Eli Lilly 2006 Annual Report Download - page 60

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PROXY STATEMENT
5858
General Information
Why did I receive this proxy statement?
The board of directors of Eli Lilly and Company is soliciting proxies to be voted at the annual meeting of sharehold-
ers (the annual meeting) to be held on Monday, April 16, 2007, and at any adjournment of the annual meeting. When
the company asks for your proxy, we must provide you with a proxy statement that contains certain information
specifi ed by law.
What will the shareholders vote on at the annual meeting?
Nine items:
• election of directors
• ratifi cation of the appointment of principal independent auditors
• amending the company’s articles of incorporation to allow for annual election of directors
• reapproving performance goals for the company’s stock plan
• a shareholder proposal on extending the company’s animal care and use policy to contract laboratories
• a shareholder proposal on international outsourcing of animal research
• a shareholder proposal on separating the roles of chairman and chief executive offi cer
• a shareholder proposal on amending the company’s articles of incorporation
• a shareholder proposal on adopting a simple majority vote standard for matters other than election of directors.
Will there be any other items of business on the agenda?
We do not expect any other items of business because the deadline for shareholder proposals and nominations
has already passed. Nonetheless, in case there is an unforeseen need, the accompanying proxy gives discretion-
ary authority to the persons named on the proxy with respect to any other matters that might be brought before the
meeting. Those persons intend to vote that proxy in accordance with their best judgment.
Who is entitled to vote?
Shareholders as of the close of business on February 15, 2007 (the record date) may vote at the annual meeting.
You have one vote for each share of common stock you held on the record date, including shares:
• held directly in your name as the shareholder of record
• held for you in an account with a broker, bank, or other nominee
• attributed to your account in the Lilly Employee 401(k) Plan (the 401(k) plan).
What constitutes a quorum?
A majority of the outstanding shares, present or represented by proxy, constitutes a quorum for the annual meet-
How many votes are required for the approval of each item?
There are differing vote requirements for the various proposals.
• The four nominees for director receiving the most votes will be elected. Abstentions and instructions to withhold
authority to vote for one or more of the nominees will result in those nominees receiving fewer votes but will not
count as votes against a nominee.
• The appointment of principal independent auditors, the management proposal regarding performance goals,
and the shareholder proposals will be approved if the votes cast for the proposal exceed those cast against the
proposal. Abstentions will not be counted either for or against the proposal.
• The management proposal to amend the articles of incorporation requires the vote of 80 percent of the
outstanding shares. For this item, abstentions and broker nonvotes have the same effect as a vote against the
proposal.
Broker nonvotes. If your shares are held by a broker, the broker will ask you how you want your shares to be voted.
If you give the broker instructions, your shares will be voted as you direct. If you do not give instructions, one of two
things can happen, depending on the type of proposal. For the election of directors and the ratifi cation of auditors,
the broker may vote your shares in its discretion. For all other proposals, the broker may not vote your shares at
all. When that happens, it is called a “broker nonvote.”
ing. As of the record date, 1,134,034,234 shares of company common stock were issued and outstanding.