Eli Lilly 2009 Annual Report Download - page 145

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represent PAs issued in January 2008 (as restricted stock grants) for company performance in 2007 and were subject
to forfeiture until they vested in February 2009.
4
For Mr. Carmine, these shares represent a payout of the SVA granted for the 2007-2009 performance period, which
vested on December 31, 2009. Mr. Carmine (along with all other participants who were not executive officers at the
time of grant) received a payout at 60 percent of target. This SVA did not pay out for any executive officer, because the
company’s stock was below $63.00.
Retirement Benefits
We maintain two plans to provide retirement income to U.S. employees, including executive officers:
•The 401(k) plan, adefined contribution plan qualified under Sections 401(a) and 401(k) of the Internal
Revenue Code. Participants may elect to contribute a portion of their salary to the plan, and the company
provides matching contributions on employees’ contributions, in the form of company stock, up to six percent
of base salary. The employee contributions, company contributions, and earnings thereon are paid out in
accordance with elections made by the participant. See the Summary Compensation Table for information
about company contributions to the named executive officers.
•The retirement plan, a tax-qualified defined benefit plan that provides monthly benefits to retirees. See the
Summary Compensation Table for additional information about the value of these pension benefits.
Sections 401 and 415 of the Internal Revenue Code generally limit the amount of annual pension that can be
paid from a tax-qualified plan ($195,000 in 2009) as well as the amount of annual earnings that can be used to
calculate a pension benefit ($245,000 in 2009). However, since 1975, the company has maintained a nonqualified
pension plan that pays retirees the difference between the amount payable under the retirement plan and the
amount they would have received without the retirement plan’s limits. The nonqualified pension plan is unfunded
and subject to forfeiture in the event of bankruptcy.
The following table shows benefits that the named executive officers are entitled to under the retirement
plan and the nonqualified pension plan.
Pension Benefits in 2009
Name Plan Number of Years of
Credited Service Present Value of
Accumulated Benefit ($)
1
Payments During
Last Fiscal Year ($)
Dr. Lechleiter
2
retirement plan 30 $1,031,202
nonqualified plan 30 $13,041,165
total $14,072,367 $0
Dr. Paul
3
retirement plan 17 $489,493
nonqualified plan 17 $8,506,726
total $8,996,219 $0
Mr. Carmine
4
retirement plan 34 $1,313,142
nonqualified plan 34 $6,036,729
total $7,349,871 $0
Mr. Rice retirement plan 20 $364,482
nonqualified plan 20 $1,871,870
total $2,236,352 $0
Mr. Armitage
5
retirement plan 10 $266,953
nonqualified plan 10 $2,181,780
total $2,448,733 $0
1
The calculation of the present value of the accumulated benefit assumes a discount rate of 6.0 percent, mortality RP
2000CH (post-retirement decrement only), and a joint and survivor benefit of 50 percent until age 62 and 25 percent
thereafter.
2
Dr. Lechleiter is currently eligible for early retirement. He qualifies for approximately five percent less than his full
retirement benefit. Early retirement benefits are further described below.
3
Dr. Paul retired effective February 28, 2010 and qualified for a full retirement benefit. His additional service credit,
described below, increased the present value of his nonqualified pension benefit, shown above, by $3,306,938.
4
Mr. Carmine is currently eligible for full retirement benefits.
5
Mr. Armitage is currently eligible for early retirement. His additional service credit, described below, increased the
present value of his nonqualified pension benefit by $440,772. The amount shown above is approximately two percent
less than his full retirement benefit.
The retirement plan benefits shown in the table are net present values. The benefits are not payable as a
lump sum; they are generally paid as a monthly annuity for the life of the retiree and any qualifying survivor. The
47
PROXY STATEMENT