FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person * Nichols Michael L   2. Issuer Name and Ticker or Trading Symbol KEY TECHNOLOGY INC [KTEC] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) Vice President of R & D (Last) (First) (Middle) C/O KEY TECHNOLOGY, INC., 150 AVERY STREET 3. Date of Earliest Transaction (Month/Day/Year) 10/01/2012 (Street) WALLA WALLA, WA 99362 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 10/01/2012   A   6,181 (1) A $ 0 35,183 D   Common Stock 10/01/2012   A   12,550 (2) A $ 0 48,459 (3) D

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
Nichols Michael L C/O KEY TECHNOLOGY, INC. 150 AVERY STREET WALLA WALLA, WA 99362			Vice President of R & D

Signatures

/s/ Michael L. Nichols		01/08/2013
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	Represents restricted stock award, the restrictions on which shall lapse as to 2,061 shares on September 30, 2013, 2,060 shares on September 30, 2014, and 2,060 shares on September 30, 2015.
(2)	Represents restricted stock award, the restrictions on which shall lapse on September 30, 2015 based on the achievement of certain performance criteria measured over a three year period ended Sepember 30, 2015 and continued employment.
(3)	Includes 131 shares purchased on December 31, 2011, 109 shares purchased on March 31, 2012, 171 shares purchased on June 30, 2012, 151 shares purchased on September 30, 2012 and 164 shares purchased on December 31, 2012 under the Key Technology, Inc. Employee Stock Purchase Plan.

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