Eli Lilly 2008 Annual Report Download - page 115

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PROXY STATEMENT
113113
Items of Business To Be Acted Upon at the Meeting
Item 1. Election of Directors
Under the company’s articles of incorporation, the board is divided into three classes with approximately one-third
of the directors standing for election each year. The term for directors elected this year will expire at the annual
meeting of shareholders held in 2012. Each of the nominees listed below has agreed to serve that term. If any
director is unable to stand for election, the board may, by resolution, provide for a lesser number of directors or
designate a substitute. In the latter event, shares represented by proxies may be voted for a substitute director.
The board recommends that you vote FOR each of the following nominees:
• Martin S. Feldstein, Ph. D.
• J. Erik Fyrwald
• Ellen R. Marram
• Douglas R. Oberhelman
Biographical information about these nominees may be found on pages 73–74 of this proxy statement. Information
about certain legal matters may be found on page 122.
Item 2. Proposal to Ratify the Appointment of Principal Independent Auditor
The audit committee has appointed the fi rm of Ernst & Young LLP as principal independent auditor for the com-
pany for the year 2009. In accordance with the bylaws, this appointment is being submitted to the shareholders for
ratifi cation. Ernst & Young served as the principal independent auditor for the company in 2008. Representatives
of Ernst & Young are expected to be present at the annual meeting and will be available to respond to questions.
Those representatives will have the opportunity to make a statement if they wish to do so.
The board recommends that you vote FOR ratifying the appointment of Ernst & Young LLP as principal indepen-
dent auditor for 2009.
Item 3. Proposal to Amend the Company’s Articles of Incorporation to Provide for Annual Election of All Directors
The company’s amended articles of incorporation currently provide that the board of directors is divided into three
classes, with each class elected every three years. On the recommendation of the directors and corporate gov-
ernance committee, the board has approved, and recommends to the shareholders for approval, amendments to
provide for the annual election of directors. This proposal was brought before shareholders in April 2007 and again
in April 2008, and received the vote of more than 75 percent of the outstanding shares at each meeting; however,
the proposal requires the vote of 80 percent of the outstanding shares to pass.
If approved, this proposal will become effective upon the fi ling of amended and restated articles of incor-
poration containing these amendments with the Secretary of State of Indiana, which the company intends to do
promptly after shareholder approval is obtained. Directors elected prior to the effectiveness of the amendments
will stand for election for one-year terms once their then-current terms expire. This means that directors whose
terms expire at the 2010 and 2011 annual meetings of shareholders would be elected for one-year terms, and
beginning with the 2012 annual meeting, all directors would be elected for one-year terms at each annual meeting.
In addition, in the case of any vacancy on the board occurring after the 2009 annual meeting, including a vacancy
created by an increase in the number of directors, the vacancy would be fi lled by interim election of the board, with
the new director to serve a term ending at the next annual meeting. At all times, directors are elected to serve for
their respective terms and until their successors have been elected and qualifi ed. This proposal would not change
the present number of directors, and it would not change the board’s authority to change that number and to fi ll
any vacancies or newly created directorships.
Article 9(b) of the company’s amended articles of incorporation contains the provisions that will be affected if
this proposal is adopted. This article, set forth in Appendix A to this proxy statement, shows the proposed changes
with deletions indicated by strike-outs and additions indicated by underlining. The board has also adopted con-
forming amendments to the company’s bylaws, to be effective immediately upon the effectiveness of the amend-
ments to the amended articles of incorporation.