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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OFProxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (AMENDMENT NO.(Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

ASECO CORPORATION
------------------------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

ASECO CORPORATION
------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)Statement, if other than the Registrant)

Payment of Filing Fee (check(Check the appropriate box):

[X] No fee requiredrequired.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set(set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
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was paid previously. Identify the previous filing by registration statement
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Notes:

Reg. (S) 240.14a-101.

SEC 1913 (3-99)

ASECO CORPORATION
500 DONALD LYNCH BOULEVARD
MARLBORO, MASSACHUSETTSDonald Lynch Boulevard
Marlboro, Massachusetts 01752

July 20, 1999
Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of
Aseco Corporation (the "Company"), which will be held on Wednesday, August 11,
1999 at 10:00 A.M., at the offices of Choate, Hall & Stewart, 36th Floor,
Exchange Place, 53 State Street, Boston, Massachusetts.

The following Notice of Annual Meeting of Stockholders and Proxy Statement
describe the items to be considered by the stockholders and contain certain
information about the Company and its officers and directors.

Please sign and return the enclosed proxy card as soon as possible in the
envelope provided so that your shares can be voted at the meeting in
accordance with your instructions. Even if you plan to attend the meeting, you
are urged to sign and promptly return the proxy card. You can revoke it at any
time before it is exercised at the meeting, or vote your shares personally if
you attend the meeting.

We look forward to seeing you.

Sincerely,

/s/ Sebastian J. Sicari
Sebastian J. Sicari
President and Chief Executive
Officer

ASECO CORPORATION
500 Donald Lynch Boulevard
Marlboro, Massachusetts 01752

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 11, 19981999

The Annual Meeting of Stockholders of Aseco Corporation (the "Company") will
be held at the offices of Choate, Hall & Stewart, 36th Floor, Exchange Place,
53 State Street, Boston, Massachusetts on Tuesday,Wednesday, August 11, 19981999 at 10:00
A.M., for the following purposes:

1. To elect one directortwo directors for a three-year term.

2. To approve an amendment to the Company's 1993 Employee Stock Purchase
Plan increasing the number of shares issuable under such plan from 100,000150,000
to 150,000.300,000.

3. To approve certain amendments to the Company's 1993 Non-Employee
Director Stock Option Plan.

4. To ratify the Board of Directors' selection of Ernst & Young LLP as
the Company's independent auditors for the fiscal year ending March 28,
1999.

4.26,
2000.

5. To transact such other business as may properly come before the
meeting, and any or all adjournments thereof.

Stockholders of record at the close of business on July 1, 1998June 30, 1999 will be
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof.

By Order of the Board of Directors

Robert V. Jahrling
Secretary

Dated: July 10, 199820, 1999

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED.

ASECO CORPORATION
500 DONALD LYNCH BOULEVARD
MARLBORO, MASSACHUSETTSDonald Lynch Boulevard
Marlboro, Massachusetts 01752

PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS

This Proxy Statement is furnished to the holders of common stock of Aseco
Corporation (the "Company") in connection with the solicitation of proxies to
be voted at the Annual Meeting of Stockholders to be held on August 11, 19981999
and at any adjournmentsadjournment of that meeting. The enclosed proxy is solicited on
behalf of the Board of Directors of the Company. Each properly signed proxy
will be voted in accordance with the instructions contained therein, and, if
no choice is specified, the proxy will be voted in favor of the proposals set
forth in the Notice of Annual Meeting.

A person giving the enclosed proxy has the power to revoke it, at any time
before it is exercised at the meeting, by written notice to the Secretary of
the Company, by sending a later dated proxy, or by revoking it in person at
the meeting.

The approximate date on which this Proxy Statement and the enclosed proxy
will first be sent to stockholders is July 10, 1998.20, 1999. The Company's Annual
Report to Stockholders for the year ended March 29, 199828, 1999 is being mailed togetherto
you with this Proxy Statement.

Only holders of common stock of record on the stock transfer books of the
Company at the close of business on July 1, 1998June 30, 1999 (the "record date") will be
entitled to vote at the meeting. There were 3,731,7183,850,658 shares of common stock
outstanding and entitled to vote on the record date.

Each share of common stock is entitled to one vote. The affirmative vote of
the holders of a plurality of the shares represented at the meeting, at which
a quorum is present, is required for the election of directors. Approval of
the other matters which are before the meeting will require the affirmative
vote at the meeting, at which a quorum is present, of the holders of a
majority of votes cast with respect to such matters.

For purposes of the matters before the Annual Meeting, under the Company's
By-Laws, a quorum consists of a majority of the issued and outstanding shares
entitled to vote on such matters as of the record date. Shares voted to
abstain or to withhold as to a particular matter and shares as to which a
nominee (such as a broker holding shares in street name for a beneficial
owner) has no voting authority in respect of such matter will be deemed
represented for quorum purposes. Under the Company's By-Laws, such shares will
not be deemed to be voting on such matters, and therefore will not be the
equivalent of negative votes as to such matters. Votes will be tabulated by
the Company's transfer agent subject to the supervision of persons designated
by the Board of Directors as inspectors.

STOCK OWNERSHIP OF DIRECTORS, NOMINEES, EXECUTIVE OFFICERS
AND PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding beneficial
ownership of the Company's common stock as of May 31, 19981999 by (a) each
director of the Company and nominee for director, (b) each of the executive
officers named in the Summary Compensation Table below, (c) all current
directors and executive officers as a group and (d) each person known to the
Company to own beneficially 5% or more of the Company's common stock. Except
as otherwise indicated, each person has sole investment and voting power with
respect to the shares shown as being beneficially owned by such person, based
on information provided by such owners.

COMMON STOCK
BENEFICIALLY PERCENT OF
NAME OWNED(1) OUTSTANDING SHARES(2)Common Stock
Beneficially Percent of
Name Owned(1) Outstanding Shares(2)
- ---- ------------ ---------------------

Mary R. Barletta........................... 35,220 *

Robert L. Murray........................... 12,080 *

Robert E. Sandberg (3)..................... 13,719 *

Sebastian J. Sicari........................ 176,133 4.41%

Philip J. Villari.......................... 23,202 *

Carl S. Archer, Jr. ....................... 260,675 6.62%
Sebastian J. Sicari........................ 187,269 4.82
C. Kenneth Gray............................ 68,668 1.81
R. Bruce O'Connor.......................... 9,884 *
Dennis A. Legal............................ 200 *(4).................... 242,080 6.00%

Sheldon Buckler............................ 15,75024,832 *

Sheldon Weinig............................. 15,75024,832 *

Gerald L. Wilson........................... 8,75020,332 *

Equitable Asset Management, Inc.(3) ....... 213,900 5.73 (5)
511 Union Street, Suite 800
Nashville, TN 37219
Kopp Investment Advisers, Inc.(3)(4)....... 325,925 8.73
6600 France37219........................ 213,900 5.55%

C.E. Unterberg, Towbin Advisors, L.P. (5)
600 Third Avenue, South
Edina, MN 55435
William D. Witter, Inc.(3)(5) ............. 343,350 9.20
153 E. 53rd Street17th Floor New York, NY
1002210158..................................... 268,000 6.96%

All current directors and executive
offi-
cersofficers as a group (9(10 persons)............... 527,949 12.68.......... 579,618 13.41%

- --------
* Less than 1%
(1) Includes 431,488470,346 shares which may be acquired by exercise of stock options
as of or within sixty days after May 31, 19981999 by the current directors and
executive officers as a group and individually as follows: Ms. Barletta,
31,629; Mr. Murray, 8,738; Mr. Sandberg, 10,802; Mr. Sicari, 144,770; Mr.
Villari, 21,719; Mr. Archer, 203,845; Mr. Sicari, 155,906;185,250; Dr. Buckler, 11,750;19,250; Dr. Weinig,
14,750;22,250; Dr. Wilson, 8,750;18,750 and other current executive officers, 36,447.7,188.
(2) The number of shares deemed outstanding includes 3,731,7183,850,658 shares
outstanding as of May 31, 1998,1999, plus any shares subject to options held by
the person or group in question that are exercisable as of or within sixty
days after May 31, 1998.1999.
(3) Includes 2,917 shares held jointly with his spouse, with whom Mr. Sandberg
shares voting power.
(4) Includes 56,830 shares held jointly with his spouse, with whom Mr. Archer
shares voting power.
(5) Based solely on information contained in filings made with the Securities
and Exchange Commission pursuant to Section 13(d) or 13(g) of the
Securities Exchange Act of 1934 as amended (the "1934 Act").
(4) Kopp Investment Advisors, Inc. serves as an investment adviser and
exercises investment power with respect to all such shares. Kopp
Investment Advisors, Inc. disclaims beneficial ownership of all such
shares.
(5) Includes 249,850 shares held by William D. Witter, Inc. and 93,500 shares
held by Penfield Partners, L.P., an affiliate of William D. Witter, Inc.

ELECTION OF DIRECTORS

(ITEM(Item 1 OF NOTICE)of Notice)

There are currently five members of the Board of Directors, divided into
three classes with terms expiring respectively at the 1998, 1999, 2000 and 20002001
annual meetings of stockholders. The Board has nominated Carl S. Archer, Jr.,Dr. Sheldon Buckler
and Dr. Gerald L. Wilson, whose term isterms are expiring, for re-election. Mr. ArcherEach of
Dr. Buckler and Dr. Wilson has consented to serve, if elected at the meeting,
for a three-year term expiring at the time of the 20012002 annual meeting of
stockholders and when his successor is elected and qualified. The shares
represented by the enclosed proxy will be voted to elect Mr. Archereach of Dr. Buckler
and Dr. Wilson unless such authority is withheld by marking the proxy to that
effect. Mr. ArcherEach of Dr. Buckler and Dr. Wilson has agreed to serve, but in the
event he becomes unavailable for any reason, the proxy, unless authority has
been withheld as to such nominee, may be voted for the election of a
substitute.

The following information is furnished with respect to the nomineenominees for
election as director and each director whose term of office will continue
after the meeting.

PRINCIPAL OCCUPATION AND
NAME AND AGE DIRECTOR BUSINESS EXPERIENCE
AS OF MAYPrincipal Occupation and
Name and Age Director Business Experience
as of May 31, 1998 SINCE DURING LAST FIVE YEARS1999 Since During Last Five Years
------------------ -------- ------------------------

NOMINEENOMINEES FOR ELECTION FOR TERMTERMS OF THREE YEARS EXPIRING IN 2001

Carl S. Archer, Jr., 1987 Mr. Archer has been Chief Executive Officer of
61..................... the Company since November 1987 and Chairman of
the Board of Directors since August 1993. Mr.
Archer served as President of the Company from
November 1987 to June 1998.

DIRECTORS WHOSE TERMS EXPIRE IN 19992002
Dr. Sheldon Buckler, 19941993 Dr. Buckler served as Vice Chairman of Polaroid
67.....................68..................... Corporation from 1990 until 1994. Since May
1995, he has served as Chairman of Commonwealth
Energy Systems, an energy utility. He is also a
director of each of Nashua Corporation and
Parlex Corporation.

Dr. Gerald L. Wilson, 1996 Dr. Wilson is currently a faculty member and the
59.....................60..................... Vannevar Bush Professor of Engineering in the
departments of Electrical Engineering and
Mechanical Engineering at the Massachusetts
Institute of Technology. He was Dean of the
School of Engineering at the Massachusetts Institute
of Technology from 1981 until 1991. Dr. Wilson
serves as a Director of Analogic Corporation, an
electronics manufacturing company, and
Commonwealth Energy Systems, and as a member of
the technical advisory boards of General Motors,
Cummins Engine and United Technologies
Corporation.

PRINCIPAL OCCUPATION AND
NAME AND AGE DIRECTOR BUSINESS EXPERIENCE
AS OF MAY 31, 1998 SINCE DURING LAST FIVE YEARS
------------------ -------- ------------------------

DIRECTORS WHOSE TERMS EXPIRE IN 2000

Sebastian J. Sicari, 1993 Mr. Sicari has been President and Chief
46..................... Operating47..................... Executive Officer of the Company since August
1998, President and COO from June 1998 until
August 1998 and Treasurer of the Company sincefrom
July 1988.1988 until August 1998. Mr. Sicari served
as Vice President, Finance and Administration,
and Chief Financial Officer of the Company from
December 1985 to June 1998.

Principal Occupation and
Name and Age Director Business Experience
as of May 31, 1998 Since During Last Five Years
------------------ -------- ------------------------

Dr. Sheldon Weinig, 70..71.. 1996 Dr. Weinig founded Materials Research Company
and served as its Chairman until 1989 when it
was acquired by the Sony Corporation of America.
He then served as Vice Chairman of Sony
Engineering and Manufacturing of America until
1996.April 1, 1996 when he retired from that company.
He is presently a Professor at Columbia
University and the State University of New York
at Stonybrook,Stony Brook, New York. Dr. Weinig is a
Director of Insituform Technologies, Inc., a
provider of pipeline reconstruction techniques,
Intermagnetics General Corporation, a
manufacturer of superconducting materials and
magnets, and U.S. Cast Polymer, a materials company.company
and Electronic Retailing Systems International,
Inc., a provider of retail inventory control
systems.

DIRECTORS WHOSE TERMS EXPIRE IN 2001

Carl S. Archer, Jr., 1987 Mr. Archer served as President of the Company
61..................... from November 1987 to June 1998 and as Chief
Executive Officer of the Company from November
1987 until August 1998. He has been Chairman of
the Board of Directors since August 1993.

BOARD OF DIRECTORS AND COMMITTEE MEETINGS

The Board of Directors has an Audit, Compensation and Nominating Committee.

The Audit Committee reviews the internal accounting procedures of the
Company and consults with and reviews the services provided by the Company's
independent auditors. The directors currently serving on the Audit Committee
are Drs. Buckler, Weinig and Wilson. The Audit Committee met two timestwice during
fiscal 1998.1999.

The Compensation Committee reviews and recommends to the Board the
compensation and benefits of all officers of the Company and reviews general
policy relating to compensation and benefits of employees of the Company. The
Compensation Committee also administers the issuance of stock options. The
directors currently serving on the Compensation Committee are Drs. Buckler,
Weinig and Wilson. The Compensation Committee met one timethree times during fiscal
1998.1999.

The Nominating Committee reviews and recommends to the Board candidates for
director. The directors currently serving on the Nominating Committee are Mr.
Archer and Drs. Weinig and Buckler. The Nominating Committee met two timesdid not meet
during fiscal 1998.1999. The Nominating Committee will consider director nominees
recommended by stockholders. Stockholder recommendations of director nominees
should be in writing, addressed to the chairman of the committee, Dr. Sheldon
Weinig, at the Company's address shown on the first page of this Proxy
Statement.

During fiscal 1998,1999, the Board of Directors of the Company held seveneleven
meetings. Each incumbent director attended at least 75% of the aggregate
number of the meetings of the Board and the meetings of the committees of the
Board on which he served.

EXECUTIVE OFFICER COMPENSATION

The following summary compensation table sets forth the compensation paid or
accrued for services rendered in fiscal 1999, 1998 1997 and 19961997 to the chief
executive officerofficers during fiscal 1999 and the other four most highly
compensated executive officers of the Company (the "Named Executive
Officers").

SUMMARY COMPENSATION TABLESummary Compensation Table

LONG-TERM
COMPENSATION AWARDSLong-Term
Compensation Awards
-----------------------------
Annual Compensation Shares
Fiscal ------------------------- ANNUAL COMPENSATION SHARES ALL OTHER
FISCAL -------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARYUnderlying All Other
Name and Principal Position Year Salary ($) BONUSBonus ($) OPTIONSOptions (#) Compensation ($)(1)
- --------------------------- ------ ---------- --------- ----------- ----------------------------

Carl S. Archer, Jr........ 1998 $282,0001999 $102,654 -- 30,000 $4,533205,250(2) $129,615(3)
President and Chief 1998 282,000 -- 30,000 4,533
Executive Officer(1)
1997 267,000 -- 145,000(3)146,000(4) 4,083
Executive Officer(2)
1996 262,633 $95,000 145,000(4) 2,930
C. Kenneth Gray........... 1998 161,538 -- 20,000 2,404
Vice President, Sales and 1997 155,000 -- 55,000(3) 2,304
Marketing(5)
1996 141,756 100,337 65,000(4) 2,476
Dennis A. Legal........... 1998 128,269 -- 20,000 1,194
Vice President, 1997 80,000 -- 30,000 960
Engineering(6)
1996 -- -- -- --
R. Bruce O'Connor......... 1998 150,769 -- 30,000 2,040
Vice President, New 1997 -- -- -- --
Product Marketing(7)
1996 -- -- -- --

Sebastian J. Sicari....... 1999 195,585(6) -- 294,000(2) 470(7)
President and Chief 1998 189,900 -- 25,000 1,942
Vice President, FinanceExecutive Officer(5)
1997 178,400 -- 90,000(3)90,000(4) 2,227

Mary R. Barletta.......... 1999 129,012(6) -- 93,839(2) 104(7)
Vice President, Chief 1998 120,728 -- 15,000 1,596
Financial
Officer and Administration(8) 1996 161,202 100,337 100,000(4) 1,422Treasurer 1997 101,462 8,000 15,000(4) 1,599

Robert L. Murray.......... 1999 119,061(6) -- 45,200(2) 240(7)
Vice President, Worldwide 1998 114,500 -- 8,000 1,691
Customer
Support 1997 16,923 3,000 -- --

Robert E. Sandberg........ 1999 143,626(6)(8) -- 47,226(2) 214(7)
Vice President, Sales 1998 168,641(8) -- 3,000 1,633
1997 136,882(8) -- 4,000(4) 1,620

Phillip J. Villari........ 1999 147,577(6) -- 171,000(2) 281(7)
Vice President, 1998 -- -- -- --
Engineering and
Manufacturing Operations 1997 -- -- -- --

- --------
(1) For fiscalMr. Archer resigned as President of the Company in June 1998 consistsand resigned
as Chief Executive Officer of (i) contributionsthe Company in August 1998.
(2) These options include the grant of options to 401(k) accountsMr. Archer, Mr. Sicari, Ms.
Barletta, Mr. Murray, Mr. Sandberg and Mr. Villari of 185,250, 169,000,
46,106, 18,200, 19,663 and 58,500 shares, respectively, in the
amountreplacement of
$1,500previously granted options and includes for each of Messrs.the previously named
officers 20,000, 60,000, 30,000, 20,000, 20,000 and 90,000 shares,
respectively, which were granted in fiscal 1999 and subsequently cancelled
in connection with a stock option repricing effected on October 13, 1998.
See Ten-Year Option Repricing Table below.
(3) Paid to Mr. Archer Gray, O'Connorpursuant to a Separation Agreement dated August 11,
1998. See "Severance and Change of Control Arrangements."
(4) These options include the grant of options to Mr. Archer, Mr. Sicari, Ms.
Barletta and $375Mr. Sandberg exercisable for 108,750, 67,500, 11,250 and
3,000 shares, respectively, in replacement of previously granted options.
(5) Mr. LegalSicari has served as President and (ii)Chief Operating Officer of the
Company since June 1998 and President and Chief Executive Officer since
August 1998.
(6) Reflects voluntary annualized salary reductions effective November 11,
1998 for each of Mr. Sicari, Ms. Barletta, Mr. Murray, Mr. Sandberg and
Mr. Villari of $20,000, $13,650, $12,650, $10,000 and $16,000,
respectively, for fiscal 1999.
(7) Consists of insurance premiums paid by the Company during
the covered fiscal years with respect to term
life insurance for the benefit of the Named Executive Officers.
(2)Officer.
(8) Consists of sales commissions to Mr. Sicari became PresidentSandberg of the Company in June 1998. Mr. Archer
remains the Chief Executive Officer of the Company.
(3) These options include the grant of options to Messrs. Archer, Gray and
Sicari exercisable for 108,750, 41,250 and 67,500 shares, respectively, in
replacement of certain options granted$58,688 in fiscal 1996.
(4) Certain of the options granted1999,
$94,506 in fiscal 1996 to Messrs. Archer, Gray1998 and Sicari were cancelled and replaced with certain options referenced$77,305 in footnote (2) above.
(5) Mr. Gray resigned from the Company in June 1998.
(6) Mr. Legal resigned from the Company in January 1998.
(7) Mr. O'Connor is no longer an executive officer of the Company.
(8) Mr. Sicari became President and Chief Operating Officer of the Company in
June 1998.fiscal 1997.

OPTION GRANTS IN LAST FISCAL YEAROption Grants In Last Fiscal Year

The following table sets forth certain information regarding options to
purchase shares of the Company's common stock granted during fiscal 19981999 by the
Company to the Named Executive Officers.

POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OFPotential Realizable
Value at Assumed
Number of % OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (2)
OPTIONS EMPLOYEES IN PRICE EXPIRATIONof Total Rates of Stock Price
Securities Options Appreciation for
Underlying Granted to Exercise Option Term (1)
Options Employees in Price Expiration ---------------------
NAME GRANTEDName Granted (#)(1) FISCAL YEAR Fiscal Year ($/SHARE) DATEShare) Date 5% 10%
---- ------------------------- ------------ --------- ---------- ---------- ----------

Carl S. Archer, Jr. .... 30,000 10.70% $9.875 5/10/07 $ 482,560 $ 768,396
C. Kenneth Gray......... 20,000 7.10 9.875 5/10/07 321,707 512,264
Dennis A. Legal......... 20,000 7.10 9.875 5/10/07 321,707 512,264
R. Bruce O'Connor....... 30,000 10.70 9.875 5/10/07 482,560 768,39658,500(2) 5.54% $0.75 08/11/01 5,303 10,983
70,688(3) 6.69% 0.75 08/11/01 6,408 13,272
23,563(4) 2.23% 0.75 08/11/01 2,136 4,424
19,500(4) 1.85% 0.75 08/11/01 1,768 3,661
20,000(15) 1.89% 3.16 08/11/01 7,640 15,820
13,000(5) 1.23% 0.75 08/11/01 1,179 2,441

Sebastian J. Sicari..... 25,000 8.90 9.875 5/Sicari
(18)................... 48,750(2) 4.62% 0.75 01/12/04 9,546 20,983
6,500(6) 0.62% 0.75 05/15/05 1,712 3,905
43,875(7) 4.15% 0.75 08/23/06 14,361 33,891
14,625(8) 1.38% 0.75 10/18/06 4,916 11,653
16,250(14) 1.54% 0.75 05/10/07 402,133 640,3305,894 14,155
60,000(16) 5.68% 3.16 08/11/08 109,434 272,369
39,000(9) 3.69% 0.75 08/11/08 16,883 42,019
65,000(10) 6.15% 0.75 10/13/08 29,085 72,905

Mary R. Barletta (18)... 1,690(11) 0.16% 0.75 11/05/03 318 696
3,791(2) 0.36% 0.75 01/12/04 742 1,632
1,625(6) 0.15% 0.75 05/15/05 428 976
7,312(7) 0.69% 0.75 08/23/06 2,393 5,648
2,437(8) 0.23% 0.75 10/18/06 819 1,942
6,500(14) 0.62% 0.75 05/10/07 2,358 5,662
3,250(12) 0.31% 0.75 11/17/07 1,284 3,136
30,000(16) 2.84% 3.16 08/11/08 54,717 136,185
19,501(9) 1.85% 0.75 08/11/08 8,442 21,011
17,733(10) 1.68% 0.75 10/13/08 7,934 19,890

Robert L. Murray (18)... 5,200(14) 0.49% 0.75 05/10/07 1,886 4,530
20,000(16) 1.89% 3.16 08/11/08 36,478 90,790
13,000(9) 1.23% 0.75 08/11/08 5,628 14,008
7,000(10) 0.66% 0.75 10/13/08 3,132 7,851

Robert E. Sandberg
(18)................... 812(2) 0.08% 0.75 01/12/04 159 350
1,300(6) 0.12% 0.75 05/15/05 342 781
1,950(7) 0.18% 0.75 08/23/06 638 1,506
650(8) 0.06% 0.75 10/18/06 218 518
1,950(14) 0.18% 0.75 05/10/07 707 1,699
20,000(16) 1.89% 3.16 08/11/08 36,478 90,790
13,001(9) 1.23% 0.75 08/11/08 5,628 14,007
7,563(10) 0.72% 0.75 10/13/08 3,384 8,483

Phillip J. Villari
(18)................... 26,000(13) 2.46% 0.75 05/12/08 137,360 339,200
40,000(17) 3.79% 6.156 05/12/08 10,877 26,863
50,000(16) 4.73% 3.16 08/11/08 91,195 226,974
32,500(9) 3.08% 0.75 08/11/08 14,069 35,016
22,500(10) 2.13% 0.75 10/13/08 10,067 25,230

- --------
(1) These options vest in equal quarterly installments over a four-year period
beginning on the date of grant.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if such options are not exercised until the end of the
option term. These gains are based on assumed rates of stock price
appreciation of 5% and 10% set by the Securities and Exchange Commission,
compounded annually from the dates the respective options were granted
until their respective expiration dates and, therefore, are not intended
to forecast possible future appreciation, if any, in the common stock.
This table does not take into account any actual appreciation or
depreciation in the price
of the common stock after the date of grant.

OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES(2) These options were fully vested on the date of grant and were granted in
exchange for the cancellation of previously granted, fully vested options
to purchase a greater number of shares at $5.375 per share. See Ten-Year
Option Repricing Table below.

(3) These options were fully vested on the date of grant and were granted in
exchange for the cancellation of previously granted, fully vested options
to purchase a greater number of shares at $10.375 per share. See Ten-Year
Option Repricing Table below.

(4) These options were fully vested on the date of grant and were granted in
exchange for the cancellation of previously granted, fully vested options
to purchase a greater number of shares at $9.875 per share. See Ten-Year
Option Repricing Table below.

(5) These options were fully vested on the date of grant and were granted in
exchange for the cancellation of options granted on August 11, 1998 to
purchase a greater number of shares at $3.16 per share. See Ten-Year
Option Repricing Table below.

(6) These options were granted in exchange for the cancellation of previously
granted options to purchase a greater number of shares at $13.00 per
share. See Ten-Year Option Repricing Table below. These options retain the
expiration date and in effect carryforward the vesting schedule of the
options they replaced. Consistent with that, these options were vested on
the date of grant with respect to 85% of the shares subject thereto and
the balance of the shares vest in equal quarterly installments over 2.5
years from the date of grant.

(7) These options were granted in exchange for the cancellation of previously
granted options to purchase a greater number of shares at $10.375 per
share. See Ten-Year Option Repricing Table below. These options retain the
expiration date and in effect carryforward the vesting schedule of the
options they replaced. Consistent with that, these options were vested on
the date of grant with respect to 86.11% of the shares subject thereto and
the balance of the shares vest in equal quarterly installments over 3
quarters from the date of grant.

(8) These options were granted in exchange for the cancellation of previously
granted options to purchase a greater number of shares at $9.875 per
share. See Ten-Year Option Repricing Table below. These options retain the
expiration date and in effect carryforward the vesting schedule of the
options they replaced. Consistent with that, these options were vested on
the date of grant with respect to 50% of the shares subject thereto and
the balance of the shares vest in equal quarterly installments over 2
years from the date of grant.

(9) These options were granted in exchange for the cancellation of options
granted on August 11, 1998 to purchase a greater number of shares at $3.16
per share. See Ten-Year Option Repricing Table below. These options retain
the expiration date and in effect carryforward the vesting schedule of the
options they replaced. Consistent with that, these options were vested on
the date of grant with respect to 6.25% of the shares subject thereto and
the balance of the shares vest in equal quarterly installments over 15
quarters from the date of grant.

(10) These options vest in sixteen equal quarterly installments from the date
of grant.

(11) These options were fully vested on the date of grant and were granted in
exchange for the cancellation of previously granted, fully vested options
to purchase a greater number of shares at $7.75 per share. See Ten-Year
Option Repricing Table below.

(12) These options were granted in exchange for the cancellation of previously
granted options to purchase a greater number of shares at $10.97 per
share. See Ten-Year Option Repricing Table below. These options retain
the expiration date and in effect carryforward the vesting schedule of
the options they replaced. Consistent with that, these options were
vested on the date of grant with respect to 25% of the shares subject
thereto and the balance of the shares vest in equal quarterly
installments over 3 years from the date of grant.

(13) These options were granted in exchange for the cancellation of options
granted on May 12, 1998 to purchase a greater number of shares at $6.156
per share. See Ten-Year Option Repricing Table below. These options
retain the expiration date and in effect carryforward the vesting
schedule of the options they replaced. Consistent with that, these
options were vested on the date of grant with respect to 12.5% of the
shares subject thereto and the balance of the shares vest in equal
quarterly installments over 3.5 years from the date of grant.

(14) These options were granted in exchange for the cancellation of previously
granted options to purchase a greater number of shares at $9.875 per
share. See Ten-Year Option Repricing Table below. These options retain
the expiration date and in effect carryforward the vesting schedule of
the options replaced. Consistent with that, these options were vested on
the date of grant with respect to 37.5% of the shares subject thereto and
the balance of the shares vest in equal quarterly installments over 2.5
years from the date of grant.

(15) These options were granted on August 11, 1998 and were cancelled in
connection with the stock option repricing effected on October 13, 1998.
See note (5).

(16) These options were granted on August 11, 1998 and were cancelled in
connection with the stock option repricing effected on October 13, 1998.
See note (9).

(17) These options were granted on May 12, 1998 and were cancelled in
connection with the stock option repricing effected on October 13, 1998.
See note (13).

(18) All options held by these persons are subject to immediate vesting in
full upon a change of control of the Company.

Option Exercises in Last Fiscal Year and Year-End Option Values

The following table sets forth information regarding (a) the number of
shares acquired upon the exercise of options during fiscal 19981999 and the value
realized therefrom and (b) the number of vested and unvested options and the
unrealized value or spread (the difference between the exercise price and the
market value) of the unexercised options issued by the Company and held by the
Named Executive Officers on March 29, 1998.28, 1999.

NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONSNumber of Shares
Underlying Value of Unexercised
Unexercised In-the-Money
Shares Options (#) OPTIONSOptions ($)
ACQUIRED ON VALUEAcquired on Value ---------------- ------------------------
NAME EXERCISE----------------------
Name Exercise (#) REALIZEDRealized ($) VESTED UNVESTED VESTED UNVESTEDVested Unvested Vested Unvested
---- ------------ ------------ ------- -------- ---------------------- -----------

Carl S. Archer, Jr. .... -- -- 194,670 70,330185,250 -- $ 219,330 --
C. Kenneth Gray......... 17,498 $210,560 62,232 35,268 24,370 --
Dennis A. Legal......... -- -- -- -- -- --
R. Bruce O'Connor....... -- -- 7,500 22,500 --208,406 --

Sebastian J. Sicari..... -- -- 149,563 50,438 182,775129,147 104,853 145,291 $ 117,959

Mary R. Barletta........ -- -- 25,783 38,056 29,006 42,813

Robert L. Murray........ -- -- 5,913 19,288 6,652 21,699

Robert E. Sandberg...... -- -- 8,697 18,529 9,784 20,845

Philip J. Villari....... -- -- 15,406 65,594 17,332 73,793

SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTSTen-Year Option Repricing

The following table sets forth information regarding all repricings of options
held by executive officers of the Company since the Company became subject to
be reporting requirements of the 1934 Act in March, 1993.

Number of
Shares Number of
Name and Underlying Shares Market Price Length of Original
Principal Position Options Underlying of Stock at Exercise Price New Option Term
(if not otherwise Repriced or Replacement Time of at Time of Exercise Remaining at Date
disclosed herein) Date Amended(#) Options Repricing($) Repricing($) Price($) of Repricing
------------------ -------- ----------- ----------- ------------ -------------- -------- ------------------

Carl S. Archer, Jr. .... 09/02/96 145,000 108,750 $10.375 $18.69 $10.375 2 years, 10 months
10/13/98 90,000 58,500 0.75 5.375 0.75 2 years, 10 months
10/13/98 108,750 70,688 0.75 10.375 0.75 2 years, 10 months
10/13/98 36,250 23,563 0.75 9.875 0.75 2 years, 10 months
10/13/98 30,000 19,500 0.75 9.875 0.75 2 years, 10 months
10/13/98 20,000 13,000 0.75 3.16 0.75 2 years, 10 months

Sebastian J. Sicari..... 09/02/96 90,000 67,500 $10.375 $18.69 10.375 4 years, 11 months
10/13/98 75,000 48,750 0.75 5.375 0.75 5 years, 3 months
10/13/98 10,000 6,500 0.75 13.00 0.75 6 years, 7 months
10/13/98 67,500 43,875 0.75 10.375 0.75 7 years, 10 months
10/13/98 22,500 14,625 0.75 9.875 0.75 8 years
10/13/98 25,000 16,250 0.75 9.875 0.75 8 years, 7 months
10/13/98 60,000 39,000 0.75 3.16 0.75 9 years, 10 months

Mary R. Barletta........ 09/02/96 15,000 11,250 10.375 18.69 10.375 4 years, 11 months
10/13/98 2,600 1,690 0.75 7.75 0.75 5 years, 1 month
10/13/98 5,833 3,791 0.75 5.375 0.75 5 years, 3 months
10/13/98 2,500 1,625 0.75 13.00 0.75 6 years, 7 months
10/13/98 11,250 7,312 0.75 10.375 0.75 7 years, 10 months
10/13/98 3,750 2,437 0.75 9.875 0.75 8 years
10/13/98 10,000 6,500 0.75 9.875 0.75 8 years, 7 months
10/13/98 5,000 3,250 0.75 10.97 0.75 8 years, 11 months
10/13/98 30,000 19,501 0.75 3.16 0.75 9 years, 10 months

C. Kenneth Gray......... 09/02/96 55,000 41,250 10.375 18.69 10.375 4 years, 11 months
Former Vice President,
Sales and Marketing

Robert L. Murray........ 10/13/98 8,000 5,200 0.75 9.875 0.75 8 years, 7 months
10/13/98 20,000 13,000 0.75 3.16 0.75 9 years, 10 months

Robert E. Sandberg...... 09/02/96 4,000 3,000 10.375 18.69 10.375 4 years, 11 months
10/13/98 1,250 812 0.75 5.375 0.75 5 years, 3 months
10/13/98 2,000 1,300 0.75 13.00 0.75 6 years, 7 months
10/13/98 3,000 1,950 0.75 10.375 0.75 7 years, 10 months
10/13/98 1,000 650 0.75 9.875 0.75 8 years
10/13/98 3,000 1,950 0.75 9.875 0.75 8 years, 7 months
10/13/98 20,000 13,001 0.75 3.16 0.75 9 years, 10 months

Philip J. Villari....... 10/13/98 40,000 26,000 0.75 6.156 0.75 9 years, 7 months
10/13/98 50,000 32,500 0.75 3.16 0.75 9 years, 10 months

Severance and Change of Control Arrangements

Pursuant to a Severance AgreementsAgreement dated December 30, 1996, the Company has
agreed to pay each of Messrs. Archer andMr. Sicari severance equal to twelve months of base salary, the
average of the annual bonus amounts paid to him for each of the two previous
fiscal years, and twelve months of continued health insurance benefits if the
Company terminates his employment for any reason other than for cause. In the
event either of such individual'sMr. Sicari's employment is terminated at any time after a Change ofin
Control Event for any reason except death, he is entitled to severance equal to
twenty-four months of base salary, two times the average of the annual bonus
amounts paid to him for each of the two previous fiscal years, and twenty-four
months of continued health 6
insurance benefits. A "Change of Control Event"in Control" is
defined to mean any of the following events: (a) the sale, lease, transfer or
other disposition by the Company of all or substantially all of its assets;
(b) the merger or consolidation of the Company with another entity in which
the stockholders of the Company immediately prior to such merger or
consolidation hold less than 50% of the outstanding voting stock of the
surviving or resulting corporation immediately following such transaction; or
(c) the sale or exchange by the Company's stockholders of greater than 50% of
the Company's outstanding voting stock. In addition, upon anya Change in Control,
the vesting of Control Event, the Company's repurchase
rights with respect to any shares of Common Stock held by such individuals
shall lapse and such individuals shall have the right to exercise anyall stock options held by themMr. Sicari is accelerated so that all
stock options then held by him are fully exercisable.

Pursuant to purchase sharesa letter agreement dated August 11, 1998, the Company agreed
that if Mr. Sicari's employment with the Company is terminated for any reason
except for cause, all stock options then held by Mr. Sicari may be exercised
at any time prior to the earlier of common stock. These agreements may have the possible effectthird anniversary of discouraging unsolicited takeover attempts.

Thethe date his
employment with the Company has also agreed to pay to Mr. Gray and Mr. Legal pursuantterminates or the expiration date of the option.

Pursuant to Severance Agreements dated March 18, 1997July 8, 1998 with each of Messrs.
Murray, Sandberg, Villari and December 30, 1996, respectively,Ms. Barletta, the Company has agreed to pay each
of Messrs. Murray, Sandberg and Villari and Ms. Barletta severance equal to
sixtwelve months of base salary and sixto provide twelve months of continued life
and health insurance benefits if the Company terminates his or her employment
for any reason other than for cause. Mr. Gray and Mr. Legal resigned fromcause following any Change in Control (as
defined above). In addition, upon any Change in Control, the Company
in June 1998 and January 1998, respectively, and no severance was owed to them
by the Company in connection with such resignations.

Asvesting of March 29, 1998, Messrs. Archer, Sicari and Gray held options to
purchase 198,750, 142,500 and 51,250 shares, respectively, whichall
stock options
by their terms become immediately exercisable in full upon (i) the acquisition
by any person, entity or group of more than 35% of the aggregate voting power
of the outstanding securities of the Company, (ii) a majority of the Board of
Directors ceasing to consist of individuals (A) who are currently members of
the Board or (B) for whose nomination for such membership a majority of such
current members voted in favor, or (iii) the disposition by the Company of
substantially all its business, other than in connection with a mere change of
place of incorporation or similar change in form. The Company has also entered
into an agreement with Mr. O'Connor pursuant to which all options held by him
will become immediately exercisablesuch individuals is accelerated so that all stock
options then held by them are fully exercisable.

Pursuant to a Separation Agreement dated August 11, 1999, Mr. Archer agreed
to render employment and consulting services to the Company during the period
August 11, 1998 to August 10, 1999 for $200,000, payable in fullbi-weekly
installments ("Service Payments"). The Company's obligation to pay such
compensation is absolute and unconditional, except that such obligation
terminates upon a changeChange in controlControl (as defined above). Under such agreement,
the Company also agreed to pay Mr. Archer severance of $360,000, payable in
equal monthly installments over the two-year period commencing on August 11,
1999 ("Severance Payments"). In the event of a Change in Control, the
Company's obligation to make the Severance Payments terminates, but the
Company is then obligated to pay Mr. Archer a lump sum amount equal to
$560,000 minus the sum of the Service Payments and Severance Payments
theretofore made to him by the Company. INDEBTEDNESS OF MANAGEMENTIn addition, the Company agreed to
provide continued medical and life insurance benefits to Mr. Archer (provided
the maximum cost to the Company for such benefits does not exceed $15,000 per
year) for the four-year period commencing on August 11, 1998. Finally, under
the agreement, the Company accelerated the vesting of all of Mr. Archer's
stock options and extended the post-employment termination exercise period of
his stock options until the earlier of August 11, 2001 or the expiration date
of the applicable option.

Indebtedness of Management

On April 15, 1996, the Company loaned $140,000 to Sebastian J. Sicari, a
director and executive officer of the Company. TheInterest accrued on the loan bears interest at
a rate of 5.33% per annum, compounded annually, and iswas due and payable in
full on the earlier of the termination of Mr. Sicari's employment with the
Company or April 15, 1999. At March 29, 1998, principal and accrued interest on the
loan totalled $154,846. The loan iswas secured by shares of the Company's
common stock owned by Mr. Sicari. On May 11, 1999, the Board of Directors
voted to forgive all accrued and future interest on the foregoing loan, which
on July 6, 1999, the date on which Mr. Sicari repaid all principal, totaled
$24,042.

11
DIRECTOR COMPENSATION

Non-employee directors are paidentitled to (i) an annual cash retainer of
$5,000,$10,000, (ii) $1,000 for each regular or special Board of Directors meeting
attended and (iii) $500 for each Board Committee meeting attended on a day on
which no meeting of the Board of Directors is held. Non-employee directors
also are reimbursed for their reasonable out-of-pocket expenses incurred in
connection with meeting attendance. In fiscal 1999, in lieu of a $10,000 cash
retainer, the Company paid each non-employee director $5,000 in cash and
$5,000 worth of the Company's common stock under the Company's 1993 Omnibus
Stock Plan (1,582 shares, valued at $3.16 per share, the fair market value on
August 11, 1998, the date on which such stock was issued).

In addition, under the Company's 1993 Non-Employee Director Stock Option
Plan (the "Director Plan"), each non-employee director serving as such on
April 30 of each year is automatically granted an option exercisable (subject
to a two-year vesting period) for the purchase of 2,500 shares of the
Company's common stock at a price per share equal to fair market value at the
date of grant. The Board of Directors has approved, subject to stockholder
approval, amendments to the Directors' Plan (x) increasing the annual option
grant which number was increasedfrom 2,500 to 3,500 effective May 12, 1998.shares and (y) providing for the automatic grant to
each non-employee director at the time of each annual meeting of the Company's
stockholders of a number of shares of common stock of the Company determined
by dividing $5,000 by the fair market value of one share of common stock on
the date of grant. See Amendments to Non-Employee Directors Stock Option Plan
(Item 3 of Notice). Any non-employee director, upon his or her first election
to the Board of Directors, is entitled to receive an option to purchase 15,000
shares of common stock.

712

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

This report, prepared by the Compensation Committee of the Company's Board
of Directors (the "Committee"), addresses the Company's executive compensation
policies and the basis on which fiscal 19981999 executive officer compensation
determinations were made. The Committee designs and approves all components of
executive pay.

To ensure that executive compensation is designed and administered in an
objective manner, the Committee's members are all non-employee directors.
During fiscal 1998,1999, the Committee was composed of Sheldon Buckler, Sheldon
Weinig and Gerald L. Wilson.

Compensation Philosophy

The objectives of the Company's executive compensation program are to (i)
enable the Company to attract, retain and reward executives who contribute to
both the short-term and long-term success of the Company, (ii) align
compensation with business objectives and individual performance, and (iii)
tie the interests of the Company's executives to the interests of the
Company's stockholders. The primary components of the Company's executive
compensation program are salary, cash bonuses and stock options. In addition,
executives are eligible to participate, on a non-discriminatory basis, in
various benefit programs provided to all full-time employees, including the
Company's stock purchase plan and group medical, disability and life insurance
programs. The Committee believes that executive compensation packages should
be viewed as a whole in order to properly assess their appropriateness.

In establishing total compensation packages for its executive officers, the
Committee takes into account the compensation packages offered to executives
of other semiconductor capital equipment companies of similar stature. These
companies are not included in the published industry index represented in the
Comparison of Cumulative Total Stockholder Return Graph on page 10.16. The
Committee uses this comparative data primarily as benchmarks to ensure that
the Company's executive compensation packages are competitive. The Committee
seeks to maintain total compensation within the broad middle range of
comparative pay. Individual amounts are based not only on comparative data,
but also on such factors as length of service with the Company, prior
experience and the Committee's judgment as to individual contributions. These
factors are not assigned specific mathematical weights.

Salary

Amounts shown under the Salary column of the Summary Compensation Table
represent the fixed portion of compensation for executive officers in fiscal
1998.1999 (except in the case of Mr. Sandberg, Vice President, Sales, whose
compensation reported as salary includes commissions based on sales made).
Changes in salary from year to year depend on such factors as individual
performance, cost of living changes, and the economic and business conditions
affecting the Company. Executive salaries are set at the beginning of each
fiscal year.

Mr. Archer receivedSicari was appointed President and Chief Operating Officer of the
Company in June 1998 and, in addition, was named Chief Executive Officer in
August 1998. The Committee increased his annual base salary compensationin August 1998
from $180,000 to $200,000 in view of $282,000 in fiscal 1998.his additional duties and
responsibilities and cost of living increases. In setting Mr. Archer'sSicari's salary,
was based on an assessment ofthe Committee also considered comparative industry salaries.salary information. In
November 1998, Mr. Sicari voluntarily reduced his annual base salary to
$180,000 because of poor business conditions affecting the Company.

Bonus

Amounts shown in the Bonus column of the Summary Compensation Table,
together with stock option grants, represent the variable compensation for
executive officers. Cash bonuses are based on the achievement of specific
financial performance goals by the Company as well as specific goals and
objectives by the executive officer. The Company seeks to structure each
executive's bonus so that, if the executive earns his or her maximum bonus,
his or her combined salary and bonus will be roughly equal to the average
prior year's reported combined salary and bonus of executives holding the same
position with other semiconductor capital equipment companies of similar
stature. In fiscal 1998, the amount of the bonus pool was dependent on the
Company achieving specified milestones related to adjusted operating profit,
the Company's newest test handler (the VT

8000) and the Company's recently acquired UK subsidiary (Western Equipment
Developments (Holdings) Ltd.). Such milestones were not achieved and,
accordingly,1999, no bonuses were paidgranted to executive officers due to
the failure of the Company in
respect ofto meet the financial performance goals set for
fiscal 1998.1999.

Stock Options

The Committee believes that stock ownership by executive officers is
important in aligning management and stockholder interests in the long-term
enhancement of stockholder value. Stock options are awarded based upon the
market price of the Company's common stock on the date of grant and are linked
to future performance of the Company's stock because they do not become
valuable to the holder unless the price of the Company's stock increases above
the price on the date of grant. Beginning inSince fiscal 1994, the Company granted
options to its executive officers,1997, the exercisability of which was tied to the
Company's achievement of specified financial performance goals. In fiscal
1997, however, the Committee changed its policy in favor of annual grants ofall
options granted to executive officers by the exercisability of which isCompany has been tied solely to
the continued employment of the executive. In fiscal 1999, the Company
repriced certain employee options, including options held by executive
officers. See "Repricing of Stock Options" below.

The number of shares for which options were granted to executive officers in
fiscal 19981999 was determined by the Committee based upon several factors,
including the executive's position, his past and future expected performance,
the comparative data described above, and the number of shares under
previously granted options. These factors were evaluated in a qualitative
manner and were not assigned predetermined weights.

Repricing of Stock Options

On October 13, 1998, the Committee approved the offer by the Company to
employees of the Company holding options to purchase common stock having
exercise prices ranging from $3.16 to $13.00 per share (the "Existing
Options") to exchange (the "Exchange") their Existing Options for new options
(the "New Options") (i) exercisable for 65% of the number of shares subject to
the Existing Options, (ii) having an exercise price of $0.75 per share, the
fair market value of the Company's common stock on October 13, 1998 and (iii)
vested to the same extent, based on the number of shares vested, as the
Existing Options, but with the balance of the shares subject thereto vesting
according to a vesting schedule that represents a continuation of the vesting
schedule of the Existing Options surrendered in exchange therefor. In view of
the decline in the market value of the common stock, the Committee determined
that the Existing Options provided inadequate incentive to motivate and retain
employees and that the foregoing repricing offer was important to regain the
incentive intended to be provided by options to purchase the Company's stock.
The Exchange was effected as of October 13, 1999 by canceling the Existing
Options and granting the New Options. All of the Named Executive Officers who
held Existing Options as of October 13, 1999 participated in the Exchange and
the New Options granted to them are shown in the Ten-Year Option Repricing
Table above.

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to its chief executive officer and its four other most highly compensated
executives. Performance-based compensation is excluded from the compensation
taken into account for purposes of the limit if certain requirements are met.
The Company currently intends to structure its stock options granted to
executives in a manner that complies with the performance-based requirements
of the statute. The Committee believes that, given the general range of
salaries and bonuses for executive officers of the Company, the $1 million
threshold of Section 162(m) will not be reached by any executive officer of
the

14
Company in the foreseeable future. Accordingly, the Committee has not
considered what its policy regarding compensation not qualifying for federal
tax deductibility might be at such time, if ever, as that threshold is within
range of any executive officer.

Compensation Committee

Sheldon Buckler
Sheldon Weinig
Gerald L. Wilson

915

COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN

The following performance graph assumes an investment of $100 on March 16,
1993April 4,
1994 (the datefirst day of the Company's common stock was first registered under Section
12 of the 1934 Act)1995 fiscal year) and compares the
changes thereafter in the market price of the Company's common stock with a
broad market index (S&P 500) and an industry index (S&P Electronics-Instrumentation)Electronics-
Instrumentation). The Company paid no dividends during the periods shown; the
performance of the indexes is shown on a total return (dividend reinvestment)
basis. The graph lines merely connect fiscal year-end dates and do not reflect
fluctuations between those dates.

[GRAPH[PERFORMANCE GRAPH APPEARS HERE]

1993 1994 1995 1996 1997 1998 1999

Aseco Corporation 100.00 80.26 111.84 114.47 111.84 82.24Corp 139.34 142.62 139.34 102.45 25.82
Electronics (Instrumentation) 144.19 193.76 244.11 303.89 312.25
S&P Industry
Group 230-Electronics
(Instrumentation) 100.00 108.36 156.24 209.95 264.51 329.29

S&P 500 100.00 101.48 117.27 154.92 185.64 274.74Composite 115.57 152.67 182.94 270.74 320.72

THE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION AND THE
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN INFORMATION ABOVE SHALL NOT
BE DEEMED "SOLICITING MATERIAL" OR INCORPORATED BY REFERENCE INTO ANY OF THE
COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION BY IMPLICATION
OR BY ANY REFERENCE IN ANY SUCH FILING TO THIS PROXY STATEMENT.

10The Compensation Committee Report on Executive Compensation and the
Comparison of Cumulative Total Stockholder Return information above shall not
be deemed "soliciting material" or incorporated by reference into any of the
Company's filings with the Securities and Exchange Commission by implication
or by any reference in any such filing to this Proxy Statement.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONCompensation Committee Interlocks and Insider Participation

No person serving on the Compensation Committee at any time during fiscal
19981999 was a present or former officer or employee of the Company or any of its
subsidiaries. During fiscal 1998,1999, no executive officer of the Company served
as a member of the board of directors or compensation committee (or other
board committee performing equivalent functions) of another entity one of
whose executive officers served on the Company's Board of Directors or
Compensation Committee.

SECTION 16(A)16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the 1934 Act requires the Company's officers and directors
and persons who own more than ten percent of its common stock to file reports
with the Securities and Exchange Commission disclosing their ownership of
stock in the Company and changes in such ownership. Copies of such reports are
also required to be furnished to the Company. Based solely on a review of the
copies of such reports received by it, the Company believes that, during
fiscal 1998,1999, all such filing requirements were complied with, except that Mr.
Archer and Mr. Sicari each filed one late Form 4 report.with.

INCREASE IN SHARES UNDER EMPLOYEE STOCK PURCHASE PLAN
(ITEM(Item 2 OF NOTICE)of Notice)

The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Company's 1993 Employee Stock Purchase Plan (the "Stock
Purchase Plan") increasing the total number of shares issuable thereunder by
50,000150,000 to 150,000.300,000. The purpose of the increase in the number of shares was to
permit the continuing availability of shares for purchase by employees, which
the Board of Directors believes is necessary to continue to attract and retain
key employees.

Approval of the stockholders is sought under the terms of the Stock Purchase
Plan and in order to meet the stockholder approval requirements of Section
423(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code").

DESCRIPTION OF THE STOCK PURCHASE PLAN AS AMENDEDDescription of the Purchase Plan, as Amended

The Stock Purchase Plan was adopted by the Board of Directors on January 18,
1993 and was subsequently approved by stockholders of the Company on January
29, 1993. The Stock Purchase Plan authorizes the issuance of 150,000300,000 shares of
common stock pursuant to the exercise of nontransferable options granted to
participating employees. The Stock Purchase Plan is administered by the
Compensation Committee.

All employees of the Company and its subsidiaries whose customary employment
exceeds 20 hours per week and more than five months per calendar year, other
than those employees who own or would own 5% orof more of the stock of the
Company, are eligible to participate in the Stock Purchase Plan. The Stock
Purchase Plan is implemented by one or more offerings of such duration as the
Compensation Committee determines, provided that no offering period may be
longer than 27 months. An eligible employee participating in an offering will
beis
able to purchase common stock at a price equal to the lesser of (i) 85% of its
fair market value on the date the right was granted or (ii) 85% of its fair
market value on the date the right was exercised. Payment for common stock
purchased under the plan is through regular payroll deduction or lump sum cash
payment, or both, as determined by the Compensation Committee. The maximum
value of common stock an employee may purchase during an offering period is 6%
of the employee's base compensation during such period, calculated on the
basis of the employee's compensation rate on the date the employee elects to
participate in that offering.

FEDERAL INCOME TAX CONSIDERATIONSFederal Income Tax Considerations

The Stock Purchase Plan is intended to qualify as an "employee stock
purchase plan" as defined in Section 423 of the Code, which provides that an
employee will not realize any federal tax consequences when such

1117

employee joins the Stock Purchase Plan, or when an offering ends and such
employee receives shares of the Company's common stock. An employee must,
however, recognize income or loss on the difference, if any, between the price
at which he or she sells the shares and the price he or she paid for them. If
any employee has owned shares purchased under the plan for more than one year,
disposes of them at least two years after the date the offering commenced, and
the market price of the shares on the date of sale is equal to or less than
the purchase price under the Stock Purchase Plan, he or she will recognize a
long-term capital loss in the amount equal to the price paid over the sale
price. If an employee has owned shares for more than one year, more than two
years has elapsed from the date the offering commenced, and the market price
of the shares on the date of sale is higher than the purchase price under the
Stock Purchase Plan, the employee must recognize ordinary income in an amount
equal to the lesser of (i) the fair market value of the shares on the date the
offering commenced over the price paid, or (ii) the excess of the amount
actually received for the shares over the purchase price. Any further gain
would be treated as long-term capital gain.

If an employee sells shares purchased under the Stock Purchase Plan prior to
holding them for more than one year or prior to two years from the date the
offering commenced, he or she must recognize ordinary income in the amount of
the difference between the price he or she paid and the market price of the
shares on the date of purchase and the Company will receive an expense
deduction for the same amount. The employee will recognize a capital gain or
loss on the difference between the sale price and the market price on the date
of purchase. The Company will not be entitled to a tax deduction upon either
the purchase or sale of shares under the Stock Purchase Plan if the holding
period requirements set forth above are met. The Stock Purchase Plan is not
qualified under Section 401(a) of the Code.

AMENDMENTS TO NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Item 3 of Notice)

The Board of Directors has adopted, subject to stockholder approval,
amendments to the Company's 1993 Non-Employee Director Stock Option Plan (the
"Director Plan") (i) extending the period of time in which options granted
under the Director Plan may be exercised by a Non-Employee Director (as
defined below) after such director ceases to serve as a director of the
Company for any reason other than death or permanent disability from no more
than 180 days to no more than 2 years, (ii) providing that, on the date of
each annual meeting of the Company's stockholders commencing with the annual
meeting of stockholders held on August 11, 1998, each Non-Employee Director
shall be entitled to receive a number of shares of common stock of the Company
determined by dividing $5,000 by the fair market value of one share of common
stock on the date of the annual meeting of the Company's stockholders (the
"Annual Grant") and (iii) increasing the Annual Option (as defined below) from
2,500 shares to 3,500 shares of common stock of the Company. The reasons for
extending the post- termination of service exercise period and increasing the
number of shares underlying the Annual Option is to restore the incentives
intended by the plan, which the Board believes are necessary to attract and
retain qualified non-employee directors. It is noted that as of the date of
this Proxy Statement the exercise price of every option held by the non-
employee directors of the Company is greater than the fair market value of the
Company's common stock. The purpose of the Annual Grant is to contribute to
the Company's efforts to conserve cash. Assuming approval of this amendment to
the plan, the Company intends to reduce the annual cash retainer amount paid
to non-employee directors from $10,000 to $5,000.

Description of the Director Plan, as Amended

The Director Plan is administered by the Compensation Committee. Subject to
the provisions of the Director Plan, each person who is a director of the
Company and not a current or former employee of the Company (a "Non-Employee
Director") upon his or her first election to the Board of Directors following
adoption of the Director Plan is entitled to receive on the date of his or her
election an option to purchase 15,000 shares of common stock. Each Non-
Employee Director is also entitled to receive on April 30 of each year an
option (an "Annual Option") to purchase 3,500 shares of common stock. In
addition, each Non-Employee Director is entitled to receive the Annual Grant,
which shares shall be fully vested when granted. The total number of shares
issuable under the Director Plan is 165,000. The exercise price of Options
granted under the Director Plan is equal to the fair market value of the
common stock on the date of grant. Options granted under the Director Plan

may only be exercised with respect to vested shares. One-half of the shares
subject to such options vest on the first anniversary of the date of grant and
the balance vest on the second anniversary of the date of grant. No options
granted under the Director Plan may be exercised more than two years after the
Non-Employee Director ceases to serve as a director of the Company (and then
only to the extent exercisable on the date the optionee ceased to be a
director), except that if a Non-Employee Director dies or becomes permanently
disabled while serving as a director of the Company, the options of such
director may be fully exercised at any time prior to the scheduled expiration
date of the option. No option granted under the Director Plan may be exercised
more than ten years after the date of grant. Options granted under the
Director Plan are non-transferable other than by will or the laws of descent
and distribution.

As of May 31, 1999, options to purchase an aggregate of 71,500 shares of
common stock were outstanding under the Director Plan, and 86,314 shares
remained available for future grant thereunder.

Federal Income Tax Consequences

A Non-Employee Director will not recognize taxable income for federal income
tax purposes at the time an option is granted under the Director Plan.
However, the Non-Employee Director will recognize compensation taxable as
ordinary income at the time of exercise in an amount equal to the difference
between the option price and the fair market value of the shares on the date
of exercise. The Company will be entitled to a deduction for federal income
tax purposes at the same time and in the same amount as the participant is
deemed to have recognized compensation income with respect to shares received
under the Director Plan. The Non-Employee Director's basis in the shares will
be adjusted by adding the amount so recognized as compensation to the purchase
price paid by the participant for the shares.

A Non-Employee Director will recognize compensation taxable as ordinary
income for federal income tax purposes in an amount equal to the fair market
value of the shares awarded as an Annual Grant at the time such shares are
awarded ($5,000). The Company will be entitled to a deduction for federal
income tax purposes at the same time and in the same amount as the Non-
Employee is deemed to have recognized as compensation income with respect to
shares awarded as an Annual Grant. The Non-Employee Director's basis in the
shares awarded as an Annual Grant will be the fair market value of such shares
at the time such shares are awarded.

The Non-Employee Director will recognize gain or loss when he disposes of
shares obtained either upon exercise of an option or as part of an Annual
Grant in an amount equal to the difference between the selling price and the
Non-Employee Director's tax basis in such shares. Such gain or loss will be
treated as long-term or short-term capital gain or loss, depending upon the
holding period. Non-Employee Directors should consult their own tax advisor
regarding the advisability of early exercise and the making of Section 83(b)
elections with respect thereto.

RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(ITEM 3 OF NOTICE)(Item 4 of Notice)

On the recommendation of the Audit Committee, the Board of Directors has
selected Ernst & Young LLP, independent auditors, as auditors of the Company
for the fiscal year ending March 28, 1999.26, 2000. This firm has audited the accounts
and records of the Company since 1989. A representative of Ernst & Young LLP
will be present at the Annual Meeting to answer appropriate questions from
stockholders and will have an opportunity to make a statement if desired.

The selection of independent auditors is not required to be submitted to a
vote of the stockholders. The Board believes, however, it is appropriate as a
matter of policy to request that the stockholders ratify the appointment. If
the stockholders do not ratify the appointment, the Board will reconsider its
selection.

19
STOCKHOLDER PROPOSALS FOR 19982000 MEETING

Proposals of stockholders intended to be presented at the 19992000 Annual
Meeting of Stockholders must be presented on or before March 9, 199921, 2000 for
inclusion in the proxy materials relating to that meeting and on or before
June 4, 2000 for matters to be considered timely such that, pursuant to Rule
14a-8 under the 1934 Act, the Company may not exercise its discretionary
authority to vote on such maters at that meeting. Any such proposals should be
sent to the Company at its principal offices addressed to the Vice
President, Finance and Administration.Chief Financial
Officer. Other requirements for inclusion are set forth in Rule 14a-8 under
the 1934 Act.

OTHER MATTERS

The Company has no knowledge of any matters to be presented for action by
the stockholders at the Annual Meeting other than as set forth above. However,
the enclosed proxy gives discretionary authority to the persons named therein
to act in accordance with their best judgment in the event that any additional
matters should be presented.

The Company will bear the cost of the solicitation of proxies by management,
including the charges and expenses of brokerage firms and others for
forwarding solicitation material to beneficial owners of common stock.

By order of the Board of Directors

Robert V. Jahrling, Secretary

July 10, 199820, 1999

The Board hopes that stockholders will attend the Annual Meeting. WHETHER OR
NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A prompt response will greatly
facilitate arrangements for the Annual Meeting, and your cooperation will be
appreciated. Stockholders who attend the Annual Meeting may vote their stock
personally even though they have sent in their proxies.

1320

ASECO CORPORATION

Dear Stockholder:

Please take note of the important information enclosed with this proxy card.
There are a number of issues related to the management and operation of your
Company that require your immediate attention and approval. These are discussed
in detail in the enclosed proxy materials.

Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.

Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy card in the enclosed
postage paid envelope.

Your card must be received prior to the Annual Meeting of Stockholders on August
11, 1999.

Thank you in advance for your prompt consideration of these matters.

Sincerely,

Aseco Corporation

PROXY ASECO CORPORATION PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - AUGUST 11, 19981999

The undersigned hereby acknowledge(s) receipt of the Notice and
accompanying Proxy Statement, revoke(s) any prior proxies, and appoint(s)
Carl S.
Archer, Jr., Sebastian J. Sicari, Mary R. Barletta and Robert V. Jahrling, III, and each of
them, with power of substitution in each, attorneys for the undersigned to act
for and vote, as specified on the reverse, all shares of stock which the
undersigned may be entitled to vote at the Annual Meeting of the Stockholders of
Aseco Corporation, to be held on Tuesday,Wednesday, August 11, 19981999 at Choate, Hall &
Stewart, 36th Floor, Exchange Place, Boston, Massachusetts at 10:00 a.m. and at
any adjourned sessions thereof.thereof,

WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. ALL PROPOSALS SET FORTH ON THE REVERSE OF THIS
PROXY CARD HAVE BEEN PROPOSED BY THE BOARD OF DIRECTORS. IF NO DIRECTION IS
GIVEN, THIS PROXY CARD WILL BE VOTED "FOR" THE NOMINEES FOR DIRECTOR AND "FOR"
ALL OTHER PROPOSALS. THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE HOLDER'S
BEST JUDGMENT AS TO ANY OTHER MATTER.

--------------------------------------------------------------------------- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND
RETURN PROMPTLY IN ENCLOSED ENVELOPE.
- -- ENVELOPE ---
----------------------------------------------------------------------------------------------------------------------------------------------------------
Please sign this proxy exactly as your name appears on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

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

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

(CONTINUED ON REVERSE SIDE)

ASECO CORPORATION

Dear Stockholder:[X] Please take note ofmark votes as in this example

1. To elect two directors for a three-year term

FOR [ ] WITHHOLD [ ]

NOMINEES: DR. SHELDON BUCKLER, DR. GERALD L. WILSON

If you do not wish your shares voted for a particular nominee, complete the important information enclosed with this proxy card.
There are"For
All Except" line below or strike a line through the nominee's name.

FOR ALL EXCEPT

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

2. To approve an amendment to the Company's 1993 Employee Stock Purchase Plan
increasing the number of issues relatedshares issuable under such plan from 150,000 to
300,000.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. To approve certain amendments to the managementCompany's 1993 Non-Employee Director
Stock Option Plan.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. To ratify the Board of Directors' selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending March 26, 2000.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. To transact such other business as may properly come before the meeting and
operation of your
Company that require your immediate attention and approval. These are discussed
in detail in the enclosed proxy materials.

Your vote counts, and you are strongly encouraged to exercise yourany or all adjournments thereof.

Mark box at right to vote
your shares.

Please mark the boxesif comments or address change have been noted on the
proxy cardreverse side of this card. [ ]

Stockholder sign here

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

Co-owner sign here

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

Date:

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

NOTE: Please be sure to indicated how your shares shall be
voted. Then sign the card, detach it and return your proxy card in the enclosed
postage paid envelope.

Your card must be received prior to the Annual Meeting of Stockholders on August
11, 1998.

Thank you in advance for your prompt consideration of these matters.

Sincerely,

Aseco Corporation

Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------------------------------------------------------

Please mark your
A [X] votes as in this
example.

FOR WITHHOLD FOR AGAINST ABSTAIN
1.) To elect one 2.) To approve an amendment to the Company's
director for a [_] [_] 1993 Employee Stock Purchase Plan increasing [_] [_] [_]
three-year term. the number of shares issuable under such plan
from 100,000 to 150,000.
NOMINEE: CARL S. ARCHER, JR.
3.) To ratify the Board of Director's selection
of Ernst & Young LLP as the Company's [_] [_] [_]
independent auditors for the fiscal year
ending March 28, 1999.

4.) To transact such other business as may
properly come before the meeting and any [_] [_] [_]
or all adjournments thereof.

MARK BOX AT RIGHT IF COMMENTS OR ADDRESS CHANGE HAVE BEEN NOTED [_]
ON THE REVERSE SIDE OF THIS CARD.

Stockholder sign here Co-owner sign here Date:
-------------------- -------------------------- -------------------
NOTE: Please be sure to sign and date this Proxy.