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2009 Management Incentive Compensation Plan

 
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2009 Management Incentive Compensation Plan
 
1.
Purpose of the Plan

 
The Management Incentive Compensation Plan (the “Plan”) is designed to offer
incentive compensation to officers and management-level employees (the
“Associates”) of Micromet, Inc. and its subsidiary Micromet AG (collectively,
“Micromet”) by rewarding the achievement of corporate goals and specifically
measured individual goals that are consistent with and support the achievement
of the corporate goals.  The Plan will create an environment that will focus
Associates on the achievement of objectives.  Since cooperation between
departments and Associates is required to achieve the corporate goals and
because such corporate goals represent a significant portion of the incentive
compensation paid under the Plan, the Plan fosters teamwork and a cohesive
management team.  The Plan is designed to:
 
 
·
Provide an incentive program to achieve overall corporate objectives and to
enhance shareholder value

 
 
·
Reward those individuals who significantly impact corporate results

 
 
·
Encourage increased teamwork among all disciplines within Micromet

 
 
·
Incorporate an incentive program in the overall compensation program of Micromet
to help attract and retain key Associates

 
2.
Plan Governance

 
The President and CEO of Micromet, Inc. (the “Chief Executive Officer”) will be
responsible for the administration of the Plan for Associates of Micromet, Inc.,
and the Vorstand of Micromet AG (“Executive Management Board”) will be
responsible for the administration of the Plan for Associates of Micromet AG,
except that the Compensation Committee (the “Committee”) of the Board of
Directors of Micromet, Inc. (the “Board”) will be responsible for approving any
incentive awards to officers of Micromet, Inc. and for determining and approving
any incentive awards to the Chief Executive Officer.
 
3.
Eligibility of Associates (other than Executive Officers)

 
3.1.
The Associates who may be eligible to participate in the Plan will be selected
at the sole discretion of Micromet (each such Associate a “Plan Participant”).

 
3.2.
In order to be eligible to receive any incentive award under this Plan, an
Associate (a) must have been in an eligible position for at least three (3)
consecutive months during the Plan year; (b) must not be a part-time Associate
(i.e. working fewer than 30 hours per week); and (c) must have had at least a
rating of 3.0 on his or her most recent performance review (on a scale of 1.0 to
5.0, with 5.0 being the highest rating).  If an eligible Associate has been on
probation for performance or other issues at any time during the Plan year or
during the period from the end of the Plan year until the time at which bonus
determinations are made, any award to such individual will be subject to the
discretion of Micromet.

 
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4.
Form of Incentive Award Payments

 
Incentive award payments may be made in cash, through the issuance of stock or
stock options, or by a combination of cash, stock and/or stock options, at the
discretion of the Committee, subject to the approval of the Board.   In the
event that the Committee and the Board elect to pay incentive awards in stock or
stock options, the Committee, in its sole discretion, will make a determination
of the number of shares of stock or stock options to be issued to each Plan
Participant based, in part, upon the Plan Participant’s achievement of corporate
and individual goals, as described below.  The issuance of stock and stock
options may also be subject to the approval of Micromet, Inc.’s stockholders,
and any stock options issued will be subject to the terms and conditions of
Micromet, Inc.’s 2003 Equity Incentive Award Plan, as amended from time to time
by Micromet, Inc.
 
5.
Target Award Multiplier

 
5.1.
Incentive awards will be determined by applying an “achievement multiplier” to
the base salary of Plan Participants.  The following target award multipliers
will be used for this purpose:

Micromet, Inc. Position
 
Micromet AG Position
 
Target Award Multiplier
 
President & CEO
 
n.a.
    50 %
Senior Vice President
 
Vorstand
    35 %
Vice President
 
Vorstand
    35 %
Executive Director
 
Vice President
    25 %
Senior Director
 
Senior Director
    20 %
Director
 
Director
    20 %
Associate Director
 
Associate Director
    15 %
Senior Manager
 
Senior Manager
    15 %

5.2.
The target award multiplier will be used to establish the target incentive award
at the beginning of each year.  The target award multiplier will be equal to the
actual award multiplier used at year-end in situations where corporate and
individual objectives have been met for the year.

 
6.
Corporate and Individual Performance

 
6.1.
Prior to or within 90 days after the beginning of the Plan year, the Chief
Executive Officer will present to the Committee a list of the overall corporate
goals for the Plan year, which are subject to approval of the Committee and the
Board of Directors of Micromet, Inc.  All Plan Participants will then develop a
list of personal goals, which must be approved by the immediate supervisor and
the executive officer responsible for the applicable department, or by the Chief
Executive Officer for personal goals of the executive officers.

 
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6.2.
The Plan calls for incentive awards based on the achievement of annual corporate
and personal goals that have been approved as indicated above.  The relative
weight between corporate goals and personal goals varies based on the
individual’s level within the organization.  The weighting will be reviewed
annually and may be adjusted, as necessary or appropriate.  The weighting for
the Plan year will be as follows:

Micromet, Inc.
 
Micromet AG
 
Corporate
   
Individual
 
President & CEO
 
n.a.
    100 %     0 %
Senior Vice President
 
Vorstand
    75 %     25 %
Vice President
 
Vorstand
    75 %     25 %
Executive Director
 
Vice President
    75 %     25 %
Senior Director
 
Senior Director
    50 %     50 %
Director
 
Director
    50 %     50 %
Associate Director
 
Associate Director
    25 %     75 %
Senior Manager
 
Senior Manager
    25 %     75 %

 
7.
Assessment of Performance

 
7.1.
Achievement of Corporate Goals

 
Within 30 days after the end of the Plan year, the Chief Executive Officer will
present to the Committee his assessment of the achievement of the corporate
goals for that Plan year.  The Committee will review and discuss the assessment
with the Chief Executive Officer, and will determine the percentage of the
achievement of the corporate goals during a meeting of the Committee in a closed
session.  The same payment multiplier for the corporate goals component will be
used for all Plan Participants in any given year.
 
7.2.
Achievement of Personal Goals

 
Within 30 days after the end of the Plan year, the Chief Executive Officer will
present to the Committee his assessment of the achievement of the personal goals
of each executive officer for that Plan year.  The Committee will review and
discuss the assessment with the Chief Executive Officer, and will determine the
percentage of the achievement of the corporate goals during a meeting of the
Committee in consultation with the Chief Executive Officer.
 
Each supervisor will determine the achievement of the personal goals of the
Associates reporting to him, subject to the approval of the executive officer
responsible for the applicable department.

 
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7.3.
Determination of Award Multiplier

 
The following scale will be used to determine the actual award multiplier for
incentive award calculations based upon the achievement of corporate and
personal goals.  Separate payment multipliers will be established for both the
corporate and the personal goals components of each award.  In making a
determination with respect to the achievement of a particular goal, the
Committee (when assessing the achievement of corporate goals and the achievement
of personal goals of the executive officers) or the assessing supervisor may
take into account any measurable factors as well as the overall performance in
view of prevailing conditions.

Performance Category
 
Award Multiplier
1.     Goal was achieved or exceeded
 
75% - 150%
2.     Goal was mostly achieved
 
50% - 75%
3.     Goal was partially achieved
 
25% - 50%
4.     Goal was mostly not achieved
 
0%

 
8.
Calculation of Cash Incentive Award

 
8.1.
The example below shows sample cash incentive award calculations under the
Plan.  First, a total target award is calculated by multiplying the Plan
Participant’s base salary by the target award multiplier.  This dollar figure is
then divided between its corporate component and its individual component based
on the performance factor mix for that specific position.  This calculation
establishes specific dollar target awards for the performance period for both
the individual and corporate components of the award.

 
8.2.
At the end of the performance period, corporate and individual award multipliers
will be established using the criteria described above.  The corporate award
multiplier, which is based on overall corporate performance, is used to
calculate corporate performance awards for all Plan Participants.  This is
accomplished by multiplying the target corporate award established for each
individual at the beginning of the performance period by the actual award
multiplier.  The individual award multiplier, which is based on an individual’s
performance against objectives, is used in the same way to calculate the actual
individual performance award.

 
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Example:
                 
Target Award Calculation
       
Position:
 
Executive Director
Base Salary:
 
$120,000
   
Target Award Multiplier:
 
25%
   
Target Award (in dollars):
 
$30,000
 
($120,000 x 25%)
 
Weighting of Corporate and Personal Goals for Executive Directors
Corporate goals:
 
75%
   
Personal goals:
 
25%
             
Target Award
       
Target Award based on corporate goals:
 
$22,500
 
($30,000 x 75%)
Target Award based on personal goals:
 
$7,500
 
($30,000 x 25%)
 
Assumed payment multipliers based on assessment of corporate and personal goal
achievement:
Award Multiplier for corporate goals
 
75%
   
Award Multiplier for personal goals
 
125%
             
Actual Incentive Award
       
Corporate component
 
$16,875
 
($22,500 x 75%)
Individual component
 
$9,375
 
($7,500 x 125%)

 
9.
Payment of the Incentive Award

 
9.1.
Annual performance reviews for Plan Participants will be completed before March
31 of the year following the Plan year.  Payment of incentive awards will be
made as soon as practicable thereafter.  Incentive award calculations will be
based on the Plan Participant’s base salary as of December 31 of the Plan
year.  In addition to the required review process, incentive award payments to
the President & CEO and to the Senior Vice President and CFO will be made after
the completion and issuance of Micromet, Inc.’s year-end audited Financial
Statements for the Plan year.

 
9.2.
Plan Participants, who have been in an eligible position for less than a year,
but for at least three months, will receive a pro-rata bonus based on the number
of days in an eligible position.  Pla  Participants promoted during the year
from one “Target Award Multiplier” level to another will have their incentive
award calculated using their base pay on December 31 of the Plan
year.  Providing the promotion occurred prior to October 1 of the Plan year, the
calculation will be pro-rated, based on the number on months at each Target
Award Multiplier level.  If the promotion occurred after October 1 of the Plan
year, the entire calculation will be based on the Target Award Multiplier
percentage applicable prior to the promotion.

 
10.
Termination

 
If a Plan Participant has given or received a notice of termination or if a Plan
Participant’s employment is terminated prior to the payment of the incentive
award under this Plan, Micromet will have sole and absolute discretion as to
whether or not to pay an incentive award. If Micromet decides to pay an
incentive award to such Plan Participant, Micromet will have sole and absolute
discretion as to whether to pay the full amount or a portion of the amount of
the incentive award that may be payable to the Plan Participant in accordance
with the provisions of this Plan.

 
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11.
Absolute Right to Alter or Abolish the Plan

 
Micromet reserves the right in its absolute discretion to abolish the Plan at
any time or to alter the terms and conditions under which incentive compensation
will be paid.  Such discretion may be exercised any time before, during, and
after the Plan year is completed.  No Plan Participant will have any vested
right to receive any compensation hereunder until actual delivery of such
compensation.
 
12.
Employment Duration/Employment Relationship

 
This Plan does not, and Micromet’s policies and practices in administering this
Plan do not, constitute a contract or other agreement concerning the duration of
any Plan Participant’s employment with Micromet.  The employment relationship of
each Plan Participant of Micromet, Inc. is “at will” and may be terminated at
any time by Micromet, Inc. or by the Plan Participant, with or without
cause.  The employment relationship of each Plan Participant of Micromet AG is
governed by the employment agreement of the Plan Participant and applicable
German law.

 
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