Exhibit 10.26
MICROMET, INC.
DIRECTOR COMPENSATION POLICY
     Non-employee members of the board of directors (the “Board”) of Micromet,
Inc. (the “Company”), shall be eligible to receive cash and equity compensation
effective upon consummation of the merger of CancerVax Corporation with Micromet
AG, a corporation organized under the laws of Germany (the “Merger Date”), as
set forth in this Director Compensation Policy. The cash compensation and equity
awards described in this Director Compensation Policy shall be paid or be made,
as applicable, automatically and without further action of the Board, to each
non-employee director who may be eligible to receive such cash compensation or
equity awards unless such non-employee director declines the receipt of such
cash compensation or equity awards by notice to the Company. This Director
Compensation Policy shall remain in effect until it is revised or rescinded by
further action of the Board.
     1. Cash Compensation.
          (a) General Board Retainer. Each non-employee director shall be
eligible to receive an annual retainer of $16,000 for service on the Board. In
addition, the Chairman of the Board shall be eligible to receive an annual
retainer of $85,000 for service on the Board. The Chairman’s annual retainer for
the first year following completion of the merger shall be paid upon
consummation of the merger in common stock in lieu of cash.
          (b) Meeting Stipends. Each non-employee director shall receive a
stipend of $1,500 for each Board meeting attended in person and $1,000 for each
committee meeting attended in person. In addition, each non-employee director
shall receive such stipends with respect to telephonic Board meetings and
committee meetings if such telephonic meetings last approximately two hours or
longer. The Chairman’s meeting stipends for the first year following completion
of the merger shall be paid in common stock in lieu of cash.
          (c) Expense Reimbursements. The Company shall reimburse non-employee
directors for reasonable expenses incurred to attend meetings of the Board or
its committees. Any travel expenses shall be reimbursed in accordance with the
Company’s standard travel policy.
     2. Equity Compensation. The stock options described in this Director
Compensation Policy shall be granted under and shall be subject to the terms and
provisions of the Company’s Amended and Restated 2003 Equity Incentive Award
Plan (the “2003 Plan”), as amended from time to time, and shall be granted
subject to the execution and delivery of award agreements, including attached
exhibits, in substantially the same forms approved by the Board, setting forth
the vesting schedule applicable to such awards and such other terms as may be
required by the 2003 Plan.
          (a) Initial Awards. On the Merger Date, a person who is a non-employee
director, other than the Chairman of the Board, automatically shall be granted a
non-qualified stock option to purchase 35,000 shares of Company common stock
(subject to adjustment as

 

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provided in the 2003 Plan). On the Merger Date, the Chairman of the Board
automatically shall be granted a non-qualified stock option to purchase 70,000
shares of the Company’s common stock (subject to adjustment as provided in the
2003 Plan). In addition, a person who is initially elected or appointed to the
Board following the Merger Date, and who is a non-employee director at the time
of such initial election or appointment, automatically shall be granted a
non-qualified stock option to purchase 35,000 shares of Company common stock
(subject to adjustment as provided in the 2003 Plan) on the date of such initial
election or appointment. Each of the options described in this Section 2(a) is
referred to herein as an “Initial Award.”
          (b) Committee Chair Awards. On the Merger Date, and thereafter on the
date of each annual meeting of the Company’s stockholders, (i) the Chairman of
the Audit Committee automatically shall be granted a non-qualified stock option
to purchase 7,500 shares of Company common stock (subject to adjustment as
provided in the 2003 Plan), (ii) the Chairman of the Compensation Committee
automatically shall be granted a non-qualified stock option to purchase 5,000
shares of Company common stock (subject to adjustment as provided in the 2003
Plan), and (iii) the Chairman of the Nominating/Corporate Governance Committee
automatically shall be granted a non-qualified stock option to purchase 2,500
shares of common stock (subject to adjustment as provided in the 2003 Plan). The
option grants described in this Section 2(b) are referred to herein as
“Committee Chair Awards.”
          (c) Annual Awards. A person who is a non-employee director, other than
the Chairman of the Board, automatically shall be granted a non-qualified stock
option to purchase 15,000 shares of Company common stock (subject to adjustment
as provided in the 2003 Plan) on the date of each annual meeting of the
Company’s stockholders after the Merger Date. The Chairman of the Board
automatically shall be granted a non-qualified stock option to purchase 30,000
shares of the Company’s common stock (subject to adjustment as provided in the
2003 Plan) on the date of each annual meeting of the Company’s stockholders
after the Merger Date. The option grants described in this Section 2(c) are
referred to herein as “Annual Awards.”
          (d) Terms of Option Awards.
               (i) Exercise Price of Options. The per share price of each option
granted to a non-employee director shall equal 100% of the fair market value of
a share of common stock on the date the option is granted (as determined under
the 2003 Plan).
               (ii) Vesting of Initial Awards. Options granted as Initial Awards
to non-employee directors shall become vested in equal installments at the end
of each calendar month over a period of three years from the date of grant, such
that each stock option shall be 100% vested on the third anniversary of its date
of grant, subject to a director’s continuing service on the Board through such
dates. No portion of an option which is unexercisable at the time of a
non-employee director’s termination of membership on the Board shall thereafter
become exercisable.
               (iii) Vesting of Committee Chair Awards and Annual Awards.
Options granted as Annual Awards to non-employee directors shall become vested
in equal installments at the end of each calendar month over a period of one
year from the date of grant, such that each stock option shall be 100% vested on
the first anniversary of the date of grant, subject to a director’s continuing
service on the Board through such date. No portion of an option which is
unexercisable at the time of a non-employee director’s termination of membership
on the Board shall thereafter become exercisable.
               (iv) Term. The term of each option granted to a non-employee
director shall be ten years from the date the option is granted.

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