Eli Lilly 2008 Annual Report Download - page 80

Download and view the complete annual report

Please find page 80 of the 2008 Eli Lilly annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

PROXY STATEMENT
7878
• a director who is employed by, who is a 10 percent shareholder of, or whose immediate family member is an
executive offi cer of a company that makes payments to or receives payments from Lilly for property or services
that exceed the greater of $1 million or two percent of that company’s gross revenues in a single fi scal year.
• a director who is an executive offi cer of a nonprofi t organization that receives grants or contributions from Lilly
in a single fi scal year exceeding the greater of $1 million or two percent of that organization’s gross revenues in
a single fi scal year.
Members of the audit, compensation, and directors and corporate governance committees must meet all
applicable independence tests of the New York Stock Exchange, Securities and Exchange Commission, and Internal
Revenue Service.
In February 2009, the directors and corporate governance committee reviewed directors’ responses to a
questionnaire asking about their relationships with the company (and those of their immediate family members)
and other potential confl icts of interest, as well as material provided by management related to transactions,
relationships, or arrangements between the company and the directors or parties related to the directors. The
committee determined that all 11 nonemployee directors listed below are independent, and that the members of
the audit, compensation, and directors and corporate governance committees also meet the independence tests
referenced above. The committee recommended this conclusion to the board and explained the basis for its deci-
sion, and this conclusion was adopted by the full board. The committee and the board determined that none of the
11 directors listed below has had during the last three years (i) any of the relationships listed above or (ii) any other
material relationship with the company that would compromise his or her independence. The table below includes
a description of categories or types of transactions, relationships, or arrangements considered by the board (in
addition to those listed above) in reaching its determination that the directors are independent. All of these rela-
tionships and transactions were entered into at arm’s length in the normal course of business and, to the extent
they are commercial relationships, have standard commercial terms. None of these relationships or transactions
exceeded the thresholds described above or otherwise compromise the independence of the named director.
Name Independent Transactions/Relationships/Arrangements
Sir Winfried Bischoff Yes Commercial banking, capital markets, and indenture trustee relationships between Lilly and various Citigroup
banks—immaterial
Mr. Cook Yes None
Mr. Eskew Yes None
Dr. Feldstein Yes Lilly grants and contributions to Harvard University—immaterial
Mr. Fyrwald Yes Lilly’s purchase of DuPont and Nalco products and services—immaterial
Dr. Gilman Yes Lilly grants and contributions to the University of Texas Southwestern Medical Center—immaterial
Ms. Horn Yes None
Ms. Marram Yes None
Mr. Oberhelman Yes None
Dr. Prendergast Yes Lilly grants and contributions to Mayo Clinic and Mayo Foundation—immaterial
Ms. Seifert Yes None
Director Tenure
Subject to the company’s charter documents, the governance guidelines establish the following expectations for
director tenure:
• A company offi cer-director, including the chief executive offi cer, will resign from the board at the time he or she
retires or otherwise ceases to be an active employee of the company.
• Nonemployee directors will retire from the board not later than the annual meeting of shareholders that follows
their seventy-second birthday.
• Directors may stand for reelection even though the board’s retirement policy would prevent them from
completing a full three-year term.
• A nonemployee director who retires or changes principal job responsibilities will offer to resign from the board.
The directors and corporate governance committee will assess the situation and recommend to the board
whether to accept the resignation.
Voting for Directors
In an uncontested election, any nominee for director who fails to receive a majority of the votes cast shall promptly
tender his or her resignation following certifi cation of the shareholder vote. The directors and corporate governance