preceding December by the U.S. Treasury Department under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code). The aggregate amount of interest that accrued in ~~2012~~2015 for the participating directors was ~~$138,129~~,$171,916, at a rate of ~~3.3~~3.2 percent. The rate for ~~2013~~2016 is ~~2.9~~3.1 percent.

Both accounts may be paid in a lump sum or in annual installments for up to 10 years, beginning the second January following the director’s departure from board service. Amounts in the deferred stock account are paid in shares of company stock.

2015 Compensation for Nonemployee Directors



Name¹	Fees Earned or Paid in Cash ($)	Stock Awards ($)²	All Other Compensation and Payments ($)³	Total ($)⁴
Mr. Alvarez	$119,000	$145,000	$0	$264,000
Dr. Baicker	$119,000	$145,000	$0	$264,000
Mr. Eskew	$140,000	$145,000	$10,000	$295,000
Mr. Fyrwald	$125,000	$145,000	$12,500	$282,500
Mr. Hoover	$128,000	$145,000	$30,000	$303,000
Ms. Horn	$128,000	$145,000	$3,050	$276,050
Dr. Kaelin	$134,000	$145,000	$0	$279,000
Ms. Marram	$158,000	$145,000	$22,000	$325,000
Mr. Douglas Oberhelman⁵	$49,583	$60,417	$30,000	$140,000
Dr. Prendergast	$119,000	$145,000	$0	$264,000
Dr. Runge	$129,500	$145,000	$0	$274,500
Ms. Seifert	$119,000	$145,000	$7,050	$271,050
Mr. Tai	$129,500	$145,000	$30,000	$304,500

~~Director Compensation~~¹Mr. Luciano is not included in this chart as he became a board member effective February 2016.

~~In 2012, we provided~~

²Each nonemployee director received an award of stock valued at $145,000 (approximately 1,785 shares), except Mr. Oberhelman, who retired from the ~~following compensation to directors who~~board in May 2015 and received a pro-rated award for a partial year of service. This stock award and all prior stock awards are fully vested; however, the shares are not ~~employees:~~

Name Fees Earned
or Paid in Cash ($)
Stock Awards ($) ¹
All Other
Compensation and Payments ($) ²
Total ($) ³
Mr. Alvarez $106,000 $145,000 $0 $251,000
Dr. Baicker $102,250 $145,000 $0 $247,250
Sir Winfried Bischoff $112,000 $145,000 $0 $257,000
Mr. Eskew $121,000 $145,000 $1,500 $267,500
Mr. Fyrwald $112,000 $145,000 $35,000 $292,000
Dr. Gilman $118,000 $145,000 $14,500 $277,500
Mr. Hoover $106,000 $145,000 $30,000 $281,000
Ms. Horn $119,500 $145,000 $5,250 $269,750
Dr. Kaelin $60,083 $84,583 $11,200 $155,867
Ms. Marram $134,500 $145,000 $30,000 $309,500
Mr. Oberhelman $106,000 $145,000 $33,750 $284,750
Dr. Prendergast $103,000 $145,000 $0 $248,000
Ms. Seifert $103,000 $145,000 $13,650 $261,650
issued until the director ends his or her service on the Board, as described above under “Lilly Directors’ Deferral Plan.” The column shows the grant date fair value for each director’s stock award. Aggregate outstanding stock awards are shown in the “Common Stock Ownership by Directors and Executive Officers” table in the “Stock Units Not Distributable Within 60 Days” column.

¹³

Each nonemployee director received an award of stock valued at $145,000 (3,083 shares), except Dr. Kaelin, who received shares proportionately for a partial year of service. This stock award and all prior stock awards are fully vested in that they are not subject to forfeiture; however, the shares are not issued until the director ends his or her service on the board, as described above under “Lilly Directors’ Deferral Plan.” The column shows the grant date fair value for each director’s stock award. Aggregate outstanding stock awards are shown in the “Common Stock Ownership by Directors and Executive Officers” table in the “Directors’ Deferral Plan Shares” column. Aggregate outstanding stock options as of December 31, 2012 are shown in the table below. Nonemployee directors received no stock options in 2012. The company discontinued granting stock options to nonemployee directors in 2005. A discussion of methodology used in calculating the award values can be found above under the heading "Lilly Directors' Deferral Plan."

Name Outstanding Stock Options (Exercisable) Weighted Average Exercise Price
Sir Winfried Bischoff 5,600 $65.48
Dr. Gilman 5,600 $65.48
Ms. Horn 5,600 $65.48
Ms. Marram 5,600 $65.48
Dr. Prendergast 5,600 $65.48
Ms. Seifert 5,600 $65.48

This column consists of amounts donated by the Eli Lilly and Company Foundation, Inc. ("Foundation") under its matching gift program, which is generally available to U.S. employees as well as the ~~outside~~non-employee directors. Under this program, the ~~foundation~~Foundation matched 100 percent of charitable donations over $25 made to eligible charities, up to a maximum of $30,000 per year for each individual. The ~~foundation~~Foundation matched these donations via payments made directly to the recipient charity.The ~~amounts~~amount for ~~Mr. Fyrwald and Mr. Oberhelman include~~Ms. Horn includes matching contributions for donations made at the end of ~~2011 (Mr. Fyrwald – $15,000; Mr. Oberhelman – $5,000)~~2014 ($1,700), for which the matching contribution was not paid until ~~2012.~~

2015.


³⁴	Directors do not participate in a company pension plan or non-equity incentive plan.

⁵Mr. Olberhelman's term expired in May 2015, and he chose not to seek reelection.

2016 Director Compensation

In 2016, nonemployee directors will receive $160,000 in stock compensation. This is the first increase to nonemployee directors' stock compensation in over ten years. All other elements of director compensation remain the same as in 2015.

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Director Independence

~~Highlights of the Company’s Corporate Governance Guidelines~~

The following summary provides highlights of the company’s guidelines established by the board of directors. A complete copy of the corporate governance guidelines is available online at http://investor.lilly.com/governance.cfm or upon request to the company’s corporate secretary.

~~I. Role of the~~ Board

~~The directors are elected by the shareholders to oversee the actions and results of the company’s management. Their responsibilities include:~~

~~providing general oversight of the business~~

~~approving corporate strategy~~

~~approving major management initiatives~~

~~providing oversight of legal and ethical conduct~~

~~overseeing the company’s management of significant business risks~~

~~selecting, compensating, and evaluating directors~~

~~evaluating board processes and performance~~

~~selecting, compensating, evaluating, and, when necessary, replacing the chief executive officer, and compensating other senior executives~~

~~ensuring that an effective succession plan is in place for all senior executives.~~

~~II. Composition of the Board~~

~~Mix of Independent Directors and Officer-Directors~~

There should always be a substantial majority (75 percent or more) of independent directors. The chief executive officer should be a board member. Other officers may, from time to time, be board members, but no officer other than the chief executive officer should expect to be elected to the board by virtue of his or her position in the company.

~~Selection of Director Candidates~~

The board selects candidates for board membership and establishes the criteria to be used in identifying potential candidates. The board delegates the screening process to the directors and corporate governance committee.

~~For more information on the director nomination process, including the current selection criteria, see “Directors and Corporate Governance Committee Matters” below.~~

~~Independence Determinations~~

~~The board~~ annually determines the independence of directors based on a review by the ~~directors~~Directors and

~~corporate governance committee.~~Corporate Governance Committee. No director is considered independent unless the ~~board~~Board has determined that he or she has no material relationship with the company, either directly or as a partner, significant shareholder, or officer of an organization that has a material relationship with the company. Material

relationships can include commercial, industrial,banking, consulting, legal, accounting, charitable, and familial relationships, among others. To evaluate the

materiality of any such relationship, the ~~board~~Board has adopted categorical independence standards consistent with the New York Stock Exchange (NYSE) listing standards, except that the “look-back period” for determining whether a director’s prior relationship(s) with the company impairs independence is extended from three to four years.

~~Specifically, a~~The company's process for determining director independence is ~~not considered independent if (i)~~set forth in our Standards for Director Independence, which can be found on our website at http://www.lilly.com/about/corporate-governance/Pages/guidelines.aspx, along with our Corporate Governance Guidelines.

On the ~~director or an immediate family member is a current partner~~recommendation of the ~~company’s independent auditor (currently Ernst & Young LLP); (ii)~~Directors and Corporate Governance Committee, the director is a current employee of such firm; (iii) the director has an immediate family member who is a current employee of such firm and who participates in the firm’s audit, assurance, or tax compliance (but not tax planning) practice; or (iv) the director or an immediate family member was within the last four years (but is no longer) a partner or employee of such firm and personally worked on our audit within that time.

~~In addition, a director is not considered independent if any of the following relationships existed within the previous four years:~~

A director who is an employee of the company, or whose immediate family member is an executive officer of the company. Temporary service by an independent director as interim chairman or chief executive officer will not disqualify the director from being independent following completion of that service.

A director who receives any direct compensation from the company other than the director’s normal director compensation, or whose immediate family member receives more than $120,000 per year in direct compensation from the company other than for service as a nonexecutive employee.

A director who is employed (or whose immediate family member is currently employed as an executive officer) by another company where any Lilly executive officer serves on the compensation committee of that company’s board.

A director who is currently employed by, who is a 10 percent shareholder of, or whose immediate family member is currently employed as an executive officer of a company that makes payments to or receives payments from Lilly for property or services that exceed the greater of $1 million or 2 percent of that company’s consolidated gross revenue in a single fiscal year.

A director who is a current executive officer of a nonprofit organization that receives grants or contributions from the company exceeding the greater of $1 million or 2 percent of that organization’s consolidated gross revenue in a single fiscal year.

~~Members of board committees must meet all applicable independence tests of the NYSE, Securities and Exchange Commission (SEC), and Internal Revenue Service (IRS).~~

~~The directors and corporate governance committee~~Board determined that all 13 current nonemployee directors, ~~listed below~~as well as Douglas Oberhelman, who served for part of 2015, are independent, and that the members of each committee also meet ~~the~~our independence ~~standards referenced above.~~standards. The directors and corporate governance committee recommended this conclusion to the board and explained the basis for its decision, and this conclusion was adopted by the board. This committee and the boardBoard determined that none of the 13nonemployee directors has had during the last four years (i) any of the relationships ~~listed~~referenced above or (ii) any other material relationship with the company that would compromise

his or her independence. ~~In reaching this~~conclusion, the committee reviewed directors’ responses to a questionnaire asking about their relationships with the company and other potential conflicts of interest, as well as information provided by management related to transactions, relationships, or arrangements between the company and the directors or parties related to the directors. The table ~~below~~that follows includes a description of categories or types of transactions, relationships, or arrangements ~~considered by~~ the ~~board~~Board considered in reaching its determinations.



Director	Organization	Type of Organization	Director Relationship to Organization	Primary Type of Transaction/ Relationship/ Arrangement between Lilly and Organization	2015 Aggregate Percentage of Organization's Revenue
Dr. Baicker	Harvard University	Educational Institution	Employee	Research grants	Less than 0.1 percent
Mr. Fyrwald	Univar, Inc.	For-profit Corporation	Executive Officer	Purchases of products	Less than 0.1 percent
Dr. Kaelin	Harvard University	Educational Institution	Employee	Research grants	Less than 0.1 percent
	Brigham and Women's Hospital	Health Care Institution	Employee	Research grants	Less than 0.1 percent
	Dana-Farber Cancer Institute	Health Care Institution	Employee	Research grants	Less than 0.1 percent
Mr. Luciano	Archer Daniels Midland	For-profit Corporation	Executive Officer	Purchases of products	Less than 0.1 percent
Mr. Luciano	Archer Daniels Midland	For-profit Corporation	Executive Officer	Sales of products	Less than 0.1 percent of Lilly's revenue
Dr. Prendergast	Mayo Clinic and Mayo Medical School	Health Care and Educational Institution	Retired Employee	Research grants	Less than 0.1 percent
Dr. Prendergast	Mayo Foundation	Charitable Organization	Employee of affiliated Mayo Clinic and Mayo Medical School	Contributions	Less than 0.1 percent
Dr. Runge	University of Michigan Medical School	Educational Institution	Executive Officer	Research grants	Less than 0.1 percent
Dr. Runge	University of North Carolina Medical School	Educational Institution	Executive Officer	Research grants	Less than 0.1 percent

All of ~~these~~the transactions described above were entered into at arm’s length in the normal course of business and, to the extent they are commercial relationships, have standard commercial terms. ~~None~~Aggregate payments to each of the relevant organizations, in each of the last four fiscal years, did not exceed the greater of $1 million or 2 percent of that organization's consolidated gross revenues in a single fiscal year for the relevant four-year period. No director had any direct business relationships with the company or received any direct

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personal benefit from any of these transactions, ~~exceeded the thresholds described above~~relationships, or ~~otherwise compromises the independence~~arrangements.

Committees of the ~~named directors.~~Board of Directors



~~Name~~	~~Independent~~	~~Transactions/Relationships/Arrangements~~
~~Mr. Alvarez~~	~~Yes~~	~~None~~
~~Dr. Baicker~~	~~Yes~~	~~Payments to Harvard University totaling approximately $3.1 million (less than 0.1 percent of Harvard's total revenue), primarily for medical research~~
~~Sir Winfried Bischoff~~	~~Yes~~	~~None~~
~~Mr. Eskew~~	~~Yes~~	~~None~~
~~Mr. Fyrwald~~	~~Yes~~	~~Purchases of products and services from Ecolab totaling approximately $0.7 million (less than 0.1 percent of Ecolab's total revenue)~~ ~~Purchases of products from Univar, Inc. totaling $1.9 million (less than 0.1 percent of Univar's total revenue)~~
~~Dr. Gilman~~	~~Yes~~	~~None~~
~~Mr. Hoover~~	~~Yes~~	~~None~~
~~Ms. Horn~~	~~Yes~~	~~None~~
~~Dr. Kaelin~~	~~Yes~~	~~Payments to Harvard University totaling approximately $3.1 million (less than 0.1 percent of Harvard's total revenue), primarily for medical research~~ ~~Payments to Brigham and Women's Hospital totaling approximately $0.7 million (less than 0.1 percent of Brigham's total revenue), primarily for medical research~~ ~~Payments to Dana-Farber Cancer Institute totaling approximately $1.7 million (less than 0.1 percent of Dana-Farber's total revenue), primarily for medical research~~
~~Ms. Marram~~	~~Yes~~	~~None~~
~~Mr. Oberhelman~~	~~Yes~~	~~None~~
~~Dr. Prendergast~~	~~Yes~~	~~Payments to the Mayo Clinic and the Mayo Foundation totaling approximately $4.4 million (less than 0.1 percent of Mayo's total revenue), primarily for medical research~~
~~Ms. Seifert~~	~~Yes~~	~~None~~

The duties and membership of the six Board-appointed committees are described below. All committee members are independent as defined in the NYSE listing requirements, and Lilly's independence standards, and the members of the Audit and Compensation Committees each meet the additional independence requirements applicable to them as members of those committees.

~~Director Tenure~~The Directors and Corporate Governance Committee makes recommendations to the board regarding director committee membership and selection of committee chairs. The Board has no set policy for rotation of committee members or chairs but annually reviews committee memberships and chair positions, seeking the best blend of continuity and fresh perspectives.

~~Subject~~

The chair of each committee determines the frequency and agenda of committee meetings. The Audit, Compensation, and Public Policy and Compliance Committees meet alone in executive session on a regular basis; all other committees meet in executive session as needed.

All six committee charters are available online at http://investor.lilly.com/governance.cfm, or upon request to the company's corporate secretary.

Audit Committee

Assists the Board in fulfilling its oversight responsibilities by monitoring:

The integrity of financial information provided to the shareholders and others;

Management's systems of internal controls and disclosure controls;

The performance of internal and independent audit functions; and

The company's compliance with legal and regulatory requirements.

The committee has sole authority to appoint or replace the independent auditor, subject to shareholder ratification.

The Board of Directors has determined that Mr. Eskew and Mr. Tai are audit committee financial experts, as defined in the SEC rules.

Compensation Committee

•Oversees the company’s global compensation philosophy and policies;

•Establishes the compensation of our chief executive officer and other executive officers;

Acts as the oversight committee with respect to the company’s ~~charter documents,~~deferred compensation plans, management stock plans, and other management incentive compensation programs; and

Reviews succession plans for the ~~following are~~CEO and other senior leadership positions.

Compensation Committee Interlocks and Insider Participation

None of the ~~board’s expectations~~Compensation Committee members:

•Has ever been an officer or employee of the company;

Is or has been a participant in a related-person transaction with the company (see “Review and Approval of Transactions with Related Persons” for a description of our policy on related-person transactions); or

Has any other interlocking relationships requiring disclosure under applicable SEC rules.

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Directors and Corporate Governance Committee

Together with the lead director, leads the process for director ~~tenure:~~recruitment;

ARecommends to the Board candidates for membership on the Board and Board committees and for lead director; and

Oversees matters of corporate governance, including Board performance, director independence and compensation, the corporate governance guidelines, and shareholder engagement on governance matters.

Finance Committee

Reviews and makes recommendations to the Board regarding financial matters, including:

Capital structure and strategies;

Dividends;

Stock repurchases;

Capital expenditures;

Investments, financing, and borrowings;

Benefit plan funding and investments;

Financial risk management; and

Significant business-development opportunities.

Public Policy and Compliance Committee

Oversees the processes by which the company ~~officer-director, including~~conducts its business so that the ~~chief executive officer,~~company will ~~resign from~~do so in a manner that complies with laws and regulations and reflects the ~~board~~highest standards of integrity;

Together with the Audit Committee, oversees the company's enterprise risk management program; and

Reviews and makes recommendations regarding policies, practices, and procedures of the company that relate to public policy and social, political, and economic issues.

Science and Technology Committee

Reviews and makes recommendations regarding the company’s strategic research goals and objectives;

Reviews new developments, technologies, and trends in pharmaceutical research and development;

Reviews the progress of the company's new product pipeline;

Reviews the scientific aspects of significant business development opportunities; and

Oversees matters of scientific and medical integrity and risk management.

Membership and Meetings of the Board and Its Committees

In 2015, each director attended at least 80 percent of the ~~time~~total number of meetings of the Board and the committees on which he or she ~~retires or otherwise ceases~~serves. In addition, all Board members are expected to ~~be an active employee of the company.~~

~~Nonemployee directors will retire from the board not later than~~attend the annual meeting of shareholders, ~~that follows their seventy-second birthday.~~

~~Directors may stand for reelection even though~~and all the ~~board’s retirement policy would prevent them from completing a full three-year term.~~

~~A nonemployee director who retires or changes~~

~~principal job responsibilities will offer to resign from~~directors attended in 2015. Current committee membership and the ~~board. The directors~~number of meetings of the Board and ~~corporate governance~~each committee ~~will assess~~in 2015 are shown in the ~~situation and recommend to the board whether to accept the resignation.~~table below.

The directors and corporate governance committee, with input from all board members, also considers the contributions of individual directors at least every three years when considering whether to recommend nominating the director to a new three-year term.

~~Other Board Service~~

~~No new director may serve on more than three other public company boards, and no incumbent director may~~

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~~accept new positions on public~~



Name	Board	Audit	Compensation	Directors and Corporate Governance	Finance	Public Policy and Compliance	Science and Technology
Mr. Alvarez	Member		Member				Member
Dr. Baicker	Member	Member				Member
Mr. Eskew	Member	Chair		Member	Member
Mr. Fyrwald	Member					Chair	Member
Mr. Hoover	Member			Member	Chair
Ms. Horn	Member		Chair	Member
Dr. Kaelin	Member				Member		Chair
Dr. Lechleiter	Chair
Mr. Luciano	Member				Member	Member
Ms. Marram	Lead Director		Member	Chair
Dr. Prendergast	Member					Member	Member
Dr. Runge	Member					Member	Member
Ms. Seifert	Member	Member	Member
Mr. Tai	Member	Member			Member
Number of 2015 Meetings	9	11	8	6	9	4	8

Board Oversight of Compliance and Risk Management

The Board, together with the Audit and Public Policy and Compliance Committees, oversees the processes by which the company ~~boards~~conducts its business to ensure the company operates in a manner that ~~would result~~complies with laws and regulations and reflects the highest standards of integrity.

The company also has an enterprise risk management program overseen by its chief ethics and compliance officer/senior vice president of enterprise risk management, who reports directly to the CEO. Enterprise risks are identified and prioritized by management through both top-down and bottom-up processes. The top priorities are assigned to a Board committee or full Board for oversight. Company management is charged with managing risk through robust internal processes and controls. The enterprise risk management program as a whole is reviewed annually at a joint meeting of the Audit and Public Policy and Compliance Committees, and enterprise risks are also addressed in ~~service on~~periodic business unit reviews and at the annual board and senior management strategy session.

Code of Ethics

The board approves the company's code of ethics, which is set out in:

The Red Book: a comprehensive code of ethical and legal business conduct applicable to all employees worldwide and to our Board of Directors. The Red Book is reviewed and approved annually by the Board.

Code of Ethical Conduct for Lilly Financial Management: a supplemental code for our CEO and all members of financial management, in recognition of their unique responsibilities to ensure proper accounting, financial reporting, internal controls, and financial stewardship.

These documents are available online at: http://www.lilly.com/about/business-practices/ethics-compliance and https://www.lilly.com/About/Business-practices/Ethics-compliance/Code-of-conduct/code-of-conduct-financial-management.aspx, or upon request to the company's corporate secretary.

Highlights of the Company’s Corporate Governance

The company is committed to good corporate governance, which promotes the long-term interests of shareholders and other company stakeholders; builds confidence in our company leadership; and strengthens

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accountability for the Board and company management. The board has adopted corporate governance guidelines that set forth the company's basic principles of corporate governance. The section that follows outlines key elements of the guidelines and other governance matters. Investors can learn more ~~than three other public company boards.~~ by reviewing the full corporate governance guidelines document, which is available online at http://investor.lilly.com/governance.cfm or upon request to the company’s corporate secretary.

Role of the Board

The directors are elected by the shareholders to oversee the actions and results of the company’s management. The Board exercises oversight over a broad range of areas, but the Board's key responsibilities include:

Providing general oversight of the business;

Approving corporate ~~governance committee~~strategy;

Approving major management initiatives;

Selecting, compensating, evaluating, and, when necessary, replacing the chief executive officer, and compensating other senior executives;

Ensuring that an effective succession plan is in place for all senior executives;

Overseeing the company’s ethics and compliance program and management of significant business risks; and

Recruiting, nominating, compensating, and evaluating directors.

Board Composition and Requirements

Mix of Independent Directors and Officer-Directors

There should always be a substantial majority (75 percent or ~~the chair~~more) of ~~that committee may approve exceptions to this limit upon~~independent directors. The CEO should be a ~~determination that such additional service will not impair the director’s effectiveness on the board.~~Board member.

Voting for Directors

In an uncontested election, directors are elected by a majority of ~~the~~ votes cast. ~~Under the bylaws, any~~An incumbent nominee ~~for director~~ who fails to receive a majority of the votes cast ~~shall promptly~~will tender his or her ~~resignation following certification~~resignation. The Board, on recommendation of the ~~shareholder vote. The directors~~Directors and ~~corporate governance committee~~Corporate Governance Committee, will ~~consider the resignation offer and recommend to the board~~decide whether to accept ~~it. The board will act on~~ the ~~committee’s recommendation within 90 days following certification of the shareholder vote. Board action on the matter will require the approval of a majority of the independent directors.~~

resignation. The company will promptly disclose the ~~board’s~~Board's decision, ~~on a Form 8-K within four business days after the decision,~~ including, ~~a full explanation of the process by which the decision was reached and,~~ if applicable, the reasons why the ~~board~~Board rejected the ~~director’s~~ resignation. If

Director Tenure and Retirement Policy

Non-employee directors must retire no later than the ~~resignation is accepted,~~date of the annual meeting that follows their seventy-second birthday. The Directors and Corporate Governance Committee has authority to recommend exceptions to this policy. The committee, with input from all Board members, also considers the contributions of the individual directors at least every three years when considering whether to nominate the director to a new three-year term.

Other Board Service

In general, no director may serve on more than three other public company boards. The Directors and ~~corporate governance~~Corporate Governance Committee may approve exceptions if it determines that the additional service will not impair the director's effectiveness on the Lilly Board. The Directors and Corporate Governance Committee reviewed an exception request for Mr. Alvarez (who serves on four other company boards), considering his attendance record and continued engagement in board matters. Upon review, the committee ~~will recommend~~determined that he could effectively balance his other board responsibilities and continue to be a strong contributor to the ~~board whether~~Lilly Board.

Board Confidentiality Policy

The Board has adopted a Confidentiality Policy, applicable to ~~fill the vacancy or reduce the size~~all current and future members of the ~~board.~~

~~Any~~Board. The policy prohibits a director ~~who tenders~~from sharing confidential information obtained in his or her ~~resignation~~role as director with

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any outside party except under ~~this provision will not participate in~~limited circumstances where the ~~directors and corporate governance committee~~director is seeking legal advice or ~~board deliberations regarding~~is required to disclose information by order of law. The Confidentiality Policy can be viewed on the ~~resignation offer.~~company's website here: http://www.lilly.com/about/corporate-governance/Pages/corporate-governance.aspx.

~~III. Director Compensation and Equity Ownership~~

~~The directors and corporate governance committee annually reviews board compensation and recommends any changes to the board.~~

Directors should hold meaningful equity ownership positions in the company; accordingly, a significant portion of director compensation is in the form of Lilly stock. Directors are required to hold Lilly stock, directly or through company plans, valued at not less than five times their annual cash retainer; new directors are allowed five years to reach this ownership level.

~~IV. Key Board Responsibilities~~

~~Selection~~Leadership Structure; Oversight of Chairman, CEO, and ~~Chief Executive Officer; Succession Planning~~Senior Management

Leadership Structure

The ~~board~~Board currently ~~combines~~believes that combining the role of chairman of the ~~board with~~Board and the ~~role of chief executive officer,~~CEO, coupled with a strong lead director position, ~~to further strengthen~~is the ~~governance structure. The board believes this provides an~~most efficient and effective leadership model for the ~~company. Combining the chairman and CEO roles~~

Policy: Related-person transactions must be approved by the ~~board~~Board or by a committee of the ~~board~~Board consisting solely of independent directors, whowill approve the transaction only if they determine that it is in the best interests of the company. In considering thetransaction, the ~~board~~Board or committee will consider all relevant factors, including:

~~the~~

The company’s business rationale for entering into the transaction;

~~the~~The alternatives to entering into a related-person transaction;

~~whether~~Whether the transaction is on terms comparable to those available to third parties, or in the case of employment relationships, to employees generally;

~~the~~The potential for the transaction to lead to an actual or apparent conflict of interest and any safeguards imposed to prevent such actual or apparent conflicts; and

~~the~~The overall fairness of the transaction to the company.

The ~~board~~Board or relevant committee will periodically monitor the transaction to ensure ~~that~~ there are no changed circumstances that would render it advisable to amend or terminate the transaction.

Procedures:

Management or the affected director or executive officer will bring the matter to the attention of the chairman, the lead director, the chair of the ~~directors~~Directors and ~~corporate governance committee,~~Corporate Governance Committee, or the secretary.

The chairman and the lead director shall jointly determine (or, if either is involved in the transaction, the other shall ~~determine in consultation with the chair of the directors and corporate governance committee)~~determine) whether the matter should be considered by the ~~board~~Board or by one of its

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existing ~~committees consisting only of independent directors.~~committees.

If a director is involved in the transaction, he or she will be recused from all discussions and decisions about the transaction.

The transaction must be approved in advance whenever practicable, and if not practicable, must be ratified as promptly as practicable.

The ~~board~~Board or relevant committee will review the transaction annually to determine whether it continues to be in the company’s best interests.

The ~~directors~~Directors and ~~corporate governance committee~~Corporate Governance Committee has approved the following employment relationships which are considered related-party ~~transactions.~~transactions under the SEC rules.

We have three current employees who are relatives of executive officers. Dr. John Bamforth, ~~senior director,~~vice president, chief marketing officer, Lilly Bio-Medicines, is the spouse of Dr. Susan Mahony, senior vice president and president, Lilly Oncology, and has been employed by the company for over 20 years. In 2012, he was paid approximately $362,000 in cash compensation, and he received grants under the company’s performance-based equity

~~program valued at approximately $49,000 based upon the fair value computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718). Similarly, Mr.~~an executive officer. Myles O’Neill, senior vice president, global drug products, is the spouse of Dr. Fionnuala Walsh, ~~senior vice president, global quality,~~an executive officer. Finally, Andrew Lechleiter, advisor, strategy and ~~has been employed by~~operations, Amyvid, is the ~~company for over 10 years. His~~son of Dr. John Lechleiter, Lilly's CEO. For 2015, these three employees received compensation, including cash compensation, and, in ~~2012 was approximately $684,000 and his equity grants were valued at approximately $141,000. Both~~the case of Dr. Bamforth and Mr. ~~O’Neill~~O'Neill, equity grants, of between $176,000 and $1.5 million.

All three individuals participate in the company’s benefit programs generally available to U.S. ~~employees, and their~~employees. Their compensation ~~was established in accordance~~is consistent with the ~~company’s~~ compensation ~~practices applicable~~paid to other employees at their levels and with ~~equivalent qualifications~~the Company's overall compensation principles based on their years of experience, performance, and ~~responsibilities and holding similar positions.~~positions within the company.

~~Orientation~~Communication with the Board of ~~New Directors; Director Education~~Directors

~~A comprehensive orientation process is~~

You may send written communications to one or more members of the Board, addressed to:

Board of Directors

Eli Lilly and Company

c/o Corporate Secretary

Lilly Corporate Center

Indianapolis, IN 46285

Shareholder Engagement on Governance Issues

Each year, the company engages large shareholders and other key constituents to discuss key areas of interest or concern related to corporate governance, as well as any specific issues for the coming proxy season. In 2015, we spoke with a number of our largest investors. Issues discussed included shareholders' perspectives regarding a potential management proposal to eliminate the company's classified board and supermajority voting requirements, proxy access, board composition and recruitment, and the company's executive compensation, among other topics. The overall tone from these conversations was positive and the investors with whom we spoke were generally supportive of our overall compensation and governance policies. We have shared the feedback we received from these conversations with our Compensation Committee and Directors and Corporate Governance Committee. We are committed to continuing to engage with our investors to ensure their diverse perspectives are thoughtfully considered.

Prior Management Proposals to Eliminate Classified Board and Supermajority Voting Requirements

Between 2007 and 2012, each year we submitted management proposals to eliminate the company's classified board structure. The proposals did not pass because they failed to receive a “supermajority vote” of 80 percent of the outstanding shares, as required in ~~place for new directors.~~the company's articles of incorporation. In addition, ~~directors receive ongoing continuing education through educational sessions at meetings,~~in 2010, 2011, 2012, we submitted management proposals to eliminate the ~~annual strategy retreat, and periodic communications between meetings. We hold periodic mandatory training sessions for~~supermajority voting requirements themselves. Those proposals also fell short of the ~~audit committee,~~required 80 percent vote.

Prior to ~~which other directors and executive officers are invited. We also afford directors~~2012, these proposals received support ranging from 72 to 77 percent of the ~~opportunity to attend external director education programs.~~

~~Director Access to Management and Independent Advisors~~

~~Independent directors have direct access to members~~outstanding shares. In 2012, the vote was even lower, approximately 63 percent of ~~management whenever they deem it necessary. The company’s executive officers attend at least~~the outstanding shares, driven in part ~~of each regularly scheduled board meeting. The independent directors and committees are also free to retain~~by a 2012 NYSE rule revision prohibiting brokers from voting their ~~own independent advisors, at company expense, whenever they feel it would be desirable to do so. The audit, compensation, and directors and~~clients' shares on corporate governance ~~committees have sole authority to retain independent advisors to their respective committees.~~matters

~~Assessment of Board Processes and Performance~~

~~The directors and corporate governance committee annually assesses the performance of the board, its committees, and board processes based on inputs from all directors.~~

The following items of business will be approved if the votes cast for the proposal exceed those cast against theproposal:

advisory approval of executive compensation;


—	~~ratification of the appointment of principal independent auditor;~~


—	~~advisory approval of executive compensation; and~~


—	~~reapproval of the material terms of the performance goals for the 2002 Lilly Stock Plan.~~

ratification of the appointment of principal independent auditor; and

shareholder proposal seeking a report regarding how we select the countries in which we operate.

Abstentions will not be counted either for or against these proposals.

Quorum

A majority of the outstanding shares, present or represented by proxy, constitutes a quorum for the annual meeting. As of the record ~~date,1,129,678,645~~date, 1,104,492,346 shares of company common stock were issued and outstanding.

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Voting by proxy

If you are a shareholder of record, you may vote your proxy by any one of the following methods:

~~On the Internet~~.You may vote online at www.proxyvote.com. Follow the instructions on your proxy card or notice. If you received these materials electronically, follow the instructions in the e-mail message that notified you of their availability. Voting on the Internet has the same effect as voting by mail. If you vote on the Internet, do not return your proxy card.

~~By mail~~. Sign and date each proxy card you receive and return it in the prepaid envelope. Sign your name exactly as it appears on the proxy. If you are signing in a representative capacity (for example, as an attorney-in-fact, executor, administrator, guardian, trustee, or the officer or agent of a corporation or partnership), please indicate your name and your title or capacity. If the stock is held in custody for a minor (for example, under the Uniform Transfers to Minors Act), the custodian should sign, not the minor. If the stock is held in joint ownership, one owner may sign on behalf of all owners. If you return your signed proxy but do not indicate your voting preferences, we will vote on your behalf with the board’s recommendations.

If you did not receive a proxy card in the materials you received from the company and you wish to vote by mail rather than by telephone or on the Internet, you may request a paper copy of these materials and a proxy card by calling 317-433-5112. If you received a notice or an e-mail message notifying you of the electronic availability of these materials, please provide the control number, along with your name and mailing address.


8	On the Internet. You may vote online at www.proxyvote.com. Follow the instructions on your proxy card or notice. If you received these materials electronically, follow the instructions in the e-mail message that notified you of their availability. Voting on the Internet has the same effect as voting by mail. If you vote on the Internet, do not return your proxy card.


)	By telephone. Shareholders in the U.S., Puerto Rico, and Canada may vote by telephone by following the instructions on your proxy card or notice. If you received these materials electronically, follow the instructions in the e-mail message that notified you of their availability. Voting by telephone has the same effect as voting by mail. If you vote by telephone, do not return your proxy card.

By mail. Sign and date each proxy card you receive and return it in the prepaid envelope. Sign your name exactly as it appears on the proxy. If you are signing in a representative capacity (for example, as an attorney-in-fact, executor, administrator, guardian, trustee, or the officer or agent of a corporation or partnership), please indicate your name and your title or capacity. If the stock is held in custody for a minor (for example, under the Uniform Transfers to Minors Act), the custodian should sign, not the minor. If the stock is held in joint ownership, one owner may sign on behalf of all owners. If you return your signed proxy but do not indicate your voting preferences, we will vote on your behalf with the Board’s recommendations.

If you did not receive a proxy card in the materials you received from the company and you wish to vote by mail rather than by telephone or on the Internet, you may request a paper copy of these materials and a proxy card by calling 855-731-6026 (toll free) or 317-433-5112. If you received a notice or an e-mail message notifying you of the electronic availability of these materials, please provide the control number, along with your name and mailing address.

You have the right to revoke your proxy at any time before the meeting by (i) notifying the company’s secretary in writing, or (ii) delivering a later-dated proxy via the Internet, by mail, or by telephone. If you are a shareholder of record, you may also revoke your proxy by voting in person at the meeting.

Voting shares held by a broker

If your shares are held by a broker, the broker will ask you how you want your shares to be voted. You may instruct your broker or other nominee to vote your shares by following instructions that the broker or nominee provides to you. Most brokers offer voting by mail, by telephone, and on the Internet.

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, the broker may vote your shares in its discretion. For all other proposals, the broker may not vote your shares at all.

Voting shares held in the 401(k) plan

You may instruct the plan trustee on how to vote your shares in the 401(k) plan via the Internet, by mail, or by telephone as described above, except that, if you vote by mail, the card that you use will be a voting instruction ~~card~~form rather than a proxy card.

In addition, unless you decline, your vote will apply to a proportionate number of other shares held by participants in the 401(k) plan for which voting directions are not received (except for a small number of shares from a prior stock ownership plan, which can be voted only on the directions of the participants to whose accounts the shares are credited).

All participants are named fiduciaries under the terms of the 401(k) plan and under the Employee Retirement Income Security Act (ERISA) for the limited purpose of voting shares credited to their accounts and the portion of undirected shares to which their vote applies. Under ERISA, fiduciaries are required to act prudently in making voting decisions.

If you do not want to have your vote applied to the undirected shares, you must so indicate when you vote. Otherwise, the trustee will automatically apply your voting preferences to the undirected shares proportionally with

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all other participants who elected to have their votes applied in this manner.

If you do not vote, your shares will be voted by other plan participants who have elected to have their voting preferences applied proportionally to all shares for which voting instructions are not otherwise received.

Proxy cards and notices

If you received more than one proxy card, notice, or e-mail related to proxy materials, you hold shares in more than one account. To ensure that all your shares are voted, sign and return each card. Alternatively, if you vote by

telephone or on the Internet, you will need to vote once for each proxy card, notice, or e-mail you receive. If you do not receive a proxy card, you may have elected to receive your proxy statement electronically, in which case you should have received an e-mail with directions on how to access the proxy statement and how to vote your shares. If you wish to request a paper copy of these materials and a proxy card, please call 855-731-6026 (toll free) or 317-433-5112.

Vote tabulation

Votes are tabulated by an independent inspector of election, IVS Associates, Inc.

Attending the annual meeting

Attendance at the meeting will be limited to shareholders of record, those holding proxies from shareholders of record, and invited guests from the media and financial community. All shareholders of record as of the record date may attend by presenting the admission ticket that appears at the end of this proxy statement. Please fill it out and bring it with you to the meeting. The meeting will be held at the Lilly Center Auditorium. Please use the Lilly Center entrance to the south of the fountain at the intersection of Delaware and McCarty streets. You will need to pass through security, including a metal detector. Present your ticket to an usher at the meeting.

Parking will be available on a first-come, first-served basis in the garage indicated on the map at the end of this report. If you have questions about admittance or parking, you may call 855-731-6026 (toll free) or 317-433-5112 (prior to the annual meeting).

The ~~2014~~2017 annual meeting

The company’s ~~2014~~2017 annual meeting is currently scheduled for May ~~5, 2014.~~

~~Shareholder proposals~~

If a shareholder wishes to have a proposal considered for inclusion in next year’s proxy statement, he or she must submit the proposal in writing so that we receive it by November 25, 2013. Proposals should be addressed to the company’s corporate secretary, Lilly Corporate Center, Indianapolis, Indiana 46285. In addition, the company’s bylaws provide that any shareholder wishing to propose any other business at the annual meeting must give the company written notice by November 25, 2013 and no earlier than September 22, 2013. That notice must provide certain other information as described in the bylaws. Copies of the bylaws are available online at http://investor.lilly.com/governance.cfm or upon request to the company’s corporate secretary.1, 2017.

Other Matters

Householding

We have adopted a procedure approved by the SEC called "householding." Under the householding procedure, certain shareholders, whether they own registered shares or shares in street name, who have the same address will receive only one set of proxy materials, unless one or more of the shareholders at that address has previously notified us that they want to receive separate copies. Each 401(k) Plan participant will continue to receive a copy of all of the proxy materials. Regardless of how you own your shares, if you received a single set of proxy materials as a result of householding, and one or more shareholders at your address would like to have separate copies of these materials with respect the meeting or in the future, please contact Broadridge Financial Solutions, Inc. at 1-866-540-7095.

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, fiduciaries, 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, and email, but directors, officers, and other employees of the company may also solicit in person or by telephone, fax, or email. We have retained Georgeson LLC to assist in the distribution and solicitation of proxies. Georgeson may solicit proxies by personal interview, telephone, fax, mail, and email. We expect that the fee for those services will not exceed $17,500 plus reimbursement of customary out-of-pocket expenses.

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Section 16(a) ~~Beneficial Ownership Reporting Compliance~~beneficial ownership reporting compliance

Under SEC rules, our directors and executive officers are required to file with the SEC reports of holdings and changes in beneficial 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 filed, except that, due to administrative errors, Dr. Susan Mahony was late in reporting a stock sale and Bryce Carmine (now retired) was late in reporting his annual Form 5 information. Additionally, we recently discovered that, due to an administrative error, an RSU grant made to Dr. John Bamforth (Dr. Mahony's husband) in December 2009 had not been incorporated into Dr. Mahony's Section 16 holdings or related reports. Each filing was made promptly after the issue was discovered.filed.

~~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, fiduciaries, 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, officers, and other employees of the company may also solicit in person or by telephone, fax, or electronic mail. We have retained Georgeson 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~~Board of ~~directors,~~Directors,

James B. Lootens

Secretary

March ~~25, 2013~~21, 2016

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Appendix A - Summary of Adjustments Related to the Annual Bonus and Performance Award

Consistent with past practice, the Compensation Committee adjusted the reported financial results on which the 2015 annual bonus and the 2014-2015 Performance Awards were determined to eliminate the distorting effect of certain unusual items on incentive compensation performance measures. The adjustments are intended to:

align award payments with the underlying performance of the core business

avoid volatile, artificial inflation or deflation of awards due to unusual items in the award year, and, where relevant, or the previous (comparator) year

eliminate certain counterproductive short-term incentives—for example, incentives to refrain from acquiring new technologies, to defer disposing of underutilized assets, or to defer settling legacy legal proceedings to protect current bonus payments.

facilitate comparisons with peer companies.

To assure the integrity of the adjustments, the Compensation Committee establishes adjustment guidelines in the first 90 days of the performance period. These guidelines are generally consistent with the company guidelines for reporting non-GAAP financial measure to the investment community, which are reviewed by the Audit Committee. The adjustments apply equally to income and expense items. The Compensation Committee reviews all adjustments and retains downward discretion, i.e., discretion to reduce compensation below the amounts that are yielded by the adjustment guidelines.

Adjustments for 2015 Bonus Plan

For the 2015 bonus calculations, the Compensation Committee made the following adjustments to reported EPS consistent with our external reporting of non-GAAP financial measures:

Eliminated the impact of the charges recognized for acquired in-process research and development related to collaborations and acquisitions.

Eliminated the impact of significant asset impairments, restructuring and other special charges

Eliminated the impact of certain amortization of intangible assets.

Eliminated the impact of the inventory step-up related to inventories assumed with the acquisition of Novartis Animal Health

Eliminated the impact of the debt extinguishment loss related to the repurchase of $1.65 billion of debt.

The Compensation Committee made two additional adjustments to reported EPS when calculating adjusted non-GAAP EPS under the bonus plan. When the Compensation Committee set 2015 bonus targets, the unprecedented impact of the strengthening of the U.S. dollar on revenue and EPS was not contemplated. The committee holds management accountable for absorbing a reasonable level of foreign currency fluctuation as part of normal business operations for a global company. However, the committee’s adjustment guidelines permit the committee to adjust revenue and EPS results in extreme conditions such as those experienced in 2015. The committee reviewed the impact of foreign currency exchange on revenues and EPS over several years to establish a reasonable amount that management should be expected to absorb as part of normal business operations. Foreign currency impact outside this range was viewed as extraordinary. Accordingly, the committee adjusted the 2015 results to neutralize the extraordinary portion of the foreign currency exchange impact on revenue and EPS. Additionally, when the Compensation Committee set 2015 bonus targets, the transfer of the commercialization rights for Erbitux in North America to Lilly (which occurred in October 2015) was not contemplated. Accordingly, the committee adjusted the 2015 results to neutralize the expected revenue and EPS impact of the transfer of commercialization rights.

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Reconciliations of these adjustments to our reported revenue are below.



(Dollars in millions)	2015
Revenue as reported	$19,959
Transfer of Erbitux commercialization rights adjustment	$(76)
Foreign currency adjustment	$689
Adjusted Non-GAAP Revenue	$20,572

Reconciliations of these adjustments to our reported EPS are below.



	2015
EPS as reported	$2.26
Eliminate certain amortization of intangible assets	$0.39
Eliminate debt extinguishment loss	$0.09
Eliminate inventory step-up for Novartis Animal Health	$0.10
Eliminate acquired in process research and development charges	$0.33
Eliminate asset impairments, restructuring and other special charges	$0.25
Non-GAAP EPS	$3.43
Transfer of Erbitux commercialization rights adjustment	$(0.01)
Foreign currency adjustment	$0.07
Adjusted Non-GAAP EPS	$3.49
*Numbers may not add due to rounding

Adjustments for 2014-2015 PA

For the 2014-2015 PA payout calculations, the Compensation Committee made the following adjustments to reported EPS consistent with our reporting of non-GAAP financial measures:

2015: Eliminated the impact of certain amortization of intangible assets.

2015: Eliminated the impact of the debt extinguishment loss.

2015: Eliminated the impact of inventory step-up for Novartis Animal Health.

2015, 2014 and 2013: Eliminated the impact of the charges recognized for acquired in-process research and development.

2015, 2014 and 2013: Eliminated the impact of asset impairments, restructuring, and other special charges.

2014: Eliminated the impact of the charge for an extra year of the U.S. Branded Prescription Drug Fee.

2014: Eliminated the impact of gain related to transfer of our linagliptin and empagliflozin commercial rights in certain countries to Boehringer Ingelheim.

2013: Eliminated the impact of income received related to the termination of the exenatide collaboration with Amylin.

When the Compensation Committee set 2014-2015 PA targets, the acquisitions of Novartis Animal Health (which occurred in January 2015) and Lohmann Animal Health (which occurred in April 2014) were not contemplated. Accordingly, the committee adjusted the 2015 and 2014 results to neutralize the expected EPS impact of the acquisitions.

When the Compensation Committee set 2014-2015 PA targets, the exclusion of certain amortization for intangible assets from non-GAAP financial measures (which began in January 2015) was not contemplated. Accordingly, the committee adjusted the 2015 non-GAAP results to neutralize the EPS impact of this change.

When the Compensation Committee set 2014-2015 Performance Award targets, the transfer of the commercialization rights for Erbitux in North America to Lilly (which occurred in October 2015) was not contemplated. Accordingly, the committee adjusted the 2015 results to neutralize the expected EPS impact of the transfer of commercialization rights.

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Reconciliations of these adjustments to our reported EPS are below.



	2015	2014	% Growth 2015 vs. 2014	2013	% Growth 2014 vs. 2013
EPS as reported	$2.26	$2.23	(3.0)%	$4.32	(46.1)%
Eliminate certain amortization of intangible assets	$0.39	—
Eliminate debt extinguishment loss	$0.09	—
Eliminate inventory step-up for Novartis Animal Health	$0.10	—
Eliminate acquired in process research and development charges	$0.33	$0.12		$0.03
Eliminate asset impairments, restructuring and other special charges	$0.25	$0.38		$0.08
Eliminate additional U.S. Drug Fee	—	$0.11		—
Eliminate gain related to transfer of commercial rights to Boehringer Ingelheim	—	$(0.06)		—
Eliminate income from the termination of the exenatide collaboration with Amylin	—	—		$(0.29)
Non-GAAP EPS	$3.43	$2.78	23.4%	$4.15	(33.0)%
Novartis Animal Health acquisition adjustment	$0.13	—		—
Lohmann Animal Health acquisition adjustment	$0.06	$0.05		—
Certain amortization of intangible assets	$(0.39)	—		—
Transfer of Erbitux commercialization rights adjustment	$(0.01)	—		—
Adjusted Non-GAAP EPS	$3.22	$2.83	13.8%	$4.15	(31.8)%
*Numbers may not add due to rounding

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Annual Meeting Admission Ticket

Eli Lilly and Company ~~2013~~2016 Annual Meeting of Shareholders

Monday, May ~~6, 2013~~2, 2016

11:00 a.m. EDT

Lilly Center Auditorium

Lilly Corporate Center

Indianapolis, Indiana 46285

The top portion of this page will be required for admission to the meeting.

Please write your name and address in the space provided below and present this ticket when you enter the Lilly Center.

Doors open at 10:15 a.m.

Name

Address

City, State, and Zip Code

Parking Pass

Directions and Parking

From I-70 take Exit 79B; follow signs to McCarty Street. Turn right (east) on McCarty Street; go straight into Lilly Corporate Center. You will be directed to parking. Be sure to take the admission ticket (the top portion of this page) with you to the meeting and leave this parking pass on your dashboard.

Take the top portion of this page with you to the meeting.

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Detach here

Eli Lilly and Company

Annual Meeting of Shareholders

May ~~6, 2013~~2, 2016

Please place this identifier on the dashboard of your car as you enter Lilly Corporate Center so it can be clearly seen by security and parking personnel.

56P66

Important notice regarding the availability of proxy material for the shareholder meeting to be held May ~~6, 2013:~~2, 2016:

The Annual Report and Proxy Statement are available at ~~http:~~https://www.lilly.com/~~pdf/lillyar2012.pdf~~_Assets/PDF/lillyar2015.pdf.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

~~M52722-P31749~~M99796-P71734

The undersigned hereby appoints Messrs. ~~M.J.~~M. J. Harrington, ~~J.C.~~J. C. Lechleiter, and ~~D.W.~~D. W. Rice, and each of them, as proxies, each with full power to act without the others and with full power of substitution, to vote as indicated on the reverse side of this card all the shares of common stock of ELI LILLY AND COMPANY in this account held in the name of the undersigned at the close of business on ~~March 1, 2013,~~February 26, 2016, at the annual meeting of shareholders to be held on May ~~6, 2013,~~2, 2016, at 11:00 a.m. EDT, and at any adjournment thereof, with all the powers the undersigned would have if personally present.

If this card is properly executed and returned, the shares represented thereby will be voted. If a choice is specified by the shareholder, the shares will be voted accordingly. If not otherwise specified, the shares represented by this card will be voted with the recommendations of the board of directors and in the discretion of the proxy holders upon such other matters as may properly come before the meeting.

This proxy is solicited on behalf of the board of directors.

PLEASE MARK YOUR VOTES AND SIGN ON THE REVERSE SIDE OF THIS CARD.



ELI LILLY AND COMPANY C/O IVS, P.O. BOX 17149 WILMINGTON, DE 19885-9801	VOTE BY INTERNET – www.proxyvote.com Use the Internet to transmit your voting instructions until 11:59 p.m. EDT on Sunday, May ~~5, 2013.~~1, 2016. Have your proxy card in hand when you access the website and follow the instructions. VOTE BY PHONE – (1-800-690-6903) Transmit your voting instructions by telephone until 11:59 p.m. EDT on Sunday, May ~~5, 2013.~~1, 2016. Have your proxy card in hand when you call and follow the instructions. VOTE BY MAIL Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return to Eli Lilly and Company, c/o IVS Associates, Inc., P.O. Box 17149, Wilmington, DE 19885-9801. Important notice regarding the availability of proxy material for the shareholder meeting to be held May ~~6, 2013:~~2, 2016: The annual report and proxy statement are available at ~~http:~~https://www.lilly.com/~~pdf/lillyar2012.pdf.~~_Assets/PDF/lillyar2015.pdf. THANK YOU FOR VOTING



TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:	~~M52721-P31749~~M99795-P71734	KEEP THIS PORTION FOR YOUR RECORDS
THIS CARD IS VALID ONLY WHEN SIGNED AND DATED.		DETACH AND RETURN THIS PORTION ONLY

ELI LILLY AND COMPANY

The board of directors recommends you vote FOR items ~~1-4:~~1-3:



~~(1)~~1.	Election of directors, each for a three-year term.	For	Against	Abstain

	~~1a)~~1a. R. Alvarez	q	q	q

	~~1b) W. Bischoff~~	q	q	q

	~~1c)~~1b. R. D. Hoover	q	q	q

	~~1d) F. G. Prendergast~~1c. J. R. Luciano	q	q	q

	~~1e)~~1d. F. G. Prendergast	q	q	q

	1e. K. P. Seifert	q	q	q	For	Against	Abstain

~~(2)~~2.	Approve advisory vote on compensation paid to the company’s named executive officers.				q	q	q
3.	Ratification of the appointment by the audit committee of the board of directors of Ernst & Young LLP as principal independent auditor for ~~2013.~~				q	q	q
~~(3)~~	~~Approve, by non-binding vote, compensation paid to the company’s named executive officers.~~				q	q	q
~~(4)~~	~~Reapprove material terms of the performance goals for the 2002 Lilly Stock Plan.~~2016.				q	q	q

The board of directors recommends you vote AGAINST shareholder proposal 4:



4.	Consideration of a shareholder proposal seeking a report regarding how we select the countries in which we operate or invest.	q	q	q



Please sign exactly as name appears hereon. One joint owner may sign on behalf of the others. When signing in a representative capacity, please clearly state your capacity.





Signature (PLEASE SIGN WITHIN BOX)	Date	Signature (Joint Owners)	Date

Important notice regarding the availability of proxy material for the shareholder meeting to be held May ~~6, 2013:~~2, 2016:

The Annual Report and Proxy Statement are available at ~~http:~~https://www.lilly.com/~~pdf/lillyar2012.pdf~~

_Assets/PDF/lillyar2015.pdf.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



ESOP	~~M52724-P31749~~M99798-P71734

~~The~~ Lilly Employee 401(k) Plan

Confidential Voting Instructions

To Northern Trust, Trustee

By signing on the reverse side or by voting by phone or Internet, you direct the Trustee to vote (in person or in proxy) as indicated on the reverse side of this card, the number of shares of Eli Lilly and Company Common Stock credited to this account under The Lilly Employee 401(k) Plan or an affiliated plan at the close of business on ~~March 1, 2013,~~February 26, 2016, at the Annual Meeting of Shareholders to be held on May ~~6, 2013 at 11:00 a.m. EDT, and at any adjournment thereof.~~

~~If this card is properly executed and returned, the shares represented thereby will be voted. If a choice is specified by the shareholder, the shares will be voted accordingly.~~ If not otherwise specified, the shares represented by this card will be voted with the recommendations of the board of directors and in the discretion of the proxy holders upon such other matters as may properly come before the meeting.

~~Also, unless you decline by checking the box below, you direct the Trustee to apply this voting instruction~~ ~~pro rata~~ (along with all other participants who provide voting instructions and do not decline as provided below) to all shares of Common Stock held in the plans for which the Trustee receives no voting instructions (the “undirected shares”), except that shares formerly held in The Lilly Employee Stock Ownership Plan (PAYSOP) may only be voted upon the express instruction of the participants to whose accounts the shares are credited. For more information on the voting of the undirected shares, ~~see~~ ~~the Proxy Statement.~~



	~~Yes~~	No
~~Question 1: Check “no” only if you decline~~ ~~to have your vote applied~~ ~~pro rata~~ ~~to the undirected shares.~~	q	q

~~These confidential voting instructions will be seen only by authorized representatives of the Trustee.~~

~~PLEASE MARK YOUR VOTES AND SIGN ON THE REVERSE SIDE OF THIS CARD.~~



~~NORTHERN TRUST, TRUSTEE~~ ~~C/O IVS, P.O. BOX 17149~~ ~~WILMINGTON, DE 19885-9801~~	~~VOTE BY INTERNET – www.proxyvote.com~~ ~~Use the Internet to transmit your voting instructions until 11:59 p.m. EDT on Tuesday, April 30, 2013. Have your proxy card in hand when you access the website and follow the instructions.~~ ~~VOTE BY PHONE – (1-800-690-6903)~~ ~~Transmit your voting instructions by telephone until 11:59 p.m. EDT on Tuesday, April 30, 2013. Have your proxy card in hand when you call and follow the instructions.~~ ~~VOTE BY MAIL~~ Mark, sign, and date this card and return it in the postage-paid envelope we have provided or return to IVS Associates, Inc., P.O. Box 17149, Wilmington, DE 19885-9801. Card must be received by April 30, 2013. Important notice regarding the availability of proxy material for the shareholder meeting to be held May 6, 2013: The annual report and proxy statement are available at http://www.lilly.com/pdf/lillyar2012.pdf. ~~THANK YOU FOR VOTING~~



~~TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:~~	~~M52723-P31749~~	~~KEEP THIS PORTION FOR YOUR RECORDS~~

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~~ESOP~~	~~THIS CARD IS VALID ONLY WHEN SIGNED AND DATED.~~	~~DETACH AND RETURN THIS PORTION ONLY~~

~~ELI LILLY AND COMPANY~~

~~The board of directors recommends you vote FOR items 1-4:~~



~~(1)~~	~~Election of directors, each for a three-year term.~~	~~For~~	~~Against~~	~~Abstain~~

	~~1a) R. Alvarez~~	q	q	q

	~~1b) W. Bischoff~~	q	q	q

	~~1c) R. D. Hoover~~	q	q	q

	~~1d) F. G. Prendergast~~	q	q	q

	~~1e) K. P. Seifert~~	q	q	q	~~For~~	~~Against~~	~~Abstain~~

~~(2)~~	~~Ratification of the appointment by the audit committee of the board of directors of Ernst & Young LLP as principal independent auditor for 2013.~~				q	q	q
~~(3)~~	~~Approve, by non-binding vote, compensation paid to the company’s named executive officers.~~				q	q	q
~~(4)~~	~~Reapprove material terms of the performance goals for the 2002 Lilly Stock Plan.~~				q	q	q



~~Please sign exactly as name appears hereon. One joint owner may sign on behalf of the others. When signing in a representative capacity, please clearly state your capacity.~~





~~Signature (PLEASE SIGN WITHIN BOX)~~	~~Date~~	~~Signature (Joint Owners)~~	~~Date~~

~~Important notice regarding the availability of proxy material for the shareholder meeting to be held May 6, 2013:~~

~~The Annual Report and Proxy Statement are available at http://www.lilly.com/pdf/lillyar2012.pdf~~

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



~~PAYSOP~~	~~M52726-P31749~~

~~The Lilly Employee 401(k) Plan~~

~~Confidential Voting Instructions~~

~~To Northern Trust, Trustee~~

By signing on the reverse side or by voting by phone or Internet, you direct the Trustee to vote (in person or in proxy) as indicated on the reverse side of this card, the number of shares of Eli Lilly and Company Common Stock credited to this account under The Lilly Employee 401(k) Plan or an affiliated plan at the close of business on March 1, 2013, at the Annual Meeting of Shareholders to be held on May 6, 20132, 2016 at 11:00 a.m. EDT, and at any adjournment thereof.

Also, unless you decline by checking the box below, you direct the Trustee to apply this voting instruction pro rata (along with all other participants who provide voting instructions and do not decline as provided below) to all shares of Common Stock held in the plans for which the Trustee receives no voting instructions (the “undirected shares”), except that shares formerly held in The Lilly Employee Stock Ownership Plan (PAYSOP) may only be voted upon the express instruction of the participants to whose accounts the shares are credited. For more information on the voting of the undirected shares, see the Proxy Statement.



	Yes	No
Question 1: Check “no” only if you decline to have your vote applied pro rata to the undirected shares.	q	q

These confidential voting instructions will be seen only by authorized representatives of the Trustee.

PLEASE MARK YOUR VOTES AND SIGN ON THE REVERSE SIDE OF THIS CARD.



NORTHERN TRUST, TRUSTEE C/O IVS, P.O. BOX 17149 WILMINGTON, DE 19885-9801	VOTE BY INTERNET – www.proxyvote.com Use the Internet to transmit your voting instructions until 11:59 p.m. EDT on Tuesday, April ~~30, 2013.~~26, 2016. Have your proxy card in hand when you access the website and follow the instructions. VOTE BY PHONE – (1-800-690-6903) Transmit your voting instructions by telephone until 11:59 p.m. EDT on Tuesday, April ~~30, 2013.~~26, 2016. Have your proxy card in hand when you call and follow the instructions. VOTE BY MAIL Mark, sign, and date this card and return it in the postage-paid envelope we have provided or return to IVS Associates, Inc., P.O. Box 17149, Wilmington, DE 19885-9801. Card must be received by April ~~30, 2013.~~26, 2016. Important notice regarding the availability of proxy material for the shareholder meeting to be held May ~~6, 2013:~~2, 2016: The annual report and proxy statement are available at ~~http:~~https://www.lilly.com/~~pdf/lillyar2012.pdf.~~ _Assets/PDF/lillyar2015.pdf. THANK YOU FOR VOTING



TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:	~~M52725-P31749~~M99797-P71734	KEEP THIS PORTION FOR YOUR RECORDS

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~~- - - -~~



~~PAYSOP~~ ESOP	THIS CARD IS VALID ONLY WHEN SIGNED AND DATED.	DETACH AND RETURN THIS PORTION ONLY

ELI LILLY AND COMPANY

The board of directors recommends you vote FOR items ~~1-4:~~1-3:



~~(1)~~1.	Election of directors, each for a three-year term.	For	Against	Abstain

	~~1a)~~1a. R. Alvarez	q	q	q

	~~1b) W. Bischoff~~	q	q	q

	~~1c)~~1b. R. D. Hoover	q	q	q

	~~1d)~~1c. J. R. Luciano	q	q	q

	1d. F. G. Prendergast	q	q	q

	~~1e)~~1e. K. P. Seifert	q	q	q	For	Against	Abstain

~~(2)~~2.	Approve advisory vote on compensation paid to the company’s named executive officers.				q	q	q
3.	Ratification of the appointment by the audit committee of the board of directors of Ernst & Young LLP as principal independent auditor for ~~2013.~~2016.				q	q	q

The board of directors recommends you vote AGAINST shareholder proposal 4:

~~(3)~~

~~Approve, by non-binding vote, compensation paid to the company’s named executive officers.~~

~~(4)~~

~~Reapprove material terms~~

Consideration of a shareholder proposal seeking a report regarding how we select the ~~performance goals for the 2002 Lilly Stock Plan.~~countries in which we operate or invest.



Please sign exactly as name appears hereon. One joint owner may sign on behalf of the others. When signing in a representative capacity, please clearly state your capacity.





Signature (PLEASE SIGN WITHIN BOX)	Date	Signature (Joint Owners)	Date

Important notice regarding the availability of proxy material for the shareholder meeting to be held May 2, 2016:

The Annual Report and Proxy Statement are available at https://www.lilly.com/_Assets/PDF/lillyar2015.pdf.

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PAYSOP	M99800-P71734

Lilly Employee 401(k) Plan

Confidential Voting Instructions

To Northern Trust, Trustee

By signing on the reverse side or by voting by phone or Internet, you direct the Trustee to vote (in person or in proxy) as indicated on the reverse side of this card, the number of shares of Eli Lilly and Company Common Stock credited to this account under The Lilly Employee 401(k) Plan or an affiliated plan at the close of business on February 26, 2016, at the Annual Meeting of Shareholders to be held on May 2, 2016 at 11:00 a.m. EDT, and at any adjournment thereof.



	Yes	No
Question 1: Check “no” only if you decline to have your vote applied pro rata to the undirected shares.	q	q

These confidential voting instructions will be seen only by authorized representatives of the Trustee.

PLEASE MARK YOUR VOTES AND SIGN ON THE REVERSE SIDE OF THIS CARD.



NORTHERN TRUST, TRUSTEE C/O IVS, P.O. BOX 17149 WILMINGTON, DE 19885-9801	VOTE BY INTERNET – www.proxyvote.com Use the Internet to transmit your voting instructions until 11:59 p.m. EDT on Tuesday, April 26, 2016. Have your proxy card in hand when you access the website and follow the instructions. VOTE BY PHONE – (1-800-690-6903) Transmit your voting instructions by telephone until 11:59 p.m. EDT on Tuesday, April 26, 2016. Have your proxy card in hand when you call and follow the instructions. VOTE BY MAIL Mark, sign, and date this card and return it in the postage-paid envelope we have provided or return to IVS Associates, Inc., P.O. Box 17149, Wilmington, DE 19885-9801. Card must be received by April 26, 2016. Important notice regarding the availability of proxy material for the shareholder meeting to be held May 2, 2016: The annual report and proxy statement are available at https://www.lilly.com/_Assets/PDF/lillyar2015.pdf. THANK YOU FOR VOTING



TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:	M99799-P71734	KEEP THIS PORTION FOR YOUR RECORDS

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



PAYSOP	THIS CARD IS VALID ONLY WHEN SIGNED AND DATED.	DETACH AND RETURN THIS PORTION ONLY

ELI LILLY AND COMPANY

The board of directors recommends you vote FOR items 1-3:



1.	Election of directors, each for a three-year term.	For	Against	Abstain

	1a. R. Alvarez	q	q	q

	1b. R. D. Hoover	q	q	q

	1c. J. R. Luciano	q	q	q

	1d. F. G. Prendergast	q	q	q

	1e. K. P. Seifert	q	q	q	For	Against	Abstain

2.	Approve advisory vote on compensation paid to the company’s named executive officers.				q	q	q
3.	Ratification of the appointment by the audit committee of the board of directors of Ernst & Young LLP as principal independent auditor for 2016.				q	q	q

The board of directors recommends you vote AGAINST shareholder proposal 4:



4.	Consideration of a shareholder proposal seeking a report regarding how we select the countries in which we operate or invest.	q	q	q



Please sign exactly as name appears hereon. One joint owner may sign on behalf of the others. When signing in a representative capacity, please clearly state your capacity.





Signature (PLEASE SIGN WITHIN BOX)	Date	Signature (Joint Owners)	Date



¨o		Preliminary Proxy Statement
¨o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x		Definitive Proxy Statement
¨o		Definitive Additional Materials
¨o		Soliciting Material Pursuant to §240.14a-12



Payment of Filing Fee (Check the appropriate box):

x	No fee required.

¨o	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

	(1)	Title of each class of securities to which transaction applies:

	(2)	Aggregate number of securities to which transaction applies:

	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

	(4)	Proposed maximum aggregate value of transaction:

	(5)	Total fee paid:


¨o	Fee paid previously with preliminary materials.

¨o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)	Amount Previously Paid:

	(2)	Form, Schedule or Registration Statement No.:

	(3)	Filing Party:

	(4)	Date Filed:



Notice of Annual Meeting of Shareholders	P1
Proxy Statement Overview	P2
Governance	P8
Item 1 - Election of Directors	P8
Board Operations and Governance	P8
Director Qualifications and Nomination Process	P13
Director Compensation	P15
Director Independence	P17
Committees of the Board of Directors	P18
Membership and Meetings of the Board and Its Committees	P19
Board Oversight of Compliance and Risk Management	P20
Highlights of the Company's Corporate Governance	P20
Shareholder Engagement on Governance Issues	P24
Prior Management Proposals to Eliminate Classified Board	P24
Shareholder Proposals and Nominations	P25
Ownership of Company Stock	P26
Compensation	P27
Item 2 - Advisory Vote on Compensation Paid to Named Executive Officers	P27
Compensation Discussion and Analysis	P28
Executive Compensation	P41
Compensation Committee Matters	P51
Audit Matters	P53
Item 3 - Proposal to Ratify the Appointment of Principal Independent Auditor	P53
Shareholder Proposal	P56
Item 4 - Shareholder Proposal on Issuing High Risks Regions Report	P56
Other Information	P57
Meeting and Voting Logistics	P57
Other Matters	P59
Appendix A - Summary of Adjustments Related to the Annual Bonus and Performance Award	P61
Annual Meeting Admission Ticket	P65



��	WHEN:	11:00 a.m. EDT, Monday, May 2, 2016
●	WHERE:	The Lilly Center Auditorium Lilly Corporate Center Indianapolis, Indiana 46285


●	ITEMS OF BUSINESS:	Election of the five directors listed in the proxy statement to serve three-year terms
		Approval, by non-binding vote, of the compensation paid to the company's named executive officers
		Ratification of Ernst & Young LLP as the principal independent auditors for 2016
		If presented, a shareholder proposal seeking a report regarding how we select the countries in which we operate or invest
●	WHO CAN VOTE:	Shareholders of record at the close of business on February 26, 2016



Agenda Item					Management recommendation	Vote required to pass
Item 1	Elect the following nominees for director to serve a three-year term that will expire in 2016:				Vote FOR all	Majority of votes cast
	Name and principal occupation	Joined the board	Age	Public boards

	Ralph Alvarez	2009	57	Lowe's Companies, Inc.; Dunkin' Brands Group, Inc.	Vote FOR
	Executive Chairman, Skylark Co., Ltd.	2009	57	Lowe's Companies, Inc.; Dunkin' Brands Group, Inc.	Vote FOR

	Sir Winfried Bischoff	2000	71	The McGraw-Hill Companies, Inc.	Vote FOR
	Chairman, Lloyds Banking Group plc	2000	71	The McGraw-Hill Companies, Inc.	Vote FOR

	R. David Hoover	2009	67	Ball Corporation; Energizer Holdings, Inc.; Steelcase, Inc.	Vote FOR
	Chairman, Ball Corporation	2009	67	Ball Corporation; Energizer Holdings, Inc.; Steelcase, Inc.	Vote FOR

	Franklyn G. Prendergast, M.D., Ph.D.	1995	68	__	Vote FOR
	Edmond and Marion Guggenheim Professor of Biochemistry and Molecular Biology and Professor of Molecular Pharmacology and Experimental Therapeutics, Mayo Medical School; and Director Emeritus, Mayo Clinic Center for Individualized Medicine	1995	68	__	Vote FOR

	Kathi P. Seifert	1995	63	Supervalu Inc.; Revlon Consumer Products Corporation; Lexmark International, Inc.	Vote FOR
	Retired Executive Vice President, Kimberly-Clark Corporation	1995	63		Vote FOR
Item 2	Ratify the appointment of Ernst & Young LLP as the company’s principal independent auditor.				Vote FOR	Majority of votes cast
Item 3	Approve, by non-binding vote, compensation paid to the company’s named executive officers.				Vote FOR	Majority of votes cast
Item 4	Reapprove the material terms of the performance goals for the 2002 Lilly Stock Plan.				Vote FOR	Majority of votes cast



SEC 1913 (11-01)	Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.



Meeting:	Annual Meeting of Shareholders	Date:	May 2, 2016
Time:	11:00 a.m. EDT	Location:	The Lilly Center Auditorium Lilly Corporate Center Indianapolis, Indiana 46285
Record Date:	February 26, 2016
Items of Business:	Item 1: Election of the five directors listed in this proxy statement to serve three-year terms.
	Item 2: Approval, by non-binding vote, of the compensation paid to the company's named executive officers.
	Item 3: Ratification of Ernst & Young LLP as the principal independent auditors for 2016.
	Item 4: If presented, a shareholder proposal seeking a report regarding how we select the countries in which we operate or invest.


•	U.S. FDA approval of six new products, including Portrazza™, in combination with gecitabine and cisplatin, Cyramza^®for treatment of colorectal cancer, Glyxambi^®, Basaglar^®, and Synjardy^®.


•	Positive results from a long-term clinical trial investigating cardiovascular outcomes for Jardiance^®.



~~Michael L. Eskew~~	~~Katherine Baicker, Ph.D.~~	~~Alfred G. Gilman, M.D., Ph.D.~~	~~Karen N. Horn, Ph.D.~~	~~Franklyn G. Prendergast, M.D., Ph.D.~~	~~J. Erik Fyrwald~~Management recommendation	~~R. David Hoover~~ Vote required to pass
Item 2	Approve, by non-binding vote, compensation paid to the company's named executive officers				Vote FOR	Majority of votes cast



Ralph Alvarez, age 60, director since 2009
Board Committees: Compensation; Science and Technology
Career Highlights		Other Board Service
Skylark Co., Ltd., a leading restaurant operator in Japan		•	Public boards: Skylark Co., Ltd.; Lowe's Companies, Inc.; Dunkin' Brands Group, Inc.; Realogy Holdings Corp.
•	Executive Chairman (2013 - present)
McDonald's Corporation		•	Prior public boards: McDonald's Corporation; KeyCorp
•	President and Chief Operating Officer (2006 - 2009)
Memberships and Other Organizations
•	University of Miami: President's Council; School of Business Administration Board of Overseers; International Advisory Board
Qualifications: Through his senior executive positions at Skylark Co., Ltd. and McDonald’s Corporation, as well as with other global restaurant businesses, Mr. Alvarez has extensive experience in consumer marketing, global operations, international business, and strategic planning. His international experience includes a special focus on Japan and emerging markets. He also has extensive corporate governance experience through his service on other public company boards.



R. David Hoover, age 70, director since 2009
Board Committees: Finance (chair); Directors and Corporate Governance
Career Highlights		Other Board Service
Ball Corporation, a provider of packaging products and other technologies and services to commercial and governmental customers		•	Public boards: Ball Corporation; Edgewell Personal Care Co.; Steelcase, Inc.

•	Chairman (2002 - 2013)	•	Prior public boards: Qwest International, Inc.
•	President and Chief Executive Officer (2001 - 2010)	•	Non-profit boards: Boulder Community Hospital; Children's Hospital Colorado; DePauw University
•	Chief Operating Officer (2000 - 2001)
•	Chief Financial Officer (1998 - 2000)
Memberships and Other Organizations
•	Indiana University Kelley School of Business, Dean's Council
Qualifications: Mr. Hoover has extensive CEO experience at Ball Corporation, with a strong record of leadership in operations and strategy. He has deep financial expertise as a result of his experience as CEO and CFO of Ball. He also has extensive corporate governance experience through his service on other public company boards.



Juan R. Luciano, age 54, director since 2016
Board Committees: Finance; Public Policy and Compliance
Career Highlights		Other Board Service
Archer Daniels Midland Company, a global food-processing and commodities-trading company		• •	Public boards: Archer Daniels Midland Company Non-profit boards: Boys and Girls Clubs of America
•	Chairman (January 2016 - present)
•	Chief Executive Officer and President (2015 - present)
•	President (2014 - 2015)
•	Executive Vice President and Chief Operating Officer (2011 - 2014)
The Dow Chemical Company, a multi-national chemical company
•	Executive Vice President and President, Performance Division (2010 - 2011)
Qualifications: Mr. Luciano has CEO and global business experience with Archer Daniels Midland Company, where he has established a reputation for strong result-oriented and strategic leadership, as well as many years of global leadership experience at The Dow Chemical Company. He brings to the board a strong technology and operations background, along with expertise in the food and agriculture sectors, an expanding area of focus for Lilly and its Elanco business.



Franklyn G. Prendergast, M.D., Ph.D., age 71, director since 1995
Board Committees: Public Policy and Compliance; Science and Technology
Career Highlights		Other Board Service
Mayo Medical School		•	Public boards: Cancer Genetics Incorporated
•	Edmond and Marion Guggenheim Professor of Biochemistry and Molecular Biology (1986 - 2014)
•	Professor of Molecular Pharmacology and Experimental Therapeutics (1987 - 2014)
•	Mayo Clinic Center for Individualized Medicine, Director Emeritus (2006 - 2012)
Qualifications: Dr. Prendergast is a prominent medical clinician, researcher, and academician. He has extensive experience in senior-most administration at Mayo Clinic, a major medical institution, and as director of its renowned cancer center. He retired from Mayo at the end of 2014. He has special expertise in two critical areas for Lilly—oncology and personalized medicine. As a medical doctor, he brings an important practicing-physician perspective to the Board’s deliberations.



2 Years Tenure or Less:	1
3-5 Years:				5
6-10 Years:		3
More than 10 Years:			4



Kathi P. Seifert, age 66, director since 1995
Board Committees: Audit; Compensation
Career Highlights		Other Board Service
Kimberly-Clark Corporation, a global consumer products company		•	Public boards: Investors Community Bank; Lexmark International, Inc.
•	Executive Vice President (1999 - 2004)
Katapult, LLC, a provider of pro bono mentoring and consulting services to non-profit organizations		•	Private boards: Appvion, Inc.
		•	Prior public boards: Albertsons; Revlon Consumer Products Co.; Supervalu Inc.
•	Chairman (2004 - present)
		•	Non-profit boards: Community Foundation for the Fox Valley Region; Fox Cities Building for the Arts; Fox Cities Chamber of Commerce; New North

Qualifications: Ms. Seifert is a retired senior executive of Kimberly-Clark. She has strong expertise in consumer marketing and brand management, having led sales and marketing for several worldwide brands, with a special focus on consumer health. She has extensive corporate governance experience through her other board positions.



Michael L. Eskew, age 66, director since 2008
Board Committees: Audit (chair); Finance; Directors and Corporate Governance
Career Highlights		Other Board Service
United Parcel Service, Inc., a global shipping and logistics company		•	Public boards: 3M Corporation; IBM Corporation; Allstate Insurance Company
•	Chairman and Chief Executive Officer (2002 - 2007)
•	Vice Chairman (2000 - 2002)	•	Non-profit boards: Chairman of the board of trustees of The Annie E. Casey Foundation
•	UPS Board of Directors (1998 - 2014)
Qualifications: Mr. Eskew has CEO experience with UPS, where he established a record of success in managing complex worldwide operations, strategic planning, and building a strong consumer-brand focus. He is an audit committee financial expert, based on his CEO experience and his service on other U.S. company audit committees. He has extensive corporate governance experience through his service on the boards of other companies.



Karen N. Horn, Ph.D., Age 72, director since 1987
Board Committees: Compensation (chair); Directors and Corporate Governance
Career Highlights		Other Board Service
Brock Capital Group, a provider of financial advising and consulting services		•	Public boards: Simon Property Group, Inc.; Norfolk Southern Corporation
•	Senior Managing Director (2004 - present)	•	Prior public boards: T. Rowe Price Mutual Funds
•	President, Private Client Services and Managing Director (1999 - 2003)	•	Non-profit boards: The National Bureau of Economic Research; The National Association of Corporate Directors
Bank One, Cleveland, N.A.
•	Chairman and chief executive officer (1982 - 1987)
Qualifications: Ms. Horn is a former CEO with extensive experience in various segments of the financial industry, including banking and financial services. Through her for-profit and her public-private partnership work, she has significant experience in international economics and finance. Ms. Horn has extensive corporate governance experience through service on other public company boards in a variety of industries.



William G. Kaelin, Jr., M.D.,age 58, director since 2012
Board Committees: Finance; Science and Technology (chair)
Career Highlights		Industry Memberships
Dana-Farber/Harvard Cancer Center		•	Institute of Medicine; National Academy of Sciences; Association of American Physicians; American Society of Clinical Investigation
•	Professor of Medicine (2002 - present)
•	Associate director, Basic Science (2009 - present)	Honors
		•	Canada Gairdner International Award
		•	Lefoulon-Delalande Prize - Institute of France
Qualifications: Dr. Kaelin is a prominent medical researcher and academician. He has extensive experience at Harvard Medical School, a major medical institution, as well as special expertise in oncology—a key component of Lilly's business. He also has deep expertise in basic science, including mechanisms of drug action, and experience with pharmaceutical discovery research.



John C. Lechleiter, Ph.D., age 62, director since 2005
Board Committees: none
Career Highlights		Industry Memberships
Eli Lilly and Company		•	American Chemical Society; Pharmaceutical Research and Manufacturers of America (PhRMA); U.S. - Japan Business Council, chairman
•	President and CEO (2008 - present)
•	Chairman of the Board (2009 - present)
Honors		Other Board Service
•	Honorary doctorates: Marian University, University of Indianapolis, the National University of Ireland, Indiana University, and Franklin College	•	Public boards: Ford Motor Company; Nike, Inc.
		•	Non-profit boards: United Way Worldwide, chairman; Chemical Heritage Foundation; and the Central Indiana Corporate Partnership
Qualifications: Dr. Lechleiter is our chairman, president, and chief executive officer. A Ph.D. chemist by training, Dr. Lechleiter has over 36 years of experience with the company in a variety of roles of increasing responsibility in research and development, pharmaceutical operations, and corporate administration. As a result, he has a sound understanding of pharmaceutical research and development, sales and marketing, and manufacturing. He also has significant corporate governance experience through his service on other public company boards.



Marschall S. Runge, M.D., Ph.D., age 61, director since 2013
Board Committees: Science and Technology; Public Policy and Compliance
Career Highlights		Industry Memberships
University of Michigan		•	Experimental Cardiovascular Sciences Study Section of the National Institutes of Health
•	CEO, University of Michigan Health System (2015 - present)
•	Executive Vice President for Medical Affairs (2015 - present)
•	Dean, Medical School (2015 - present)
University of North Carolina, School of Medicine
•	Executive Dean (2010 - 2015); Chair of the Department of Medicine (2000 - 2015)
•	Principal Investigator and Director of the North Carolina Translational and Clinical Sciences Institute
Qualifications: Dr. Runge brings the unique perspective of a practicing physician who has a broad background in health care, clinical research, and academia. He has extensive experience as a practicing cardiologist, and has deep expertise in biomedical research and clinical trial design.



Katherine Baicker, Ph.D., age 44, director since 2011
Board Committees: Audit; Public Policy and Compliance
Career Highlights		Industry Memberships
Harvard T.H. Chan School of Public Health, Department of Health Policy and Management		•	Commissioner of the Medicare Payment Advisory Commission
•	Professor of health economics (2007 - present)	•	Chair of the Group Insurance Commission of Massachusetts
•	C. Boyden Gray Professor and Acting Chair, department of Health Policy and Management (2014 - 2016)	•	Panel of Health Advisers to the Congressional Budget Office
Council of Economic Advisers, Executive Office of the President		•	Editorial boards of Health Affairs and the Journal of Health Economics
•	Member (2005 - 2007)	•	Member of the Institute of Medicine
•	Senior Economist (2001 - 2002)
Qualifications: Dr. Baicker is a leading researcher in the fields of health economics, public economics, and labor economics. As a valued adviser to numerous health care-related commissions and committees, her expertise in health care policy and health care delivery is recognized in both academia and government.



J. Erik Fyrwald, age 56, director since 2005
Board Committees: Public Policy and Compliance (chair); Science and Technology
Career Highlights		E.I. duPont de Nemours and Company, a global chemical company
Univar, Inc.,a leading distributor of industrial and specialty chemicals and provider of related services
		•	Group Vice President, agriculture and nutrition (2003 - 2008)
•	President and Chief Executive Officer (2012 - present)
Nalco Company, a provider of integrated water treatment and process improvement services, chemicals and equipment programs for industrial and institutional applications		Other Board Service
		•	Private boards: Amsted Industries
•	Chairman and Chief Executive Officer (2008 - 2011)	•	Non-profit boards: Society of Chemical Industry; Amsted Industries; The Chicago Public Education Fund; Field Museum of Chicago, Trustee
Ecolab, a leading cleaning and sanitization and water treatment products and services company

•	President (2012)
Qualifications: Mr. Fyrwald has a strong record of operational and strategic leadership in three complex worldwide businesses with a focus on technology and innovation. He is an engineer by training and has significant CEO experience with Univar and Nalco.



Ellen R. Marram, age 69, director since 2002, lead director since 2012
Board Committees: Compensation; Directors and Corporate Governance (chair)
Career Highlights		Other Board Service
The Barnegat Group LLC, provider of business advisory services • President (2006 - present)		•	Public boards: Ford Motor Company, The New York Times Company
North Castle Partners, LLC		•	Prior public boards: Cadbury plc
•	Managing Director (2000 - 2006)	•	Private boards: Newman's Own, Inc.
Tropicana Beverage Group		•	Non-profit boards: Wellesley College; Institute for the Future; New York-Presbyterian Hospital; Lincoln Center Theater; and Families and Work Institute
•	President and Chief Executive Officer (1993 - 1998)
Nabisco Biscuit Company, a unit of Nabisco, Inc.
•	President and Chief Executive Officer (1988 - 1993)
Qualifications: Ms. Marram is a former CEO with a strong marketing and consumer-brand background. Through her nonprofit and private company activities, she has a special focus and expertise in wellness and consumer health. Ms. Marram has extensive corporate governance experience through service on other public company boards in a variety of industries.



Jackson P. Tai, age 65, director since 2013
Board Committees: Audit; Finance
Career Highlights		Other Board Service
DBS Group Holdings and DBS Bank (formerly the Development Bank of Singapore), one of the largest financial services groups in Asia		•	Public boards: The Bank of China Limited, MasterCard Incorporated, Royal Philips NV

•	Vice Chairman and Chief Executive Officer (2002-2007)	•	Prior boards: Singapore Airlines; NYSE Euronext; ING Groep NV; CapitaLand (Singapore); DBS Group Holdings and DBS Bank
•	President and Chief Operating Officer (2001-2002)
J.P. Morgan & Co. Incorporated, a leading global financial institution
•	25 year career in investment banking, including senior management responsibilities in New York, Tokyo and San Francisco
Qualifications: Mr. Tai is a former CEO with extensive experience in international business and finance, and is an audit committee financial expert. He has deep expertise in the Asia-Pacific region, a key growth market for Lilly. He also has broad corporate governance experience from his service on public company boards in the U.S., Europe, and Asia.



Name	Fees Earned or Paid in Cash ($)	Stock Awards ($) ¹	All Other Compensation and Payments ($) ²	Total ($) ³
Mr. Alvarez	$106,000	$145,000	$0	$251,000
Dr. Baicker	$102,250	$145,000	$0	$247,250
Sir Winfried Bischoff	$112,000	$145,000	$0	$257,000
Mr. Eskew	$121,000	$145,000	$1,500	$267,500
Mr. Fyrwald	$112,000	$145,000	$35,000	$292,000
Dr. Gilman	$118,000	$145,000	$14,500	$277,500
Mr. Hoover	$106,000	$145,000	$30,000	$281,000
Ms. Horn	$119,500	$145,000	$5,250	$269,750
Dr. Kaelin	$60,083	$84,583	$11,200	$155,867
Ms. Marram	$134,500	$145,000	$30,000	$309,500
Mr. Oberhelman	$106,000	$145,000	$33,750	$284,750
Dr. Prendergast	$103,000	$145,000	$0	$248,000
Ms. Seifert	$103,000	$145,000	$13,650	$261,650



Name	Outstanding Stock Options (Exercisable)	Weighted Average Exercise Price
Sir Winfried Bischoff	5,600	$65.48
Dr. Gilman	5,600	$65.48
Ms. Horn	5,600	$65.48
Ms. Marram	5,600	$65.48
Dr. Prendergast	5,600	$65.48
Ms. Seifert	5,600	$65.48


◦	Leading the Board’s processes for selecting and evaluating the CEO;


◦	Presiding at all meetings of the Board at which the chairman is not present;


◦	Serving as a liaison between the chairman and the independent directors;


◦	If requested by major shareholders, ensures that she is available for consultation and direct communication;


◦	Approving meeting agendas and schedules and generally approving information sent to the Board;


◦	Conducting executive sessions of the independent directors;


◦	Overseeing the independent directors' annual performance evaluation of the chairman and CEO; and


◦	Together with the Directors and Corporate Governance Committee, leading the director recruitment process.

Management recommendation

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Ratify the appointment of Ernst & Young LLP as the company's principal independent auditor for 2016

Majority of
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