ENTA Enanta Pharmaceuticals Inc

PROPOSAL 1

ELECTION OF DIRECTORS

Our Board of Directors has fixed the number of directors at seven, which will be reduced to six effective after the resignation of Dr. Afting upon completion of his current year of service on February 15, 2017. Under our charter, our Board is divided into three classes, with each class having as nearly as possible an equal number of directors. The term of one class expires, with their successors being subsequently elected to a three-year term, at each annual meeting of stockholders. At the 2017 annual meeting, the two nominees named in this proxy statement as Class I Directors will be elected to hold office for three years until their successors are elected and qualified. The Board has nominated Bruce L.A. Carter, Ph.D. and Jay R. Luly, Ph.D. for election as Class I Directors at the upcoming annual meeting. Dr. Carter is an independent director as defined by applicable NASDAQ Stock Market standards governing the independence of directors. Dr. Luly is our President and Chief Executive Officer. Each nominee has consented to serve, if elected. If any nominee is unable to serve, proxies will be voted for any replacement candidate nominated by our Board of Directors.

Votes Required

Directors will be elected by a plurality of the votes cast by the stockholders entitled to vote on this proposal at the meeting. Broker non-votes and proxies marked to withhold authority with respect to one or more Class I directors will not be treated as votes cast for this purpose and, therefore, will not affect the outcome of the election.

Nominees for Director and Current Directors

The following table contains biographical information as of December 1, 2016 about the nominees for Class I Director and current directors whose terms of office will continue after the annual meeting. The table includes information provided by the directors individually as to their age, current position, principal occupation and experience for the past five years, and the names of other publicly-held companies for which they currently serve as a director or have served as a director during the past five years.

Current SEC rules require us to discuss briefly the specific experience, qualifications, attributes or skills that led the Board to conclude that each director or nominee for director should serve on our Board of Directors. We have provided this discussion in a separate paragraph immediately below the biographical information provided for each director.

As you read the disclosure, please keep in mind that any specific qualification, attribute or skill that is attributed to one director should not necessarily imply that other directors do not possess that qualification, attribute or skill. Furthermore, this disclosure does not impose on any director any duties, obligations or liability that are greater than the duties, obligations, and liability imposed on each other member of the Board.

Because the discussion of the specific experience, qualifications, attributes or skills of a director is to be made each year in light of the Company’s business and structure at that time, the content of this discussion may change for one or more directors in future years.

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WE RECOMMEND A VOTE “FOR” EACH OF OUR TWO CLASS I DIRECTOR NOMINEES

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PROPOSAL 2

APPROVAL OF PERFORMANCE MEASURES IN THE 2012 EQUITY INCENTIVE PLAN

FOR PURPOSES OF INTERNAL REVENUE CODE SECTION 162(m)

Our 2012 Equity Incentive Plan, referred to as the 2012 Equity Plan, is an important part of our compensation program and we believe it is essential to our ability to attract and retain highly qualified employees in an extremely competitive environment in which employees view equity incentive awards as an important component of their compensation. Our Compensation Committee intends to continue to make such awards under the 2012 Equity Plan as it considers desirable to provide appropriate incentive to our employees, including our Chief Executive Officer and the next four highest paid executive officers (each, a “covered employee”), with the intention of also satisfying Section 162(m) of the Internal Revenue Code of 1986, as amended, with respect to such awards whenever possible.

We are asking stockholders to approve the performance measures in the 2012 Equity Plan in order to comply with the requirements of Section 162(m) of the Internal Revenue Code so that equity awards under the plan to “covered employees” are exempt from the limitations of Section 162(m).

The closing price of our common stock on the NASDAQ Stock Market on December 1, 2016 was $31.24 per share. The material terms of the 2012 Equity Plan are set forth below.

General Description of 2012 Equity Plan

The purpose of the 2012 Equity Plan is to attract and retain employees, directors and consultants and to provide an incentive for these individuals to achieve long-range performance goals. The 2012 Equity Plan permits us to grant equity awards to our employees, directors and consultants, including incentive and non-statutory stock options, stock appreciation rights, performance shares, restricted stock and stock units. Under the 2012 Equity Plan to date, we have granted only incentive stock options, non-statutory stock options and restricted stock units, including performance share units and relative total stockholder return units.

As of December 1, 2016, 84 employees were eligible to participate in the 2012 Equity Plan. As of that date, a total of 1,912,264 shares were reserved for outstanding stock options and 112,460 shares were reserved for outstanding restricted stock unit awards under the 2012 Equity Plan. In addition, as of that date a total of 194,100 shares were reserved for potential issuance pursuant to performance-based and market-based stock unit awards. The Company has issued 12,951 shares of common stock upon option holders exercising options awarded under the 2012 Equity Plan through December 1, 2016. In addition, under the terms of the 2012 Equity Plan, at the beginning of each of our fiscal years an additional number of shares is automatically added to the reserve of shares available for issuance under the plan. The number of shares added is equal to the LESSER of (i) 3% of the outstanding shares on such date, (ii) 2,088,167 shares of Common Stock, or (iii) an amount determined by the Compensation Committee. For example, as of October 1, 2016, based on 3% of the outstanding shares of our common stock on that date, 571,077 shares of common stock were added to the shares available for future awards. Additionally, while no further awards have been made under our Amended and Restated 1995 Equity Incentive Plan, referred to as the 1995 Equity Plan, since our initial public offering in March 2013, shares subject to options that were granted under that plan and that are forfeited or that expire unexercised are then added to the shares available for issuance under the 2012 Equity Plan. To date we have had 28,871 shares added to the 2012 Plan from such forfeitures. There remain 455,649 shares subject to outstanding options awarded under the 1995 Equity Plan, which have exercise prices ranging from $1.21 to $14.18 per share.

Outstanding options awarded under the 2012 Equity Plan have exercise prices ranging from $17.70 to $49.92 per share. The weighted average exercise price of all outstanding options is $33.19 per share. All options granted under the 2012 Equity Plan have a term of ten years. As the amount of any awards under the 2012 Equity Plan is within the Compensation Committee’s discretion, total awards that may be granted for a fiscal year are not determinable until completion of the year.

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The following table sets forth shares underlying stock option, restricted stock unit and performance-based and market-based stock unit awards granted under the 2012 Equity Plan and unexercised or not settled, as the case may be, as of December 1, 2016:

Administration and Eligibility

Awards are made by the Compensation Committee, which has been designated by our Board of Directors to administer the 2012 Equity Plan. Subject to certain limitations, the Compensation Committee may delegate to one or more of our executive officers the power to make awards to participants who are not subject to Section 16 of the Securities Exchange Act of 1934 and are not “covered employees” for purposes of Internal Revenue Code Section 162(m). The Compensation Committee has authorized our Chief Executive Officer to make awards to non-executive employees within parameters approved by the Committee.

The Compensation Committee administers the 2012 Equity Plan and determines the terms and conditions of each stock option award to our executive officers and directors, including the exercise price, the form of payment of the exercise price, the number of shares subject to the award and the time at which such options become exercisable. The exercise price of any stock option granted under the 2012 Equity Plan may not, however, be less than the fair market value of the common stock on the date of grant and the term of any such option cannot be greater than ten years. The maximum number of shares of Common Stock with respect to which awards may be granted to any participant under the 2012 Equity Plan is 1,392,111 per calendar year. The Compensation Committee also determines the terms and conditions of each full value award to our executive officers and directors, including the number of shares subject to the award and the time or times at which such options become exercisable and are issued, and the terms of any withholding of shares or other provisions to satisfy tax withholding requirements.

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Awards

The 2012 Equity Plan provides for the following categories of awards:

Stock Options. Our Compensation Committee may grant options to purchase shares of common stock that are either incentive stock options, or ISOs, eligible for the special tax treatment described below, or nonstatutory stock options. No option may have an exercise price that is less than the fair market value of the common stock on the date of grant or a term of more than ten years. An option may be exercised by the payment of the option price in cash or with such other lawful consideration as our Compensation Committee may determine, including by delivery of a note or shares of common stock owned by the optionholder, including restricted stock, or by retaining shares otherwise issuable pursuant to the option, in each case valued at their fair market value on the date of delivery or retention.

Restricted Stock. Our Compensation Committee may grant shares of common stock that are only earned if specified conditions, such as a completing a term of employment or satisfying pre-established performance goals, are met and that are otherwise subject to forfeiture. Shares of restricted stock may not be sold, transferred or otherwise encumbered until earned, unless the Compensation Committee provides otherwise.

Restricted Stock Units. Our Compensation Committee may grant units that represent the right to receive shares of our common stock, subject to such terms, restrictions, conditions, performance criteria, vesting requirements, settlement terms, and payment rules, if any, as the Committee shall determine.

Unrestricted Stock. Our Compensation Committee may grant shares of common stock that are not subject to restrictions or forfeiture.

Stock Appreciation Rights. Our Compensation Committee may grant stock appreciation rights, or SARs, where the participant receives cash, shares of common stock, or other property, or a combination thereof, as determined by the Compensation Committee, equal in value to the difference between the exercise price of the SAR and the fair market value of the common stock on the date of exercise. SARs may be granted in tandem with options (at or after award of the option) or alone and unrelated to an option. SARs in tandem with an option shall terminate to the extent that the related option is exercised, and the related option shall terminate to the extent that the tandem SARs are exercised. SARs granted in tandem with options shall have an exercise price not less than the exercise price of the related option. SARs granted alone and unrelated to an option shall have an exercise price not less than 100% of the Fair Market Value of the common stock on the date of award may be granted at such exercise prices as the Committee may determine. The Committee shall determine the manner of calculating the excess in value of the shares of common stock over the exercise price of a SAR.

Federal Income Tax Consequences Relating to Stock Options and Restricted Stock

Incentive Stock Options. An optionee does not realize taxable income upon the grant or exercise of an incentive stock option, known as an ISO, under the 2012 Equity Plan. If no disposition of shares issued to an optionee pursuant to the exercise of an ISO is made by the optionee within two years from the date of grant or within one year from the date of exercise, then (a) upon sale of such shares, any amount realized in excess of the option price (the amount paid for the shares) is taxed to the optionee as a capital gain and any loss sustained will be a capital loss and (b) no deduction is allowed to Enanta for Federal income tax purposes. The exercise of ISOs gives rise to an adjustment in computing alternative minimum taxable income that may result in alternative minimum tax liability for the optionee.

If shares of common stock acquired upon the exercise of an ISO are disposed of prior to the expiration of the two-year and one-year holding periods described above, referred to as a disqualifying disposition, then (a) the optionee realizes ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares at exercise (or, if less, the amount realized on a sale of such shares) over the option price thereof and (b) Enanta is entitled to deduct this amount. Any further gain realized is taxed as a capital gain and does not result in any deduction to Enanta. A disqualifying disposition in the year of exercise will generally avoid the alternative minimum tax consequences of the exercise of an ISO.

Non-statutory Stock Options. No income is realized by the optionee at the time a non-statutory option is granted. Upon exercise, (a) ordinary income is realized by the optionee in an amount equal to the difference between the option price and the fair market value of the shares on the date of exercise and (b) Enanta receives a tax deduction for the same amount. Upon disposition of the shares, appreciation or depreciation after the date of exercise is treated as a capital gain or loss and will not result in any deduction by Enanta.

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Restricted Stock. Awards of restricted stock that are non-transferable and subject to forfeiture are generally not taxable to the recipient until the shares vest. When the shares vest, the recipient realizes compensation income equal to the difference between the amount paid for the shares and their fair market value at the time of the vesting, and we are entitled to a corresponding deduction. Appreciation in the value of the shares during the vesting period therefore increases the income subject to tax at ordinary income rates at the time of vesting as well as the corresponding deduction we are entitled to take at that time. The tax is payable for the year in which the vesting occurs, regardless of whether the shares are sold at that time. If the recipient is an employee, Enanta is required to withhold income and social security taxes from the compensation income (by withholding from shares, from other income of the employee or from a cash payment made by the employee to Enanta to cover the withholding taxes).

Instead of being taxed when the shares vest, a recipient may elect to be taxed in the year the shares are awarded by filing a “Section 83(b) election” with the Internal Revenue Service within 30 days after issuance of the restricted shares. The recipient then realizes compensation income in the year of the award equal to the difference between the amount paid for the shares and their fair market value at the time of issuance, and we are entitled to a corresponding deduction at that time.

Unrestricted Stock. Generally, a recipient will be taxed at the time of the grant of the award. The fair market value of the shares at that time will be treated as ordinary income. We receive a tax deduction for the amount reported as ordinary income to the recipient subject to the limitations of Internal Revenue Code Section 162(m). Upon disposition of the shares, any appreciation or depreciation after the taxable event is treated as short or long- term capital gain or loss and will not result in any further deduction by us.

Restricted Stock Units. A recipient does not realize taxable income upon the grant or vesting of a restricted stock unit. When a stock unit is settled, i.e. when the underlying share of common stock is issued to the unitholder, the unitholder must include as ordinary income an amount equal to the fair market value of the shares (or the amount of cash) distributed to settle the award. Subject to the limitations of Internal Revenue Code Section 162(m), we receive a corresponding tax deduction at the time of settlement. If the award is settled in shares, then any subsequent appreciation or depreciation is treated as short- or long-term capital gain or loss and will not result in any further deduction by us.

Compliance with the “Performance-Based” Exemption of Internal Revenue Code Section 162(m)

United States tax laws generally do not allow publicly-held companies to obtain tax deductions for compensation of more than $1 million accrued in any year with respect to any of the chief executive officer and the next four highest paid executive officers (each, a “covered employee”) unless the compensation is “performance- based” as defined in Internal Revenue Code Section 162(m). Stock options and SARs granted under an equity compensation plan are performance-based compensation if (a) stockholders approve a maximum aggregate per person limit on the number of shares that may be granted each year (the “Annual Share Limit”), (b) any stock options or SARs are granted by a committee consisting solely of outside directors, and (c) the stock options or SARs have an exercise price that is not less than the fair value of common stock on the date of grant.

Our Compensation Committee has designed the 2012 Equity Plan with the intention of satisfying Section 162(m) with respect to stock options and SARs, if any, granted to covered employees.

In the case of restricted stock and restricted stock units, Section 162(m) requires that the general business criteria of any performance measures that are established by our Compensation Committee be approved and periodically reapproved by stockholders (generally, every five years) in order for such awards to be considered performance- based and deductible by the employer. The performance goals must be established within a prescribed time frame commencing at the beginning of the relevant performance period. Furthermore, satisfaction of any performance goals during the relevant performance period must be certified by our Compensation Committee.

The 2012 Equity Plan, as previously approved by our stockholders, has the following list of business criteria upon which our Compensation Committee may establish objective performance measures, which shall be based on the relative or absolute attainment of specified levels of one or any combination of such criteria, for deductible performance-based awards made to covered employees, which may be determined pursuant to generally accepted accounting principles, known as GAAP, or on a non-GAAP basis, as determined by the Committee: scientific progress, product development progress, business development progress, including in-licensing or out-licensing of

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intellectual property, net income/(loss), earnings/(loss) before or after discontinued operations, interest, taxes, depreciation and/or amortization, operating profit/(loss) before or after discontinued operations and/or taxes, sales, sales growth, earnings growth, cash flow or cash position, gross margins, stock price, financings (issuance of debt or equity), refinancings, market share, return on sales, assets, equity or investment, improvement of financial ratings, achievement of balance sheet or income statement objectives or total stockholder return. Such goals may reflect absolute entity or business unit performance or a relative comparison to the performance of a peer group of entities or other external measure of the selected performance criteria and may be absolute in their terms or measured against or in relationship to other companies comparably, similarly or otherwise situated. The Committee may specify that such performance measures shall be adjusted to exclude any one or more of (i) extraordinary items, (ii) gains or losses on the dispositions of discontinued operations, (iii) the cumulative effects of changes in accounting principles, (iv) the write-down of any asset, (vi) fluctuation in foreign currency exchange rates, and (vi) charges for restructuring and rationalization programs. Performance goals may be particular to a participant or may be based, in whole or in part, on the performance of the division, department, line of business, subsidiary, or other business unit in which the participant works, or on the performance of the Company as a whole. The Compensation Committee has the authority to reduce (but not to increase) the amount payable at any given level of performance to take into account factors that the Compensation Committee may deem relevant.

Equity Compensation Plan Information

The following table provides information about the securities authorized for issuance under the Company’s equity compensation plans as of September 30, 2016:

(1) Consists of the 2012 Equity Plan, as amended, and the Company’s Employee Stock Purchase Plan.

(2) Includes 185,614 shares issuable under the Employee Stock Purchase Plan. The remaining shares consist of 487,906 shares issuable under the 2012 Equity Plan. Does not include an additional 571,077 shares of common stock that were added to the shares available for future awards under the 2012 Equity Plan as of October 1, 2016 pursuant to the plan’s provision for automatic annual increases. These plans may be amended, suspended, or terminated by the Compensation Committee of the Board of Directors at any time, subject to any required stockholder approval.

Proposed Approval of the Performance Goals of the 2012 Equity Plan

We are seeking stockholder approval of the Compensation Committee’s right to develop performance goals based upon the business criteria noted above for any future awards of restricted stock or restricted stock units to any of our covered employees. Stockholder approval of these business criteria will enable us to realize a full income tax deduction for these awards under the 2012 Equity Plan where the deduction would otherwise be restricted by Internal Revenue Code Section 162(m).

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The preceding summary is qualified in its entirety by reference to the full text of the 2012 Equity Plan, as amended by our Board of Directors and subject to stockholder approval, which has been filed with the SEC and will be made available upon written request to Enanta Pharmaceuticals, Inc., Watertown, Massachusetts 02472, Attn: Investor Relations.

Votes Required

The affirmative vote of a majority of the shares represented in person or by proxy at the annual meeting and entitled to vote on this proposal will constitute the approval of the 2012 Equity Plan for purposes of Section 162(m). Abstentions will count as votes against the amendment and broker non-votes will not be counted.

WE RECOMMEND A VOTE “FOR” APPROVAL OF THE PERFORMANCE MEASURES

IN THE 2012 EQUITY PLAN

PROPOSAL 3

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The firm of PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited our financial statements for each of the years ended September 30, 2016, 2015 and 2014. Our Audit Committee has appointed them to serve as our auditors for the fiscal year ending September 30, 2017. Detailed disclosure of the audit and tax fees we paid to PricewaterhouseCoopers LLP in 2016 and 2015 may be found in “Audit Fees” below. Based on these disclosures and information in the Audit Committee Report provided elsewhere in this proxy statement, our Audit Committee is satisfied that PricewaterhouseCoopers LLP is sufficiently independent of management to perform its duties properly. Although not legally required to do so, our Board considers it desirable to seek, and recommends, stockholder ratification of our selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year 2017. If the stockholders fail to ratify our selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interest of Enanta and its stockholders.

WE RECOMMEND A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP

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CORPORATE GOVERNANCE

Board and Committee Matters

Board Leadership and Independence . Our Board of Directors has determined that Bruce L.A. Carter, Ph.D., who is standing for re-election as a director, as well as those directors continuing their terms after the 2017 Annual Meeting, are independent directors as defined by applicable NASDAQ Stock Market standards governing the independence of directors. Jay R. Luly, Ph.D., our President and Chief Executive Officer who is also standing for re-election, is not considered independent. Dr. Carter has served as our non-executive Chairman of the Board since December 2015. Dr. Luly continues to be responsible for setting the strategic direction for our Company and the day-to-day leadership and performance of the Company. Ernst-Günter Afting, M.D., Ph.D. has decided to retire as a director, effective as of February 15, 2017, after more than twenty years of valued service to Enanta.

Board Meetings and Committees. Our Board of Directors held 5 meetings during 2016, and the independent directors held executive sessions at 4 of the meetings of the Board. During 2016, each of the directors then in office attended at least 75% of the aggregate of all meetings of the Board of Directors and all meetings of the committees of the Board of Directors on which such director then served. Continuing directors and nominees for election as directors in a given year are required to attend the annual meeting of stockholders, barring significant commitments or special circumstances. All of our directors then serving as directors attended our 2016 annual meeting of stockholders, except for Dr. Carter, who had planned to attend but could not due to travel delays.

Stockholder Communications. Any stockholder wishing to communicate with our Board of Directors, a particular director or the chair of any committee of the Board of Directors may do so by sending written correspondence to our principal executive offices, to the attention of the Chairman of the Board. All such communications will be delivered to the Board of Directors or the applicable director or committee chair.

During 2016, our Board of Directors had three standing committees: Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

Audit Committee.

Our Audit Committee’s responsibilities include:

The members of our Audit Committee during 2016 were Dr. Afting and Messrs. Buckley and Vance. Mr. Buckley chairs our Audit Committee, and Dr. Russell has been elected a member of the committee as of January 1, 2017. All members of our Audit Committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and NASDAQ. Our Board has determined that Mr. Buckley is an Audit Committee financial expert as defined under the applicable rules of the SEC and has the requisite financial sophistication as defined under the applicable rules and regulations of NASDAQ. Our Board has determined that each of Drs. Afting

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and Russell and Messrs. Buckley and Vance are independent under the applicable rules of NASDAQ and under the applicable rules of the SEC. The Audit Committee held 5 meetings during 2016. The Audit Committee operates under a written charter that satisfies the applicable standards of the SEC and NASDAQ. A copy of the Audit Committee charter is available in the “Investors – Corporate Governance” section of the Company’s website at www.enanta.com .

Compensation Committee.

Our Compensation Committee’s responsibilities include:

The current members of our Compensation Committee are Drs. Carter and Golumbeski and Mr. Vance. Dr. Golumbeski chairs our Compensation Committee. None of the members of our Compensation Committee has at any time been one of our officers or employees. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the Board or Compensation Committee of any entity that has one or more executive officers on our Board or Compensation Committee. Each of the members of our Compensation Committee is independent under the applicable rules and regulations of NASDAQ, is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act and is an “outside director” as that term is defined in Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended, or Section 162(m). The Compensation Committee held 7 meetings during 2016. The Compensation Committee operates under a written charter adopted by the Board, which is available in the “Investors – Corporate Governance” section of our website at www.enanta.com .

Nominating and Corporate Governance Committee.

Our Nominating and Corporate Governance Committee’s responsibilities include:

The current members of our Nominating and Corporate Governance Committee are our independent directors, namely Drs. Afting, Carter, Golumbeski and Russell and Messrs. Buckley and Vance. Mr. Vance chairs the Nominating and Corporate Governance Committee. Each of the members of our Nominating and Corporate Governance Committee is an independent director under the applicable rules and regulations of NASDAQ relating to Nominating and Corporate Governance Committee independence. The Committee held one meeting during 2016. The Nominating and Corporate Governance Committee operates pursuant to a written charter, which is available in the “Investors – Corporate Governance” section of our website at www.enanta.com .

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The Nominating and Corporate Governance Committee considers candidates for Board membership suggested by its members and the Chief Executive Officer. In 2013 it also established a subcommittee consisting of Messrs. Vance and Buckley (the “Nominating Subcommittee”) to work with an independent recruiting firm and Dr. Luly to help identify and recruit additional candidates, which resulted in the recruitment of Drs. Carter and Golumbeski. Additionally, in selecting nominees for directors, the Nominating and Corporate Governance Committee will review candidates recommended by stockholders in the same manner and using the same general criteria as candidates recruited by the committee and/or recommended by the Board. Any stockholder who wishes to recommend a candidate for consideration by the committee as a nominee for director should follow the procedures described later in this proxy statement under the heading “Stockholder Matters-Stockholder Recommendations for Director Nominations.” The Nominating Subcommittee will also consider whether to nominate any person proposed by a stockholder in accordance with the provisions of our bylaws relating to stockholder nominations as described later in this proxy statement under the heading “Stockholder Matters-Deadline for Stockholder Proposals and Director Nominations.”

The process used by the Nominating Subcommittee in 2013 is representative of the process the Board used to recruit Dr. Russell in 2016 and is likely to be the process for any future director searches. In 2013, the Nominating Subcommittee started the director search process by identifying a mix of types of experience and personal characteristics that the Nominating Subcommittee considered most valuable to complement the skills and experience of existing directors. Once the Nominating Subcommittee had identified prospective nominees, the Subcommittee then made an initial determination as to whether to conduct a full evaluation of the candidate. This initial determination was based on the information provided to the Subcommittee in a report from the recruiting firm, as well as the Subcommittee’s own knowledge of the prospective candidate. The preliminary determinations were based primarily on the need for additional Board members to fill vacancies or expand the size of the Board and the likelihood that the prospective nominee could satisfy the evaluation factors described below. The Subcommittee then evaluated the prospective nominees against the standards and qualifications set out in our Corporate Governance Guidelines, which include among others:

Although the Committee does not have a formal policy for considering diversity in identifying nominees for director, it has sought a variety of occupational and personal backgrounds on the Board in order to obtain a range of viewpoints, perspectives and skills.

If the Nominating Subcommittee’s initial evaluation was positive, the members of the Nominating Subcommittee each interviewed the candidate. Upon completion of this evaluation and interview process, the Nominating Subcommittee made a recommendation to the full Board as to whether the candidate should be nominated by the Board and invited other directors to interview the candidate in person or by phone. The Board then determined whether to approve the nominee after considering the recommendation and report of the Nominating Subcommittee.

In November 2016, the Nominating and Corporate Governance Committee established a new subcommittee (the “Nominating Committee”) for the purpose of determining the director nominees for election at the annual meeting of stockholders. The 2017 Nominating Committee consists of Messrs. Vance and Buckley and Dr. Golumbeski, who are all independent directors whose terms are not expiring at the 2017 annual meeting. In December 2016, the 2017 Nominating Committee approved the director nominees for election at the 2017 annual meeting.

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Risk Oversight. The Board’s role in our risk oversight process includes receiving reports from time to time from the Audit Committee on areas of material risk to the Company, including operational, financial, legal and regulatory, and strategic and reputational risks.