Eli Lilly 2008 Annual Report Download - page 124

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PROXY STATEMENT
122122
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.
Certain Legal Matters
In 2007, the company received two demands from 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
through improper marketing of Evista, Prozac, and 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 per-
sons to consider the demands and determine what action, if any, the company should take in response. Since Janu-
ary 2008, we have been served with seven shareholder derivative lawsuits: Lambrecht, et al. v. Taurel, et al., fi led
January 17, 2008, in the United States District Court for the Southern District of Indiana; Staehr, et al. v. Eli Lilly and
Company, et al., fi led March 27, 2008, in Marion County Superior Court in Indianapolis, Indiana; Waldman, et al. v. Eli
Lilly and Company, et al., fi led February 11, 2008, in the United States District Court for the Eastern District of New
York; Solomon v. Eli Lilly and Company, et al., fi led March 27, 2008, in Marion County Superior Court in Indianapolis,
Indiana; Robbins v. Taurel, et al., fi led April 9, 2008, in the United States District Court for the Eastern District of New
York; City of Taylor General Employees Retirement System v. Taurel, et al., fi led April 15, 2008, in the United States
District Court for the Eastern District of New York; and Zemprelli v. Taurel, et al., fi led June 24, 2008, in the United
States District Court for the Southern District of Indiana. Two of these lawsuits were fi led by the shareholders who
served the demands described above. All seven lawsuits are nominally fi led on behalf of the company, against vari-
ous current and former directors and offi cers and allege that the named offi cers and directors harmed the com-
pany through the improper marketing of Zyprexa, and in certain suits, Evista and Prozac. The Zemprelli suit also
claims that certain defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Each of the
current directors, other than Mr. Eskew and Mr. Oberhelman, are named in the suits. We believe these suits are
without merit and are prepared to defend against them 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 9, 2009