CHARTER OF THE NOMINATING AND CORPORATE GOVERNANCE COMMITTEE OF THE BOARD OF DIRECTORS1
The Nominating and Corporate Governance Committee (the “Committee”) of the Board of Directors (the “Board”) of Exelixis, Inc., a Delaware corporation (the “Company”), shall consist of at least two (2) members of the Board. No Committee member shall be an employee of the Company, and each member shall be free from any relationship that would interfere with the exercise of his or her independent judgment, as determined by the Board, in accordance with the applicable independence requirements of the Nasdaq Stock Market and the rules and regulations of the Securities and Exchange Commission (“SEC”). The Board shall appoint the members of the Committee and the Committee chairperson.
STATEMENT OF POLICY
The purpose of the Committee shall be to (i) oversee all aspects of the Company’s corporate governance functions on behalf of the Board; (ii) make recommendations to the Board regarding corporate governance issues and issues arising under the Company’s Corporate Code of Conduct; (iii) provide oversight for, and ongoing evaluation of, the Company’s corporate compliance program; (iv) identify, review and evaluate candidates to serve as directors of the Company; (v) serve as a focal point for communication between such candidates, non-committee directors and the Company’s management; (vi) recommend such candidates to the Board and make such other recommendations to the Board regarding affairs relating to the directors of the Company; and (vii) develop a set of Corporate Governance Guidelines for the Company.
OPERATING PRINCIPLES AND PROCESSES
In fulfilling its function and responsibilities, the Committee should give due consideration to the following operating principles and processes:
- Communication – Regular and meaningful contact throughout the year with the Board, committee chairpersons, members of senior management and independent professional advisors to the Board and its various committees, as applicable, is viewed as important for strengthening the Committee’s knowledge of relevant current and prospective corporate governance issues.
- Committee Education/Orientation – Developing with management and participating in a process for systematic review of important corporate governance issues and trends in corporate governance practices that could potentially impact the Company and enhance the effectiveness of the Committee.
- Resources – The Committee shall be authorized to access such internal and, in consultation with senior management, external resources as the Committee deems necessary or appropriate to fulfill its defined responsibilities, including engagement of independent counsel, consultants and other professional advisors, as well as executive search firms to help identify director candidates. The Committee shall have sole authority to approve fees, costs and other terms of engagement of such outside resources. The Committee shall have the authority to perform such other functions, and shall have such powers, as may be necessary or appropriate in the efficient and lawful discharge of its responsibilities hereunder.
- Reporting to the Board – The Committee, through the Committee chairperson, shall report all material activities of the Committee to the Board from time to time, or whenever so requested by the Board.
The Committee will have the full power and authority to carry out the following primary responsibilities or to delegate such power and authority to one or more subcommittees of the Committee:
- Director Nominations – The Committee shall have the responsibility for establishing criteria for Board membership and identifying, evaluating, reviewing and recommending qualified candidates to serve on the Board, including consideration of any potential conflicts of interest as well as applicable independence and experience requirements. The Committee shall also have the responsibility for evaluating, reviewing and considering the recommendation for nomination of current directors for reelection to the Board. The selection of nominees for director to be presented to the stockholders for election or reelection, and the selection of new Directors to fill vacancies and newly created directorships on the Board, shall be made by the full Board based on the recommendations of the Committee. Nominations from security holders shall be considered using the same criteria as potential nominees recommended by the members of the Committee or others, and there shall be no differences in the manner in which the Committee evaluates a candidate that is recommended for nomination for membership on the Board by the directors, officers or security holders.
- Board Assessment – The Committee shall periodically review, discuss and assess the performance of the Board, including that of the Committee and the other Board committees, seeking input from senior management, the full Board and others. The assessment includes evaluation of the Board’s contribution as a whole, specific areas in which the Board and/or management believe better contributions could be made, and overall Board composition and makeup, including the reelection of current Board members. The factors to be considered shall include whether the size of the Board is appropriate for the Company and whether the directors, both individually and collectively, can and do provide the skills and expertise appropriate for the Company. The Committee shall also consider and assess the independence of directors,including whether a majority of the Board continue to be independent from management in both fact and appearance, as well as within the meaning prescribed by the Nasdaq Stock Market. The results of such reviews shall be provided to the Board for further discussion, as appropriate.
- Board Committee Nominations – The Committee, in consultation with the Chief Executive Officer, and after due consideration of the wishes, independence and experience of the individual directors and independence and experience requirements in accordance with the Nasdaq Stock Market, the rules and regulations of the SEC and applicable law, shall recommend to the entire Board annually the chairmanship and membership of each committee.
- Corporate Governance Guidelines – The Committee shall develop a set of Corporate Governance Guidelines (the “Guidelines”) applicable to the Company. The Committee shall periodically review and assess the Guidelines and their application and recommend any proposed changes to the Board for approval.
- Information Reporting – The Committee shall oversee and review the processes and procedures used by the Company to provide information to the Board and its committees. The Committee should consider, among other factors, the reporting channels through which the Board and its committees receive information and the level of access to outside advisors where necessary or appropriate, as well as the procedures for providing accurate, relevant and appropriately detailed information to the Board and its committees on a timely basis.
- Corporate Code of Conduct – The Committee shall review and administer the Company’s Corporate Code of Conduct (the “Code”) and any similar codes of conduct that may be implemented by the Company from time to time. The Committee shall have the authority to amend the Code and to make waivers of any provisions of the Code. The Committee shall have the authority to enforce the provisions of the Code (including with respect to executive officers and directors) and to direct the management of the Company to take appropriate actions to implement any such enforcement decisions. The Committee hereby delegates to management of the Company the ability to make technical, administrative or other non-substantive amendments to the Code that do not constitute a “waiver” (or “implicit waiver”) for purposes of Item 5.05 of Form 8-K or Rule 5610 of the Nasdaq Stock Market Rules.
- Security Holder Communications – The Committee shall receive and review on behalf of the Board any communications from security holders of the Company to the Board. The Committee shall report to the Board, as appropriate, regarding any such communications from security holders and shall recommend to the Board whether the Committee believes that a response to any such communication is necessary or appropriate and whether any additional actions should be taken by the Company with respect to or as a result of any such communication.
- Compliance with Food and Drug Administration (FDA) and Healthcare Laws – The Committee shall oversee the Company’s compliance program created to prevent fraudand abuse in federal healthcare programs and non-compliance with applicable FDA and healthcare laws. The compliance program will include the elements as outlined in the Department of Health and Human Services Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers, the PhRMA Code on Interactions with Healthcare Professionals, and applicable laws.
- Chief Executive Officer Succession Planning – In the event that the Company’s Chief Executive Officer is no longer able to serve in that position, the Committee shall carry out its prescribed duties under the “CEO Succession Plan” approved by the Board. The Committee shall periodically review and discuss the CEO Succession Plan and recommend any proposed changes to the Board for approval.
- Review of Committee Charter – The Committee shall review and assess the adequacy of this charter on an annual basis and recommend any proposed changes to the Board for approval.
The Committee will hold at least one (1) regular meeting per year and additional meetings as the Committee deems appropriate. At the discretion of the Committee, the President, Chief Executive Officer, Chairman of the Board, Chief Financial Officer and any other person the Committee deems appropriate may attend any meeting of the Committee, except for portions of the meetings where his, her or their presence would be inappropriate, as determined by the Committee.
MINUTES AND REPORTS
Minutes of each meeting shall be prepared and distributed to each member of the Committee and the Secretary of the Company promptly after each meeting. The Committee chairperson will report to the Board from time to time, or whenever so requested by the Board.
1 This Charter of the Nominating and Corporate Governance Committee of the Board of Directors was originally adopted on February 24, 2004, and subsequently amended on September 2, 2009, September 14, 2010, September 19, 2012, September 19, 2014, September 7, 2017 and September 5, 2018.