Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

PLEASE READ CAREFULLY:

THIS CONTAINS A RELEASE OF ALL CLAIMS,

KNOWN OR UNKNOWN

THIS SEPARATION AGREEMENT AND RELEASE (the “Agreement”) is entered into by and
between Frances K. Heller (“Employee”) and Exelixis, Inc. (“Employer” or
“Company”).

Now, therefore, in consideration of the mutual promises contained herein, it is
agreed as follows:

 

1. Separation: The Company and the Employee mutually agree that the Employee’s
last day of employment with the Company will be July 18, 2011 (“Separation
Date”) and that her separation from the Company will be governed by the terms
herein. On the Separation Date, Employee will be provided with her final
paycheck which includes all accrued wages and all accrued but unused vacation
time. Employee’s accrued but unused vacation time is 191.78 hours. Between the
date Employee executes this Agreement and her Separation Date (the “Transition
Period”), Employee will continue to be an employee of the Company and will be
provided with her full pay and benefits (including continued vesting of her
stock options). During the Transition Period, Employee will use reasonable
efforts to perform her assigned duties and responsibilities (including the
transition of her duties) upon request of the CEO and she will be expected to
continue to comply with all of the Company’s policies and procedures (including
its insider trading policy). Employer will provide accurate information
regarding Employee’s earnings, will not oppose any unemployment compensation
claims Employee may file, and, for purposes of unemployment compensation, will
not characterize Employee’s separation as a voluntary departure “without good
cause,” or as a discharge in connection with “misconduct,” as those terms are
defined in California Unemployment Insurance Code Section 1256.

 

2. Severance Benefits: If Employee: (i) signs this Agreement and allows all
releases contained herein to become effective; (ii) reaffirms her release of
claims on the Separation Date by signing where indicated on the final page of
this Agreement (the “Separation Date Affirmation”); and (iii) complies with all
of her obligations to the Company during the Transition Period; then the Company
shall provide Employee with the following Severance Benefits:

 

  a. Severance Pay. Employer shall pay Employee as severance the sum of
$212,175.12 (“Severance Pay”), less required withholdings, which represents 6
months (the “Severance Pay Period”) of Employee’s regular gross compensation of
$8,160.59 per week. This amount shall be paid in one lump sum via check sent by
overnight delivery upon the Effective Date of the releases provided on the
Separation Date (as defined in Section 5(c) herein). For the avoidance of doubt
and for purposes of ensuring that the Severance Pay qualifies as a “short-term
deferral,” which is exempt from Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), the Severance Pay shall, in all events, be paid
no later than July 30, 2011. In the event of the Employee’s death, the benefits
and payments provided for in this Agreement shall inure to the benefit of the
Employee’s estate.

 

  b.

Transition Payment. Employer shall pay Employee the sum of $146,000.00

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  (“Transition Payment”), less required withholdings, in lieu of any bonus
payments, outplacement services payments, any compensation or benefits which may
be required under the federal or California WARN Acts, and any other payments to
which she may be entitled. This amount shall be paid in one lump sum via check
sent by overnight delivery upon the Effective Date of the releases provided on
the Separation Date (as defined in Section 5(c) herein, but in all events no
later than July 30, 2011).

 

  c. COBRA Benefits. If Employee timely elects continued coverage under COBRA
for herself and/or any eligible dependents, the Company will pay the COBRA
premiums necessary to continue Employee’s current coverage (including dependent
coverage), in the manner described in the Exelixis, Inc. Change in Control and
Severance Benefits Plan, until the earlier of: (i) a period of twelve
(12) months after the Separation Date; or (ii) until such time as Employee
becomes eligible for similar health insurance through another employer. Employee
agrees to notify the Company in writing within ten (10) business days upon
becoming eligible for similar health insurance through another employer.

 

  d. Stock Options. Employee’s stock options shall cease vesting as of the close
of business on July 18, 2011. As part of this Agreement, Employee shall be
entitled to exercise any outstanding vested stock options until the earlier of:
(i) January 31, 2012; or (ii) the original expiration date of each option.
Subsequent to the Employee’s separation from the Company, if there is a trading
restriction placed by the Company on the E*Trade account holding Employee’s
Company stock options (the “Employee’s E*Trade Account”), then the above
January 31, 2012 expiration date is extended by one day for each day after
July 18, 2011, that the trading restriction on such account remains in effect.
Employee understands that extension of the exercise period may result in
different tax treatment of certain stock options and that the Company makes no
representation as to tax treatment of any such options. Employee hereby consents
to the extension of the period for exercise of outstanding vested stock options.
Except for the modifications of the exercise period as set forth herein,
Employee’s stock options shall continue to be governed by the applicable grant
notice, stock option agreement, and stock option plan. The Company warrants,
represents and acknowledges that unless otherwise required under applicable
statute, regulation, judgment or court order, the Company will ensure that:
(i) any restriction or prohibition on the Employee’s ability to trade her
Company stock options or shares of common stock upon exercise thereof is
permanently removed from the Employee’s E*Trade Account on the date the first
quarterly trading window opens after the Separation Date; and (ii) no trading
restriction or prohibition will be placed on the Employee’s E*Trade Account
after that date at, or pursuant to, the direction of the Company.

 

  e. Business Expenses. Employee has thirty (30) days from the Separation Date
to submit to the Company any business expenses along with the supporting
documentation for such expenses (i.e., receipts) incurred by the Employee for
which the Employee has not yet sought reimbursement. The Company will reimburse
Employee within thirty (30) days of the date Employee submits such expenses and
supporting documentation.

 

3.

Employee’s Representations: Employee warrants, represents and acknowledges that:
(i) Employee has been paid all compensation owed by Employer as of the date
Employee signs this Agreement, including any and all wages, expense
reimbursements, and commissions, and bonuses; (ii) Employee has no reason to
believe that she has suffered any injuries or illnesses on the job which have
not been reported to Employer;

 

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  (iii) Employee has been properly provided any leave of absence because of
Employee’s or Employee’s family member’s health condition and has not been
subjected to any improper treatment, conduct or actions due to a request for or
taking such leave; and (iv) Employee is not eligible for any compensation or
benefits pursuant to any federal or state WARN laws.

 

4. Release:

 

  a. General Release. In exchange for the Severance Benefits Employee hereby
generally and completely releases, acquits and forever discharges the Company,
and its parent, subsidiary, and affiliated entities, along with its and their
predecessors and successors and their respective directors, officers, employees,
shareholders, stockholders, partners, agents, attorneys, insurers, affiliates
and assigns (collectively, the “Released Parties”), of and from any and all
claims, liabilities and obligations, both known and unknown, that arise from or
are in any way related to events, acts, conduct, or omissions occurring at any
time prior to and including the date that Employee signs this Agreement
(collectively, the “Released Claims”). The Employee does not waive any rights or
claims that may arise after the date this Agreement is executed.

 

  b. Scope of Release. The Released Claims include, but are not limited to:
(i) all claims arising out of or in any way related to Employee’s employment
with the Company, or the cessation of that employment; (ii) all claims related
to Employee’s compensation or benefits from the Company, including salary,
bonuses, commissions, other incentive compensation, vacation pay and the
redemption thereof, expense reimbursements, severance payments, fringe benefits,
stock, stock options, or any other ownership or equity interests in the Company;
(iii) all claims for breach of contract, wrongful termination, and breach of the
implied covenant of good faith and fair dealing; (iv) all tort claims, including
but not limited to claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (v) all federal, state, and local
statutory claims, including but not limited to claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Worker Adjustment and Retraining Notification Act (as amended) (the
“WARN Act”), the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990 (as amended), the federal Age
Discrimination in Employment Act, as amended (the “ADEA”), the federal Family
and Medical Leave Act (as amended) (the “FMLA”), the California Family Rights
Act (“CFRA”), the California Labor Code (as amended) and the California Fair
Employment and Housing Act (as amended).

 

  c.

ADEA Waiver. Employee acknowledges that she is knowingly and voluntarily waiving
and releasing any rights she may have under the ADEA (“ADEA Waiver”). Employee
also acknowledges that the consideration given for the ADEA Waiver is in
addition to anything of value to which Employee was already entitled. Employee
further acknowledges that she has been advised by this writing, as required by
the ADEA, that: (i) her ADEA Waiver does not apply to any rights or claims that
arise after the date she signs this Agreement; (ii) she should consult with an
attorney prior to signing this Agreement (although she may choose voluntarily
not to do so); (iii) she has twenty-one (21) days to consider this Agreement
(although she may choose to voluntarily sign it sooner); (iv) she has seven
(7) days following the date she signs this Agreement to revoke it, with such
revocation to be effective only if she delivers written notice of revocation to
the Company within the seven (7)-day period; and (v) the ADEA

 

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  Waiver will not be effective until the date upon which the revocation period
has expired unexercised, which will be the eighth day after Employee signs this
Agreement or, in the case of the Separation Date Affirmation, the eighth day
after Employee signs this Affirmation (“Effective Date”). To revoke the
Agreement, Employee must deliver a written statement of revocation to Exelixis,
Inc., c/o Laura Dillard, Executive Director, Human Resources, 210 E. Grand
Avenue, P.O. Box 551, South San Francisco, CA 94093-0511, by hand delivery by no
later than the close of business on the seventh day after signing the Agreement
or by registered or certified mail postmarked within the seven-day revocation
period, along with a faxed copy of Employee’s revocation to 650-837-7226 within
the seven-day revocation period.

 

  d. Section 1542 Waiver. In giving the release herein, which includes claims
which may be unknown to Employee at present, Employee acknowledges that she has
read and understands Section 1542 of the California Civil Code, which reads as
follows: “A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or her
settlement with the debtor.” Employee hereby expressly waives and relinquishes
all rights and benefits under that section and any law or legal principle of
similar effect in any jurisdiction with respect to her release of claims in this
Agreement, including her release of unknown and unsuspected claims.

 

  e. Exceptions. Notwithstanding the foregoing, the following are not included
in the Released Claims (the “Excluded Claims”): (i) any rights or claims for
indemnification Employee may have pursuant to any fully signed indemnity
agreement she may have with the Company, the charter, bylaws, or operating
agreements of the Company, any policy, by-law, agreement, practice or obligation
of the Company with respect to the defense or indemnification of directors,
officers or employees, or under applicable law; (ii) Employee’s rights under any
liability insurance policy (including directors’ and officers’ liability);
(iii) Employee’s vested rights and benefits under any pension or welfare benefit
plans; (iv) any rights or claims which are not waivable as a matter of law; or
(v) any rights under, or claims arising from the breach of, this Agreement. In
addition, nothing in this Agreement prevents Employee from filing, cooperating
with, or participating in any investigation or proceeding before the Equal
Employment Opportunity Commission, the federal Department of Labor, the
California Fair Employment and Housing Commission, or any other government
agency, except that Employee hereby waives her right to any monetary benefits in
connection with any such claim, charge, investigation, or proceeding. Employee
hereby represents and warrants that, other than the Excluded Claims, she is not
aware of any claims she has or might have against any of the Released Parties
that are not included in the Released Claims.

 

5. Proprietary Information: Employee agrees and acknowledges that during her
employment Employee obtained certain confidential and proprietary information of
Employer. Employee agrees that she will comply fully with her Employee
Proprietary Information and Inventions Agreement.

 

6.

Nondisparagement: As a material inducement to enter into this Agreement, the
parties agree as follows: (1) Employee agrees not to disparage, criticize or
make any derogatory statement about the Company, or issue any communication that
reflects adversely on the Company and its officers, directors, employees,
shareholders and

 

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  agents, and (2) the Company agrees to direct its officers, directors and
personnel in its Human Resources department not to disparage, criticize or make
any derogatory statement about the Employee, or issue any communication that
reflects adversely on the Employee; and (3) both Employee and the Company may
respond accurately and fully to any request for information to the extent
required by legal process. The Company agrees that only Dr. Stelios
Papadopoulos, Chairman of the Board of Directors of the Company (or any member
of the Audit Committee of the Board of Directors of the Company if
Dr. Papadopoulos is not a member of the Board of Directors of the Company or is
otherwise not reasonably available) shall be authorized to (1) respond to any
inquiries about the Employee received by the Company and (2) make any public
statement regarding the Employee. If any other officer or director of the
Company is contacted regarding Employee, they will refer the contact either to
Dr. Papadopoulos or the Company’s Human Resources Department (which will only
verify dates of employment and positions held). In addition, the parties agree
that any disclosure regarding this Agreement, the Employee, or that in any way
relates to, refers to or discusses the Employee’s employment by the Company or
the cessation of that employment in any 8-K or press release shall be as set
forth on Exhibit A hereto and that any other disclosure or statement made in a
public filing or other statement shall be consistent with such disclosure on
Exhibit A hereto. Further, through December 31, 2011, Employer will allow an
auto-reply on Employee’s current Company email address that states:

I am no longer with Exelixis. For matters relating to Exelixis business
development, please contact:

Rekha Hemrajani, Vice President Business Development at rhemraja@exelixis.com
(650) 837-7480; or

Aman Parhar, Senior Director Business Development at aparhar@exelixis.com
(650) 837-8325

For personal matters, please contact me at fheller@gmail.com

 

7. No Voluntary Adverse Action: Employee agrees that she will not voluntarily
(except in response to legal compulsion) assist any person in bringing or
pursuing any proposed or pending litigation, arbitration, administrative claim
or other formal proceeding against the Company, its parent or subsidiary
entities, affiliates, officers, directors, employees or agents.

 

8. Cooperation: Employee agrees to cooperate fully with the Company in
connection with its actual or contemplated defense, prosecution, or
investigation of any claims or demands by or against third parties, or other
matters arising from events, acts, or failures to act that occurred during the
period of her employment by the Company. Such cooperation includes, making
herself available to the Company upon reasonable notice, without subpoena,
provided that such cooperation does not interfere unreasonably with any
subsequent employment or consulting work of the Employee, to provide complete,
truthful and accurate information in witness interviews, depositions, and trial
testimony. The Company will reimburse Employee for time actually expended at an
hourly rate (based upon Employee’s base salary as of the last day of her
employment) for cooperation that occurs post-employment; provided, however, that
Employee shall not be compensated for actual time spent providing testimony,
which time shall not exceed 10.5 hours in the aggregate. The Company also will
reimburse Employee for reasonable out-of-pocket expenses she incurs in
connection with any such cooperation.

 

9.

No Admissions: Nothing contained in this Agreement shall be construed as an

 

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  admission by Employee or the Company of any liability, obligation, wrongdoing
or violation of law.

 

10. Dispute Resolution: To aid in the rapid and economical resolution of any
disputes which may arise under this Agreement, Employee and the Company agree
that any and all claims, disputes or controversies of any nature whatsoever
arising from or regarding the interpretation, performance, negotiation,
execution, enforcement or breach of this Agreement shall be resolved by
confidential, final and binding arbitration conducted before a single arbitrator
with JAMS, Inc. (“JAMS”) in San Francisco, California, in accordance with JAMS’
then-applicable arbitration rules. The parties acknowledge that by agreeing to
this arbitration procedure, they waive the right to resolve any such dispute
through a trial by jury, judge or administrative proceeding. Employee will have
the right to be represented by legal counsel at any arbitration proceeding at
her own expense. The arbitrator shall: (a) have the authority to compel adequate
discovery for the resolution of the dispute and to award such relief as would
otherwise be available under applicable law in a court proceeding; and (b) issue
a written statement signed by the arbitrator regarding the disposition of each
claim and the relief, if any, awarded as to each claim, the reasons for the
award, and the arbitrator’s essential findings and conclusions on which the
award is based. The Company shall bear JAMS’ arbitration fees and administrative
costs. Nothing in this Agreement shall prevent either Employee or the Company
from obtaining injunctive relief in court to prevent irreparable harm pending
the conclusion of any such arbitration. Any awards or orders in such
arbitrations may be entered and enforced as judgments in the federal and state
courts of any competent jurisdiction.

Prior to the initiation by any party of a JAMS arbitration procedure, the
parties agree to enter into direct and good faith negotiations to resolve any
and all claims, disputes or controversies of any nature whatsoever arising from
or regarding the interpretation, performance, negotiation, execution,
enforcement or breach of this Agreement. In that regard, the party that believes
there may be a dispute relating to this Agreement shall send a notice to the
other party (pursuant to the notice provision in this Agreement) that sets forth
the reasons it believes there is a dispute and nature of the potential dispute,
and shall give the other party ten (10) business days after its receipt of the
notice to remedy the matter. If the potential dispute is not resolved by the
parties within those ten (10) business days, then either party may initiate a
JAMS arbitration proceeding.

 

11. Governing Law: This Agreement shall be governed by California law.

 

12. Entire Agreement: This Agreement constitutes the complete and total
agreement between the Company and Employee with respect to issues addressed in
this Agreement; provided, however, that this Agreement shall not in any way
affect, modify, or nullify any other agreement Employee has entered into with
the Company, including any equity agreement, lock-up agreement or any agreement
which obligates Employee to protect the Company’s confidential information,
after Employee’s employment is terminated. Employee represents that she is not
relying on any other agreements or oral representations not fully expressed in
this document. This Agreement is being executed on behalf of the Company by an
officer or a director of the Company duly authorized to do so by the Company’s
Board of Directors. Employee agrees that this Agreement shall not be modified,
altered, or discharged except by written instrument signed by an authorized
Company representative and Employee.

 

13. Captions: The headings in this Agreement are for reference only, and shall
not in any way affect the meaning or interpretation of this Agreement.

 

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14. Section 409A of the Internal Revenue Code: This Agreement shall, to the
greatest extent possible, be construed to provide payments and benefits to the
Employee that are exempt from Code Section 409A.

 

15. Severability: The parties agree that should any part of this Agreement be
found to be void or unenforceable by a court of competent jurisdiction, that
determination will not affect the remainder of this Agreement.

 

16. Mergers and Consolidations; Assignability: This Agreement shall be binding
upon the parties and their respective representatives, heirs, executors,
successors and assigns.

 

17. Notices: Any notice, requests, claims, demands and other communications
permitted or required to be given under this Agreement by any party to another
party shall be in writing and shall be given or made (and shall be deemed to
have been duly given or made upon receipt) by hand-delivery, by an
internationally recognized overnight courier service, or by registered or
certified mail (return receipt requested), to the party at the address set forth
for the party below (or such other address as may be specified by such party
upon ten (10) days written notice to all other parties in accordance with this
subparagraph):

If to Exelixis Inc:

Exelixis, Inc.

Attn: General Counsel

210 East Grand Avenue

South San Francisco, CA 94080

With a copy (which shall not constitute notice) to:

Cooley LLP

Attn:    Suzanne Hooper, Esq.    5 Palo Alto Square    3000 El Camino Real   
Palo Alto, CA 94306

If to Frances K. Heller:

At the address of the Employee as set forth in the Employee’s personnel file
maintained by the Company as of July 18, 2011.

With a copy (which shall not constitute notice) to:

Dewey & LeBoeuf LLP

Attn:    Donna Gordon, Esq.    1301 Avenue of the Americas    New York, New York
10019

 

18.

Execution; Counterparts: This Agreement may be executed in one or more
counterparts, each of which parts shall be deemed to be an original and all of
which,

 

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  when taken together, shall constitute one and the same agreement. The exchange
of copies of this Agreement and of signature pages by facsimile transmission
shall constitute effective execution and delivery of this Agreement as to the
parties hereto and may be used in lieu of the originally signed Agreement for
all purposes. Signatures of the parties hereto transmitted by facsimile shall be
deemed to be their original signatures for all purposes.

 

19. Indemnification: Following the Separation Date and until the expiration of
the applicable statute of limitations, if any, the Company will continue to
provide to Employee indemnification and director and officer insurance coverage
for the period of time that she was employed by the Company which is
substantially identical to that which the Company provides to its directors and
officers. At Employee’s request, subject to the consent of the Company, which
shall not be unreasonably withheld, the Employee shall be afforded separate
counsel at Company expense designated by Employee in connection with any matter
for which indemnification or insurance may be applicable if there is a conflict
of interest with any other party or parties.

WHEREOF, intending to be legally bound, the parties have agreed to the aforesaid
terms of this Agreement and indicate their agreement by signing below.

 

    Dated: July 17, 2011      

/s/ Frances K. Heller

      Frances K. Heller       “Employee” Dated: July 18, 2011          

Exelixis, Inc

“Employer”

     

/s/ Pamela Simonton

     

By: Pamela Simonton, General Counsel

       & EVP

             Exelixis, Inc.

 

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SEPARATION DATE AFFIRMATION

(To be signed on or after Separation Date)

In exchange for the consideration and promises set forth in this Agreement, I
hereby acknowledge and agree that the Release provided by me in Paragraph 5
herein shall apply fully and completely to waive and release any claims that I
may have that arise out of or are in any way related to events, acts, conduct,
or omissions occurring during the period of time from the date I first signed
this Agreement to the date of my signature below. I further acknowledge that the
Representations made by me in Paragraph 4 herein remain true as of today.

 

Accepted and Agreed:

/s/ Frances K. Heller

Frances K. Heller

July 18, 2011

Date

 

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