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EXHIBIT 10.4    
    


 
 

CASCADE MICROTECH, INC.
  
    FORM OF 2004 EMPLOYEE STOCK PURCHASE PLAN    
    


        The following constitute the provisions of the 2004 Employee Stock Purchase Plan of Cascade Microtech, Inc. The Plan was adopted by the Board on
February     , 2004 effective as of the date of the Company's IPO. 



        1.     Purpose.
The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company
through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986,
as amended. The provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 



        2.     Definitions. 



        (a)   "Board"
shall mean the Board of Directors of the Company. 


        (b)   "Code"
shall mean the Internal Revenue Code of 1986, as amended. 


        (c)   "Common
Stock" shall mean the common stock of the Company. 


        (d)   "Company"
shall mean Cascade Microtech, Inc. an Oregon corporation, and any Designated Subsidiary of the Company. 



        (e)   "Compensation"
shall mean all base straight time gross earnings and commissions, but exclusive of payments for overtime, shift premium, incentive compensation, incentive
payments, bonuses and other compensation. 


        (f)    "Designated
Subsidiary" shall mean any Subsidiary which has been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan. 


        (g)   "Employee"
shall mean any individual who is an Employee of the Company for tax purposes whose customary employment with the Company is at least twenty (20) hours
per week and more than five (5) months in any calendar year. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or
other leave of absence approved by the Company. Where the period of leave exceeds 90 days and the individual's right to re-employment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave. 


        (h)   "Enrollment
Date" shall mean the first Trading Day of each Offering Period. 


        (i)    "Exercise
Date" shall mean the last Trading Day of each Purchase Period. 


        (j)    "Fair
Market Value" shall mean, as of any date, the value of Common Stock determined as follows: 



        (1)   If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system
for the last market trading day on or before the date of such determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; 



        (2)   If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean of the closing bid
and asked prices for the Common Stock for the last quotation day on or before the date of such 














determination,
as reported in The Wall Street Journal or such other source as the Board deems reliable; 


        (3)   In
the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board; or 



        (4)   For
purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair Market Value shall be the initial price to the public as set forth in the final
prospectus included within the Company's registration statement on Form S-1 filed with the Securities and Exchange Commission for the IPO. 




        (k)   "IPO"
shall mean the initial offering of Common Stock to the public pursuant to a registration statement filed by the Company with the Securities and Exchange
Commission. 


        (k)   "Offering
Periods" shall mean the periods of approximately twenty-four (24) months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after February 1 and August 1 of each year and terminating on the last Trading Day in the periods ending twenty-four
months later, provided, however, that the first Offering Period under the Plan shall commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares
effective the Company's registration statement with respect to the IPO and end on the last Trading Day on or before July 31, 2004, unless the registration statement shall be declared effective
after July 31, 2004, in which case the first Offering Period shall end on the last Trading Day on or before January 31, 2005. The duration and timing of Offering Periods may be changed
pursuant to Section 4 of this Plan. 


        (l)    "Plan"
shall mean this 2004 Employee Stock Purchase Plan. 


        (m)  "Purchase
Period" shall mean the approximately six month period commencing after one Exercise Date and ending with the next Exercise Date, except that the first Purchase
Period of any Offering Period shall commence on the Enrollment Date and end with the next Exercise Date. 


        (n)   "Purchase
Price" shall mean 85% of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided however,
that the Purchase Price may be adjusted by the Board pursuant to Section 20. 



        (o)   "Reserves"
shall mean the number of shares of Common Stock covered by each option under the Plan which have not yet been exercised and the number of shares of Common
Stock which have been authorized for issuance under the Plan but not yet placed under option. 


        (p)   "Subsidiary"
shall mean a corporation, domestic or foreign, of which not less than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such
corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary. 



        (q)   "Trading
Day" shall mean a day on which national stock exchanges and the Nasdaq System are open for trading. 




        3.     Eligibility 



        (a)   Any
Employee who shall be employed by the Company on a given Enrollment Date shall be eligible to participate in the Plan. 


        (b)   Any
provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) to the extent that, immediately after the
grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and/or hold outstanding
options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Subsidiary, or
(ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of the Company and its subsidiaries accrues at a rate which exceeds Twenty-Five
Thousand Dollars ($25,000) worth of 













stock
(determined at the fair market value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time. 




        4.     Offering
Periods. The Plan shall be implemented by consecutive, overlapping Offering Periods with a new Offering Period commencing on the first Trading Day on or after
February 1 and August 1 each year, or on such other date as the Board shall determine, and continuing thereafter until terminated in accordance with Section 20 hereof, provided,
however, that the first Offering Period under the Plan shall commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares effective the Company's
registration statement with respect to the IPO and end on the last Trading Day on or before July 31, 2004, unless the registration statement shall be declared effective after July 31,
2004, in which case the first Offering Period shall end on the last Trading Day on or before January 31, 2005. The Board shall have the power to change the duration of Offering Periods
(including the commencement dates thereof) with respect to future offerings without shareholder approval if such change is announced at least five (5) days prior to the scheduled beginning of
the first Offering Period to be affected thereafter. 


        5.     Participation.
An eligible Employee may become a participant in the Plan by completing a subscription agreement authorizing payroll deductions in the form of
Exhibit A to this Plan and filing it with the Company's payroll office prior to the applicable Enrollment Date. Notwithstanding the foregoing, all eligible Employees shall be automatically
enrolled as a participant in the Plan in the first Offering Period. 


        6.     Payroll
Deductions. 



        (a)   A
participant may purchase shares of Common Stock under the Plan solely by means of payroll deductions: provided, however, that in the first Offering Period,
participants may also purchase shares of Common Stock by making a lump sum cash payment at the end of the Offering Period. At the time a participant files his or her subscription agreement, he or she
shall elect to have payroll deductions made on each pay day during the Offering Period in one percent (1%) increments of not less than two percent (2%) or greater than fifteen percent (15%) of the
Compensation which he or she receives on each pay day during the Offering Period. Payroll deductions for a participant shall commence on the first payroll following the Enrollment Date and shall end
on the last payroll in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof; provided, however, that
during the first Offering Period, no payroll deduction will be made unless a participant timely files the subscription agreement with the Company after a registration statement on
Form S-8 covering the Common Stock under the Plan is filed and effective under the Securities Act of 1933, as amended. 



        (b)   All
payroll deductions made for a participant shall be credited to his or her account under the Plan and shall be withheld in whole percentages only. A participant may
not make any additional payments into such account. 


        (c)   A
participant may discontinue his or her participation in the Plan as provided in Section 10 hereof, or may increase or decrease the rate of his or her payroll
deductions during the Offering Period by completing or filing with the Company a new subscription agreement authorizing a change in payroll deduction rate. The Board may, in its discretion, limit the
number of participation rate changes during any Offering Period. The change in rate shall be effective with the first full payroll period following five (5) business days after the Company's
receipt of the new subscription agreement unless the Company elects to process a given change in participation more quickly. A participant's subscription agreement shall remain in effect for
successive Offering Periods unless terminated as provided in Section 10 hereof. 


        (d)   Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's payroll
deductions may be decreased to zero percent (0%) at any time during a Purchase Period. Payroll deductions shall recommence at the rate provided in such participant's subscription agreement at the
beginning of the first Purchase 












Period
which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10 hereof. 


        (e)   At
the time the option is exercised, in whole or in part, or at the time some or all of the Company's Common Stock issued under the Plan is disposed of, the participant
must make adequate provision for the Company's federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock. At any
time, the Company may, but shall not be obligated to, withhold from the participant's compensation the amount necessary for the Company to meet applicable withholding obligations, including any
withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Employee. 




        7.     Grant
of Option. On the Enrollment Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option to purchase on
each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of the Company's Common Stock determined by dividing such Employees payroll deductions
accumulated prior to such Exercise Date and retained in the Participant's account as of the Exercise Date by the applicable Purchase Price; provided that in no event shall an Employee be permitted to
purchase during each Purchase Period more than five thousand (5,000) shares of the Company's Common Stock (subject to any adjustment pursuant to Section 19), and provided further that such
purchase shall be subject to the limitations set forth in Sections 3(b), 8(a) and 8(b) hereof. The Board may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum
number of shares of the Company's Common Stock an Employee may purchase during each Purchase Period of such Offering Period. Exercise of the option shall occur as provided in Section 8 hereof,
unless the participant has withdrawn pursuant to Section 10 hereof. The option shall expire on the last day of the Offering Period. 


        8.     Exercise
of Option. 



        (a)   Unless
a participant withdraws from the Plan as provided in Section 10 hereof, his or her option for the purchase of shares shall be exercised automatically on
the Exercise Date, and the maximum number of full shares subject to option shall be purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or
her account; provided that in no event shall an Employee be permitted to purchase during each Purchase Period more than two hundred percent (200%) of the number of shares that the Employee could
purchase if the Purchase Price was limited to eight-five percent (85%) of the Fair Market Value of a share of Common Stock on the Enrollment Date. No fractional shares shall be purchased;
any payroll deductions accumulated in a participant's account which are not sufficient to purchase a full share shall be
retained in the participant's account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the participant as provided in Section l0 hereof. Any other monies
leftover in a participant's account after the Exercise Date shall be returned to the participant. During a participant's lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her. 


        (b)   If
the Board determines that, on a given Exercise Date, the number of shares with respect to which options are to be exercised may exceed (i) the number of shares
of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of shares available for sale under the Plan on such
Exercise Date, the Board may in its sole discretion (x) provide that the Company shall make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or
Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase
Common Stock on such Exercise Date, and continue all Offering Periods then in effect, or (y) provide that the Company shall make a pro rata allocation of the shares available for purchase on
such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all 












participants
exercising options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20 hereof. The Company may make pro
rata allocation of the shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares for issuance
under the Plan by the Company's shareholders subsequent to such Enrollment Date. 




        9.     Delivery.
As promptly as practicable after each Exercise Date on which a purchase of shares occurs, the Company shall arrange the delivery to each participant, as
appropriate, of a certificate representing the shares purchased upon exercise of his or her option. 


        10.   Withdrawal. 



        (a)   A
participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan
at any time by giving written notice to the Company in the form of Exhibit B to this Plan. All of the participant's payroll deductions credited to his or her account shall be paid to such
participant promptly after receipt of notice of withdrawal and such participant's option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase
of shares shall be made for such Offering Period. If a participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the
participant delivers to the Company a new subscription agreement. 


        (b)   In
the first Offering Period, participants may be deemed to withdraw from the Plan by declining or failing to remit timely payment to the Company for the shares of
Common Stock accumulated during such Offering Period. 


        (c)   A
participant's withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be
adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws. 




        11.   Termination
of Employment. Upon a participant's ceasing to be an Employee, for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the
payroll deductions credited to such participant's account during the Offering Period but not yet used to exercise the option shall be returned to such participant or, in the case of his or her death,
to the person or persons entitled thereto under Section 15 hereof, and such participant's option shall be automatically terminated. The preceding sentence notwithstanding, a participant who
receives payment in lieu of notice of termination of employment shall be treated as continuing to be an Employee for the participant's customary number of hours per week of employment during the
period in which the participant is subject to such payment in lieu of notice. 


        12.   Interest.
No interest shall accrue on the payroll deductions of a participant in the Plan. 


        13.   Stock.




        (a)   Subject
to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 400,000 shares, plus an annual increase to be added on the first day of the Company's fiscal year beginning in 2006 equal to the lesser
of: (i) one and one-half percent (1.5%) of the outstanding shares of Common Stock on the first day of the Company's fiscal year for which the increase is being made;
(ii) 100,000 shares or; (iii) an amount determined by the Board. 


        (b)   The
participant shall have no interest or voting right in shares covered by his option until such option has been exercised. 



        (c)   Shares
to be delivered to a participant under the Plan shall be registered in the name of the participant or in the name of the participant and his or her spouse. 













        14.   Administration.
The Plan shall be administered by the Board or a committee of members of the Board appointed by the Board. The Board or its committee shall have full and
exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claim filed under the Plan. Every finding, decision
and determination made by the Board or its committee shall to the full extent permitted by law, be final and binding upon all parties. 


        15.   Designation
of Beneficiary. 



        (a)   A
participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant' s account under the Plan in the
event of such participant's death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may
file a written designation of a beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death prior to exercise of the option. If
a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. 


        (b)   Such
designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of
the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to
any one or more dependents or relatives of the participant or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 




        16.   Transferability.
Neither payroll deductions credited to a participant's account nor any rights with regard to the exercise of an option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15 hereof) by the participant.
Any such attempt at assignment, transfer, pledge or other disposition shall be without effect except that the Company may treat such act as an election to withdraw funds from an Offering Period in
accordance with Section 10 hereof. 


        17.   Use
of Funds. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions. 


        18.   Reports.
Individual accounts shall be maintained for each participant in the Plan. Statements of account shall be given to participating Employees at least annually,
which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any. 



        19.   Adjustments
Upon Changes in Capitalization, Dissolution, Liquidation, Merger of Asset Sale 



        (a)   Changes
in Capitalization. Subject to any required action by the shareholders of the Company, the Reserves, the maximum number of shares each participant may purchase
each Purchase Period pursuant to Section 7, as well as the price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised shall
be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company, provided, however, that
conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into 









shares
of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option. 



        (b)   Dissolution
or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a
new Exercise Date (the "New Exercise Date"), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or liquidation. The Board shall notify each participant in writing, at least ten (10) business days prior to the New
Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option shall be exercised automatically on the New Exercise
Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof. 



        (c)   Merger
or Asset Sale. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another
corporation, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option, any Purchase Periods then in progress shall be shortened by setting
a new Exercise Date (the "New Exercise Date") and any Offering Periods then in progress shall end on the New Exercise Date. The New Exercise Date shall be before the date of the Company's proposed
sale or merger. The Board shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been
changed to the New Exercise Date and that the participant's option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering
Period as provided in Section 10 hereof. 




        20.   Amendment
or Termination. 



        (a)   The
Board of Directors of the Company may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19 hereof, no such termination
can affect options previously granted, provided that an Offering Period may be terminated by the Board of Directors on any Exercise Date if the Board determines that the termination of the Offering
Period or the Plan is in the best interests of the Company and its shareholders. Except as provided in Section 19 and this Section 20 hereof, no amendment may make any change in any
option theretofore granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other
applicable law, regulation or stock exchange rule), the Company shall obtain shareholder approval in such a manner and to such a degree as required. 


        (b)   Without
shareholder consent and without regard to whether any participant rights may be considered to have been "adversely affected," the Board (or its committee) shall
be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld
in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for
each participant properly correspond with amounts withheld from the participant's Compensation, and establish such other limitations or procedures as the Board (or its committee) determines in its
sole discretion advisable which are consistent with the Plan. 



        (c)   In
the event the Board determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board may, in its discretion
and, to the extent 












necessary
or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to: 



        (1)   altering
the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price; 



        (2)   shortening
any Offering Period so that Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board action; and 


        (3)   allocating
shares. 





        Such
modifications or amendments shall not require stockholder approval or the consent of any Plan participants. 


        21.   Notices.
All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received
in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 


        22.   Conditions
Upon Issuance of Shares. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares
pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel
for the Company with respect to such compliance. 


        As
a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law. 


        23.   Term
of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of the Company. It
shall continue in effect for a term of ten (10) years unless sooner terminated under Section 20 hereof 


        24.   Automatic
Transfer to Low Price Offering Period. To the extent permitted by any applicable laws, regulations, or stock exchange rules if the Fair Market Value of the
Common Stock on any Exercise Date in an Offering Period is lower than the Fair Market Value of the Common Stock on the Enrollment Date of such Offering Period, then all participants in such Offering
Period shall be automatically withdrawn from such Offering Period immediately after the exercise of their option on such Exercise Date and automatically re-enrolled in the immediately
following Offering Period as of the first day thereof. 









 
 

EXHIBIT A    
    


 
 

CASCADE MICROTECH, INC.
  
    2004 EMPLOYEE STOCK PURCHASE PLAN    
    


SUBSCRIPTION
AGREEMENT 



	 	Original Application	 	Enrollment Date:
	 	
 Change in Payroll Deduction Rate	
 	

 
	 	Change of Beneficiary(ies)	 	 





        1.     I,
                        , hereby elect to participate in the Cascade Microtech, Inc. 2004 Employee Stock Purchase Plan
(the "Plan") for the
Offering Period                         ,             
to                         ,             
and subscribe to purchase shares of the Company's Common Stock in accordance with this Subscription Agreement and the Plan. 


        2.     I
hereby authorize payroll deductions from each paycheck in the amount of      % of my Compensation on each payday during the Offering Period in accordance with
the Plan. I understand that this amount must not be less than 2% and not more than 15% of my Compensation during the Offering Period. (Please note that no fractional percentages are permitted.) 


        3.     I
understand that said payroll deductions shall be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with
the Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option. 


        4.     I
understand that I may discontinue at any time prior to the Purchase Date my participation in the Plan as provided in Section 10 of the Plan. I also understand
that I can increase or decrease the rate of my payroll deductions on one occasion only with respect to any increase and one occasion only with respect to any decrease during any Purchase Period by
completing and filing a new Subscription Agreement with such increase or decrease taking effect as of the beginning of the calendar month following the date of filing of the new Subscription
Agreement, if filed at least ten (10) business days prior to the beginning of such month. Further, I may change the rate of my payroll deductions for future Offering Periods by filing a new
Subscription Agreement, and any such change will be effective as of the beginning of the next Offering Period. In addition, I acknowledge that, unless I discontinue my participation in the Plan as
provided in Section 10 of the Plan, my election will continue to be effective for each successive Offering Period. 


        5.     I
have received a copy of the complete "Cascade Microtech, Inc. 2004 Employee Stock Purchase Plan." I understand that my participation in the Plan is in all
respects subject to the terms of the Plan. I understand that my ability to exercise the option under this Subscription Agreement is subject to shareholder approval of the Plan. 



        6.     Shares
purchased for me under the Plan should be issued in the name(s) of (Employee or Employee and Spouse only): 


        7.     1
understand that if I dispose of any shares received by me pursuant to the Plan within two years after the Enrollment Date (the first day of the Offering Period during
which I purchased such shares) or one year after the Exercise Date, I will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount
equal to the excess of the fair market value of the shares at the time such shares were purchased by me over the price which I paid for the shares. I agree to notify the Company in writing within
30 days after the date of any disposition of my shares and I will make adequate provision for Federal, state or other tax withholding obligations, 










if
any, which arise upon the disposition of the Common Stock. The Company may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding
obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by me. If I dispose of such
shares at any time after the expiration of the 2-year and 1-year holding periods, I understand that I will be treated for federal income tax purposes as having received income
only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (1) the excess of the fair market value of the
shares at the time of such disposition over the purchase price which I paid for the shares, or (2) 15% of the fair market value of the shares on the first day of the Offering Period. The
remainder of the gain, if any, recognized on such disposition will be taxed as capital gain. 


        8.     I
hereby agree to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Plan. 



        9.     In
the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due me under the Plan: 


NAME:    (Please
print) 


                                        
                                          
    

(First)              (Middle)                   (Last) 


                                        
                                          
    

Relationship 


                                        
                                          
    


(Address) 


Employee's
Social Security Number:
                                         
                                          
    


Employee's
Address:
                                         
                                          
   
 


                                        
                                          
                                       



I
UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME. 



Dated:
                                         
        


Signature
of Employee:
                                         
       



Spouse's
Signature (If beneficiary other than spouse):
                                         
       
 







 
 

EXHIBIT B    
    


 
 

CASCADE MICROTECH
  
    2004 EMPLOYEE STOCK PURCHASE PLAN
  
    NOTICE OF WITHDRAWAL    
    


        I,                         , hereby elect to withdraw my
participation in the Cascade Microtech, Inc. 2004 Employee Stock Purchase Plan
for the Offering Period that began on                         
            , 20      . This withdrawal covers
all payroll deductions credited to my account and is effective on the date designated below. 


        I
understand that all payroll deductions credited to my account will be paid to me as promptly as practicable and that my option for the current Offering Period will automatically
terminate. I further understand that no further payroll deductions will be made for the purchase of shares in the current Offering Period and I shall be eligible to participate in succeeding Offering
Periods only by delivering to the Company a new Subscription Agreement. 


        Name
and Address of Participant: 


        Signature:
                                         
                  


        Date:
                                         
                 
 











QuickLinks



EXHIBIT 10.4


CASCADE MICROTECH, INC. FORM OF 2004 EMPLOYEE STOCK PURCHASE PLAN




EXHIBIT A


CASCADE MICROTECH, INC. 2004 EMPLOYEE STOCK PURCHASE PLAN


EXHIBIT B


CASCADE MICROTECH 2004 EMPLOYEE STOCK PURCHASE PLAN NOTICE OF WITHDRAWAL