Eli Lilly 2010 Annual Report Download - page 96

PROXY STATEMENT
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 shareholders
(the annual meeting) to be held on Monday, April 18, 2011, 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 specified
by law.
What will the shareholders vote on at the annual meeting?
Seven items:
• election of directors
• ratification of the appointment of principal independent auditor
• advisory approval of 2010 compensation paid to named executive officers
• frequency of future advisory votes on executive compensation
• amendments to the company’s articles of incorporation to provide for annual election of all directors
• amendments to the company’s articles of incorporation to eliminate all supermajority voting requirements
• approval of the executive officer incentive plan.
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, if necessary, the accompanying proxy gives discretionary 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, 2011 (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 Eli Lilly and Company 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 meeting.
As of the record date, 1,157,664,779 shares of company common stock were issued and outstanding.
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 will be elected if the votes cast for the nominee exceed the votes cast against the
nominee. Abstentions will not count as votes cast either for or against a nominee.
• The following items of business will be approved if the votes cast for the proposal exceed those cast against the
proposal:
—ratification of the appointment of principal independent auditor
—advisory approval of 2010 executive compensation
—approval of the executive officer incentive plan
Abstentions will not be counted either for or against these proposals.
• The vote on frequency of future advisory votes on executive compensation asks shareholders to express their
preference for one of three choices for future advisory votes on executive compensation—every year, every
other year, or every three years. Abstentions have the same effect as not expressing a preference.
• The proposals to amend the articles of incorporation to provide for annual election of all directors and to
eliminate all supermajority voting requirements require the vote of 80 percent of the outstanding shares. For
these items, abstentions have the same effect as a vote against the proposals.
Broker discretionary voting. 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 ratification of the auditor and the proposals
on annual election of all directors and elimination of all supermajority voting requirements, the broker may vote your
shares in its discretion. For all other proposals, the broker may not vote your shares at all.
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