Eli Lilly 2007 Annual Report Download - page 115

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alternative proposals that maximize the value of the company for all shareholders, including large institutional
investors as well as smaller institutions and individual shareholders.
The board believes that these supermajority voting provisions protect all shareholders by making it more
diffi cult for one or a few large shareholders to replace important corporate governance rules of the company to
further a special interest, or to take control of the company, without negotiating with the board to assure that the
best results are achieved for all shareholders.
The board recommends that you vote AGAINST this proposal.
Item 9. Shareholder Proposal Regarding Reporting on the Company’s Political Contributions
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), 815 Sixteenth Street, N.W.,
Washington, D.C. 20006, benefi cial owner of approximately 700 shares, has submitted the following proposal:
Resolved, that the shareholders of Eli Lilly and Company (the “Company”) hereby request that the Company pro-
vide a report, updated semi-annually, disclosing the Company’s:
1. Policies and procedures for political contributions and expenditures (both direct and indirect) made with
corporate funds.
2. Monetary and non-monetary political contributions and expenditures not deductible under Section 162 (e)(1)(B)
of the Internal Revenue Code, including but not limited to contributions to or expenditures on behalf of political
candidates, political parties, political committees and other political entities organized and operating under
26 USC Sec. 527 of the Internal Revenue Code and any portion of any dues or similar payments made to any
tax exempt organization that is used for an expenditure or contribution if made directly by the corporation
would not be deductible under Section 162 (e)(1)(B) of the Internal Revenue Code. The report shall include the
following:
a. An accounting of the Company’s funds that are used for political contributions or expenditures as
described above;
b. Identifi cation of the person or persons in the Company who participated in making the decisions to make
the political contribution or expenditure; and
c.
The internal guidelines or policies, if any, governing the Company’s political contributions and expenditures.
The report shall be presented to the board of directors’ audit committee or other relevant oversight commit-
tee and posted on the Company’s website to reduce costs to shareholders.
Supporting Statement: As long-term shareholders, we support policies that apply transparency and accountabil-
ity to corporate spending on political activities. Absent a system of accountability, we believe that company assets
can be used for political objectives that are not shared by and may be inimical to the interests of the Company and
its shareholders. We are concerned that there is currently no single source of information that provides all of the
information sought by this resolution.
Data from the Federal Election Commission and the Internal Revenue Service provides an incomplete picture of
our Company’s political donations. Although corporate contributions to political parties are prohibited at the federal
level, companies can contribute to independent political committees, or 527s. In addition, payments can be made to
trade associations, and the portion of those payments used for political activities do not have to be disclosed.
Trade associations engage in political activity that may support or confl ict with our Company’s positions on
important issues like universal access to healthcare, biomedical research and women’s health choices.
The recently enacted Honest Leadership and Open Government Act requires greater disclosure of trade as-
sociation political and lobbying activity including the reporting of all contributions bundled by a trade association’s
political action committee and the listing of all companies who contribute more than $5,000 in any quarterly period
in support of a trade association’s lobbying activity. Company disclosure will help assure that trade associations
are meeting their legal obligation in reporting political and lobbying activity and that those activities are consistent
with the interests of our Company as a member of a trade association.
Statement in Opposition to the Proposal Regarding Reports on the Company’s Political Contributions
The public policy and compliance committee of the board has reviewed this proposal and recommends a vote
against it as we currently publish most of the information requested by the shareholder. The additional reporting
requirements are unnecessary, as the information requested is publicly available and this reporting would place