material   are   Employer's    confidential   commercial   information,
         technology, methods of manufacture, designs, and any computer programs,
         source codes,  object codes,  executable  codes and related  materials,
         including  without  limitation  customer lists and all such information
         and material relating to the Assets, all as they may exist from time to
         time,  and that  they are  valuable,  special  and  unique  aspects  of
         Employer's Business. All such Confidential Material shall be and remain
         the  property of the  Company.  Except as required by his duties to the
         Company, Employee shall not, directly or indirectly,  either during the
         term  of  his  employment  or  at  any  time  thereafter,  disclose  or
         disseminate to anyone or make use of, for any purpose  whatsoever,  any
         Confidential  Material.  Upon  termination of his employment,  Employee
         shall  promptly  deliver  to  the  Company  all  Confidential  Material
         (including all copies thereof,  whether prepared by Employee or others)
         which are in the possession or under the control of Employee.  Employee
         shall not be deemed to have  breached this Section 2.13 if (i) Employee
         shall be  specifically  compelled  by  lawful  order  of any  judicial,
         legislative,  or  administrative  authority  or  body to  disclose  any
         Confidential  Material  or else  face  civil  or  criminal  penalty  or
         sanction,  or (ii)  Employee can  demonstrate  by clear and  convincing
         evidence  that the  Confidential  Material  is or became  publicly  and
         openly known and in the public domain through no fault of the Employee.

                  (b) Employee  hereby  agrees that damages and any other remedy
         available at law would be  inadequate  to redress or remedy any loss or
         damage  suffered  by  Employer  upon any  breach  of the  terms of this
         Section 2.13 by Employee,  and Employee therefore agrees that Employer,
         in addition to  recovering  on any claim for damages or  obtaining  any
         other  remedy  available  at law,  also may  enforce  the terms of this
         Section 2.13 by injunction or specific performance,  and may obtain any
         other appropriate remedy available in equity.

         2.14 Representations and Warranties. The Employee hereby represents and
warrants  that  the  execution  of  this  Agreement  and  the  discharge  of his
obligations  hereunder  will not breach or  conflict  with any other  contracts,
agreements,  covenants or  understandings,  either oral or written,  between the
Employee and any other party or parties.
                                        6

         2.15 Assignment.  This Agreement and the rights, interests and benefits
shall not be assigned, transferred, pledged or hypothecated in any way and shall
not be subject to  execution,  attachment  or similar  process.  Any  attempt to
assign,  transfer,  pledge or hypothecate or make any other  disposition of this
Agreement or of such rights,  interests  and benefits  contrary to the foregoing
provision or the levy of any attachment or similar process  thereupon,  shall be
null and void and without  effect and shall relieve the Employer and Employee of
any and all liability  hereunder;  provided,  however,  that the obligations set
forth in  Sections  2.11,  2.12 and 2.13 of this  Agreement  shall  survive  any
termination of this Agreement.

         2.16  Attorneys'  Fees. In the event either party hereto  institutes an
action or other  proceeding to enforce any rights arising under this  Agreement,
the  party  prevailing  in such  action  or other  proceeding  shall be paid all
reasonable costs and attorneys' fees by the other party,  such fees to be set by
court and not by the jury.

         2.17 Notices.  Any notice or  communication to be given under the terms
of this  Agreement  ("Notice")  shall be in writing and  delivered  in person or
deposited,  certified or registered, in the United States mail, postage prepaid,
addressed as follows:

         If to Employer:                Amtech Systems, Inc.
                                        131 S. Clark Drive
                                        Tempe, Arizona  85181
                                        Attn:  J.S. Whang

         If to Employee:                John R. Krieger
                                        4 Hall Drive
                                        Dillsburg, Pennsylvania 17019

or at such other  address  as either  party may from time to time  designate  by
Notice  hereunder.  Notices shall be effective  upon  delivery in person,  or if
mailed at midnight on the third business day after the date of mailing.

         2.18 Entire Agreement. This Agreement constitutes and embodies the full
and complete  understanding  and agreement of the parties  hereto and supersedes
all prior understandings or agreements whether oral or in writing.

         2.19 Modifications and Amendments.  This Agreement shall not be altered
or amended except by a written agreement signed by the parties hereto.

         2.20 Benefit and Binding Effect.  Except as herein otherwise  expressly
provided,  this Agreement  shall be binding upon and inure to the benefit of the
Employer and its successors and assigns,  including any  corporation,  person or
other  entity  which may acquire all or  substantially  all of the assets of the
business  of Employer or any other  corporation  with or into which  Employer is
consolidated   or  merged,   and  the   Employee   and  his  heirs,   executors,
administrators  and  legal   representatives;   provided,   however,   that  the
obligations of Employee hereunder may not be delegated or assigned.
                                        7

         2.21 Governing  Law. This Agreement  shall be governed by and construed
in  accordance  with  Pennsylvania  law,  without  reference to conflict of laws
principles.  Notwithstanding  the foregoing choice of law, the parties expressly
agree that any  controversy,  dispute,  litigation  or claim  arising out of the
subject matter of this Agreement shall be brought or commenced only in a federal
or state court  located in Maricopa  County,  Arizona.  The parties  agree to be
subject to the personal jurisdiction of the federal and/or state courts situated
in  Maricopa  County,  Arizona,  and agree that a claim of forum  non-conveniens
shall not be a defense to an action initiated in such venues.

         2.22  Headings;  Interpretation;  Gender.  The paragraph  headings used
herein are for  convenience  and reference  only and are not intended to define,
limit or describe the scope or intent of any provision of this  Agreement.  When
used in this Agreement,  the term "including"  shall mean without  limitation by
reason of  enumeration.  Words used  herein in the  singular  shall  include the
plural and words used herein in the masculine  gender shall include the feminine
in all cases where such would apply.

         2.23 Waiver.  The failure of either party to insist, in any one or more
instances,  upon strict  performance  of any of the terms or  conditions of this
Agreement  shall not be construed as a waiver or a  relinquishment  of any right
granted  hereunder or of the future  performance  of any such term,  covenant or
condition,  but the  obligations  of either  party with  respect  thereto  shall
continue in full force and effect.

         2.24 Severability.  In the event that any portion of this Agreement may
be held to be invalid or unenforceable for any reason  whatsoever,  it is agreed
that said invalidity or unenforceability  shall not affect the other portions of
this  Agreement  and that the  remaining  covenants,  terms and  conditions,  or
portions  thereof,  shall  remain  in full  force and  effect,  and any court of
competent jurisdiction may so modify the objectionable  provisions as to make it
valid, reasonable and enforceable.

         2.25  Counterparts.  This  Agreement  may be  executed in any number of
counterparts, each of which shall be deemed a duplicate original.

         IN WITNESS  WHEREOF,  the parties  hereto have executed this  Agreement
this 1st day of July, 1997.

                                        AMTECH SYSTEMS, INC.,
                                        an Arizona corporation

                                        By:
                                           -------------------------------------
                                        Its:
                                            ------------------------------------

                                                                        EMPLOYER


                                        ----------------------------------------
                                        JOHN R. KRIEGER
                                                                        EMPLOYEE
                                        8