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Exhibit 10.7    
    


[DADE BEHRING LOGO]  


MANAGEMENT INCENTIVE

COMPENSATION PLAN (MICP)  


 2003 PLAN DOCUMENT
  (Revised March, 2003)  



	Table of Contents


	 	 

	1.0	 	Plan Objectives	 	 
	

2.0	
 	

Participation	
 	

 
	

3.0	
 	

Target Bonus	
 	

 
	

4.0	
 	

Funding	
 	

 
	

5.0	
 	

Payout Calculation	
 	

 
	

6.0	
 	

Payment of Awards	
 	

 
	

7.0	
 	

Plan Administration	
 	

 
	

8.0	
 	

Plan Approval	
 	

 
	

9.0	
 	

Appendix	
 	

 




~ Confidential ~

Solely for Human Resources use in MICP plan administration.

Not to be disclosed to or used by any other person without prior written authorization.  





 

1.0   PLAN OBJECTIVES  



        The Dade Behring Management Incentive Compensation Plan was developed to link a significant portion of Dade Behring's management employees' total cash
compensation to the financial success of the company. 


        This
program is an integral component of the company's "pay-for-performance" philosophy. The objectives of the Plan are to: 



	•
	Support
Dade Behring's business plans and financial goals;



	•
	Motivate
and reward both individual performance and teamwork;



	•
	Enable
Dade Behring to attract and retain high quality managers. 




        The
2003 plan maintains continuity by keeping the same overall structure as the prior year plan. The 2003 MICP continues to place emphasis on global Dade Behring results to encourage a
company-wide focus on teamwork. Individual performance is also a vital part of the plan. 


2.0   PARTICIPATION  


        All US employees in salary grade level 17 and above are eligible to participate in the Plan. Salary grade level 16 Product Managers are also eligible to
participate in the Plan. 


        For
non-US employees, the participation is based on the US equivalent grade level since global compensation structure is not formally in place in all countries. 


        All
participants will be reviewed and approved by the Compensation Administrative Committee contingent upon the participant's submission of Individual Performance Objectives (IPOs). 


        Individuals
hired or promoted into a bonus eligible position on or before September 30, 2003 are eligible for a pro-rated bonus target based on the number of full
months of participation in the Plan. 


        Individuals
hired or promoted into a bonus eligible position after September 30, 2003 are not eligible to participate in the 2003
Plan. 


3.0   TARGET BONUS  


        The 2003 target bonus percentage will be communicated to participants through the communication letter from the CEO. 


        The
2003 MICP target bonus amount is determined by multiplying the participant's annual base salary as of December 31, 2003 by the participant's target bonus percentage. 



        The
following chart outlines the MICP target bonus percentage structure for 2003. 



	Grade
	 	Target Bonus Percentage

	23	 	50% to 60% (varies by position)
	22	 	40%
	21	 	35%
	20	 	25%
	19	 	20%
	18	 	15%
	17	 	10% (Exception: Marketing Manager 15%)
	16	 	0% (Exception: Product Manager 15%)






        Note: Some participants may be grandfathered at a certain target bonus percentage or dollar amount. If so, the bonus information in their communication letter
will supersede the bonus structure shown above. 


3.1   Pro-rated Target Bonus  


        An individual hired or promoted into a bonus eligible position on or before September 30, 2003 is eligible for a pro-rated bonus target based
on the number of full months of participation in the Plan. The participant's target bonus percentage and pro-ration (number of eligible months in the Plan) should be outlined and
communicated in the offer or promotion letter. 


2





 



        Examples:




	Example
 
	 	Hire or Promotion Date
	 	Proration (# of mo)
	 	Target %
	 	Annual Salary
	 	Calculation
	 	Target Bonus $

	A	 	3/3/03	 	10	 	10	%	$	70,000	 	($70,000 × 10%) × 10/12	 	$	5,833
	B	 	3/17/03	 	9	 	15	%	$	80,000	 	($80,000 × 15%) × 9/12	 	$	9,000





        If a participant changes jobs during the year, resulting in a higher or lower target bonus percentage, the MICP target bonus amount is calculated on a
pro-rated basis. The total target bonus amount is determined by multiplying the participant's December 31, 2003 annual base salary by each applicable target percentage for the
number of full months at that target percentage level. 


        For
Example: 



	Effective

Date
 
	 	Proration (# of mo)
	 	Target %
	 	Year End Annual Salary
	 	Calculation
	 	Target Bonus $

	1/1/03	 	5	 	10	%	$	90,000	 	($90,000 × 10%) × 5/12	 	$	3,750
	5/26/03	 	7	 	15	%	$	90,000	 	($90,000 × 15%) × 7/12	 	$	7,875
	Total Target Bonus:	 	$	11,625





3.2   Pro-ration Rule  


        The number of months of full participation will be based on Dade Behring's "15th Day Rule." That is, the effective date of the job change or hire
date must be on or before the 15th day of the month for the whole month to be counted. If the job change or hire date takes place after the 15th of the month, the
pro-ration will count from the following month. 


4.0   FUNDING  


        Plan funding reflects performance of four financial measures. 



	Year End Net Debt:	 	Total gross debt less cash at the end of the year.
	

EBITDA:	
 	

Earnings before interest, taxes, depreciation, amortization and non-recurring and non-cash charges.
	

Net Income:	
 	

Earnings less interest and taxes.
	

Quarterly Net Cash Flow:	
 	

Cash flow before financing activities.






        Note: Since Dade Behring financials are globally based, they are affected by changes in foreign exchange rates. The MICP financial targets published in this
document are developed using the Annual Operating Plan exchange rates at the beginning of the year ("plan rates"). At the end of the year, however, the targets are re-calculated using the
actual exchange rates during the year ("actual rates"). This is done so that a
comparison may be made on an equivalent basis to the year-end financial results, which are based on the actual rates. 



4.1   Minimum Threshold for Plan Funding  


        MICP funding will occur only if the Global Dade Behring Year End Net Debt threshold measure is met. 



	Performance Measure
 
	 	Target Required
 

	Year End Net Debt	 	No higher than $745MM






4.2   Global Dade Behring Plan Funding  


        The 2003 MICP will fund 35% based on Dade Behring's EBITDA performance, 35% based on Net Income performance and 30% on quarterly net Cash Flow performance, if the
Year End Net Debt target is achieved. 


        The
funding measurement targets have been approved by the Board of Directors and may be subject to technical adjustments as a result of business events or accounting transactions.
Results that fall between performance levels will be interpolated. 


3





 



Global Dade Behring EBITDA  


        The following table outlines the EBITDA target and funding schedule for the 2003 MICP. The funding schedule will be applied to the EBITDA funding for the full
year. An EBITDA of at least $230.0MM must be achieved to fund 35% of the Plan. Maximum Plan funding based on EBITDA is capped at 200%. 



	 
	Performance to Plan
	 	EBITDA Target
	 	MICP Funding
	 
	 	112	%	$280.0 MM	 	200	%
	 	108	%	$270.0 MM	 	160	%
	 	104	%	$260.0 MM	 	130	%
	 	100	%	$250.0 MM	 	100	%
	 	96	%	$240.0 MM	 	75	%
	 	92	%	$230.0 MM	 	50	%
	 	‹ 92	%	‹ $230.0 MM	 	0	%






Global Dade Behring Net Income  


        The following table outlines the revised Net Income target and funding schedule for the 2003 MICP. (This table was changed as the result of the finalization of
Fresh Start Accounting.) The funding schedule will be applied to the Net Income funding for the full year. A Net Income of at least $27.3MM must be achieved to fund 35% of the Plan. Maximum Plan
funding based on Net Income is capped at 200%. 



	 
	Performance to Plan
	 	Net Income Target
	 	MICP Funding
	 
	 	121	%	$37.6 MM	 	200	%
	 	114	%	$35.3 MM	 	160	%
	 	107	%	$33.2 MM	 	130	%
	 	100	%	$31.0 MM	 	100	%
	 	96	%	$29.8 MM	 	85	%
	 	92	%	$28.5 MM	 	65	%
	 	88	%	$27.3 MM	 	25	%
	 	‹ 88	%	‹ $27.3 MM	 	0	%






Global Dade Behring Quarterly Net Cash Flow  


        The following table outlines the cash flow targets and funding schedules. Each quarter is weighted equally; therefore, the target for each quarter must be reached
to achieve the full 30% MICP funding. 


        Cashflow
is measured quarterly. Any over-achievement above the maximum performance to plan or any under-achievement below the threshold performance to plan will be carried
over to the following quarter in 2003. Ability to carryover provides incentive for cashflow results earlier in the year and prohibits the ability to manipulate cashflow by deferring cashflow to the
following quarter once maximum amount is obtained. 


        For
Q1, Q2 and Q3, the amount of cash flow achieved above 112% performance to plan will be counted toward the next quarter's results. Conversely, when cash flow achieved falls below the
minimum threshold (‹88% for Q1, Q2 and Q3), the deficiency must be made up in the following quarter before any results can be counted toward that quarter's goal. 



	 
	Performance to Plan
	 	Q1 Cash Flow Target
	 	Q2 Cash Flow Target
	 	Q3 Cash Flow Target
	 	Q4 Cash Flow Target
	 	MICP Funding

	 	112%	 	$(1.41) MM	 	$2.91MM	 	$18.82 MM	 	$41.66 MM	 	200%
	 	108%	 	$(1.47) MM	 	$2.81 MM	 	$18.14 MM	 	$40.18 MM	 	160%
	 	104%	 	$(1.54) MM	 	$2.70 MM	 	$17.47 MM	 	$38.69 MM	 	130%
	 	100%	 	$(1.60) MM	 	$2.60 MM	 	$16.80 MM	 	$37.20 MM	 	100%
	 	96%	 	$(1.66) MM	 	$2.50 MM	 	$16.13 MM	 	$35.71 MM	 	85%
	 	92%	 	$(1.73) MM	 	$2.39 MM	 	$15.46 MM	 	$34.22 MM	 	65%
	 	88%	 	$(1.79) MM	 	$2.29 MM	 	$14.78 MM	 	$32.74 MM	 	25%
	 	‹ 88%	 	‹ $(1.79) MM	 	‹ $2.29 MM	 	‹ $14.78 MM	 	‹ $32.74 MM	 	0%





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5.0   PAYOUT CALCULATION  


        Once the MICP payout pools have been funded, individual bonus payouts will be calculated. The actual 2003 MICP award will be based on two components: 



a)    Dade Behring Overall Financial Performance  



Sixty
percent (60%) of a participant's MICP award is based on how well Global Dade Behring has met its financial objectives (EBITDA, Net Income and Quarterly Net Cash Flow). 




b)    Individual Performance  



Forty
percent (40%) of a participant's award is based upon individual performance. Each participant's performance rating will be determined by his or her supervisor. Out of the 40% payout based on
individual performance, 15% will be measured by financial IPOs, others will be project or initiative based. 


Financial
objectives of an individual should always reflect the way an individual supports his/her organization (such as region target, functional target, cost center budget, etc.). 


One
financial target should be of immediate control (country target or cost center budget), another financial target should be measured at a higher level to reinforce teamwork (region instead of
countries, functional instead of departmental). 


Note:    A
new individual performance evaluation process and ratings will be developed and put in place near the end of 2003 to ensure consistency and objectivity. 



Using
the payout pool and distribution of performance ratings, the Corporate Compensation Department will develop a payout schedule. Final performance ratings and payouts will be approved by Dade
Behring's CEO. The total dollars granted under this portion cannot exceed the funded pool. 




5.1   Example 2003 Payout Calculation  


        The following example assumes that the Dade Behring Year-End Net Debt threshold goal has been achieved, the participant's target bonus is $10,000 and
the participant's individual performance is at target. 



	 
	 	Performance to Plan
	 	Funding Percent
	 	Threshold
	 	Target
	 	Maximum
	 	Bonus Payout

	60% Based on Global Dade Behring	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	21.0% Global DB EBITDA	 	104	%	130	%	$	1,050	 	$	2,100	 	$	4,200	 	$	2,730
	 	21.0% Global DB Net Income	 	104	%	130	%	$	525	 	$	2,100	 	$	4,200	 	$	2,730
	 	  4.5% Global DB Net Cash Flow Q1	 	112	%	200	%	$	112.5	 	$	450	 	$	900	 	$	900
	 	  4.5% Global DB Net Cash Flow Q2	 	100	%	100	%	$	112.5	 	$	450	 	$	900	 	$	450
	 	  4.5% Global DB Net Cash Flow Q3	 	100	%	100	%	$	112.5	 	$	450	 	$	900	 	$	450
	 	  4.5% Global DB Net Cash Flow Q4	 	100	%	100	%	$	112.5	 	$	450	 	$	900	 	$	450
	
40% Based on Individual Performance	
 	

 	
 	

 	
 	
 	

 	
 	
 	

 	
 	
 	

 	
 	
 	

 
	 	40.0% Individual Performance	 	 	 	 	 	$	0	 	$	4,000	 	$	8,000	 	$	4,000
	
Total MICP Opportunity	
 	

 	
 	

 	
 	
$	

2,025	
 	
$	

10,000	
 	
$	

20,000	
 	
 	

 
	
Total MICP Payout	
 	

 	
 	

 	
 	
 	

 	
 	
 	

 	
 	
 	

 	
 	
$	

11,710





6.0   PAYMENT OF AWARDS  


        Awards are typically paid out during the first quarter of the following year. A participant must be an active employee as of the date of the payout in order to
receive a 2003 MICP award. 


        If
a participant dies, retires at age fifty-five (55) or older, or is involuntarily terminated (except for cause), plan participation will be pro-rated. If
the termination date is on or before the 15th of the month, that month will not be counted. If the termination takes place after the 15th of the month, the
pro-ration will include that month. 


        If
a participant resigns, or is terminated for cause, prior to the 2003 MICP payout, no bonus award will be granted. 


        The
attainment of financial objectives does not guarantee a payment of an MICP award. MICP awards may be adjusted at the discretion of management based upon, but not limited to, the
employee's performance, conduct, and contribution. 


5





 



        Appropriate
withholdings are deducted from the bonus award, such as income taxes, FICA and the Saving Investment Plan (SIP). Appropriate withholdings will be made for those employees who
are subject to the tax laws of other countries. 


7.0   PLAN ADMINISTRATION  


        This document outlines the 2003 Management Incentive Compensation Plan (Plan) for Dade Behring Inc. This Plan is a statement of intention and does not
constitute a guarantee of a particular payment. This Plan does not create a contractual relationship or any contractually enforceable rights between Dade Behring and the participants. 



        The
2003 Dade Behring Management Incentive Compensation Plan is administered by the Compensation Administrative Committee, as directed by the Board of Directors. 


        The
Board of Directors reserves the right within its sole discretion: 



	•
	To
amend, modify or cancel any provision of the Plan in whole or in part at any time;



	•
	To
eliminate, reduce, modify, or withhold awards based on such factors as changes in business conditions, individual performance, company performance, or any other reason;



	•
	To
interpret the Plan and make decisions on all questions and issues arising under the Plan and its decisions are final. 




        Any
questions about this document should be directed to the Corporate Compensation Department. 


8.0   PLAN APPROVAL  


        The 2003 MICP plan was approved by the Dade Behring Compensation Administrative Committee and the Board of Directors. 



9.0   APPENDIX  


        The 2003 goals for Global Dade Behring are as follows: 



	 
	 	Threshold
	 	 
	 	 

	Global Dade Behring Year End Net Debt	 	No higher than $745 MM	 	 	 	 
	

 
	
 	

Full Year
	
 	

 
	
 	

 
	
 	

 

	35% Global Dade Behring EBITDA	 	$250.0 MM	 	 	 	 	 	 
	

 
	
 	

Full Year
	
 	

 
	
 	

 
	
 	

 

	35% Global Dade Behring Net Income	 	$31.0 MM	 	 	 	 	 	 
	

 
	
 	

Quarter 1
	
 	

Quarter 2
	
 	

Quarter 3
	
 	

Quarter 4

	30% Global Dade Behring Quarterly Net Cash Flow	 	$(1.6) MM	 	$2.6 MM	 	$16.8 MM	 	$37.2 MM




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Exhibit 10.7