CHARTER OF THE COMPENSATION COMMITTEE1
The Charter of the Company’s Compensation Committee is as follows:
The Compensation Committee (the “Committee”) of the Board of Directors of Exelixis, Inc., a Delaware Corporation (the “Company”), shall consist of at least two members of the Board of Directors (the “Board”). All members of the Committee shall satisfy the independence requirements of the Nasdaq Global Select Market (“Nasdaq”) applicable to compensation committee members, as in effect from time to time, when and as required by Nasdaq. The Board shall fill any vacancies occurring on the Committee and shall also designate the Chairperson of the Committee.
The purpose of the Committee shall be to act on behalf of the Board in fulfilling the Board’s responsibilities to oversee the Company’s compensation policies, plans and programs and to review and determine the compensation to be paid to the Company’s officers (which shall include any “officer” as such term is defined in Section 16 of the Securities Exchange Act of 1934, as amended, and Rule 16a-1(f) promulgated thereunder, as well as other employees of the Company who hold the title of “Executive Vice President” or higher) (“Officers”) and directors, as well as to prepare and review the Committee report included in the Company’s annual proxy statement (the “Proxy Statement”) in accordance with applicable rules and regulations of the Securities and Exchange Commission (“SEC”) in effect from time to time (the “Compensation Committee Report”).
The Committee shall be charged with the following functions:
- To take any and all actions which may be taken by the Board with respect to fixing the compensation level of Officers of the Company, including but not limited to the development of compensation policies that will attract and retain the highest quality executives, that will clearly articulate the relationship of corporate performance to executive compensation and that will reward executives for the Company’s progress. In particular, it shall be the responsibility of the Committee to determine and approve or, at the discretion of the Committee, recommend to the full Board for its approval the compensation and other terms of employment of each Officer, taking into consideration each such Officer’s success in achieving his or her individual performance goals and objectives and the corporate performance goals and objectives deemed relevant to the Officer as established by the Committee. No Officer, including the Chief Executive Officer, may be present during the voting or deliberations regarding his or her compensation.
- To recommend to the full Board for its approval, the adoption, amendment, and termination of stock option plans, stock appreciation rights plans, pension and profit sharing plans, stock bonus plans, stock purchase plans, bonus plans for Officers, deferred compensation plans, and other similar programs (collectively, “Compensation Plans”). Notwithstanding the foregoing, the Committee shall have the full power and authority of the Board regarding the adoption, amendment and termination of all bonus plans, including those applicable to Officers.
- To periodically review the compensation paid to non-employee directors for their service on the Board and its committees and recommend any changes considered appropriate to the full Board for its approval.
- To administer all Compensation Plans, establish guidelines, interpret plan documents and generally to grant rights, participation and interests in Compensation Plans to eligible participants.
- To review and approve such other compensation matters as the Board, the Committee or the Chief Executive Officer of the Company determines to have the Committee approve.
- To review and discuss with the Company’s management the Compensation Discussion and Analysis (“CD&A”), taking into account the results of the most recent stockholder advisory vote on executive compensation (“say-on-pay”) and the most recent stockholder advisory vote on the frequency of say-on-pay, and to recommend to the Board, if it deems it advisable, that the CD&A be included in the Company’s annual report and the Proxy Statement and to provide the Compensation Committee Report for inclusion in the Proxy Statement.
- To periodically assess the Company’s compensation policies and practices in order to determine whether any such policies or practices are reasonably likely to have a material adverse effect on the Company, and to report the Committee’s assessment and determination to the Board.
- To periodically review, discuss and assess its own performance and to review and assess the adequacy of this Charter on an annual basis, including the Committee’s role and responsibilities as outlined in this Charter. The Committee shall recommend any proposed changes to the Board for its consideration.
- To perform such other functions and have such other powers as may be necessary or convenient in the efficient discharge of the foregoing.
The Committee shall have full access to all books, records, facilities and personnel of the Company as deemed necessary or appropriate by any member of the Committee to discharge his or her responsibilities hereunder. The Committee shall have the sole authority to obtain, at the expense of the Company, advice and assistance from internal or external legal, accounting or other advisors and consultants. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel and other adviser retained by the Committee. Other reasonable expenditures for external resources that the Committee deems necessary or appropriate in the performance of its duties are permitted, and shall be paid for by the Company.
To the extent required by the Nasdaq or SEC rules, before engaging, or receiving advice from, a compensation consultant, external legal counsel or any other advisor, the Committee shall consider the independence of each such advisor by taking into account the following factors and any other factors required by Nasdaq or the SEC and corresponding rules that may be amended from time to time, including any exceptions permitted by such rules:
- the provision of other services to the Company by the employer of the compensation consultant, counsel or other advisor (the “Advisory Firm”);
- the amount of fees received from the Company by the Advisory Firm, as a percentage of the Advisory Firm’s total revenue;
- the Advisory Firm’s policies and procedures that are designed to prevent conflicts of interest;
- any business or personal relationship of the compensation consultant, counsel or other advisor with a member of the Committee;
- any stock of the Company owned by the compensation consultant, counsel or other advisor; and
- any business or personal relationship between an executive officer of the Company and the compensation consultant, counsel, other advisor or the Advisory Firm.
Except to the extent inconsistent with any laws and rules applicable to the Company, including the rules of Nasdaq, any responsibility or authority of the Committee under this Charter may be delegated as appropriate by the Board or the Committee, including to the Chairperson of the Committee or to a subcommittee composed of one or more Committee members and/or other members of the Board and/or Officers. Without limiting the foregoing, the Committee may form subcommittees or special committees for the purpose of determining or approving compensation and equity grants to be made under the Compensation Plans (such as, for example, year- end performance-related bonuses, salary increases and equity incentive grants) to employees that are not Officers.
The Committee will hold at least one regular meeting per year and additional meetings as the Committee deems appropriate. Officers and other employees of the Company may attend these meetings at the invitation of the Committee, subject to the limitations set forth in this Charter.
MINUTES AND REPORTS
Minutes of each meeting of the Committee shall be kept and distributed to each member of the Committee and the Secretary of the Company. The Chairperson of the Committee shall report to the Board from time to time, or whenever so requested by the Board.
1 This Charter of the Compensation Committee of the Board of Directors was originally adopted on January 27, 2000, and subsequently amended on February 24, 2004, May 16, 2012, May 15, 2013, May 15, 2014, September 19, 2014, May 14, 2015, May 10, 2018 and May 9, 2019.
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