Eli Lilly 2012 Annual Report Download - page 116

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Members of board committees must meet all applicable
independence tests of the NYSE, Securities and
Exchange Commission (SEC), and Internal Revenue
Service (IRS).
The directors and corporate governance committee
determined that all 13 nonemployee directors listed
below are independent, and that the members of each
committee also meet the independence standards
referenced above. The directors and corporate
governance committee recommended this conclusion to
the board and explained the basis for its decision, and
this conclusion was adopted by the board. This
committee and the board determined that none of the
13 directors has had during the last four years (i) any of
the relationships listed above or (ii) any other material
relationship with the company that would compromise
his or her independence. In reaching this conclusion,
the committee reviewed directors’ responses to a
questionnaire asking about their relationships with the
company and other potential conflicts of interest, as
well as information provided by management related to
transactions, relationships, or arrangements between
the company and the directors or parties related to the
directors. The table below includes a description of
categories or types of transactions, relationships, or
arrangements considered by the board in reaching its
determinations. All of these 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
transactions exceeded the thresholds described above
or otherwise compromises the independence of the
named directors.
Name Independent Transactions/Relationships/Arrangements
Mr. Alvarez Yes None
Dr. Baicker Yes Payments to Harvard University totaling approximately $3.1 million (less than 0.1 percent
of Harvard's total revenue), primarily for medical research
Sir Winfried Bischoff Yes None
Mr. Eskew Yes None
Mr. Fyrwald Yes Purchases of products and services from Ecolab totaling approximately $0.7 million (less
than 0.1 percent of Ecolab's total revenue)
Purchases of products from Univar, Inc. totaling $1.9 million (less than 0.1 percent of
Univar's total revenue)
Dr. Gilman Yes None
Mr. Hoover Yes None
Ms. Horn Yes None
Dr. Kaelin Yes
Payments to Harvard University totaling approximately $3.1 million (less than 0.1 percent
of Harvard's total revenue), primarily for medical research
Payments to Brigham and Women's Hospital totaling approximately $0.7 million (less than
0.1 percent of Brigham's total revenue), primarily for medical research
Payments to Dana-Farber Cancer Institute totaling approximately $1.7 million (less than
0.1 percent of Dana-Farber's total revenue), primarily for medical research
Ms. Marram Yes None
Mr. Oberhelman Yes None
Dr. Prendergast Yes Payments to the Mayo Clinic and the Mayo Foundation totaling approximately $4.4 million
(less than 0.1 percent of Mayo's total revenue), primarily for medical research
Ms. Seifert Yes None
Director Tenure
Subject to the company’s charter documents, the
following are the board’s expectations for director
tenure:
• A company officer-director, including the chief
executive officer, 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.
• The directors and corporate governance committee,
with input from all board members, also considers
the contributions of individual directors at least
every three years when considering whether to
recommend nominating the director to a new three-
year term.
Other Board Service
No new director may serve on more than three other
public company boards, and no incumbent director may