EVFM 2018 Proxy Statement

13 In establishing compensation amounts for executives, the Compensation Committee seeks to support the Company’s overall business strategy and objectives, attract and retain key executives, link compensation with business objectives and organizational performance, and provide competitive compensation opportunities. In connection with the Merger, the officers of Evofem Operations were appointed to serve as executive officers of the Company. As our current management team transitions from operating a private company to operating a publicly traded company, our Compensation Committee will evaluate our compensation practices, philosophy and arrangements to ensure alignment with our structure and the roles of the executives as they relate to managing and oversight of a public company. The Compensation Committee may delegate authority to one or more members of the Compensation Committee or to one or more executives of the Compensation Committee, except that the Compensation Committee may not delegate authority to approve compensation of the Company’s chief executive officer or its other Section 16 officers to any person or committee (other than to a subcommittee consisting exclusively of at least three members of the Compensation Committee). The Compensation Committee has engaged the services of Marsh & McLennan Agency, or Marsh, a national executive compensation consulting firm, to review and provide recommendations concerning all of the components of the Company's executive compensation program. Marsh performs services solely on behalf of the Compensation Committee and has no relationship with the Company or management except as it may relate to performing such services. Marsh assists the Compensation Committee in defining the appropriate market of the Company's peer companies for executive compensation and practices and in benchmarking our executive compensation program against the peer group each year. Marsh also assists the Compensation Committee in benchmarking our director compensation program and practices against those of our peers. The Compensation Committee has assessed the independence of Marsh pursuant to SEC rules and the corporate governance rules of The Nasdaq Stock Market and concluded that no conflict of interest exists that would prevent Marsh from independently representing the Compensation Committee. A copy of the Compensation Committee’s written charter is publicly available on our website at www.evofem.com . Nominating and Corporate Governance Committee. Our Nominating Committee met once during 2017 and has two members, Gillian Greer, Ph.D. and William Hall, Ph.D., M.D (Chairman). The Nominating Committee’s role and responsibilities are set forth in the Nominating Committee’s written charter and include evaluating and making recommendations to the full Board as to the size and composition of the Board and its committees, evaluating and making recommendations as to potential candidates, and evaluating current Board members’ performance. All members of the Nominating Committee qualify as independent under the definition promulgated by The Nasdaq Stock Market. If a stockholder wishes to nominate a candidate for director who is not to be included in our proxy statement, it must follow the procedures described in our bylaws and in “Stockholder Proposals and Nominations For Director” at the end of this proxy statement. A copy of the Nominating Committee’s written charter is publicly available on the Company’s website at www.evofem.com . Director Independence Our Board of Directors has reviewed the materiality of any relationship that each of our directors has with the Company, either directly or indirectly. Based upon this review, our Board has determined that the following members of the Board are “independent directors” as defined by The Nasdaq Stock Market: Dr. Greer, Dr. Hall, Dr. Kamdar, Mr. O’Brien and Mr. Rutherford. Board Leadership Structure Our corporate governance practices do not indicate a particular board structure, and our Board is given the flexibility to select its chairman and our chief executive officer in the manner that it believes is in the best interests of our stockholders. Accordingly, the positions of chairman and the chief executive officer may be filled by either one individual or two individuals. The Board has currently elected to separate the positions of Chairman and Chief Executive Officer at this time. Ms. Pelletier serves as our Chief Executive Officer and as a member of our Board of Directors. Mr. Lynch currently serves as the Chairman of our Board of Directors. The Board believes that this structure serves us well by creating a critical link between management (through Ms. Pelletier’s membership on the Board) and the non-executive directors led by Thomas Lynch in his role as a non-executive Chairman.