CONFIDENTIAL

    

     

     

    

     

     

     

     

     

     

     

     

    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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              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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