Exhibit 10.1

SEATTLE GENETICS, INC.

2010 Senior Executive Annual Bonus Plan

This 2010 Senior Executive Annual Bonus Plan (the “Plan”) is intended to enhance
stockholder value by promoting a connection between the performance of Seattle
Genetics, Inc. (the “Company”) and the compensation of senior executives of the
Company and to promote retention of participating senior executives.

1. Executives of the Company at the Vice President level and above
(“Participants”) are eligible to receive annual bonuses for 2010 according to
this Plan. The Plan will be administered by the Compensation Committee of the
Board of Directors of the Company (the “Committee”). The Committee shall have
all powers and discretion necessary to administer the Plan and to control its
operation and may delegate responsibilities to Company officers as it deems
appropriate. Participants are eligible to receive bonuses based on their
individual performance and the Company’s performance during 2010. A Participant
who does not demonstrate satisfactory individual performance (50% or higher),
however, will not be eligible for any portion of his or her bonus, including the
portion based on Company performance.

2. Company performance shall be determined by the Committee based on the
Company’s ability to meet or exceed Company goals as set forth by the Board of
Directors of the Company, which may include such factors as research,
development and clinical milestones, hiring goals, strategic alliances,
licensing and partnering transactions and financings. For clarification, the
Committee may determine in its sole discretion that the Company did not
satisfactorily complete enough goals and in that case, the Committee may
determine that no bonus shall be paid to Participants. Individual performance of
the Participants shall be reviewed and recommended to the Committee by the Head
of Human Resources and the Chief Executive Officer, except for the individual
performance of the Chief Executive Officer, which shall be determined by the
Committee, and in all cases shall be based on the individual Participant’s
satisfactory completion of individual performance goals.

3. To be eligible for a bonus, a Participant must be on payroll prior to
November 1, 2010 and must by employed by the Company as of the date of payment
of the bonus. A Participant hired after commencement of the Plan Year shall be
eligible for a pro-rated bonus. A Participant who is promoted into a position
with a higher bonus target will have a pro-rated bonus based on his or her time
in each position and the applicable individual performance targets for such
positions but calculated based on the Participant’s annual base pay as of
December 31, 2010.

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4. A Participant who has taken an approved leave of absence pursuant to the
Company’s policies of longer than 90 calendar days during 2010 shall receive a
pro-rated bonus calculated by excluding the number of days that exceed 90
calendar days during 2010 that he or she was on an approved leave of absence.
For example, a person on an approved leave of absence for 100 days is eligible
for a pro-rated bonus by subtracting 10 days from the bonus calculation.

5. A Participant who is on an approved leave of absence on the date the bonus
payment is made will be eligible to receive a pro-rated bonus as calculated
above upon the bonus payment date.

6. The amount of a Participant’s bonus is based on a target percentage of such
Participant’s annual base pay as of December 31, 2010. This target percentage
shall be determined by the Committee at the beginning of the Plan Year on a
position level basis so that all Participants with the same position level shall
have the same target percentage. The target percentage shall then be adjusted
based on the Company’s performance and the individual Participant’s performance
over the course of the Plan Year to arrive at a final performance percentage.
For all Participants that are not members of the Company’s Executive Committee,
the final performance percentage shall be based 50% on the Company’s performance
and 50% on each Participant’s individual performance. For those Participants
that are members of the Company’s Executive Committee, other than the Chief
Executive Officer and the Chief Business Officer, the final performance
percentage shall be based 60% on the Company’s performance and 40% on each
Participant’s performance. The Chief Business Officer’s final performance
percentage shall be based 80% on the Company’s performance and 20% on the
Participant’s performance and the Chief Executive Officer’s final performance
percentage shall be determined by the Committee in its sole discretion. The
Company performance percentage and/or the individual performance percentage may
exceed 100% in the event the Company or the individual Participant exceeds
expected goals, provided that neither percentage may exceed 150%. For example,
assuming the Company has met 100% of its goals, a Participant, not a member of
the Company’s Executive Committee, who has met 150% of his or her individual
goals, has a target percentage of 25% and has a base pay rate of $100,000 will
receive a bonus of $31,250 (100% × 0.5 + 150% × 0.5 = 125%; and 125% × 25% =
31.25%; and 31.25% of Participant’s base pay rate of $100,000 = $31,250). A
Participant’s bonus may be paid in cash or stock or a combination of both at the
discretion of the Committee. All determinations and decisions made by the
Committee shall be final, conclusive and binding on all persons and shall be
given the maximum deference permitted by law.

7. This Plan is effective for the Company’s 2010 calendar year beginning
January 1, 2010 through December 31, 2010 (the “Plan Year”) and will expire
automatically on December 31, 2010. Bonus payments will be made by February 15th
following the end of the Plan Year.

8. The Company shall provide a copy of this Plan to each Participant and
communicate to each Participant his or her target percentage as determined by
the Committee at the beginning of the Plan Year.

 

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9. This Plan supersedes all prior bonus plans or any written or verbal
representations regarding the subject matter of this Plan and is the entire
understanding between the Company and the Participant regarding the subject
matter of this Plan. Participation in this Plan during the Plan Year will not
convey any entitlement to participate in this or future plans or to the same or
similar bonus payments. The Committee may at any time amend, suspend, or
terminate this Plan, including amendment of the target percentages for each
Participant and amendment so as to ensure that no amount paid or to be paid
hereunder shall be subject to the provisions of Section 409(a)(1)(B) of the
Internal Revenue Code of 1986, as amended (the “Code”). For the avoidance of
doubt, it is intended that the Plan satisfy the exemption from the application
of Section 409A of the Code and the Treasury Regulations and other guidance
issued thereunder and any state law of similar effect provided under
Section 1.409A-1(b)(4) of the Treasury Regulations, and the Plan shall be
administered and interpreted to the greatest extent possible in compliance
therewith.

10. The Company shall withhold all applicable taxes from any bonus payment,
including any federal, state and local taxes.

11. Nothing in this Plan shall interfere with or limit in any way the right of
the Company to terminate any Participant’s employment or service at any time,
with or without cause. Nothing in these guidelines should be construed as an
employment agreement or an entitlement to any Participant for any incentive
payment hereunder.

12. This Plan and all awards shall be construed in accordance with and governed
by the laws of the State of Washington, without regard to its conflict of law
provisions.

13. Payments under this Plan shall be unsecured, unfunded obligations of the
Company. To the extent a Participant has any rights under this Plan, the
Participant’s rights shall be those of a general unsecured creditor of the
Company.

 

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