<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Eli Lilly and Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Eli Lilly and Company
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] 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:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
LILLY
ELI LILLY AND COMPANY
LILLY CORPORATE CENTER
INDIANAPOLIS, INDIANA 46285
March 6, 1995
Dear Shareholder:
It is my pleasure to extend to you a cordial invitation to attend the 1995
Annual Meeting of Shareholders of Eli Lilly and Company on Monday, April 17,
1995. The meeting will be at the Indiana Convention Center, 100 South Capitol
Avenue, Indianapolis, Indiana, at 11:00 a.m. Please complete and return the
enclosed reply card if you plan to attend. An admittance card will be sent to
shareholders who return the card.
The Notice of Annual Meeting of Shareholders and the Proxy Statement
accompanying this letter describe the business we will consider at the meeting.
In particular I would like to call to your attention the three nominees who are
standing for election to the Board for the first time. Mrs. Kathi P. Seifert,
Dr. Alfred G. Gilman, and Dr. Franklyn G. Prendergast have distinguished
academic and professional careers and will bring important and diverse
experiences to the Board. We believe they will make important contributions as
members of the Board of Directors.
Your vote is very important. I urge you to sign, date, and return the
enclosed proxy card in the envelope provided in order to be certain your shares
are represented at the meeting, even if you plan to attend the meeting.
I look forward to seeing you at the meeting.
/s/ Randall L. Tobias
Randall L. Tobias
Chairman of the Board and
Chief Executive Officer
<PAGE>
ELI LILLY AND COMPANY
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 17, 1995
The Annual Meeting of Shareholders of Eli Lilly and Company will be held at
the Indiana Convention Center, 100 South Capitol Avenue, Indianapolis, Indiana,
on Monday, April 17, 1995, at 11:00 a.m. (local time), for the following
purposes:
1. To elect six directors of the Company, five for a three-year term and
one to serve the remaining year of a three-year term;
2. To ratify the appointment by the Board of Directors of Ernst & Young LLP
as principal independent auditors for the year 1995; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Holders of common stock of record at the close of business on February 10,
1995, are entitled to notice of and to vote at the Annual Meeting. If you plan
to attend the meeting, please complete the enclosed reply card and return it to
the Company. An admittance card will be mailed to you.
By order of the Board of Directors,
Daniel P. Carmichael
Secretary
March 6, 1995
Indianapolis, Indiana
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. IF YOU DO NOT EXPECT TO ATTEND THE ANNUAL MEETING, OR
IF YOU DO PLAN TO ATTEND BUT WISH TO VOTE BY PROXY, PLEASE DATE, SIGN, AND MAIL
PROMPTLY THE ENCLOSED PROXY, FOR WHICH A RETURN ENVELOPE IS PROVIDED.
DIRECTIONS TO THE INDIANA CONVENTION CENTER AND INFORMATION CONCERNING PARKING
WILL BE SENT TO SHAREHOLDERS WHO REQUEST AN ADMITTANCE CARD.
<PAGE>
ELI LILLY AND COMPANY
PROXY STATEMENT
----------------
ANNUAL MEETING OF SHAREHOLDERS
April 17, 1995
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Eli Lilly and Company (the "Company") of proxies to be
voted at the Annual Meeting of Shareholders to be held on Monday, April 17,
1995, and at any adjournment thereof.
The accompanying proxy may be revoked at any time before it is exercised by
giving a later proxy, notifying the Secretary of the Company in writing, or
voting in person at the Annual Meeting.
At the close of business on February 10, 1995, the record date for the Annual
Meeting, there were outstanding and entitled to vote 292,260,706 shares of
common stock of the Company. Each shareholder is entitled to one vote for each
such share held of record on that date on all matters that are properly
presented for action at the meeting. The Company has no other outstanding
voting securities.
A copy of the Company's Annual Report to Shareholders, including financial
statements and a description of its operations for the year 1994, is enclosed
with this Proxy Statement. That report is not incorporated in this Proxy
Statement by reference.
The principal executive offices of the Company are located at Lilly Corporate
Center, Indianapolis, Indiana 46285. The approximate mailing date of this Proxy
Statement and the accompanying proxy will be March 6, 1995.
1. ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
The shareholders are requested to vote for six nominees for director. The
terms of four directors will expire at this Annual Meeting. In addition, the
Board has increased the number of directors from 13 to 15.
Three of the nominees whose terms expire at this Annual Meeting, Dr. Steven
C. Beering, Mr. James W. Cozad, and Mr. Randall L. Tobias, were elected for a
three-year term by the shareholders at the 1992 Annual Meeting. The fourth
nominee, Mrs. Kathi P. Seifert, has not previously served as a director.
Mrs. Seifert was nominated to fill the position previously held by Mr. Ben F.
Love, who will retire effective at this Annual Meeting. Dr. Franklyn G.
Prendergast and Dr. Alfred G. Gilman, who have not previously served as
directors, were designated by the Board to fill the vacancies created by the
increase in the number of directors, subject to their election by shareholders
at the Annual Meeting.
Under the Company's Articles of Incorporation, the members of the Board are
divided into three classes with approximately one-third of the directors
standing for election each year for three-year terms. To attain this result,
the Board has assigned Dr. Gilman to the class of directors whose term will
expire at the 1996 Annual Meeting of Shareholders. The other five nominees have
been nominated to serve for a term of three years, expiring at the Annual
Meeting in 1998. The other directors listed below will continue to serve in
their positions for the remainder of their terms. The election of all six
nominees will result in five directors serving in each of the three classes.
<PAGE>
Directors will be elected by a plurality of the votes cast. Only votes cast
for a nominee will be counted, except that the accompanying proxy will be voted
for the six nominees in the absence of instructions to the contrary.
Abstentions, broker non-votes, and instructions on the accompanying proxy card
to withhold authority to vote for one or more of the nominees will result in
the respective nominees receiving fewer votes. However, the number of votes
otherwise received by the nominee will not be reduced by such action.
In the event any nominee for director declines or is unable to serve, it is
intended either that the persons designated as proxies will vote for a
substitute who will be designated by the Board of Directors or that the
authorized number of directors will be reduced accordingly by the Board. The
Board expects that each of the nominees named below will be available for
election.
CERTAIN INFORMATION CONCERNING DIRECTOR NOMINEES AND DIRECTORS CONTINUING IN
OFFICE
The names of each director nominee and each director continuing in office,
along with his or her age, year first served as a director, and recent business
and professional experience, is set forth below by class.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERMS ENDING IN 1998:
STEVEN C. BEERING, M.D. Director since 1983
PRESIDENT, PURDUE UNIVERSITY Age 62
Black & White Dr. Beering has served as President of Purdue University since
photograph of 1983. He served as Dean of the Indiana University School of
Steven C. Medicine and Director of the Indiana University Medical Center
Beering from 1974 until 1983. Dr. Beering is a fellow of the American
College of Physicians and the Royal Society of Medicine and a
member of the National Academy of Sciences Institute of
Medicine. He is a director of American United Life Insurance
Company; Arvin Industries, Inc.; Guidant Corporation; and
NIPSCO Industries, Inc. Dr. Beering is also a director of the
Indiana Business Modernization and Technical Corporation; the
Corporation of Innovative Development; and the Indiana State
Chamber of Commerce.
JAMES W. COZAD Director since 1989
RETIRED CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE Age 68
OFFICER, WHITMAN CORPORATION
Black & White Mr. Cozad served as Chairman of the Board and Chief Executive
photograph of Officer of Whitman Corporation from 1990 until his retirement
James W. Cozad in 1992. Prior to assuming that position, he served as Vice
Chairman of the Board and as a Vice President of Amoco
Corporation. Mr. Cozad is a director of GATX Corporation;
Guidant Corporation; Inland Steel Industries, Inc.; Sears
Roebuck & Co.; and Whitman Corporation. He is also a director
of the Chicago Medical School and the Indiana University
Foundation. Mr. Cozad is a Trustee of the Northern Funds.
FRANKLYN G. PRENDERGAST, M.D., PH.D. New Nominee
PROFESSOR IN BIOCHEMISTRY AND MOLECULAR Age 49
BIOLOGY AND PROFESSOR IN PHARMACOLOGY,
MAYO MEDICAL SCHOOL
Black & White Dr. Prendergast has served as Professor in Biochemistry and
photograph of Molecular Biology and Professor in Pharmacology at Mayo
Franklyn G. Medical School since 1986. He held several other teaching
Prendergast positions at the school since 1975. Dr. Prendergast serves on
the Board of Governors of Mayo Rochester and on the Board of
Trustees of Mayo Foundation.
2
<PAGE>
KATHI P. SEIFERT New Nominee
GROUP PRESIDENT, Age 45
KIMBERLY-CLARK CORPORATION
Black & White Mrs. Seifert is Group President, North American Consumer
photograph of Products, for Kimberly-Clark Corporation, responsible for the
Kathi P. Feminine Care, Adult Care, and Household Products Businesses.
Seifert She joined Kimberly-Clark in 1978 and has served in several
capacities in connection with both the domestic and
international marketing of consumer products.
RANDALL L. TOBIAS Director since 1986
CHAIRMAN OF THE BOARD AND Age 52
CHIEF EXECUTIVE OFFICER
Black & White Mr. Tobias became Chairman of the Board and Chief Executive
photograph of Officer of the Company in 1993. Prior to assuming this
Randall L. position, he served as Vice Chairman of the Board of American
Tobias Telephone and Telegraph Company ("AT&T") from 1986 until 1993.
In addition, Mr. Tobias served as Chairman and Chief Executive
Officer of AT&T International (an AT&T subsidiary) from 1991
to 1993. Mr. Tobias is a director of DowElanco; Guidant
Corporation; Kimberly-Clark Corporation; Knight-Ridder, Inc.;
and Phillips Petroleum Company. He also serves as Vice
Chairman of the Board of Trustees of Duke University; a
trustee of the Colonial Williamsburg Foundation; and a
director of the Indiana University Foundation.
NOMINEE FOR DIRECTOR FOR ONE-YEAR TERM ENDING IN 1996:
ALFRED G. GILMAN, M.D., PH.D. New Nominee
REGENTAL PROFESSOR AND CHAIRMAN, Age 53
DEPARTMENT OF PHARMACOLOGY,
UNIVERSITY OF TEXAS SOUTHWESTERN
MEDICAL CENTER AT DALLAS
Black & White Dr. Gilman has served as Professor and Chairman of the
photograph of Department of Pharmacology at the University of Texas
Alfred G. Southwestern Medical Center at Dallas since 1981. He has held
Gilman the Raymond Willie Distinguished Chair in Molecular
Neuropharmacology at the University since 1987 and was named a
Regental Professor in 1995. Dr. Gilman was on the faculty of
the University of Virginia School of Medicine from 1971 until
1981, where he was named a Professor of Pharmacology in 1977.
He is a director of Regeneron Pharmaceuticals, Inc. Dr. Gilman
was a recipient of the Nobel Prize in Physiology or Medicine
in 1994.
DIRECTORS CONTINUING IN OFFICE UNTIL 1996:
JAMES M. CORNELIUS Director since 1986
VICE PRESIDENT, FINANCE, AND Age 51
CHIEF FINANCIAL OFFICER
Black & White Mr. Cornelius has served as Vice President, Finance, and Chief
photograph of Financial Officer of the Company since 1983. He has also
James M. served as Treasurer of the Company. Mr. Cornelius joined the
Cornelius Company in 1967. He is Chairman of the Board of Guidant
Corporation and serves as a director of CompuServe
Incorporated, DowElanco, and The National Bank of
Indianapolis. Mr. Cornelius also serves on the Advisory Board
of The Walker Group and as a trustee of the University of
Indianapolis.
3
<PAGE>
KAREN N. HORN, PH.D. Director since 1987
CHAIRMAN OF THE BOARD AND Age 51
CHIEF EXECUTIVE OFFICER, BANK ONE,
CLEVELAND, N.A.
Black & White Mrs. Horn has served as Chairman of the Board and Chief
photograph of Executive Officer of Bank One, Cleveland, N.A., since 1987.
Karen N. Horn Prior to joining Bank One, she served as President of the
Federal Reserve Bank of Cleveland, Treasurer of Bell of
Pennsylvania, and Vice President of First National Bank of
Boston. Mrs. Horn is a director of Guidant Corporation, The
British Petroleum Company p.l.c., Rubbermaid Incorporated, and
TRW, Inc. She also serves as Vice Chairman of the Board of
Trustees of Case Western Reserve University and as a trustee
of The Rockefeller Foundation and The Cleveland Clinic
Foundation.
J. CLAYBURN LA FORCE, JR., PH.D. Director since 1981
DEAN EMERITUS, JOHN E. ANDERSON Age 66
GRADUATE SCHOOL OF MANAGEMENT,
UNIVERSITY OF CALIFORNIA AT LOS ANGELES
Black & White Dr. La Force served as Dean of the John E. Anderson Graduate
photograph of School of Management of the University of California at Los
J. Clayburn Angeles ("UCLA") from 1978 until he retired in 1993. He joined
La Force, Jr. the faculty of UCLA in 1962 and served as Chairman of the
Economics Department. Dr. La Force is a director of BlackRock
Funds; Imperial Credit Industries, Inc.; Jacobs Engineering
Group, Inc.; Payden and Rygel Fund; Provident Investment
Counsel Funds; Rockwell International Corporation; and The
Timken Company.
AUGUST M. WATANABE, M.D. Director since 1994
VICE PRESIDENT AND PRESIDENT, Age 53
LILLY RESEARCH LABORATORIES
Black & White Dr. Watanabe was elected to the Board of Directors and a Vice
photograph of President of the Company and President of Lilly Research
August M. Laboratories, a division of the Company, effective January
Watanabe 1994. He joined the Company in 1990 as Vice President of Lilly
Research Laboratories and served as Group Vice President of
Lilly Research Laboratories before being elected to his
present position. Prior to joining the Company, Dr. Watanabe
was a member of the faculty of the Indiana University School
of Medicine from 1972 to 1990, where he served as Chairman of
the Department of Medicine from 1983 through 1990. He is also
a fellow of the American College of Physicians and the
American College of Cardiology and a director of the Indiana
University Foundation.
DIRECTORS CONTINUING IN OFFICE UNTIL 1997:
KENNETH L. LAY, PH.D. Director since 1993
CHAIRMAN OF THE BOARD AND Age 52
CHIEF EXECUTIVE OFFICER,
ENRON CORP.
Black & White Mr. Lay has served as Chairman of the Board and Chief
photograph of Executive Officer of Enron Corp. since 1986 and 1985,
Kenneth L. Lay respectively. He joined Enron as President and Chief Operating
Officer in 1985. Prior to serving in that position, he was
President and Chief Executive Officer of Houston Natural Gas
from 1984 to 1985 and Chairman, Chief Operating Officer, and a
director of Transco Energy Company from 1981 to 1984. Mr. Lay
is a director of Compaq Computer Corporation and Trust Company
of the West.
4
<PAGE>
STEPHEN A. STITLE Director since 1991
VICE PRESIDENT, CORPORATE AFFAIRS Age 49
Black & White Mr. Stitle has served as Vice President of Corporate Affairs
photograph of since 1993. He previously served as Vice President, Human
Stephen A. Resources, from 1988 until 1993. Mr. Stitle, who joined the
Stitle Company in 1971, has served as President and General Manager
of Eli Lilly Canada Inc. and as Secretary of the Company. Mr.
Stitle is a director of National City Corporation and National
City Bank, Indiana. He serves as a trustee of DePauw
University and the Christian Theological Seminary and as a
director of the Indiana University Foundation.
SIDNEY TAUREL Director since 1991
EXECUTIVE VICE PRESIDENT AND Age 46
PRESIDENT, PHARMACEUTICAL
DIVISION
Black & White Mr. Taurel has served as Executive Vice President of the
photograph of Company and President of its Pharmaceutical Division since
Sidney Taurel 1993. Mr. Taurel joined the Company in 1971 and has held
management positions in the Company's operations in Brazil and
Europe. He served as President of Eli Lilly International
Corporation from 1986 until 1991 and as Executive Vice
President of the Pharmaceutical Division from 1991 until 1993.
Mr. Taurel is a director of the Pharmaceutical Research and
Manufacturers of America and serves on the Board of Overseers
of the Columbia Business School.
ALVA O. WAY Director since 1980
CHAIRMAN OF THE BOARD, IBJ Age 65
SCHRODER BANK & TRUST COMPANY
Black & White Mr. Way became Chairman of the Board of IBJ Schroder Bank &
photograph of Trust Company in 1986. He also serves as a director of and
Alva O. Way consultant to Schroder plc., London, and related companies.
Mr. Way previously served as President of both The Travelers
Corporation and American Express Company and served in
executive positions at General Electric Company. He is a
director of Gould, Inc.; Guidant Corporation; McGraw-Hill,
Inc.; Ryder System, Inc.; and Schroder plc. Mr. Way also
serves as a member of the board of trustees and chancellor of
Brown University.
RICHARD D. WOOD Director since 1971
RETIRED CHAIRMAN OF THE BOARD, Age 68
PRESIDENT, AND CHIEF EXECUTIVE
OFFICER
Black & White Mr. Wood served as Chief Executive Officer of the Company from
photograph of 1973 until his retirement in 1991 and as its Chairman of the
Richard D. Board from 1973 until 1993. He also served as President of the
Wood Company from 1972 until 1973 and from 1977 until his
retirement. Mr. Wood joined the Company in 1950. He is a
director of Amoco Corporation, Chemical Banking Corporation,
The Chubb Corporation, and Dow Jones & Company, Inc. Mr. Wood
also serves as a trustee of DePauw University.
During 1994 the Board of Directors of the Company held 12 meetings. No
director attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings of all
committees of the Board of Directors on which the director served.
COMMITTEES OF THE BOARD OF DIRECTORS
Committees of the Board of Directors consist of the Audit Committee, the
Committee on Directors and Corporate Governance, the Compensation and
Management Development Committee, the Finance Committee, and the Public Policy
Committee. Information concerning the committees is set forth below.
5
<PAGE>
The Audit Committee is composed of Directors Way (Chairperson), Beering, La
Force, and Love. During 1994 the Audit Committee held three meetings. The Audit
Committee annually recommends independent auditors for appointment by the Board
of Directors, reviews the services to be performed by the independent auditors,
and receives and reviews the reports submitted by them. It also determines the
duties and responsibilities of the internal auditors, reviews the internal
audit program, and receives and reviews reports submitted by the internal
auditing staff.
The Committee on Directors and Corporate Governance is composed of Directors
Horn (Chairperson), Beering, Cozad, Lay, Love, and Tobias (ex officio). The
Committee held two meetings during 1994. The Committee on Directors and
Corporate Governance recommends to the Board of Directors candidates for
membership on the Board and Board committees. It also oversees matters of
corporate governance. The Committee will consider nominees for the Board
recommended by shareholders. Recommendations by shareholders should be
forwarded to the Secretary of the Company and should identify the nominee by
name and provide pertinent information concerning his or her background and
experience. A shareholder recommendation must be received at least 90 days
prior to the date of the Annual Meeting of Shareholders.
The Compensation and Management Development Committee is composed of
Directors Cozad (Chairperson), Horn, La Force, and Way. This Committee held
five meetings during 1994. The Compensation and Management Development
Committee establishes the compensation of executive officers and administers
the Deferred Compensation Plan, the Company's management stock plans, and the
Executive Bonus Plan, which replaced the Senior Executive Bonus Plan in 1995.
The Committee also reviews the Company's management development programs and
succession plans.
The Finance Committee is composed of Directors Lay (Chairperson), Cornelius,
Cozad, Horn, Tobias (ex officio), Watanabe, and Wood. The Committee, which held
five meetings during 1994, reviews and makes recommendations to the Board of
Directors and management on matters concerning both current and long-range
financial strategy and planning, including, but not limited to, budgets,
dividends, and borrowings.
The Public Policy Committee is composed of Directors Beering (Chairperson),
Lay, Love, Stitle, Taurel, and Wood. During 1994 the Committee held two
meetings. The Public Policy Committee reviews and makes recommendations to the
Board of Directors concerning policies, practices, and procedures of the
Company that relate to public policy, including, but not limited to, social,
political, and economic issues.
COMMON STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of common stock of the
Company beneficially owned by the directors, the nominees, the Named Executive
Officers listed on page 10, and all directors and executive officers as a
group, as of February 1, 1995.
6
<PAGE>
<TABLE>
<CAPTION>
NAME OF INDIVIDUALS OR SHARES OWNED
IDENTITY OF GROUP BENEFICIALLY(1)
---------------------- --------------
<S> <C>
Steven C. Beering, M.D................................... 2,763
James M. Cornelius....................................... 85,894(2)
James W. Cozad........................................... 2,600
Alfred G. Gilman, M.D., Ph.D............................. -0-
Karen N. Horn, Ph.D...................................... 2,500
J. B. King*.............................................. 29,746(3)
J. Clayburn La Force, Jr., Ph.D.......................... 2,600
Kenneth L. Lay, Ph.D..................................... 5,816(4)
Ben F. Love.............................................. 9,600
Franklyn G. Prendergast, M.D., Ph.D...................... -0-
Kathi P. Seifert......................................... 500
Stephen A. Stitle........................................ 46,346(5)
Sidney Taurel............................................ 29,544(6)
Randall L. Tobias........................................ 57,684(7)
August M. Watanabe, M.D.................................. 15,045(8)
Alva O. Way.............................................. 3,180(9)
Richard D. Wood.......................................... 220,598(10)
All directors and executive officers as a group (24 per-
sons)................................................... 636,782
</TABLE>
- --------
*Mr. King retired as an officer of the Company effective February 28, 1995.
(1) Unless otherwise indicated in a footnote, each person listed in the table
possesses sole voting and sole investment power with respect to the shares
shown in the table to be owned by that person. The shares shown do not
include the following shares that may be purchased pursuant to stock
options that are exercisable within 60 days of February 1, 1995: Mr.
Cornelius, 64,800 shares; Mr. King, 93,164 shares; Mr. Stitle, 55,000
shares; Mr. Taurel, 66,691 shares; Dr. Watanabe, 4,500 shares; Mr. Wood,
250,000 shares; and all directors and executive officers as a group,
655,565 shares. The shares shown include shares credited to the accounts
of certain of those persons listed in the table under The Lilly Employee
Savings Plan ("Savings Plan"). No person listed in the table owns more
than .075% of the outstanding common stock of the Company. All directors
and executive officers as a group own .218% of the outstanding common
stock of the Company.
(2) Mr. Cornelius' wife owns 8,328 shares of those shown in the table, and he
disclaims any beneficial interest therein. The shares shown for Mr.
Cornelius include 6,290 shares credited to his account under the Savings
Plan.
(3) The shares shown for Mr. King include 1,047 shares credited to his account
under the Savings Plan.
(4) Mr. Lay has shared voting power and shared investment power with respect
to 5,000 shares that are included in the table and are owned by a family
partnership of which he is a partner.
(5) Mr. Stitle's children own 550 shares of those shown in the table, and he
disclaims any beneficial interest therein. The shares shown for Mr. Stitle
include 5,240 shares credited to his account under the Savings Plan.
(6) The shares shown for Mr. Taurel include 2,824 shares credited to his
account under the Savings Plan.
(7) Mr. Tobias has shared voting power and shared investment power with
respect to 20,000 shares that are included in the table and are owned by a
family foundation of which he is a director. The shares shown for Mr.
Tobias include 190 shares credited to his account under the Savings Plan.
(8) The shares shown for Dr. Watanabe include 636 shares credited to his
account under the Savings Plan.
(9) Mr. Way's wife owns 180 shares of those shown in the table, and he
disclaims any beneficial interest therein.
(10) Mr. Wood's wife owns 10,020 shares of those shown in the table, and he
disclaims any beneficial interest therein.
7
<PAGE>
The following table sets forth the names of those directors, nominees, and
Named Executive Officers listed above who own beneficially shares of common
stock of Guidant Corporation, a subsidiary of the Company, and the number of
shares beneficially owned by each such individual and by all directors and
executive officers of the Company as a group, as of February 1, 1995. Guidant
Corporation was created by the Company in 1994 as a holding company for five
subsidiaries of the Company engaged in the medical devices business. The
Company owns 80.156% of the outstanding Guidant common stock, which is traded
publicly.
<TABLE>
<CAPTION>
NAME OF INDIVIDUALS OR SHARES OWNED
IDENTITY OF GROUP BENEFICIALLY(1)
---------------------- --------------
<S> <C>
James M. Cornelius....................................... 50,000
J. B. King............................................... 2,000(2)
All directors and executive officers as a group (24 per-
sons)................................................... 53,000
</TABLE>
- --------
(1) Except as set forth in footnote (2) below, each person listed in the table
possesses sole voting power and sole investment power with respect to the
shares shown in the table to be owned by that person. No director or
executive officer of the Company has the right to acquire beneficial
ownership of common stock of Guidant Corporation within 60 days of February
1, 1995. No person listed in the table owns more than .001% of the
outstanding common stock of Guidant. All directors and executive officers
as a group own less than .001% of the outstanding common stock of Guidant.
(2) Mr. King retired as an officer of the Company effective February 28, 1995.
Mr. King's wife owns 1,000 shares of those shown in the table, and he
disclaims any beneficial interest therein.
PRINCIPAL HOLDERS OF COMMON STOCK
To the best of the Company's knowledge, and except as set out below, Lilly
Endowment, Inc., is the only beneficial owner of more than 5% of the
outstanding shares of common stock of the Company. The following table sets
forth information regarding this ownership as of February 1, 1995:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OWNED OF CLASS
---------------- ------------------ --------
<S> <C> <C>
Lilly Endowment, Inc. ........................... 47,715,342 16.330
2801 North Meridian Street
Indianapolis, Indiana 46208
</TABLE>
The Endowment has sole voting and sole investment power with respect to these
shares. The Endowment may be deemed to be a parent of the Company as that term
is defined for purposes of the Securities Act of 1933. The Board of Directors
of the Endowment is composed of Mr. Thomas H. Lake, Honorary Chairman; Mr.
Thomas M. Lofton, Chairman; Otis R. Bowen, M.D.; Drs. William G. Enright, Earl
B. Herr, Jr., and Herman B Wells; and Messrs. Byron P. Hollett, Eli Lilly II,
and Eugene F. Ratliff. Drs. Bowen and Herr and Messrs. Hollett, Lake, Lilly,
Lofton, and Ratliff are shareholders of the Company. The Endowment and Guidant
Corporation, a subsidiary of the Company, have entered into a Registration
Rights Agreement that provides the Endowment with certain registration rights
with respect to shares of Guidant stock it may acquire pursuant to the planned
distribution of Guidant stock in 1995 by the Company.
As of February 1, 1995, National City Bank, Indiana ("NCBI"), held 20,206,279
shares of the Company's common stock (6.915% of the outstanding shares) in
various fiduciary capacities. Over half of the shares are held by it as trustee
under the Savings Plan, savings plans of affiliated companies, and the employee
stock ownership plan. In addition, NCBI holds such shares for various parties
in personal trusts, agency and custodial accounts, pension accounts, estates,
and guardianships. NCBI has sole voting power with respect to 7,881,658 shares,
shared voting power with respect to 1,000 shares, sole investment power with
respect to 1,230,637 shares, shared investment power with respect to 3,342,935
shares, and the right to vote an additional 9,532,819 shares in the savings
plans to the extent it is not instructed on how to vote such shares by plan
participants.
8
<PAGE>
DIRECTORS' COMPENSATION
Each director who is not a salaried officer or employee of the Company
receives a retainer of $2,500 per month. In addition, each such director
receives $1,600 for each Board meeting attended and $1,600 for each Committee
or other meeting attended if not held on the same day as a Board meeting. Each
such director also is reimbursed for customary and usual traveling expenses
incurred by reason of attendance at such meetings. Employee directors receive
no additional compensation for service on the Board of Directors or Committees.
Under the Directors' Deferred Compensation Plan, each director who is not an
employee of the Company may elect each year to defer all or part of his or her
director's fees (but not less than $1,000) by filing an irrevocable election
with the Company before the beginning of the year or such shorter period for
which the election may be effective. The deferred compensation is credited to
an account that receives a Company credit on all amounts deferred at an annual
rate that is 2% above the prime interest rate. The amount in each participating
director's account, including the accrued Company credit, will be paid in
accordance with the payment option selected by the participating director at
the time the irrevocable election is made. Under the Plan, a participating
director may elect to receive either lump sum or installment payments (not
exceeding 10 installments). There are alternate payment provisions for cases of
death and hardship. The aggregate amount of the Company credit accrued during
1994 for the participating directors was $81,820.
Each director who has never been a full-time employee of the Company
participates in the Non-Employee Directors' Deferred Stock Plan. Under the
Plan, the Company credits annually on the first business day in December to the
account of each participating director 400 shares of the Company's common
stock. These shares are not issued or transferred until the director's death or
retirement or resignation from the Board. In addition, the Company credits to
the director's account an amount equal to the dividends that would be payable
on the credited shares if the shares were actually held of record by the
director. The director is entitled to a Company credit on the dividend amounts
at an annual rate that is 2% above the prime interest rate. Receipt of the
dividend amounts and Company credit is deferred until the director's death or
retirement or resignation from the Board. The director may elect to receive the
shares and cash in his or her Plan accounts, including the Company credit, in
lump sum or installment payments (not exceeding 10 installments). There are
alternate payment provisions for cases of death and hardship. The shares
credited to the directors' accounts are included in the table on page 7.
In lieu of participating in the Non-Employee Directors' Deferred Stock Plan,
each director who is a former full-time employee of the Company receives
additional annual cash compensation equal to the closing price of 400 shares of
the Company's common stock on the first business day in December. The amount is
payable the earlier of July 1 of the year following the award or the date of
the director's death or retirement or resignation from the Board, except that
the director may elect to defer receipt of the award.
Each director or former director who has served as a director for at least
five years, is not a salaried employee of the Company, and is not eligible to
receive benefits under The Lilly Retirement Plan is entitled to receive
retirement benefits under The Lilly Non-Employee Directors' Retirement Plan.
Monthly benefits under this non-contributory plan are payable beginning the
month following retirement as a director and are equal to the monthly retainer
in effect on the retirement date. Directors who served 15 years or more receive
benefits for life. Directors who served five years or more, but less than 15
years, receive benefits for a time period equal to their length of service as a
director. The Plan also provides for monthly payments to the spouse of a
deceased director based on the length of service of the director.
9
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following Summary Compensation Table shows the compensation paid to Mr.
Tobias, who served as Chief Executive Officer of the Company during 1994, and
the four most highly compensated executive officers other than Mr. Tobias who
were serving as executive officers as of December 31, 1994 ("Named Executive
Officers"). The compensation of the Named Executive Officers is reported for
each of the last three years, except for Mr. Tobias, who became an executive
officer of the Company in June 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION (1)
---------------------
ANNUAL COMPENSATION AWARDS PAYOUTS(2)
------------------------------------- ---------- ----------
NUMBER OF
SECURITIES LONG-TERM
UNDERLYING INCENTIVE
NAME AND PRINCIPAL OTHER OPTIONS PLAN ALL OTHER
POSITION YEAR SALARY BONUS ANNUAL COMPENSATION GRANTED PAYOUTS COMPENSATION
- ------------------ ---- -------- -------- ------------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Randall L. Tobias 1994 $984,000 $864,995 $ 9,059 125,000 $962,868 $59,040(3)
Chairman of the Board 1993 503,182 418,861 787,709 200,000 -0- 25,650
and Chief Executive
Officer
Sidney Taurel 1994 600,000 455,249 35,411 40,000 511,988 36,240(3)
Executive Vice 1993 540,000 430,287 -0- 110,000 -0- 46,689
President and 1992 438,000 320,935 11,523 20,000 -0- 21,024
President, Pharma-
ceutical Division
James M. Cornelius 1994 555,900 339,771 10,271 25,000 442,622 33,354(3)
Vice President, 1993 537,900 321,140 386 35,000 -0- 57,198
Finance, and Chief 1992 519,900 320,935 -0- 18,000 -0- 34,955
Financial Officer
Stephen A. Stitle 1994 432,000 222,065 11,516 20,000 340,224 25,920(3)
Vice President, 1993 414,000 209,888 -0- 35,000 -0- 44,795
Corporate Affairs 1992 396,000 209,755 787 18,000 -0- 26,625
J. B. King* 1994 438,600 222,065 17,374 40,000(4) 340,224 26,316(3)
Vice President and 1993 423,600 209,888 251 30,000 -0- 37,202
General Counsel 1992 408,600 209,755 5,655 12,000 -0- 27,472
</TABLE>
- --------
* Mr. King retired as an officer of the Company effective February 28, 1995.
(1) During the years indicated, restricted stock was not awarded and stock
appreciation rights were not granted. Mr. King held 6,000 shares of
restricted stock valued at $393,750 as of December 31, 1994.
(2) Amounts paid in Company common stock (except for amounts paid in cash to
satisfy federal income tax withholding requirements) in February 1995 under
the performance award program for the period January 1, 1993, through
December 31, 1994.
(3) Company contribution to the named individual's account in the Savings Plan.
(4) Mr. King was not granted an option to purchase Company common stock.
However, Guidant Corporation, a subsidiary of the Company, granted Mr.
King, who is Vice President, General Counsel, and Secretary of Guidant
Corporation, an option to purchase 40,000 shares of Guidant stock. See the
table entitled "Option Shares Granted in Last Fiscal Year" on page 11.
10
<PAGE>
Stock Option Grants
The following table provides information on options to purchase Company
common stock granted in 1994 to the Named Executive Officers pursuant to the
1994 Lilly Stock Plan, except for Mr. King, who received an option to purchase
Guidant Corporation common stock granted by Guidant Corporation pursuant to the
Guidant Corporation 1994 Stock Plan.
OPTION SHARES GRANTED IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL OPTION
SECURITIES SHARES GRANTED EXERCISE OR GRANT DATE
UNDERLYING TO EMPLOYEES BASE PRICE EXPIRATION PRESENT
NAME OPTIONS GRANTED IN FISCAL YEAR(2) PER SHARE(3) DATE VALUE(4)
---- --------------- ----------------- ----------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Randall L. Tobias....... 125,000 5.20 $58.63 10/15/04(5) $1,947,500
Sidney Taurel........... 40,000 1.67 58.63 10/15/04(5) 623,200
James M. Cornelius...... 25,000 1.04 58.63 10/15/04(5) 389,500
Stephen A. Stitle....... 20,000 0.83 58.63 10/15/04(5) 311,600
J. B. King (Guidant
shares)................ 40,000 4.75 14.50 12/10/04(6) 326,000
</TABLE>
- --------
(1) Stock appreciation rights were not granted during 1994.
(2) Percent of total Lilly option shares or Guidant option shares, as
applicable.
(3) Market price of the stock on the date of grant.
(4) These values were established using the Black-Scholes stock option
valuation model that was modified to include dividends. Assumptions used to
calculate the Grant Date Present Value of option shares granted during 1994
were:
LILLY OPTION SHARES
(a) Expected Volatility--The variance in the percent change in daily
stock price during the six-month period immediately preceding each
grant, which was 23.24%.
(b) Risk Free Rate of Return--The average monthly rate for 10-year U.S.
Treasury obligations during the month of grant as published in the
Federal Reserve Statistical Release, which was 7.74%.
(c) Dividend Yield--The yield calculated by dividing the annualized
dividend rate of the Company's common stock in the amount of $2.50
per share by the fair market value of the stock on the date of
grant, which resulted in an assumed dividend yield of 4.26%.
(d) Time of Exercise--The maximum exercise period for each grant at the
time of the grant, which was 10 years.
GUIDANT OPTION SHARES
(a) Expected Volatility--The average variance in the percent change in
daily stock prices of eight companies in the medical device industry
during the six-month period immediately preceding the grant, which
was 31.66%. The price of Guidant Corporation common stock was not
used because the stock was not publicly traded prior to the grant of
the option.
(b) Risk Free Rate of Return--The average monthly rate for 10-year U.S.
Treasury obligations during the month of grant as published in the
Federal Reserve Statistical Release, which was 7.81%.
(c) Dividend Yield--The yield calculated by dividing the annualized
dividend rate of Guidant Corporation's common stock in the amount of
$.10 per share by the fair market value of the stock on the date of
grant, which resulted in an assumed dividend yield of .69%.
(d) Time of Exercise--The maximum exercise period for each grant at the
time of the grant, which was 10 years.
11
<PAGE>
The valuation model was not adjusted for non-transferability, risk of
forfeiture, or the vesting restrictions of the options. The Company
does not believe that the Black-Scholes model, whether modified or not
modified, or any other valuation model, is a reliable method of
computing the present value of the Company's employee stock options.
The value ultimately realized, if any, will depend on the amount that
the market price of the stock exceeds the exercise price on the date
of exercise.
(5) These options will become exercisable 10/17/97.
(6) This option will become exercisable 12/15/97.
Stock Option Exercises and Option Values
The following table contains information concerning stock options exercised
during 1994 and stock options unexercised at the end of 1994 with respect to
the Named Executive Officers.
AGGREGATED OPTION SHARES EXERCISED IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED,
NUMBER OF OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS
SHARES END AT FISCAL YEAR-END(2)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Randall L. Tobias....... -0- -0- -0- 325,000 -0- $4,802,000
Sidney Taurel........... 4,331 $139,079 46,691 170,000 $527,435 1,710,700
James M. Cornelius...... 6,200 96,535 46,800 78,000 365,618 832,150
Stephen A. Stitle....... -0- -0- 37,000 73,000 278,120 796,550
J. B. King (Lilly
shares).......... 2,836 46,440 51,164 42,000 801,622 560,700
(Guidant shares).... -0- -0- -0- 40,000 -0- 60,000
</TABLE>
- --------
(1) All options are for common stock of the Company except Mr. King holds
options for common stock of both the Company and Guidant Corporation. Stock
appreciation rights were not exercised during 1994 and no stock
appreciation rights were outstanding on December 31, 1994.
(2) Represents the amount by which the market price of the common stock of the
Company or Guidant, as applicable, exceeded the exercise prices of
unexercised options on December 31, 1994.
12
<PAGE>
Long-Term Incentive Awards
The following table provides information on long-term performance awards
granted in 1994 to the Named Executive Officers pursuant to the 1994 Lilly
Stock Plan.
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYMENTS
UNDER
NON-STOCK PRICE BASED
PLANS(3)
--------------------------
PERFORMANCE
NUMBER OF PERIOD MAXIMUM
SHARES UNTIL THRESHOLD TARGET #
NAME AWARDED PAYOUT # SHARES # SHARES SHARES
---- --------- ----------- --------- -------- -------
<S> <C> <C> <C> <C> <C>
Randall L. Tobias.............. 8,400(1) 2 years 5,400 8,400 19,000
8,400(2) 2 years 5,400 8,400 19,000
Sidney Taurel.................. 3,625(1) 2 years 2,575 3,625 10,000
3,625(2) 2 years 2,575 3,625 10,000
James M. Cornelius............. 3,100(1) 2 years 2,150 3,100 8,700
3,100(2) 2 years 2,150 3,100 8,700
Stephen A. Stitle.............. 2,075(1) 2 years 1,350 2,075 7,000
2,075(2) 2 years 1,350 2,075 7,000
J. B. King..................... 2,075(1) 2 years 1,350 2,075 7,000
</TABLE>
- --------
(1) Represents the targeted award amount payable in February 1996 if earned for
the fiscal years 1994-1995 award period.
(2) Represents the targeted award amount payable in February 1997 if earned for
the fiscal years 1995-1996 award period.
(3) Payouts are determined by the aggregate earnings per share (EPS) level for
the award period. The target amount will be paid for each award period in
which 100% of the targeted EPS is achieved; the threshold amount will be
paid for the 1994-1995 award period if at least 96% of the targeted EPS is
achieved and for the 1995-1996 award period if at least 95% of the targeted
EPS is achieved; and the maximum amount will be paid for the 1994-1995
award period if 112% or more of the targeted EPS is achieved and for the
1995-1996 award period if 114% or more of the targeted EPS is achieved. No
payment will be made for the 1994-1995 award period unless at least 96% of
the targeted EPS level is achieved and no payment will be made for the
1995-1996 award period unless at least 95% of the targeted EPS is achieved.
13
<PAGE>
Compensation and Management Development Committee Report
The Compensation and Management Development Committee (the "Committee")
consists of four non-employee directors. The Committee regularly reviews the
executive compensation policies and practices of the Company and establishes
the salaries of executive officers. The Committee also administers the Deferred
Compensation Plan and the Company's cash bonus plan and stock plans covering
executive officers. Committee members during 1994 were Mr. Cozad (Chairperson),
Mrs. Horn, Dr. La Force, and Mr. Way.
A. Executive Compensation Policy
The Committee's executive compensation policy is founded on principles that
guide the Company in establishing all its compensation programs. The Company
designs compensation programs to attract, retain, and motivate highly talented
individuals at all levels of the organization. In addition, the programs are
designed to be cost-effective and to treat all employees fairly. To that end,
all programs, including those for executive officers, share these
characteristics:
. Compensation of Lilly employees is based on the level of job
responsibility, the individual's level of performance, and Company
performance. Members of senior management have a greater portion of
their pay based on Company performance than other employees.
. Compensation also reflects the value of the job in the marketplace.
To retain its highly skilled work force, the Company strives to
remain competitive with the pay of employers of a similar stature who
compete with the Company for talent.
. To more closely align the interest of employees with those of
shareholders, the Company provides employees at all levels of the
organization the opportunity for equity ownership. Employees
worldwide are given the opportunity to own Company common stock
through the Company's savings plans and other programs. In addition,
executive officers and other key employees worldwide have the
opportunity to build more substantial equity ownership through
Company stock plans.
. Compensation programs are developed and administered to foster the
long-term focus required for success in the research-based
pharmaceutical industry.
The Committee believes that the Company's executive compensation program
reflects the fundamental principles described above and provides executives
strong incentives to maximize Company performance and therefore enhance
shareholder value. The program consists of both annual and long-term
components. The Committee believes that the various components of compensation
should be considered collectively in order to properly assess the
appropriateness of the Company's program to the attainment of its objectives.
In establishing total compensation, the Committee considers a variety of
measures of historical and projected Company performance. This review includes
such measures as sales, net income, return on shareholders' equity, return on
sales, return on assets, sales and net income per employee, and total market
value. This data forms the basis for the Committee's assessment of the overall
performance and prospects of the Company that underpins the Committee's
judgment in establishing total compensation ranges. In evaluating these factors
the Committee does not assign relative weights or rankings to each, rather it
makes a subjective determination based on a collective consideration of all
such factors.
The Committee also compares the Company's total compensation package (and, to
the extent possible, the compensation of individual executive officers) with
those global pharmaceutical companies of comparable size and stature to the
Company that constitute the "Peer Group" for the Performance Graph on page 18.
The Peer Group companies are identified in a footnote to the Performance Graph.
The Committee uses the Peer Group data primarily as benchmarks to ensure that
the Company's total compensation is within the broad middle range of
comparative pay of the Peer Group companies. The Committee does not, however,
14
<PAGE>
target a specific position in the range of comparative data for each individual
or for each component of compensation. Individual amounts are established in
view of the comparative data and such other factors as level of responsibility,
prior experience, and the Committee's subjective judgment as to individual
contribution. These factors are not assigned specific mathematical weights;
rather, the Committee exercises its judgment and discretion in the information
it reviews and the analysis it considers.
The Company also retains periodically outside compensation and benefits
consultants to assist in the evaluation of salary and incentive compensation
programs for the Company's executive officers. Such independent consultants
provide an additional measure of assurance that the Company's programs are
reasonable and appropriate to the Company's objectives.
The Committee believes that the Company's overall compensation program is
appropriate and competitive and that the compensation levels of the Company's
executive officers are appropriate relative to corporate performance and the
compensation levels of persons in similar positions within the Peer Group.
B. Components of Executive Compensation
Annual Compensation. Annual compensation for 1994 consists of two components,
base salary and a cash bonus under the Senior Executive Bonus Plan ("SEB
Plan"). Individual base salary increases are determined primarily by individual
performance. Assessment of an individual's performance includes consideration
of a person's impact on financial performance as well as judgment, creativity,
effectiveness in developing subordinates and a diverse organization, and
contributions to improvement in the quality of the Company's products,
services, and operations.
Annual cash bonuses are paid to senior executives under the SEB Plan. Bonuses
are formula-driven based on percentages of the Company's consolidated annual
net income after taxes and annual net sales. The formulas are structured such
that the larger portion of the bonus amounts will be determined by net income.
Before the beginning of the year, the Committee selected the SEB Plan
participants and determined for each the level of participation for the year.
The Committee's goal was for the 1994 annual cash bonus to be within the broad
middle range of annual cash bonuses of the Peer Group.
Long-Term Incentives. Two forms of long-term incentives are used for
executive officers--performance awards and stock options. These incentives
emphasize the long-term focus necessary for continued success in the research-
based pharmaceutical business. The Company has also emphasized the importance
of substantial equity ownership by individuals in leadership roles to ensure
proper focus on shareholder value. Stock options and performance awards have
traditionally been granted broadly and deeply within the organization, with
approximately 1,700 management and professional employees, in addition to the
executive officers, eligible to receive performance awards and stock options.
Performance awards provide recipients the opportunity to earn shares of
Company common stock annually if certain performance goals are achieved. The
awards are structured as a schedule of shares of common stock based on the
Company's achievement of specific cumulative earnings-per-share ("EPS") levels
over a two-year award period. Individual award size varies depending on the
recipient's level of responsibility and performance. Normally the Committee
grants performance awards to executive officers once each calendar year.
However, in 1994, the Committee granted performance awards for two award
periods. The first grant, for the award period 1994-1995 (payable in 1996 if
the EPS goals are achieved), was made after the shareholders approved the 1994
Lilly Stock Plan ("Stock Plan") at the shareholders meeting in April. The
second, for the award period 1995-1996 (payable in 1997 if the EPS goals are
achieved), was granted in December.
For many years, stock options have been an important part of the performance-
based compensation of Company management. Stock options provide a strong
incentive to increase shareholder value, since Company stock options have value
only if the stock price increases over time. The Company's 10-year
15
<PAGE>
options, granted at the market price on the date of grant, ensure that
management and professional employees are oriented to growth over the long term
and not simply to short-term profits. In addition, the options create an
incentive to remain with the Company for the long term because they carry a
three-year vesting period and, if not exercised, are forfeited if the employee
leaves the Company before retirement. The size of grants to executive officers
in 1994 was based on the same factors considered in granting performance
awards. The Committee also considered the size of grants to individuals in
previous years and internal relativity.
Adjustments for Extraordinary Events. The Committee also believes that
employees, including executive officers, should not be penalized by the
implementation of strategic actions that reduce current earnings. Therefore,
consistent with past practices, the Committee adjusted the financial results on
which awards were determined under the SEB Plan, the 1993-94 performance
awards, and the Company's non-executive cash bonus plans to eliminate the
effect of certain strategic actions and special charges. The adjustments were
made to take into account the effect of the acquisition of Sphinx
Pharmaceuticals Corporation and PCS Health Systems, Inc., and a recall of oral
antibiotics. In the view of the Committee, the actions, while having an
unfavorable effect on 1994 earnings, are in the best long-term interest of the
Company and the shareholders.
Deductibility Cap on Executive Compensation. Beginning in 1994, a new federal
tax law disallows corporate deductibility for certain compensation paid in
excess of $1 million to the chief executive officer and the four other most
highly paid executive officers. "Performance-based compensation," as defined in
the tax law, is not subject to the deductibility limitation provided certain
shareholder approval and other requirements are met. Stock option and
performance award compensation under the Stock Plan qualifies as "performance-
based compensation," and therefore is fully deductible. The Committee decided,
however, to not qualify the SEB Plan, since to do so would have limited the
Committee's flexibility in the administration of the Plan. Further, because
certain executive officers deferred receipt of their bonuses, the loss of
deductibility with respect to the SEB for 1994 would have been nominal.
Additionally, the Committee has decided to defer action on whether to qualify a
new annual cash bonus program that has replaced the SEB Plan. The anticipated
loss of deductibility, if any, from deferring action is expected to be nominal
as the Company has a deferred compensation plan. The Committee will continue to
review the Company's executive compensation plans over the next year to
determine what changes if any should be made as the result of the limitation on
deductibility.
C. Chief Executive Officer Compensation
The compensation of Randall L. Tobias, Chairman of the Board and Chief
Executive Officer, consists of the same components as for other senior
executives, namely base salary, SEB, performance awards, and stock options.
In establishing Mr. Tobias' compensation package for 1994, the Committee
reviewed the financial and business performance for 1993. The review was based
on a number of factors including sales, earnings, unit volume, profit margins,
return on equity, growth in earnings, and total shareholder return. The
Committee did not assign relative weights or rankings to each of these factors
but rather made a subjective determination based on a consideration of all such
factors collectively. In addition, the Committee took note of the significant
strategic actions and financial restructuring initiated by Mr. Tobias including
the divestiture of the medical devices and diagnostics companies, acquisitions
and alliances to strengthen the Company's core pharmaceutical business, the
consolidation and rationalization of certain manufacturing operations, and
restructuring of other operations to better position the Company to compete in
the changing and challenging global health care environment.
Mr. Tobias' base salary for 1994 was $984,000, the level established by the
Committee when Mr. Tobias became Chairman and Chief Executive Officer in June,
1993. Because base salaries for all employees, including Mr. Tobias, were
administered on an 18-month cycle, he was not considered for a merit salary
adjustment for 1994.
16
<PAGE>
Consistent with the goal of linking a significant portion of management's
compensation to Company performance, Mr. Tobias' 1994 SEB formula was set such
that if targeted sales and earnings were achieved, the performance-based cash
bonus would represent approximately 45% of combined salary and bonus. The SEB
was also targeted to be within the middle range relative to other CEOs of Peer
Group companies.
In April the Committee provided Mr. Tobias a performance award to be earned
over the two-year award period 1994-95. If earnings per share performance
targets are achieved, the award will pay out 8,400 shares of the Company's
common stock in 1996. A similar performance award was granted to Mr. Tobias in
December 1994 for the 1995-96 award period. That award will also provide Mr.
Tobias with 8,400 shares of common stock if the target for the period is
attained. In determining the size of each award, the Committee considered
internal relativity and the value of similar awards granted to CEOs in the Peer
Group. The value of the awards was within the middle range of other Peer Group
companies.
In October, the Committee granted Mr. Tobias an option to purchase 125,000
shares of the Company's common stock at $58.63 per share, the market price of
the stock on the date of the grant. In determining the size of the grant, the
Committee considered Mr. Tobias' strong leadership in initiating the strategic
and financial actions designed to better position the Company for long-term
growth. The Committee also took note of the number of shares subject to options
he was granted in 1993. The 1994 grant was larger relative to the other
executive officers of the Company because it was made in lieu of an increase in
Mr. Tobias' base salary for 1995. The Committee believed the larger stock grant
was a more appropriate way of rewarding Mr. Tobias' performance since it more
closely aligns his total compensation with the strategic initiatives he
implemented and, ultimately, the interests of shareholders.
D. Committee Action Affecting 1995 Compensation
The Committee made several decisions in 1994 that will affect compensation of
the Chief Executive Officer and other executive officers beginning in 1995.
First, the salary reviews of executive officers, as with all Company employees,
will be administered annually, rather than on 18-month cycles. Also, the
Committee decided that stock option grants should be made on an annual basis
with the number of option shares in each grant being reduced from past levels
when grants were made on a less frequent basis. The Committee also adopted a
new annual cash bonus plan for senior executives that replaced the SEB Plan.
The new plan, The Eli Lilly and Company Executive Bonus Plan, is based on the
concept of economic value added, a comprehensive measure of financial
performance that incorporates both asset and income management. The performance
measures under this plan more closely align the bonus payment with management
efforts that enhance shareholder value.
Compensation and Management Development Committee
James W. Cozad, Chairperson
Karen N. Horn, Ph.D. J. Clayburn La Force, Jr., Ph.D. Alva. O. Way
17
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the cumulative total shareholder
return on the Company's common stock with Standard & Poor's 500 Stock Index and
the Peer Group* for the years 1990 through 1994. The graph is constructed on
the assumption that $100 was invested on December 31, 1989, in each of the
Company's common stock, the S&P 500 Stock Index, and the Peer Group common
stock.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN **
AMONG LILLY, S&P 500 STOCK INDEX, AND PEER GROUP
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement period S & P PEER
(Fiscal year Covered) LILLY INDEX GROUP
- --------------------- --------- --------- ---------
<S> <C> <C> <C>
Measurement PT -
12/31/89 $ 100 $ 100 $ 100
FYE 12/31/90 $ 109 $ 97 $ 121
FYE 12/31/91 $ 128 $ 126 $ 201
FYE 12/31/92 $ 96 $ 136 $ 166
FYE 12/31/93 $ 99 $ 150 $ 152
FYE 12/31/94 $ 114 $ 152 $ 169
</TABLE>
- --------
* The Peer Group has been constructed by the Company as the industry index for
purposes of the performance graph. This Peer Group, which consists of 9
companies in the pharmaceutical industry, consists of the same companies
used by the Company to compare compensation of executive officers. The
companies included in the Peer Group are Abbott Laboratories; American Home
Products Corporation; Bristol-Myers Squibb Company; Glaxo Holdings p.l.c.;
Merck & Co.; Pfizer, Inc.; SmithKline Beecham p.l.c.; The Upjohn Company;
and Warner-Lambert Company. The Peer Group was reduced from 10 companies to
9 companies upon the acquisition in 1994 by American Home Products
Corporation of American Cyanamid Company.
** Total return assumes reinvestment of dividends.
18
<PAGE>
RETIREMENT PLAN
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------
AVERAGE ANNUAL
EARNINGS
(HIGHEST
5 OF LAST 10
YEARS) 5 10 15 20 25 30
-------------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 700,000............ $ 48,230 $ 96,460 $144,690 $192,920 $ 241,150 $ 289,385
900,000............ 62,275 124,550 186,820 249,095 311,370 373,645
1,100,000............ 76,315 152,635 228,950 305,270 381,585 457,905
1,300,000............ 90,360 180,720 271,080 361,445 451,805 542,165
1,500,000............ 104,405 208,810 313,210 417,615 522,020 626,425
1,700,000............ 118,445 236,895 355,340 473,790 592,235 710,685
1,900,000............ 132,490 264,980 397,470 529,965 662,455 794,945
2,100,000............ 146,535 293,070 439,600 586,135 732,670 879,205
2,300,000 ........... 160,580 321,155 481,730 642,310 802,890 963,465
2,500,000............ 174,620 349,240 523,865 698,485 873,105 1,047,725
2,700,000............ 188,665 377,330 565,995 754,655 943,320 1,131,985
2,900,000............ 202,710 405,415 608,125 810,830 1,013,540 1,216,245
</TABLE>
The Pension Plan Table sets forth a range of annual retirement benefits for
graduated levels of average annual earnings (consisting of Salary, Bonus, and
Long-Term Incentive Plan Payouts as set forth in the Summary Compensation Table
on page 10) and years of service for the life of a retired employee, assuming
retirement at age 65 with a 50% survivor income benefit. The amounts shown in
the table are not subject to deduction for social security benefits.
The years of service credited to the Named Executive Officers are Mr. Tobias,
16 years; Mr. Taurel, 23 years; Mr. Cornelius, 27 years; Mr. Stitle, 24 years;
and Mr. King, 7 years.
Section 415 of the Internal Revenue Code ("Code") generally places a limit of
$120,000 on the amount of annual pension benefits that may be paid at age 65
from a plan such as the Company's Retirement Plan. The Code also places a
$9,240 limit, subject to adjustment by the Internal Revenue Service, on annual
contributions by an employee to the Company's Savings Plan and, in addition,
imposes a combined limitation when an employee is covered by both types of
plans. Under an unfunded plan adopted in 1975, however, the Company will make
payments as permitted by the Code to any employee who is a participant in the
Retirement Plan or the Savings Plan in an amount equal to the difference, if
any, between the benefits that would have been payable under such plans without
regard to the limitations imposed by the Code and the actual benefits payable
under such plans as so limited.
CHANGE-IN-CONTROL SEVERANCE PAY ARRANGEMENTS
The Company has adopted a change-in-control severance pay program ("Program")
covering most employees of the Company and its subsidiaries, including the
Company's executive officers. In general, the Program would provide severance
payments and benefits to eligible employees and executive officers in the event
of their termination of employment under certain circumstances within fixed
periods of time following a change in control. A "change-in-control" would
occur if 20% or more of the Company's voting stock were acquired by an entity
other than the Company, a subsidiary, an employee benefit plan of the Company,
or Lilly Endowment, Inc. There are additional conditions that could result in a
change-in-control event. The Program would not be subject to amendment by the
Board, whether prior to or following a change-in-control, in any manner adverse
to a participant without his or her prior written consent.
19
<PAGE>
Under the portion of the Program covering the Named Executive Officers, each
would be entitled to severance payments and benefits in the event that his or
her employment is terminated following a change-in-control (i) without "cause"
by the Company; (ii) for "good reason" by the executive officer, each as is
defined in the Program; or (iii) for a limited period of time, for any reason
by the executive officer. In such case, the executive officer would be entitled
to a severance payment equal to three times his or her current annual cash
compensation. Additional benefits would include a pension supplement and full
and immediate vesting of all stock options and other equity incentives. In the
event that any payments made in connection with the change-in-control would be
subject to the excise tax imposed under Section 4999 of the Internal Revenue
Code as a result of the aggregate compensation payments and benefits made to
the individual, under the Program or otherwise, in connection with a change-in-
control, the Company is obligated to make whole the individual with respect to
such excise tax.
2. PROPOSAL TO RATIFY APPOINTMENT OF PRINCIPAL INDEPENDENT AUDITORS
The Board of Directors, on the recommendation of the Audit Committee, has
appointed the firm of Ernst & Young LLP as principal independent auditors for
the Company for the year 1995. In accordance with the By-laws of the Company,
this appointment will be submitted to the shareholders for ratification. Ernst
& Young LLP served as the principal independent auditors for the Company in
1994. Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will be available to respond to appropriate questions. Those
representatives will have the opportunity to make a statement if they desire to
do so.
Ratification of this appointment requires that the number of votes cast in
favor of ratification exceed the number of votes cast opposing ratification.
Only votes cast for or against ratification will be counted, except that the
accompanying proxy will be voted in favor of ratification in the absence of
instructions to the contrary. Abstentions and broker non-votes will not change
the number of votes cast for or against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG LLP AS PRINCIPAL INDEPENDENT AUDITORS FOR
THE YEAR 1995.
3. OTHER MATTERS
As of the date of this Proxy Statement, the management of the Company has no
knowledge of any matters to be presented for consideration at the meeting other
than those described in this Proxy Statement. If any other matters properly
come before the meeting, the accompanying proxy confers discretionary authority
with respect to those matters, and the persons named in the accompanying form
of proxy intend to vote that proxy to the extent entitled in accordance with
their best judgment.
All expenses in connection with solicitation of proxies will be borne by the
Company. The Company 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.
The Company expects to solicit proxies primarily by mail, but directors,
officers, and other employees of the Company may also solicit in person, by
telephone, by telegraph, or by mail. The Company may retain D. F. King & Co.,
Inc., to assist in the solicitation of proxies. If retained, the firm will
solicit proxies by personal interview, telephone, telegraph, and mail. It is
anticipated that the fee for those services will not exceed $18,000 plus
reimbursement of customary out-of-pocket expenses.
The Corporation Trust Company has been retained to receive and tabulate
proxies and to provide representatives to act as inspectors of election for the
Annual Meeting.
20
<PAGE>
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
The date by which shareholder proposals must be received by the Company for
inclusion in the proxy materials relating to the 1996 Annual Meeting of
Shareholders is November 7, 1995.
By order of the Board of Directors,
Daniel P. Carmichael
Secretary
March 6, 1995
21
<PAGE>
LOGO
PRINTED ON RECYCLED AND RECYCLABLE PAPER
<PAGE>
LILLY
ELI LILLY AND COMPANY
LILLY CORPORATE CENTER
INDIANAPOLIS, INDIANA 46285
March 6, 1995
Dear Savings Plan Participant:
It is my pleasure to provide you a meeting notice, proxy statement, and
voting instruction card for the 1995 Annual Meeting of Shareholders of Eli
Lilly and Company.
The proxy statement describes the business we will consider at the meeting.
In particular I would like to call to your attention the three nominees who are
standing for election to the Board for the first time. Mrs. Kathi P. Seifert,
Dr. Alfred G. Gilman, and Dr. Franklyn G. Prendergast have distinguished
academic and professional careers and will bring important and diverse
experiences to the Board. We believe they will make important contributions as
members of the Board of Directors.
As a participant in the savings plan, you may instruct the Trustee on how to
vote the number of shares of Company stock credited to your account under the
plan. As a member of the Lilly family, your participation in these matters is
very important. I urge you to sign, date, and return the enclosed voting
instruction card in the envelope provided in order to be certain the Trustee is
aware of your views on the matters to be presented at the meeting.
/s/ Randall L. Tobias
Randall L. Tobias
Chairman of the Board and
Chief Executive Officer
<PAGE>
PARTICIPANTS IN
THE LILLY EMPLOYEE SAVINGS PLAN
AND
PARTICIPANTS IN
THE SAVINGS PLANS FOR AFFILIATED COMPANIES
ANNUAL MEETING OF SHAREHOLDERS
APRIL 17, 1995
The Annual Meeting of Shareholders of Eli Lilly and Company will be held at
the Indiana Convention Center, 100 South Capitol Avenue, Indianapolis, Indiana,
on Monday, April 17, 1995, at 11:00 a.m. (local time), for the following
purposes:
1. To elect six directors of the Company, five for a three-year term and
one to serve the remaining year of a three-year term;
2. To ratify the appointment by the Board of Directors of Ernst & Young LLP
as principal independent auditors for the year 1995; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Each participant in the above plans is permitted to instruct the Trustee on
how to vote the number of shares of Company common stock credited to the
participant's account under those plans. For that purpose, the enclosed voting
instruction card is being furnished to each participant in lieu of the proxy
referred to in the accompanying Proxy Statement.
Eli Lilly and Company
March 6, 1995
Indianapolis, Indiana
<PAGE>
ELI LILLY AND COMPANY
The undersigned hereby appoints J.M. Cornelius, R.O. Goss, and R.L. Tobias, and
each of them, as proxies of the undersigned, each with full power to act without
the others and with full power of substitution, to vote all the shares of Common
Stock of ELI LILLY AND COMPANY held in the name of the undersigned at the close
of business on February 10, 1995, at the Annual Meeting of Shareholders to be
held on April 17, 1995, at 11:00 a.m. (local time), and at any adjournment
thereof, with all the powers the undersigned would have if personally present,
as follows:
P R O X Y
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS:
(1) Election of Directors, all nominated as Directors to serve for the terms
indicated in the Proxy Statement
FOR all nominees listed below WITHHOLD AUTHORITY to vote for
(except as marked to the all nominees listed below [_]
contrary below) [_]
S.C. Beering, J.W. Cozad, A.G. Gilman,
F.G. Prendergast, K.P. Seifert, R.L. Tobias
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.
---------------------------------------
(2) Ratification of the appointment by the Board of Directors of Ernst & Young
LLP as principal independent auditors for 1995
[_] FOR [_] AGAINST [_] ABSTAIN
(Continued on other side)
In their discretion, upon such other matters as may properly come before the
meeting, all in accordance with the accompanying Notice and Proxy Statement,
receipt of which is acknowledged.
IF THIS PROXY 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 PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
Dated , 1995
-----------------------
-----------------------------------
-----------------------------------
Sign exactly as name appears
hereon. When signing in a
representative capacity, please
give full title.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
<PAGE>
CONFIDENTIAL VOTING INSTRUCTIONS
TO NATIONAL CITY BANK, INDIANA, TRUSTEE
The undersigned, as a participant in The Lilly Employee Savings Plan or in a
savings plan of an affiliated company, hereby directs the Trustee to vote (in
person or by proxy) the number of shares of Eli Lilly and Company Common Stock
credited to the undersigned's account under those plans or a combination thereof
at the Annual Meeting of Shareholders to be held on April 17, 1995, and at any
adjournment thereof, as follows:
THE BOARD OF DIRECTORS HAS RECOMMENDED TO THE SHAREHOLDERS A VOTE FOR THE
FOLLOWING ITEMS:
(1) Election of Directors, all nominated as Directors to serve for the terms
indicated in the Proxy Statement
FOR all nominees listed below WITHHOLD AUTHORITY to vote for
(except as marked to the all nominees listed below
contrary below) [_] [_]
S.C. Beering, J.W. Cozad, A.G. Gilman,
F.G. Prendergast, K.P. Seifert, R.L. Tobias
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.
---------------------------------------
(2) Ratification of the appointment by the Board of Directors of Ernst & Young
LLP as principal independent auditors for 1995
[_] FOR [_] AGAINST [_] ABSTAIN
(Continued on other side)
In the Trustee's discretion, upon such other matters as may properly come before
the meeting.
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. THE TRUSTEE MAY VOTE, AT ITS
DISCRETION, ANY SHARES OF ELI LILLY AND COMPANY COMMON STOCK IN ANY OF THE PLANS
FOR WHICH VOTING INSTRUCTIONS ARE NOT RECEIVED, EXCEPT THE TRUSTEE MAY ONLY
VOTE THOSE SHARES FORMERLY HELD IN THE LILLY EMPLOYEE STOCK OWNERSHIP PLAN
(PAYSOP) FOR WHICH INSTRUCTIONS HAVE BEEN RECEIVED.
Dated , 1995
----------------------
-----------------------------------
Signature of Participant
PLEASE SIGN, DATE, AND RETURN THIS
CARD ON OR BEFORE APRIL 7, 1995,
IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE.
These confidential voting instructions will be seen only by authorized personnel
of the Trustee.
<PAGE>
CONFIDENTIAL VOTING INSTRUCTIONS
TO FIDELITY MANAGEMENT COMPANY, TRUSTEE
The undersigned, as a participant in The DowElanco Employee Savings Plan, hereby
directs the Trustee to vote (in person or by proxy) the number of shares of Eli
Lilly and Company Common Stock credited to the undersigned's account under the
plan at the Annual Meeting of Shareholders of Eli Lilly and Company to be held
on April 17, 1995, and at any adjournment thereof, as follows:
THE BOARD OF DIRECTORS OF ELI LILLY AND COMPANY HAS RECOMMENDED TO THE
SHAREHOLDERS A VOTE FOR THE FOLLOWING ITEMS:
(1) Election of Directors, all nominated as Directors to serve for the terms
indicated in the Proxy Statement
FOR all nominees listed below WITHHOLD AUTHORITY to vote for
(except as marked to the all nominees listed below [_]
contrary below) [_]
S.C. Beering, J.W. Cozad, A.G. Gilman,
F.G. Prendergast, K.P. Seifert, R.L. Tobias
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.
---------------------------------------
(2) Ratification of the appointment by the Board of Directors of Ernst & Young
LLP as principal independent auditors for 1995
[_] FOR [_] AGAINST [_] ABSTAIN
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF CARD.
(Continued on other side)
In the Trustee's discretion, upon such other matters as may properly come before
the meeting.
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. ANY SHARES OF ELI LILLY AND COMPANY
COMMON STOCK IN THE PLAN FOR WHICH VOTING INSTRUCTIONS ARE NOT RECEIVED WILL BE
VOTED PROPORTIONAL TO THE VOTING OF SHARES FOR WHICH VOTING INSTRUCTIONS ARE
RECEIVED.
These confidential voting instructions will be seen only
by authorized personnel of the Trustee.
Dated , 1995
------------------------
-----------------------------------
Signature of Participant
PLEASE SIGN, DATE, AND RETURN THIS
CARD ON OR BEFORE APRIL 7, 1995,
IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE.
