ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES

On September 30, 2009, Key Technology, Inc. (the "Company") announced a reduction of approximately 7% in its global workforce effective ­September 30, 2009 in order to reduce costs and better position the Company for the next fiscal year. The Company estimates that the total costs to be incurred related to the workforce reduction will be approximately $875,000, all of which will be severance and employee related costs, with approximately 50% of the associated cash expenditures to be incurred in the first quarter of fiscal 2010 and the remainder to be paid at later dates.

ITEM 8.01 OTHER EVENTS

On September 30, 2009, the Company announced it will not exercise its option to purchase the additional 85% of Proditec SAS provided for in the purchase agreement announced in March 2009. As a result, the Company estimates it will take approximately $225,000 in pre-tax charges against earnings in the fourth quarter of fiscal 2009.

The Company also announced certain other business developments and disclosed certain other financial information as set forth in the Press Release of the Company dated September 30, 2009 and attached to this Current Report on Form 8-K as Exhibit 99.1.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

The following exhibit is furnished with this Current Report on Form 8-K:

99.1 Press Release of Key Technology, Inc., dated September 30, 2009

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