CONFIDENTIAL
 
 
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2010 Management Incentive Compensation Plan

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CONFIDENTIAL

 
2010 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 the Chief Executive Officer and the senior vice presidents
constituting the Executive Management of Micromet, Inc. (each of whom hereafter
referred to as “EM Member”).
 
3.
Eligibility

 
3.1.
The EM Members are eligible to participate in the Plan. Any other Associates who
may be eligible to participate in the Plan will be selected at the sole
discretion of Micromet.   Each EM Member and each Associate selected to
participate in the Plan is hereafter referred to as 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 an
average 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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CONFIDENTIAL
 
 
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 personal 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

 
The target incentive award of each Plan Participant is determined by applying a
“target award multiplier” to the base salary of the Plan Participant.  The
target award multiplier is dependent on the management level of the Plan
Participant.  The following target award multipliers will apply to determine the
target incentive award of the Plan Participants for the Plan year, provided that
the Committee, based on individual circumstances and in its discretion, may
approve a target award multiplier for a Plan Participant that is different from
that listed below:
 
Position
Target Award Multiplier
President & CEO
60%
Senior Vice President (EM Member)
40%
Vorstand (AG)/Geschaeftsfuehrer (GmbH)
35%
Vice President
30%
Executive Director
25%
Senior Director
20%
Director
20%
Associate Director
15%
Senior Manager
15%

 
6.
Corporate and Personal Goals

 
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.  The Committee assigns a percentage to each
corporate goal based on the relative importance of the goal compared to the
other corporate goals, with the sum of all percentages amounting to 100%.  All
Plan Participants develop a list of personal goals, which must be approved by
the immediate supervisor and the EM Member responsible for the applicable
department, or by the Chief Executive Officer for personal goals of the other EM
Members.  The supervisor assigns a percentage to each personal goal based on the
relative importance of the goal compared to the other personal goals, with the
sum of all percentages amounting to 100%.

 
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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 described in Section 6.1
above.  The relative weight between corporate goals and personal goals varies
based on the Plan Participant’s level within the organization.  The weighting of
the corporate goals relative to the personal goals for the Plan year is as
follows:

 
Position
Weighting of
Corporate Goals
Weighting of
Personal Goals
President & CEO
100%
0%
Senior Vice President (EM Member)
75%
25%
Vorstand (AG)/Geschaeftsfuehrer GmbH)
75%
25%
Vice President
75%
25%
Executive Director
50%
50%
Senior Director
50%
50%
Director
50%
50%
Associate Director
25%
75%
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 determined by the
Committee will be used for all Plan Participants in any given year.  The
Committee may, in its discretion, include achievements that have not been
established as corporate goals at the beginning of the Plan year or determine
that the level of achievement of a particular corporate goal exceeds 100%.
 
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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 EM Member 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 personal 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 EM Member
responsible for the applicable department.  The final determination of the
achievement of the personal goals will be made by the Executive Management
taking into account the variances in goal setting and assessment practices
across the departments of Micromet.
 
The Committee and the supervisors may, in their discretion, include achievements
that have not been established as personal goals at the beginning of the Plan
year or determine that the level of achievement of a particular personal goal
exceeds 100%.
 
8.
Calculation of Cash Incentive Award

 
8.1.
The example below shows sample cash incentive award calculations under the
Plan.  First, the target award is calculated by multiplying the Plan
Participant’s base salary by the target award multiplier.  This amount is then
divided between its corporate component and its individual component based on
the weighting assigned for the specific management level.

 
8.2.
After the end of the Plan year, the achievement of the corporate and personal
goals (each expressed as a percentage) will be established as described
above.  The corporate award multiplier, which is based on overall corporate
performance, is used to calculate corporate goal component of the incentive
award by multiplying the target award for the corporate goal component by the
percentage of the corporate goal achievement determined by the Committee.  The
percentage determined by the Compensation Committee or the responsible
supervisor for the achievement of the personal goals of a Plan Participant is
used in the same way to calculate the personal goal component of the incentive
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:
50%
   
Personal goals:
50%
           
Target Award
     
Target Award based on corporate goals:
$15,000
($30,000 x 50%)
 
Target Award based on personal goals:
$7,500
($30,000 x 50%)
     
Assumed achievement of corporate and personal goal achievement:
 
Achievement of corporate goals
75%
   
Achievement of personal goals
125%
           
Actual Incentive Award
     
Corporate component
$11,250
($15,000 x 75%)
 
Individual component
$9,375
($15,000x 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.  If a Plan Participants is promoted during the
Plan year from one target award multiplier level to another, his or her
incentive award will be calculated based on their base salary on December 31 of
the Plan year, but based on the amount of time during the Plan year served at
each target award multiplier level.

 
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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CONFIDENTIAL
 
 
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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