Eli Lilly 2007 Annual Report Download - page 117

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PROXY STATEMENT
115115
Other Matters
Section 16(a) Benefi cial Ownership Reporting Compliance
Under Securities and Exchange Commission rules, our directors and executive offi cers are required to fi le with the
Securities and Exchange Commission reports of holdings and changes in benefi cial ownership of company stock.
We have reviewed copies of reports provided to the company, as well as other records and information. Based on
that review, we concluded that all reports were timely fi led except that, due to administrative error, Mr. Rice fi led
one late report in connection with the receipt of performance award shares by his wife, a former Lilly employee.
Upon discovery, this matter was promptly reported.
Certain Legal Matters
In April 2007, the company received demands from two shareholders that the board of directors cause the company
to take legal action against current and former directors and others for allegedly causing damage to the company
with respect to the allegedly improper marketing of Evista, Prozac, and Zyprexa. We received a similar demand
in September related only to Zyprexa. In accordance with procedures established under the Indiana Business
Corporation Law (Ind. Code §23-1-32), the board has appointed a committee of independent persons to consider
the demands and determine what action, if any, the company should take in response. In January 2008, two of the
three shareholders who had submitted the demands fi led a derivative suit in the United States District Court for
the Southern District of Indiana, nominally on behalf of the company, against various current and former directors
and offi cers. The suit alleges that the board of directors constructively denied the shareholders’ prior demands by
failing to take action on the demands suffi ciently promptly. Each of the current directors, other than Mr. Eskew, is
named in the suit. We believe this suit is without merit and are prepared to defend against it vigorously.
Other Information Regarding the Company’s Proxy Solicitation
We will pay all expenses in connection with our solicitation of proxies. We will pay brokers, nominees, fi ducia-
ries, or other custodians their reasonable expenses for sending proxy material to and obtaining instructions from
persons for whom they hold stock of the company. We expect to solicit proxies primarily by mail, but directors,
offi cers, and other employees of the company may also solicit in person or by telephone, fax, or electronic mail. We
have retained Georgeson Shareholder Communications Inc. to assist in the distribution and solicitation of proxies.
Georgeson may solicit proxies by personal interview, telephone, fax, mail, and electronic mail. We expect that the
fee for those services will not exceed $17,500 plus reimbursement of customary out-of-pocket expenses.
By order of the board of directors,
James B. Lootens
Secretary
March 10, 2008