8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 10, 2007

CASCADE MICROTECH, INC.

(Exact name of registrant as specified in its charter)

OREGON	000-51072	93-0856709
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2430 N.W. 206th Avenue

Beaverton, Oregon 97006

(503) 601-1000

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

On August 10, 2007, the Board of Directors of Cascade Microtech, Inc. (the “Company”) approved annual salaries for the Company’s executive officers effective as of September 1, 2007 as follows:

Name	Title	Annual Salary
Eric Strid	President and Chief Executive Officer	$	221,000
Steve Sipowicz	Vice President and Chief Financial Officer	$	178,600
John Pence	Vice President Engineering Products	$	252,200
Willis Damkroger	Vice President Production Products	$	162,000

On August 10, 2007, the Board of Directors of the Company approved the Executive Compensation Plan for the six-month period ending December 31, 2007 (the “Executive Compensation Plan”). The Executive Compensation Plan establishes target bonus levels for each participant and will be paid based on the achievement of certain goals. A copy of the Executive Compensation Plan is filed as Exhibit 10.1 to this report and is incorporated herein by reference.

On August 16, 2007, the Company issued a press release announcing a planned succession and search for a new Chief Executive Officer. Eric Strid, the Company’s Chairman, President and Chief Executive Officer, will transition to the position of Chairman and Chief Technical Officer upon the selection and appointment of a new President and Chief Executive Officer.

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

10.1 Executive Compensation Plan for the Six-Month Period Ending December 31, 2007.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on August 16, 2007.

CASCADE MICROTECH, INC.
(Registrant)
By	/s/ Steven Sipowicz
	Steven Sipowicz
	Vice President and Chief Financial Officer

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EX-10.1

Exhibit 10.1

Cascade Microtech, Inc.

2007 Executive Compensation Plan

for the Six-Month Period Ending December 31, 2007

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
Willis Damkroger	Vice President and General Manager, Production Products 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.

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

	Corporate and Division Metrics 80%								Individual Metrics 20%
	Net income		Operating income		Engineering products revenue		Production products revenue		Quarterly Objectives
Chief Executive Officer	30	%	30	%	10	%	10	%	20	%
Chief Financial Officer	30	%	30	%	10	%	10	%	20	%
VP Engineering Products	—		60	%	20	%	—		20	%
VP Production Products	—		60	%	—		20	%	20	%

The payout for the operating income and net income portion will be:

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

• Linear for operating income and net income beginning at minimum dollar level to 100% payout at 100% of target to 200% payout cap at maximum dollar level and higher

• Zero for operating income and net income below minimum dollar level

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 cap at 150% of target and higher

• Zero for product line revenues below 50% of target

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