<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-Q

(MARK ONE)
     [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995

     [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

               FOR THE TRANSITION PERIOD FROM ....... TO .......

                        COMMISSION FILE NUMBER: 0-17995

                               AMTECH CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              TEXAS                                    75-2216818
     (STATE OF INCORPORATION)                      (I.R.S. EMPLOYER
                                                IDENTIFICATION NUMBER)

                               17304 PRESTON ROAD
                                 BUILDING E-100
                              DALLAS, TEXAS  75252
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (214) 733-6600
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS) AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.

                               YES  [X]   NO 
                                   -----     -----   

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.


                CLASS                       OUTSTANDING AT OCTOBER 31, 1995
- --------------------------------------      -------------------------------
COMMON STOCK, PAR VALUE $.01 PER SHARE               14,670,546


<PAGE>
 
                                     INDEX


PART I-FINANCIAL INFORMATION

                                                                           Page
                                                                          Number
                                                                          ------

ITEM 1.  FINANCIAL STATEMENTS
 
         Condensed Consolidated Balance Sheets at September 30, 1995
         and December 31, 1994                                              3
 
         Condensed Consolidated Statements of Operations for the
         three months and nine months ended September 30, 1995 and 1994     4
 
         Condensed Consolidated Statements of Cash Flows for the
         nine months ended September 30, 1995 and 1994                      5
 
         Notes to Condensed Consolidated Financial Statements               6
 

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS                                          8
 

PART II-OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS                                                 10

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                  10

                                       2

<PAGE>
 
                               AMTECH CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                                  (Unaudited)

<TABLE>
<CAPTION>
 
                                                     September 30, 1995   December 31, 1994
                                                     -------------------  ------------------
<S>                                                  <C>                  <C>
     ASSETS
Current assets:
 Cash and cash equivalents                                      $14,526             $14,217
 Short-term marketable securities                                12,365              35,695
 Accounts receivable, net of allowance for
   doubtful accounts of $569,000 in 1995 and
   $210,000 in 1994                                              25,959               6,089
 Accounts receivable from related parties                         1,038               1,349
 Inventories (Note 2)                                            11,501               8,199
 Deferred income taxes                                            1,246               1,060
 Prepaid expenses                                                   752                 425
                                                                -------             -------
    Total current assets                                         67,387              67,034
 
Property and equipment, at cost                                  21,759              16,166
 Accumulated depreciation                                        (8,977)             (7,281)
                                                                -------             -------
                                                                 12,782               8,885
 
Deferred income taxes                                             1,367               1,810
Intangible assets, net (Note 3)                                   9,067                  --
Other assets                                                      2,588               2,893
                                                                -------             -------
                                                                $93,191             $80,622
                                                                =======             =======
 
  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                               $ 5,338             $ 1,607
 Note payable (Note 3)                                            1,887                  --
 Accrued expenses                                                 5,789               1,789
 Deferred income and license revenues                             2,234                  80
                                                                -------             -------
    Total current liabilities                                    15,248               3,476
 
Deferred license revenues                                            --               1,810
Note payable (Note 3)                                             2,637                  --
Contingencies (Note 4)
 
Stockholders' equity:
 Preferred stock, $1 par value, 10,000,000 shares
   authorized; none issued                                           --                  --
 Common stock, $.01 par value, 30,000,000 shares
   authorized; shares issued and outstanding:
   14,668,608 in 1995 and 14,599,283 in 1994                        147                 146
 Additional paid-in capital                                      75,431              75,086
 Unrealized gain (loss) on marketable securities                  1,465                (411)
 Retained earnings (accumulated deficit)                         (1,737)                515
                                                                -------             -------
    Total stockholders' equity                                   75,306              75,336
                                                                -------             -------
                                                                $93,191             $80,622
                                                                =======             =======
 
</TABLE>




                            See accompanying notes.

                                       3

<PAGE>
 
                               AMTECH CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)

                                  (Unaudited)



<TABLE>
<CAPTION>
                                               Three Months        Nine Months
                                            Ended September 30  Ended September 30
                                            ------------------  ------------------    
                                             1995       1994      1995      1994
                                           --------   --------  --------  --------
<S>                                        <C>        <C>       <C>       <C>
 
Sales                                       $24,526    $12,213   $51,462   $49,685
Operating costs and expenses:                                             
  Cost of sales                              15,775      7,046    33,582    23,731
  Research and development (Note 3)           2,798      1,591     6,323     4,666
  Marketing, general and administrative       6,629      3,408    14,312    10,803
                                            -------    -------   -------   -------
                                             25,202     12,045    54,217    39,200
                                            -------    -------   -------   -------
                                                                          
Operating income (loss)                        (676)       168    (2,755)   10,485
                                                                          
Investment income                               276        535       628     1,367
                                                                          
Interest expense                                (66)        --       (66)       --
                                            -------    -------   -------   -------
                                                                          
Income (loss) before income taxes              (466)       703    (2,193)   11,852
                                                                          
Provision (benefit) for income taxes            (44)       200      (234)    4,266
                                            -------    -------   -------   -------
                                                                          
Net income (loss)                           $  (422)   $   503   $(1,959)  $ 7,586
                                            =======    =======   =======   =======

Earnings (loss) per share (Note 1)          $ (0.03)   $  0.03   $ (0.13)  $  0.51
                                            ========   =======   =======   ======= 

Shares used in computing earnings 
 (loss) per share                             14,666    14,734    14,648    14,793
                                            ========   =======   =======   =======
</TABLE>



                            See accompanying notes.

                                       4

<PAGE>
 
                               AMTECH CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

                                  (Unaudited)
 

<TABLE>
<CAPTION>
                                                           Nine Months Ended September 30
                                                           ------------------------------
                                                                   1995       1994
                                                                 ---------  ---------
<S>                                                              <C>        <C>
Cash flows from operating activities:
Net income (loss)                                                $ (1,959)  $  7,586
Adjustments to reconcile net income (loss) to net cash
  from operating activities:
   Depreciation and amortization                                    2,493      2,263
   Deferred income taxes                                             (709)       540
   Tax benefit from exercise of stock options                          72      2,179
   Purchased in-process research and development                      882         --
   Change in assets and liabilities:
       (Increase) decrease in accounts receivable                  (2,764)     2,171
       (Increase) decrease in inventories                           1,655     (3,271)
       (Increase) decrease in prepaid expenses                        271        (56)
       Decrease in other assets                                       229      2,115
       Decrease in current liabilities                             (2,148)    (3,042)
                                                                 --------   --------
         Total adjustments                                            (19)     2,899
                                                                 --------   --------
         Net cash provided (used) by
            operating activities                                   (1,978)    10,485
 
Cash flows from investing activities:
   Purchases of property and equipment                             (1,460)    (1,715)
   Purchase of Cotag International Limited (Note 3)                (5,784)        --
   Purchase of Cardkey Systems, net of cash acquired (Note 3)     (16,502)        --
   Increase in other assets                                          (145)    (3,081)
   Purchases of marketable securities                                  --    (32,025)
   Sales and maturities of marketable securities                   26,172     17,857
                                                                 --------   --------
     Net cash provided (used) by investing activities               2,281    (18,964)
 
Cash flows from financing activities:
   Proceeds from issuances of common stock                            289        228
   Payment of cash dividends                                         (293)      (876)
                                                                 --------   --------
     Net cash used by financing activities                             (4)      (648)
 
Effect of exchange rate changes on cash and cash equivalents           10         --
                                                                 --------   --------
 
Increase (decrease) in cash and cash equivalents                      309     (9,127)
 
Cash and cash equivalents, beginning of period                     14,217     22,366
                                                                 --------   --------
 
Cash and cash equivalents, end of period                         $ 14,526   $ 13,239
                                                                 ========   ========
 
</TABLE>




                            See accompanying notes.

                                       5

<PAGE>
 
                               AMTECH CORPORATION


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

1.   BASIS OF PRESENTATION

     The accompanying financial statements, which should be read in conjunction
with the audited consolidated financial statements included in the Company's
1994 Annual Report to Shareholders and Form 10-K, are unaudited but have been
prepared in the ordinary course of business for the purpose of providing
information with respect to the interim periods.  The Condensed Consolidated
Balance Sheet at December 31, 1994 was derived from the audited Consolidated
Balance Sheet at that date which is not presented herein.  Management of the
Company believes that all adjustments necessary for a fair presentation for such
periods have been included and are of a normal recurring nature except for the
one-time charge for purchased in-process research and development as discussed
in Note 3.  The results of operations for the three-month and nine-month periods
ended September 30, 1995 are not necessarily indicative of the results to be
expected for the full year.

     Earnings per share is computed based on the weighted average number of
shares of common stock and dilutive common equivalent shares outstanding.
 
2.   INVENTORIES

     Inventories consist of the following:
 
                     September 30, 1995  December 31, 1994
                     ------------------  -----------------
 
  Raw materials          $ 5,288,000         $4,486,000
                         
  Work in process          3,986,000          2,168,000
                         
  Finished goods           2,227,000          1,545,000
                         -----------         ----------
                         
                         $11,501,000         $8,199,000
                         ===========         ==========

3.   ACQUISITIONS

     In late January 1995, the Company purchased all of the stock of Cotag
International Limited ("Cotag") for approximately $5,800,000, including
acquisition expenses.  Cotag is located in Cambridge, England and manufactures
radio frequency identification security systems for hands-free electronic access
control and other related applications.  The results of operations for Cotag are
included in the consolidated financial statements of the Company beginning
February 1, 1995.  The acquisition of Cotag resulted in goodwill of
approximately $4,100,000, which is being amortized over ten years.

     On August 1, 1995, the Company purchased substantially all of the assets
and assumed certain liabilities of Cardkey Systems, Inc. and Cardkey Systems
Limited (collectively, "Cardkey") for approximately $16,500,000 in cash,
including acquisition expenses. The Company also issued a non-interest bearing
promissory note which has been recorded at a present value of approximately
$4,500,000 with imputed interest at a rate of 8.75%. Such note is payable over
the next one and one-half years. The primary operating companies of Cardkey are
headquartered in Simi Valley, California and Reading, England. Cardkey sells,
installs and services electronic access control systems through an international
network of

                                       6

<PAGE>
 
direct sales offices and resellers.

     The results of operations for Cardkey are included in the consolidated
financial statements of the Company beginning August 1, 1995.  Allocation of the
purchase price resulted in a one-time charge in the third quarter of 1995 in the
amount of $882,000 for purchased in-process research and development.  The
acquisition of Cardkey resulted in goodwill and other intangible assets of
approximately $5,200,000 which are being amortized over estimated useful lives
of seven to fifteen years.

     The following unaudited pro forma summary combines the consolidated results
of operations of the Company and Cardkey as if the acquisition had occurred on
January 1, 1994, after giving effect to certain adjustments, including
amortization of goodwill and intangible assets, decreased interest income on the
cash consideration paid for the purchase, decreased interest expense on
intercompany debt not assumed by the Company and related income tax effects. The
pro forma summary does not include the effect of the one-time charge for
purchased in-process research and development. This pro forma summary is not
necessarily indicative of the results of operations as they would have been if
the Company and Cardkey had constituted a single entity during such periods, nor
is it necessarily indicative of the future results of operations.
 
                                   Nine Months Ended September 30
                               --------------------------------------
                                       1995                1994
                                       ----                ----      
                               (In thousands, except per share data)
                                             (Unaudited)
 
  Sales                              $90,243            $104,198
  Net income (loss)                   (3,825)              4,440
  Earnings (loss) per share            (0.26)               0.30

4.   CONTINGENCIES

     In October 1992, the Company filed suit against AT/Comm Incorporated
("AT/Comm"), one of the Company's competitors in certain markets, in federal
district court for the Northern District of Texas, Dallas Division. The suit
currently alleges unfair competition and requests an affirmative determination
that the Company's technology and products do not infringe on certain patents
held by AT/Comm.  AT/Comm subsequently filed claims against the Company, which
did not request any specific damage amounts, alleging unfair competition and
related claims and patent infringement.  In September 1994, the court ruled that
the Company's radio frequency rail car identification products do not infringe
two AT/Comm patents and in June 1995, the court dismissed AT/Comm's unfair
competition and related claims.  In September 1995, the court dismissed
AT/Comm's remaining claim relating to an AT/Comm patent covering certain
read/write electronic toll collection systems.  The court's action completely
exonerates the Company against all asserted claims by AT/Comm against Amtech.

     In December 1994, the Company agreed to provide up to approximately
$2,300,000 in convertible debt and equity financing to WaveLink Technologies,
Inc. ("WaveLink") of Ontario, Canada, which will result in an ownership of up to
75% of WaveLink's equity, assuming eventual full conversion of the convertible
debt by the Company. WaveLink and certain of its employees are the subject of a
$7,800,000 suit brought by Teklogix, Inc., their former employer. The suit
alleges improper use of confidential information, theft of technology,
misappropriation of business opportunities and similar improprieties. In
addition to the damages requested, the suit seeks to enjoin the defendants from
soliciting customers and distributors of Teklogix and from disclosing alleged
confidential information of Teklogix. WaveLink has denied any wrongdoing by it
or its employees and has advised the Company that it intends to vigorously
defend the litigation. While the final outcome of this matter cannot be
predicted with certainty, the Company believes that the final resolution of this
matter will not have a material adverse effect on the consolidated financial
position of the Company.

                                       7

<PAGE>
 

I
TEM 2.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

  The Company designs, manufactures and markets hardware and software products
for wireless data communications.  Products and services for electronic access
control applications are the focus of Cotag International Limited ("Cotag") and
Cardkey Systems, Inc. and Cardkey Systems Limited (collectively "Cardkey").
Cotag and Cardkey were acquired by the Company in January and August, 1995,
respectively.  Amtech Systems Corporation and Amtech World Corporation develop
and provide high-frequency radio frequency identification (RFID) solutions to
the transportation markets which include vehicle-roadside communications,
electronic toll and traffic management (ETTM), rail, intermodal and motor
freight.  WaveLink Technologies, Inc. ("WaveLink") is developing a line of
products targeting the interactive data marketplace consisting of mobile radio
frequency data communications terminals using wireless local area networks for
use in portable computing in logistics, warehousing, transportation and medical
applications.

RESULTS OF OPERATIONS

  Sales for the three months and nine months ended September 30, 1995 increased
$12,313,000 or 101% and $1,777,000 or 4%, respectively, from the comparable
periods in 1994.  Shipments in transportation markets for the rail industry
decreased from $3,706,000 to $2,206,000 for the three month period and from
$28,092,000 to $7,406,000 for the nine month period, primarily as a result of
the substantial completion in mid-1994 of tag deliveries for the implementation
of the Association of American Railroads' mandatory standard for automatic
equipment identification.  Sales volumes for the ETTM sector of the
transportation markets increased, primarily as a result of revenues of
approximately $4,000,000 and $12,000,000 in the three month and nine month
periods, respectively, from a systems integration services contract.   Sales in
the electronic access control markets amounted to approximately $9,600,000 and
$13,100,000 for the three month and nine month periods ended September 30, 1995.
Sales of Cotag were included in the Company's consolidated financial statements
beginning February 1, 1995 and sales of Cardkey were included beginning August
1, 1995.

  Cost of sales for the three months and nine months ended September 30, 1995
increased $8,729,000 or 124% and $9,851,000 or 42% from the comparable periods
in 1994.  Gross profit as a percentage of sales decreased from 42% for the third
quarter of 1994 to 36% for the third quarter of 1995 and from 52% for the first
nine months of 1994 to 35% for the first nine months of 1995.  This decrease was
primarily due to a reduction in the percentage of sales attributable to the
Company's manufactured products for the transportation markets, and a larger
percentage of sales being attributable to lower margin systems integration
project work in the ETTM market.

  Research and development expenses for the three months and nine months ended
September 30, 1995 increased $1,207,000 or 76% and $1,657,000 or 36% from the
comparable periods in 1994.  The largest component of the increase for both
periods is the one-time charge of $882,000 for purchased in-process research and
development as a result of the Cardkey acquisition.  The remaining increase was
primarily attributable to expenditures by WaveLink for the development of a
product line for the radio frequency data collection market and the inclusion of
expenses for Cotag and Cardkey of $772,000 and $1,448,000 for the three month
and nine month periods, respectively.  These increases were partially offset by
increased research and development expenditures included in cost of sales
relating to software development costs associated with the installation of
customer projects and reduced joint venture expense levels relating to product
development for certain transportation applications.

                                       8

<PAGE>
 
  Marketing, general and administrative expenses for the three months and nine
months ended September 30, 1995 increased $3,221,000 or 95% and $3,509,000 or
32% from the comparable periods in 1994.  The increases are primarily
attributable to the inclusion of expenses for Cotag and Cardkey of $3,903,000
and $5,130,000 for the three month and nine month periods, respectively.  These
increases were partially offset by decreases in outside consultant costs,
advertising and travel incurred to pursue and support new business opportunities
for the transportation markets.

  Investment income for the three months and nine months ended September 30,
1995 decreased from $535,000 to $276,000 and from $1,367,000 to $628,000,
respectively.  The decrease for both periods was primarily attributable to the
reduction in interest income resulting from the reduction of cash and marketable
securities used for the purchase of Cotag and Cardkey.  Also contributing to the
decrease for the nine month periods were declines in the market value of certain
of the Company's cash and cash equivalent investments.

  The income tax benefit as a percentage of the loss before taxes was 9% for the
three months and 11% for the nine months ended September 30, 1995.  The primary
difference between the statutory and effective tax rates is the effect of
unbenefitted foreign losses.

  As a result of the foregoing, the Company experienced a net loss of $422,000
and $1,959,000 for the three months and nine months ended September 30, 1995,
respectively, as compared to net income of $503,000 and $7,586,000 for the same
periods in 1994.  The Company currently expects consolidated revenues for
calendar year 1995 to be between $73 and $80 million with a consolidated net
loss for the full year of between $0.23 and $0.36 per share.

LIQUIDITY AND CAPITAL RESOURCES

  At September 30, 1995, the Company's principal source of liquidity consisted
of cash and cash equivalents of $14,526,000 and marketable securities of
$12,365,000.  The Company's future liquidity will be affected by payments of
approximately $5,000,000 which are scheduled to be made over the next one and
one-half years pursuant to the acquisition of Cardkey.  In addition, in December
1994, the Company entered into an agreement to provide up to approximately
$2,300,000 of debt and equity financing to WaveLink.  Approximately $1,200,000
had been advanced as of September 30, 1995.

  With total current liabilities at September 30, 1995 of approximately
$15,200,000 and no long-term debt other than the long-term portion of the note
payable relating to the Cardkey transaction, the Company believes that existing
cash investments will be sufficient to meet the capital requirements for the
current businesses for at least the next two years.

                                       9

<PAGE>
 
 
                         PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

  The information set forth under Part I, Notes to Condensed Consolidated
Financial Statements, Note 4 is incorporated herein by reference.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

  (A)  Exhibits

       The following is a list of exhibits filed as part of this Quarterly
Report on Form 10-Q.

            DESCRIPTION OF EXHIBITS
            -----------------------

       10.1   1995 Long-Term Incentive Plan of the Company.  Filed under Annex A
               in the Company's Proxy Statement for the Annual Meeting of
               Shareholders held April 21, 1995, and incorporated herein by
               reference.

       10.2*  Fourth Amendment to Employment Agreement, effective August 1,
               1995, by and between Amtech Corporation and Steve M. York.

       10.3*  Employment Agreement, effective January 25, 1995, by and between
               Cotag International Limited and Stuart M. Evans.

       10.4*  First Amendment to Employment Agreement, effective August 1, 1995,
               by and between Cotag International Limited and Stuart M. Evans.

       27.1*  Financial Data Schedule

  (B)  No reports of the registrant on Form 8-K have been filed with the
       Securities and Exchange Commission during the three months ended
       September 30, 1995.


*Filed herewith.

                                       10

<PAGE>
 

                                   SIGNATURE

  Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

                                         AMTECH CORPORATION
                                           (Registrant)



Date:  November 13, 1995                 By:        /s/Steve M. York
                                             ----------------------------------
                                             Steve M. York
                                             Senior Vice President, Chief
                                             Financial Officer, and Treasurer
                                             (Principal Financial Officer and
                                             Duly Authorized Officer)

                                       11





<PAGE>
 
                                                                    EXHIBIT 10.2

                    FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT


     Reference is made to that certain Employment Agreement, dated August 6,
1991, as amended (the "Employment Agreement"), entered into between Amtech
Corporation, a Texas corporation (the "Company"), and Steve M. York
("Employee").

     Employee and Company desire to amend the Employment Agreement, as follows:

1.   Paragraph 4 of the Employment Agreement is amended by substituting
"$175,000" for "$145,000" wherever it appears in such Paragraph.

2.   Other than as set forth herein the Employment Agreement remains in full
force and effect as written.

     The parties have executed this Fourth Amendment to be effective as of
August 1, 1995.


                                        AMTECH CORPORATION


                                        By:   /s/ G. Russell Mortenson
                                             ----------------------------------
                                             G. Russell Mortenson
                                             President and Chief
                                             Executive Officer
                                
                                        Date:     August 1, 1995
                                             ----------------------------------



                                        EMPLOYEE:
                              
                              
                                         /s/ Steve M. York
                                         --------------------------------------
                                         Steve M. York
                                    
                              
                                         Date:     August 1, 1995
                                              ---------------------------------





<PAGE>
 
                                                                    EXHIBIT 10.3

                                 CONFIDENTIAL
                                 ------------

                                                                  EXECUTION COPY

                              EMPLOYMENT AGREEMENT
                              --------------------

     This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into on
January 25, 1995, by and between Cotag International Limited, a company
organized under the laws of England (the "Company"), and Stuart Evans
("Employee").

                                    Recitals
                                    --------


     A.  Employee has been employed by the Company (or its subsidiary, Tag
Radionics Limited) since January 1, 1983 and as Chairman and Chief Executive of
the Company since April 28, 1987, and has accumulated experience and knowledge
of value to the Company.

     B.  The Company desires to provide for the continued employment of Employee
in such a manner as will reinforce and encourage the Employee's highest
attention and dedication to the Company.

     C.  Employee is willing to continue to serve the Company on the terms and
conditions provided herein.

                              Terms and Conditions
                              --------------------

     In consideration of the covenants and agreements contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1.  Employment.  The Company shall continue to employ Employee, and
         ----------                                                     
Employee shall continue to serve the Company, on the terms and conditions set
forth herein.


     2.  Term.  Subject to the terms and conditions herein, the employment of
         ----                                                                
Employee by the Company as provided in Section 1 will be for a term commencing
on the date hereof and expiring on the close of business on January 31, 1997
(the "Primary Term").  Thereafter this Agreement may be terminated by either the
Company or the Employee upon twelve months written notice of termination which
may be given at any time, but not to expire before the expiring of the Primary
Term.

     3.  Position and Duties.  The Company shall engage Employee, and Employee
         -------------------                                                  
shall serve, as Chairman and Chief Executive of the Company with such duties as
may be assigned to him from time to time by the President and Chief Executive
Officer of Amtech Corporation, the Company's parent corporation organized under
the laws of the State of Texas, (hereinafter referred to as the "Amtech CEO").
Employee shall devote 

                                      -1-

<PAGE>
 
substantially all his working time and efforts to the business and affairs of
the Company and to the Employee's responsibilities as Vice President-Europe of
Amtech Systems Corporation, a corporation organized under the laws of the State
of Delaware. The location of Employee's principal employment shall be Mercers
Row, Cambridge CB5 8EX.

     4.  Compensation.  During the term of Employee's employment hereunder, the
         ------------                                                          
Company shall pay Employee for his services a base salary of not less than
(Pounds)95,000 per annum (the "Base Salary"), payable monthly in arrears on the
last Friday of every month.  The Base Salary includes any amounts that the
Employee may request that the Company contribute to a defined contribution
pension scheme on the Employee's behalf.   The Amtech CEO shall review the Base
Salary of Employee once a year and if he, in his sole and complete discretion,
deems an adjustment in the Base Salary is appropriate for any reason whatsoever
(including, but not limited to, a change of Employee's duties), the adjustment
will be effective on the date designated by the Amtech CEO and be evidenced by
appropriate entries on the payroll records of the Company.  All applicable taxes
on the Base Salary will be withheld in accordance with applicable taxation
guidelines.

     During the Primary Term, the Employee will receive on such dates a minimum
increase equal to the increase in the United Kingdom retail price index for the
twelve months ended on February 1, 1996 and February 1, 1997.

     The Employee will have the opportunity to receive on an annual basis an
amount equal to between 25% to 30% of the Base Salary in a bonus (the "Bonus
Opportunity").  For 1995, 1/3 of the Bonus Opportunity is based upon the
Company's financial performance, as set forth in a bonus plan similar to a bonus
plan applicable to the executive management team at Amtech Corporation, the
parent corporation of the Company ("Amtech"), 1/3 of the Bonus Opportunity is
based upon the financial performance of Amtech, as set forth in a bonus plan
applicable to the executive management team at Amtech, while 1/3 of the Bonus
Opportunity is based upon individual performance as determined by the Amtech
CEO.

     5.  Working Hours and Vacation.  The Employee's normal hours are 37.5 hours
         --------------------------                                             
per week, excluding lunch break during the hours of 9:00 a.m. through 5:30 p.m.,
Monday through Friday.

     In addition to public holidays when the Company is closed, the Employee is
entitled, without loss of remuneration, to twenty-five vacation days in each
calendar year, of which up to ten accrued and unused vacation days may be
carried into the next calendar year.  Vacation days may be taken in advance of
entitlement to such days; provided, however, if the Employee leaves employment
of the Company for any reason and the Employee has taken a number of vacation
days in excess of the number accrued to that date, then the Employee shall
reimburse 

                                      -2-

<PAGE>
 
the Company any remuneration paid on account of the excess vacation days.

     6.  Absence Due to Illness.  During any period of absence from work due to
         ----------------------                                                
physical or mental illness or accident, the Employee is required to produce a
proper certificate so as to continue to be entitled to the Base Salary. In the
event of absence from work due to physical or mental illness or accident for a
period of four or more consecutive days, the Employee is required to provide the
Company with a statement signed by the Employee under the self certification
procedure of the Statutory Sick Pay Scheme stating the cause of incapacity.
Where the Employee's absence due to physical or mental illness or accident
exceeds six or more consecutive days, the Employee will cause to be produced to
the Company a certificate signed by a qualified medical examiner.

     The Company shall set off against the Employee's remuneration all Statutory
Sick Pay payments made by the Company in accordance with the Statutory Sick Pay
Scheme.

     7.  Life Assurance.  The Company will maintain at its own expense a life
         --------------                                                      
assurance policy (the "Policy") in favor of the Employee's dependents or
beneficiaries in the event of the Employee's death during the term of this
Agreement.  The benefit payable under the Policy will be a lump sum of four
times the Base Salary on the date of death of the Employee.

     8.  Expenses and Services.  During the term of Employee's employment
         ---------------------                                           
hereunder, Employee will be required to travel both domestically and
internationally and shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by Employee by reason of his employment, provided
that such expenses are incurred and accounted for in accordance with the
policies and procedures established by the Company and in effect when the
expenses are incurred.  The Company shall furnish Employee with office space,
secretarial assistance, office supplies, office equipment and such other
facilities and services as are suitable to Employee's position and adequate for
the performance of his duties.

     9.  Transportation.  The Company will provide the Employee with a Jaguar
         --------------                                                      
XJ6 Sovereign motor car (the "Company Vehicle"), or its substantial equivalent.
The Company agrees to pay for the licensing, insurance, repair and servicing of
the Company Vehicle and for the cost of all petrol and oil.  The Employee, with
his permission, and members of his immediate family may use the Company Vehicle
for private purposes when the Employee is not engaged in transacting business on
behalf of the Company.

     10.  Confidential Information.  Employee recognizes and acknowledges that
          ------------------------                                            
Employee will have access to confidential information of the Company and its
Affiliates including, without limitation, customer information, lists of
suppliers and costs, information concerning the business and operations of the

                                      -3-

<PAGE>
 
Company, and its Affiliates and proprietary data, information, concepts and
ideas (whether or not patentable or copyrightable) relating to the business of
the Company, or its Affiliates, as applicable. Employee agrees not to disclose
such confidential information, except as may be necessary in the performance of
Employee's duties, to any Person, nor use such confidential information in any
way, unless Employee has received the written consent of the Company or its
Affiliates as applicable, or unless such confidential information becomes public
knowledge through no wrongful act of Employee. Upon termination of Employee's
employment for any reason, Employee shall promptly deliver to the Company all
drawings, manuals, letters, notebooks, customer lists, documents, records,
equipment, files, computer disks or tapes, reports or any other materials
relating to the business of the Company or its Affiliates,(and all copies) which
are in Employee's possession or under Employee's control excluding documents in
the possession of Employee (as a direct result of Employee being a signatory to
such documents) relating to the purchase by Amtech of the Employee's shares in
the Company. Additionally, the parties hereby acknowledge that Employee has
previously executed an Assignment of Inventions and Confidential Information
Agreement dated January 25, 1995.

     11.  Rights under Certain Plans.  Each of the Employee and the Employee's
          --------------------------                                          
spouse and children is entitled to participate in the Company's medical
insurance scheme, as operated from time to time, the cost of which will be paid
for by the Company.  In addition, the Company will maintain at its cost a
disability insurance policy for the benefit of the Employee.
 
     12.  Early Termination.  Employee's employment hereunder may be terminated
          -----------------                                                    
without any breach of this Agreement only under the following circumstances:

          (A) Employee's employment hereunder will terminate upon Employee's
     death;

          (B) If, as a result of Employee's incapacity due to physical or mental
     illness, Employee shall have been absent from his duties or is unable to
     perform his full duties hereunder for a total of 180 days during any 12
     month period, and within 30 days after written notice of termination is
     given (which may occur before or after the end of such 180 day period)
     shall not have returned to the performance of his full duties hereunder on
     a full-time basis, the Company may terminate Employee's employment
     hereunder.

          (C) The Company may terminate Employee's employment hereunder for
     Cause. For purposes of this Agreement, the Company shall have "Cause" to
     terminate Employee's employment hereunder upon (1) the willful and
     continued failure by Employee to substantially perform his duties hereunder
     (other than any such failure resulting from Employee's incapacity due to
     physical or mental illness), 

                                      -4-

<PAGE>
 
     after written demand for substantial performance is delivered by the
     Company that specifically identifies the manner in which the Company
     believes Employee has not substantially performed his duties; or (2) the
     willful engaging by Employee in misconduct that is materially injurious to
     the Company; or (3) the conviction of Employee of any indictable offense or
     crime of moral turpitude. For purposes of this subsection (C), no act, or
     failure to act, on Employee's part shall be considered "willful" unless
     done, or omitted to be done, by him not in good faith and without
     reasonable belief that his action or omission was in the best interest of
     the Company. Notwithstanding the foregoing, Employee shall not be deemed to
     have been terminated for Cause without (a) reasonable written notice to
     Employee, setting forth the reasons for the Company's intention to
     terminate for Cause; (b) an opportunity for Employee, together with his
     counsel, to be heard before the Board (or an authorized representative
     thereof); and (c) delivery to Employee of a written Notice of Termination
     as defined in subsection (D) hereof from the Board finding that, in the
     good faith opinion of the Board, Employee was guilty of conduct set forth
     above in clause (1), (2) or (3) of this subsection (C), and specifying the
     particulars thereof in detail.

          (D) Any termination of Employee's employment by the Company (other
     than termination pursuant to subsection (A) above) shall be communicated by
     written Notice of Termination to the Employee. For purposes of this
     Agreement, a "Notice of Termination" shall mean a notice that shall
     indicate the specific termination provision in this Agreement relied upon
     and shall set forth in reasonable detail the facts and circumstances
     claimed to provide a basis for termination of Employee's employment under
     the provision so indicated.

          (E) "Date of Termination" shall mean (1) if Employee's employment is
     terminated by Employee's death, the date of Employee's death; and (2) if
     Employee's employment is terminated for any other reason, the date
     specified in the Notice of Termination.

     13.  Compensation upon Termination.  Upon termination of Employee's
          -----------------------------                                 
employment under Paragraph 12 hereof, the Company shall pay to Employee the
monthly Base Salary earned through the Date of Termination at the rate then in
effect, any invoiced and unpaid expenses payable under Section 8 hereof and an
amount equivalent to the Employee's accrued and unused vacations days to the
Date of Termination.  The Company shall have no further obligations to Employee
under this Agreement.

     14.  Noncompetition and Nonsolicitation.   Employee agrees and covenants:
          ----------------------------------                                  

                                      -5-

<PAGE>
 
          (A) That Employee will not compete directly or indirectly with the
     Company (which term, for purposes of this Section 14, shall mean the
     Company and its subsidiaries) in the Designated Geographical Area in any
     business or businesses conducted by the Company during the term provided
     for in Section 2 and for a period of six months after Employee ceases to be
     employed by the Company. For purposes of this Agreement, "Competition"
     shall include, without limitation, any engagement in any business whether
     as proprietor, partner, joint venturer, employee, agent, officer or holder
     of more than five percent (5%) of any class of equity ownership of a
     business enterprise, which is competitive with any business or businesses
     conducted by the Company;

          (B) That the Employee will not furnish advice to, solicit or do
     business of a like nature to that done by the Company and with any past or
     current customer of the Company during term provided for in Section 2 and
     for a period of twelve months after the Employee ceases to be employed by
     the Company.

          (C) That the Employee will not hire away on any basis any person who
     is an employee of the Company during the term provided for in Section 2 and
     for a period of twelve months after the Employee ceases to be employed by
     the Company.

          (D) For purposes of this Section 13, "Designated Geographical Area"
     shall mean and includes the United Kingdom and any foreign jurisdiction in
     which the Company has conducted or is actively conducting business,
     directly or indirectly, at the time Employee ceases to be employed by the
     Company; and

          (E) The non-competition and non-solicitation covenants of Employee
     contained in this Section 14 shall be construed as agreements independent
     of any other provision of this Agreement and the existence of any claim or
     cause of action of Employee against the Company, whether predicated on this
     Agreement or otherwise, shall not constitute a defense to the enforcement
     by the Company of the non-competition and non-solicitation covenants.

     15.  Affiliate Defined.  The term "Affiliate" as used in this Agreement
          -----------------                                                 
means any individual, corporation, unincorporated organization, trust or other
form of entity controlling, controlled by or under common control with the
Company.  For purposes of this definition, "control" (including "controlled by"
and "under common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such individual, corporation, unincorporated organization, trust or other form
of entity, whether through the ownership of voting securities or otherwise.

                                      -6-

<PAGE>
 
     16.  Waiver.  No waiver of any provision of this Agreement shall be deemed,
          ------                                                                
or shall constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a waiver of any continuing or succeeding breach
of such provision, a waiver of the provision itself, or a waiver of any right
under this Agreement.  No waiver shall be binding unless executed in writing by
the party making the waiver.

     17.  Limitation of Rights.  Nothing in this Agreement, except as
          --------------------                                       
specifically stated herein, is intended to confer any rights or remedies under
or by reason of this Agreement on any persons other than the parties to it and
their respective permitted successors and assigns and other legal
representatives, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provision give any third persons any right of
subrogation or action over against any party to this Agreement.

     18.  Remedies.  Employee hereby agrees that a violation of the provisions
          --------                                                            
of Section 10 or 14 or any agreement referred to in Section 14 would cause
irreparable injury to the Company for which it would have no adequate remedy at
law.  Accordingly, in the event of any such violation, the Company shall be
entitled to preliminary and other injunctive relief.  Any such injunctive relief
shall be in addition to any other remedies to which the Company may be entitled
at law or in equity, or otherwise.

     19.  Notice.  Any consent, notice, demand or other communication (including
          ------                                                                
any payment hereunder) required or permitted hereby must be in writing to be
effective and shall be deemed to have been received on the date delivered, if
personally delivered, on the date transmitted, if transmitted by telecopy with
receipt appropriately confirmed, or ten days following the date the same is
deposited in the mail, postage prepaid, certified return receipt requested,
addressed to the applicable party at the address for such party set forth below
or at such other address as such party may designate by like notice:

                         The Company:
                    
                         Amtech Corporation
                         Dominion Plaza
                         17304 Preston Road, E-100
                         Dallas, Texas  75252
                         Attn:  General Counsel
                    
                         Employee:
                    
                         Mr. Stuart M. Evans
                         3 Wordsworth Grove
                         Newham
                         Cambridge CB3 9HH

                                      -7-

<PAGE>
 
     20.  Inconsistent Obligations.  Employee represents and warrants that
          ------------------------                                        
Employee has not previously assumed any obligations inconsistent with those of
this Agreement.  The Employee's employment hereunder is not subject to any
agreement between the Company and any trade union.

     21.  Entirety and Amendments.  This instrument and the instruments referred
          -----------------------                                               
to herein embody the entire agreement between the parties relating to the
subject matters hereof, supersede all prior agreements and understandings
relating to the subject matter hereof, and may be amended only by an instrument
in writing executed by all parties, and supplemented only by documents delivered
or to be delivered in accordance with the express terms hereof.

     22.  Successors and Assigns.  This Agreement will be binding upon and inure
          ----------------------                                                
to the benefit of the parties hereto and any successors in interest to the
Company but neither this Agreement nor any rights hereunder may be assigned by
the Company or the Employee except in the case of the death of Employee.

     23.  Governing Law. The construction, validity and performance of this
          -------------                                                    
Agreement shall be governed by English law which shall be the applicable law in
all respects.  The parties irrevocably agree that, for the exclusive benefit of
the Company and the Employee, the courts of England shall have exclusive
jurisdiction in respect of any dispute, suit, action or proceedings that may
arise out of or in connection with this Agreement.

     24.  Cumulative Remedies.  No remedy herein conferred upon any party is
          -------------------                                               
intended to be exclusive of any other benefits or remedy, and each and every
such remedy shall be cumulative and shall be in addition to every other benefit
or remedy given hereunder or now or hereafter existing at law or in equity or by
statute or otherwise.  No single or partial exercise by any party of any right,
power or remedy hereunder shall preclude any other exercise or further exercise
thereof.

     25.  Multiple Counterparts.  This Agreement may be executed in a number of
          ---------------------                                                
identical counterparts, each of which constitute collectively, one agreement;
but in making proof of this Agreement, it shall not be necessary to produce or
account for more than one counterpart.

     26.  Descriptive Headings.  The headings, captions and arrangements used in
          --------------------                                                  
this Agreement are for convenience only and shall not be deemed to limit,
amplify, or modify the terms of this Agreement, nor affect the meaning hereof.

                                      -8-

<PAGE>
 
                                   Signatures
                                   ----------

     To evidence the binding effect of the covenants and agreements described
above, the parties hereto have executed this Agreement effective as of the date
first above written.

                                   THE COMPANY:
                            
                                   Cotag International Limited
                            
                            
                                   By:     /s/G. Russell Mortenson
                                        ---------------------------------------
                                              G. Russell Mortenson
                            
                            
                                   EMPLOYEE:
                            
                            
                                           /s/Stuart M. Evans
                                        ---------------------------------------

                                      -9-



<PAGE>
 
                                                                    EXHIBIT 10.4

[LOGO OF COTAG INTERNATIONAL LIMITED APPEARS HERE]
                                                     COTAG INTERNATIONAL LIMITED
                                                  Mercers Row, Cambridge CB5 8EX
                                   Tel: +44(0)1223 321535 Fax: +44(0)1223 366799
                                               Reg No. 1710122 VAT:GB 388 851296

                    FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

     Reference is made to that certain Employment Agreement, entered into on
January 25, 1995 (the "Employment Agreement"), between Cotag International
Limited, a company organized under the laws of England (the "Company"), and
Stuart M. Evans ("Employee").

     Employee and Company desire to amend the Employment Agreement, as follows:

1.   Paragraph 4 of the Employment Agreement is hereby amended by substituting
"(Pounds)115,000" for "(Pounds)95,000" wherever it appears in such Paragraph.

2.   Paragraph 3 of the Employment Agreement is hereby amended in its entirety
to read as follows:

     "3.  Position and Duties.  The Company shall engage Employee, and Employee
          -------------------                                                  
          shall serve, as Chairman and Chief Executive of the Company with such
          duties as may be assigned to Employee from time-to-time by the
          President and Chief Executive Officer of Amtech Corporation, the
          Company's parent corporation organized under the laws of the State of
          Texas (hereinafter referred to as the "Amtech CEO"). Employee shall
          also serve in
 such officer capacities with such Affiliates of the
          Company as may be designated, in each case, from time-to-time by the
          Amtech CEO. Employee shall devote substantially all of his working
          time and efforts to the business and affairs of the Company and the
          Employee's responsibilities vis-a-vis such Affiliates of the Company
                                      ---------
          as have been designated by the Amtech CEO. The location of Employee's
          principal place of employment shall be Mercers Row, Cambridge CB5 8EX.

3.   The second paragraph of Paragraph 4 is hereby amended in its entirely to
read as follows:

     "During the Primary Term, the Employee will receive on each of February 1,
     1996, and February 1, 1997, a minimum percentage increase in Base Salary
     equal to the percentage increase in the United Kingdom retail price index
     for the twelve months ended on February 1, 1996, and February 1, 1997, as
     applicable.  However, no such increase in Base Salary shall be given to the
     Employee until the cumulative amounts that the Employee would be entitled
     to receive under the provisions of the preceding sentence exceed
     (Pounds)20,000."

4.   Other than as set forth herein the Employment Agreement remains in full
force and effect as written.

     The parties have executed this First Amendment to be effective as of August
1, 1995.

                                    COTAG INTERNATIONAL LIMITED


                                    By:   /s/ G. RUSSELL MORTENSON
                                          _____________________________________
                                          G. Russell Mortenson

                                    Date:      October 5, 1995
                                          _____________________________________


                                    EMPLOYEE:

                                    /s/ STUART M. EVANS
                                    ___________________________________________
                                    Stuart M. Evans

                                    Date:      October 5, 1995
                                          _____________________________________



<TABLE> <S> <C>


<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1995
<PERIOD-START>                             JUL-01-1995
<PERIOD-END>                               SEP-30-1995
<CASH>                                          14,526
<SECURITIES>                                    12,365
<RECEIVABLES>                                   27,566
<ALLOWANCES>                                       569
<INVENTORY>                                     11,501
<CURRENT-ASSETS>                                67,387
<PP&E>                                          21,759
<DEPRECIATION>                                   8,977
<TOTAL-ASSETS>                                  93,191
<CURRENT-LIABILITIES>                           15,248
<BONDS>                                              0
<COMMON>                                           147
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<OTHER-SE>                                      75,159
<TOTAL-LIABILITY-AND-EQUITY>                    93,191
<SALES>                                         17,013
<TOTAL-REVENUES>                                24,526
<CGS>                                            9,011
<TOTAL-COSTS>                                   15,775
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                    76
<INTEREST-EXPENSE>                                  66
<INCOME-PRETAX>                                   (466)
<INCOME-TAX>                                       (44)
<INCOME-CONTINUING>                               (422)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                      (422)
<EPS-PRIMARY>                                    (0.03)
<EPS-DILUTED>                                    (0.03)
        

</TABLE>