Beat 1 cup softened butter and 1 cup sugar on medium high speed with an electric mixer until pale and creamy, about 3 minutes. Add 2 eggs, one at a time, mixing after each; mix in 1/2 tsp vanilla.
To make the caramel sauce, combine 1 cup brown sugar, 1/2 cup butter, 1/4 cup milk, 1 tsp vanilla and 1/4 tsp salt in medium saucepan over medium heat. Bring to a boil and simmer 3-4 minutes, stirring often, until caramel is smooth and thickened.