Exhibit 10.1

 

Cascade Microtech, Inc.

2005 Executive Compensation Plan

for the Six-Month Period Ending June 30, 2005

 

Participants

 

Eric Strid

Chief Executive Officer and President

Steven Sipowicz

Chief Financial Officer, Vice President of Finance, Treasurer and Corporate
Secretary

John Pence

Vice President and General Manager, Engineering Products Division

Bruce McFadden

Vice President and General Manager, Production Probe Division

 

Performance Criteria

 

Bonuses for these participants are calculated on a percentage of their base
salary based on attainment of planned levels of net income, operating income and
divisional revenue.  Determinations as to whether the performance targets have
been met are made quarterly, with respect to 20% of the bonus, and
semi-annually, with respect 80% of the bonus.

 

This table lists the portion of the total bonus payout that is based on the
different performance measures, for each executive:

 

 

 

Semi-annual 80%

 

Quarterly
20%

 

 

 

Net
income

 

Operating
income

 

Engineering
products
revenue

 

Production
probes revenue

 

Quarterly
Objectives

 

Chief Executive Officer

 

20%

 

40%

 

10%

 

10%

 

20%

 

Chief Financial Officer

 

30%

 

30%

 

10%

 

10%

 

20%

 

VP Engineering Products

 

 

 

60%

 

20%

 

 

 

20%

 

VP Production Probe

 

 

 

60%

 

 

 

20%

 

20%

 

 

In the cases of net income, operating income, and product line revenues, the
period of the performance measures will be for the first half of 2005 (first two
quarters).

 

The payout for the net income portion will be:

•                  100% payout for achievement of 100% of the planned net income
(“target”)

•                  Linear from 0% to 100% for net income between 75% and 100% of
target

•                  Zero for net income below 75% of target

•                  Linearly proportional to net income at or above 100% of
target

 

The payout for the operating income portion will be:

•                  100% payout for achievement of 100% of the planned
consolidated operating income (“target”)

•                  Linear from 50% payout for operating income at 75% of target
to 100% payout at 100% of target and higher

•                  Zero for operating income below 75% of target

 

The payout for the product line revenue portion will be:

•                  100% payout for achievement of 100% of the planned respective
consolidated product line revenue (“target”)

•                  Linear from 0% payout for product line revenues at 75% of
target to 200% payout at 125% of target

•                  200% payout for product line revenues above 125% of target

•                  Zero for product line revenues below 75% of target

 

The payout for quarterly objectives will be proportional to the fraction of
quarterly objectives completed. The CEO is the final arbiter of such completion
status. A set of quarterly objectives is formulated by a consensus of the
management team for each executive at the beginning of each quarter.

 

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