Cascade Microtech, Inc. 2006 Executive Compensation Plan for the Six-Month Period Ending December 31,2006

EX-10.1 2 a06-21814_1ex10d1.htm EX-10

Exhibit 10.1

Cascade Microtech, Inc.
2006 Executive Compensation Plan
for the Six-Month Period Ending December 31, 2006

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%
	Operating income		Engineering products revenue		Production probes revenue		Quarterly Objectives
Chief Executive Officer	60	%	10	%	10	%	20	%
Chief Financial Officer	60	%	10	%	10	%	20	%
VP Engineering Products	60	%	20	%			20	%
VP Production Probe	60	%			20	%	20	%

In the cases of operating income, and product line revenues, the period of the performance measures will be for the second half of 2006 (last two quarters).

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 50% of target to 100% payout at 100% of target and higher

· Zero for operating income below 50% 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 50% of target to 200% payout at 150% of target

· 200% payout for product line revenues above 150% of target

· Zero for product line revenues below 50% 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.