EXHIBIT 10.3

MEDIVATION, INC.

2013 CASH PERFORMANCE INCENTIVE PLAN

ADOPTED: APRIL 22, 2013

APPROVED BY THE STOCKHOLDERS: JUNE 28, 2013

 

1. GENERAL

The 2013 Cash Performance Incentive Plan (the “Plan”) is a cash incentive plan
intended to motivate executives of Medivation, Inc. (the “Company”) and it
subsidiaries to achieve short-term and long-term corporate objectives relating
to the performance of the Company or one or more of the Company’s business
units, divisions, subsidiaries, affiliates or business segments, as established
by the Plan Administrator (as defined below), and to reward such executives when
those objectives are achieved, thereby tying Company performance to stockholder
value.

 

2. ADMINISTRATION

The Plan shall be administered by the Compensation Committee (the “Committee”)
of the Board of Directors (the “Board”) of the Company or a sub-committee
thereof, in either case consisting solely of two or more outside directors of
the Company who satisfy the requirements of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the “Code”), and such committee or
sub-committee shall be referred to herein as the “Plan Administrator.” Among
other things, the Plan Administrator will have the authority to select
participants in the Plan, to determine the performance goals, award amounts and
other terms and conditions of awards under the Plan. The Plan Administrator also
will have the authority to establish and amend rules and regulations relating to
the administration of the Plan. All decisions made by the Plan Administrator in
connection with the Plan will be made in the Plan Administrator’s sole and
absolute discretion and will be final and conclusive. The Plan Administrator
will administer the Plan in a manner intended to comply with the requirements
for “performance-based compensation” under Section 162(m) of the Code, except in
the case of awards that are not intended to qualify as “performance-based
compensation.”

 

3. ELIGIBILITY

The Plan Administrator has the sole authority to designate the executives of the
Company and its subsidiaries who will participate in the Plan. No executive is
automatically entitled to participate in the Plan and participation in the Plan
for any Performance Period (as such term is defined in Section 5) does not
guarantee participation in the Plan in respect of any other Performance Period.
Any executive of the Company or any of its subsidiaries designated by the Plan
Administrator as a participant in the Plan with respect to any Performance
Period shall be referred to herein as a “Participant.”

 

4. COMPLIANCE WITH SECTION 162(m)

In general, awards under the Plan that are based on the attainment of one or
more Performance Goals (as such term is defined in Section 5) during a
Performance Period are intended to qualify as “performance-based compensation”
under Section 162(m) of the Code. However, Participants may receive awards under
the Plan based on the attainment of corporate or individual performance goals
that either (a) are not based on one or more of the Performance Criteria or
(b) are not intended to qualify as “performance-based compensation” under
Section 162(m) of the Code.

 

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5. PERFORMANCE CRITERIA, PERFORMANCE GOALS, AND PERFORMANCE PERIODS

Pursuant to the terms of the Plan, the Plan Administrator may establish in
writing one or more objective performance goals (each, a “Performance Goal” and
collectively, the “Performance Goals”) based on the attainment of specified
levels of one or more of the following “performance criteria” (the “Performance
Criteria”): (i) earnings per share; (ii) earnings before interest, taxes and
depreciation; (iii) earnings before interest, taxes, depreciation and
amortization (EBITDA); (iv) net earnings; (v) return on equity; (vi) return on
assets, investment, or capital employed; (vii) operating margin; (viii) gross
margin; (ix) operating income; (x) net income (before or after taxes); (xi) net
operating income; (xii) net operating income after tax; (xiii) pre- and
after-tax income; (xiv) pre-tax profit; (xv) operating cash flow; (xvi) sales or
revenue targets; (xvii) increases in revenue or product revenue;
(xviii) expenses and cost reduction goals; (xix) improvement in or attainment of
expense levels; (xx) improvement in or attainment of working capital levels;
(xxi) economic value added; (xxii) market share; (xxiii) cash flow; (xxiv) cash
flow per share; (xxv) share price performance; (xxvi) debt reduction;
(xxvii) implementation or completion of projects or processes (including,
without limitation, in-license, out-license and collaboration agreements,
clinical trial initiation, clinical trial enrollment, clinical trial results,
new and supplemental indications for existing products, regulatory filing
submissions, regulatory filing acceptances, regulatory or advisory committee
interactions, regulatory approvals, and product supply); (xxviii) customer
satisfaction; (xxix) total stockholder return; and (xxx) stockholders’ equity.
The Plan Administrator, in its sole discretion, shall determine the manner of
calculating the specified Performance Goals selected for a Performance Period;
provided, that if any Performance Goals are based on the Performance Criteria
set forth above that refer to items that are typically calculated in accordance
with GAAP, at the time such Performance Goals are established for a Performance
Period, the Plan Administrator must specify whether the Performance Goals are to
be calculated in accordance with GAAP or on a non-GAAP basis; and provided,
further, that to the extent the Performance Goals are to be determined on a
non-GAAP basis, the Plan Administrator must also set forth in writing, at the
time the Performance Goals are established, the precise manner in which such
Performance Goals will be calculated.

With respect to a Performance Period, the Performance Goals may be established
on a Company-wide basis or with respect to one or more of the Company’s business
units, divisions, subsidiaries, affiliates, or business segments, and may be
measured in either absolute terms or relative to the performance of one or more
comparable companies or a relevant index. The Plan Administrator is authorized
to make adjustments in the method of calculating the attainment of Performance
Goals for a Performance Period as follows: (i) to exclude restructuring and/or
other nonrecurring charges; (ii) to exclude exchange rate effects, as
applicable, for non-U.S. dollar denominated net sales and operating earnings;
(iii) to exclude the effects of changes to generally accepted accounting
standards required by the Financial Accounting Standards Board; (iv) to exclude
the effects of any statutory adjustments to corporate tax rates; and (v) to
exclude the effects of any “extraordinary items” as determined under generally
accepted accounting principles.

Notwithstanding the preceding provisions of this Section 5, the Plan
Administrator may establish in writing corporate or individual performance goals
that either (a) are not based on one or more of the Performance Criteria or
(b) are not intended to result in the corresponding awards pursuant to the Plan
qualifying as “performance-based compensation” under Section 162(m) of the Code.

Pursuant to the terms of the Plan, the Plan Administrator will also establish
one or more periods of time (each, a “Performance Period”), which may be of
varying and overlapping durations, over which the attainment of one or more
Performance Goals (or, in the case of awards not intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, the
attainment of corporate or individual performance goals that are not based on
one or more of the Performance Criteria) will be measured for the purpose of
determining a Participant’s entitlement to an award under the Plan.

 

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6. TERMS OF AWARDS

With respect to each Performance Period, the Plan Administrator will establish
the applicable Performance Goals for such Performance Period based on some or
all of the Performance Criteria set forth in Section 5 (or will establish
corporate or individual performance goals that are not based on one or more of
the Performance Criteria, in the case of awards not intended to qualify as
“performance-based compensation” under Section 162(m) of the Code). With respect
to awards under the Plan that are intended to qualify as “performance-based
compensation under Section 162(m) of the Code, prior to the earlier of
(i) ninety (90) days following the commencement of the applicable Performance
Period and (ii) the passage of twenty-five percent (25%) of the duration of such
Performance Period and while the outcome is substantially uncertain, the Plan
Administrator will establish in writing the Performance Goals for each award to
a Participant under the Plan and the threshold, target and maximum amounts of
the award, as applicable, that may be earned if the Performance Goals are
achieved at the levels corresponding to such amounts. The Performance Goals (or
corporate or individual performance goals that are not based on one or more of
the Performance Criteria, in the case of awards not intended to qualify as
“performance-based compensation” under Section 162(m) of the Code) established
in respect of a Performance Period may differ from those established in respect
of other Performance Periods and may differ for each Participant.

After the end of the applicable Performance Period, the Plan Administrator will
certify in writing the extent to which the previously established Performance
Goals (or, in the case of awards not intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, such other corporate or
individual performance goals) were achieved and will determine the amount of the
award, if any, that is payable to each Participant for such Performance Period.
The Plan Administrator will have the discretion to determine that the actual
amount paid with respect to a Participant’s award will be equal to or less than
(but not greater than) the maximum payout calculated on the basis of the level
of achievement of the applicable Performance Goals (or, in the case of awards
not intended to qualify as “performance-based compensation” under Section 162(m)
of the Code, such other corporate or individual performance goals) with respect
to the Performance Period. The maximum payout for awards under the Plan to any
one Participant in any one calendar year is $3 million.

 

7. ALTERNATIVE METHOD

As an alternative to establishing and determining awards pursuant to Section 6,
the Plan Administrator may establish one or more Performance Goals for a
Performance Period based on one or more of the Performance Criteria (each, a
“Threshold Goal”). The Threshold Goal may be established on a Company-wide basis
or with respect to one or more of the Company’s business units, divisions,
subsidiaries, affiliates or business segments, and may be measured either
absolutely or relative to a designated group of comparable companies or a
relevant index. The Threshold Goal must be established by the Plan Administrator
in writing not later than ninety (90) days after the start of the Performance
Period, but in no event after twenty-five percent (25%) of the Performance
Period has elapsed, provided that the outcome of the Threshold Goal is
substantially uncertain at such time.

If the Threshold Goal is achieved, each Participant shall be eligible to earn a
maximum award (the “Maximum Award”), the amount of which will be established no
later than the time when the Performance Goals applicable to the Performance
Period are established. No awards shall be earned or payable under the Plan
unless the Threshold Goal is achieved. If the Threshold Goal is achieved, each
Participant’s Maximum Award shall be subject to possible reduction by the Plan
Administrator based on such factors as determined by the Plan Administrator, in
its sole and absolute discretion, and the actual award payable to a Participant
under the Plan shall be the Maximum Award, or a portion thereof, based on the
attainment of the specified Performance Goals and such additional factors as
determined by the Plan Administrator, in its sole and absolute discretion.

 

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8. PLAN PAYMENTS

Awards, if any, under the Plan will be payable following the end of each
Performance Period. A Participant must be a regular employee of the Company or a
subsidiary of the Company on the last day of the applicable Performance Period
and also on the date of payment of the award, in order to earn any award in
respect of such Performance Period.

Payments, if any, under the Plan will be paid as soon as administratively
feasible after the Plan Administrator certifies in writing the extent to which
the Performance Goals (or, in the case of awards not intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, such other
corporate or individual performance goals that are not based on one or more of
the Performance Criteria) were achieved for the applicable Performance Period
and determines the amount of the award, if any, payable to each Participant, but
in no event later than March 15 of the calendar year following the end of the
applicable Performance Period. All payments under the Plan will be subject to
applicable tax withholding and other deductions.

 

9. TERM OF THE PLAN

Subject to stockholder approval of the Plan in 2013, the Plan shall first apply
to Performance Periods that begin after the date of such approval and shall
continue in effect until the earlier of (i) the date on which the Plan
Administrator terminates the Plan and (ii) the date of the first stockholder
meeting that occurs in 2018, unless the Company’s stockholders again approve the
Plan on or before such date.

 

10. CLAWBACK/RECOVERY

All payments under the Plan will be subject to recoupment in accordance with any
clawback policy that the Company is required to adopt pursuant to the Dodd-Frank
Wall Street Reform and Consumer Protection Act or as required under other
applicable law. In addition, the Plan Administrator may impose such other
clawback, recovery or recoupment provisions on awards granted under the Plan,
which terms shall be set forth in the applicable plan document or agreements
governing the terms of awards granted in respect of any Performance Period under
the Plan, as the Plan Administrator determines necessary or appropriate.

 

11. SECTION 409A OF THE INTERNAL REVENUE CODE

It is intended that the Plan and any awards granted under the Plan be exempt
from the requirements of Section 409A of the Code, and the Plan Administrator
shall interpret and administer the Plan accordingly.

 

12. UNFUNDED OBLIGATION

The Company’s obligations under the Plan will, in every case, be an unfunded and
unsecured promise. A Participants’ rights as to any benefits under the Plan
shall be no greater than those of general, unsecured creditors of the Company.
The Company will not be obligated to fund its financial obligations under the
Plan.

 

13. AMENDMENT AND TERMINATION

The Plan Administrator may amend, modify suspend or terminate the Plan, in whole
or in part, at any time and in any respect, including the adoption of amendments
deemed necessary in order to (i) comply with Section 162(m) of the Code or
(ii) be exempt from Section 409A of the Code. However, in no event may any such
amendment, modification, suspension or termination result in an increase in the
amount of compensation payable as identified for any Performance Period or cause
compensation that is intended to qualify as “performance-based compensation”
under Section 162(m) of the Code to fail to so qualify.

 

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