Eli Lilly 2008 Annual Report Download - page 107

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PROXY STATEMENT
105105
following issuance. For Mr. Taurel, these amounts also include a performance award issued in January 2008 for
company performance in 2007, which vested upon his retirement.
Retirement Benefi ts
We maintain two programs to provide retirement income to all eligible U.S. employees, including executive offi cers:
• The Lilly Employee 401(k) Plan, a defi ned contribution plan qualifi ed under Sections 401(a) and 401(k) of the
Internal Revenue Code. Eligible employees may elect to contribute a portion of their salary to the plan, and
the company provides matching contributions on the employees’ contributions up to six percent of base salary.
The matching contributions are in the form of Lilly stock. The employee contributions, company contributions,
and earnings thereon are paid out in accordance with elections made by the participant. See the Summary
Compensation Table on page 100 for information about company contributions to the named executive offi cers.
• The Lilly Retirement Plan (the retirement plan), a tax-qualifi ed defi ned benefi t plan that provides monthly
retirement benefi ts to eligible employees. See the Summary Compensation Table on page 100 for additional
information about the value of these pension benefi ts.
Section 415 of the Internal Revenue Code generally places a limit on the amount of annual pension that can be
paid from a tax-qualifi ed plan ($185,000 in 2008) as well as on the amount of annual earnings that can be used to
calculate a pension benefi t ($230,000 in 2008). However, since 1975 the company has maintained a non-tax-quali-
fi ed pension plan that pays eligible employees the difference between the amount payable under the tax-qualifi ed
plan and the amount they would have received without the qualifi ed plan’s limit. The nonqualifi ed pension plan is
unfunded and subject to forfeiture in the event of bankruptcy.
The following table shows benefi ts that named executive offi cers are entitled to under the retirement plan.
Pension Benefi ts in 2008
Name Plan
Number of Years of
Credited Service
Present Value of
Accumulated Benefi t ($) 1
Payments During Last
Fiscal Year ($)
Mr. Taurel tax-qualifi ed plan 36 $1,164,665
nonqualifi ed plan 36 $29,699,031
total $30,863,696 $0
Dr. Lechleiter 2 tax-qualifi ed plan 29 $820,109
nonqualifi ed plan 29 $8,699,133
total $9,519,242 $0
Dr. Paul 3 tax-qualifi ed plan 16 $289,080
nonqualifi ed plan 16 $3,998,445
total $4,287,525 $0
Mr. Carmine 4 tax-qualifi ed plan 33 $1,159,841
nonqualifi ed plan 33 $4,413,493
total $5,573,334 $0
Mr. Rice tax-qualifi ed plan 19 $259,527
nonqualifi ed plan 19 $999,084
total $1,258,611 $0
Mr. Armitage 5 tax-qualifi ed plan 10 $2,201,713
nonqualifi ed plan 10 $1,198,148
total $3,399,861 $0
1 The calculation of present value of accumulated benefi t assumes a discount rate of 6.9 percent, mortality RP
2000CH (post-retirement decrement only), and joint and survivor benefi t of 25 percent.
2 Dr. Lechleiter is currently eligible for early retirement. He qualifi es for approximately eight percent less than his
full retirement benefi t. Early retirement benefi ts are further described below.
3 Dr. Paul is currently eligible for early retirement. He qualifi es for approximately 20 percent less than his full
retirement benefi t. Dr. Paul’s potential additional service credit, described below, increased the present value of
his nonqualifi ed pension benefi t shown above by $1,531,259.
4 Mr. Carmine is currently eligible for full retirement benefi ts.
5 Mr. Armitage is currently eligible for early retirement. His additional service credit, described below, does not
change the present value of his nonqualifi ed pension benefi t, which is approximately fi ve percent less than his full
retirement benefi t.