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                                                                    EXHIBIT 10.6

                      THE LILLY DEFERRED COMPENSATION PLAN

                 (As Amended and Restated as of January 1, 2004)

SECTION 1.  ESTABLISHMENT OF THE PLAN.

There is hereby established for the benefit of Participants an unfunded plan of
voluntarily deferred compensation known as "The Lilly Deferred Compensation
Plan."

SECTION 2.  DEFINITIONS.

When used in the Plan, the following terms shall have the definitions set forth
in this Section 2:

2.1. Base Salary. The term "Base Salary" means the base salary to which a
management employee is entitled for services rendered to the Company as a
management employee.

2.2. Base Salary Year. The term "Base Salary Year" means each calendar year in
which Base Salary deferred under the Plan is earned by a Participant.

2.3. Beneficiary. The term "Beneficiary" means the beneficiary or beneficiaries
(including any contingent beneficiary or beneficiaries) designated pursuant to
subsection 6.2 hereof.

2.4. Board of Directors. The term "Board of Directors" means the Board of
Directors of Eli Lilly and Company.

2.5. Bonus. The term "Bonus" means the payment to which an Eligible Employee is
entitled pursuant to the Contingent Compensation Plan,the Senior Executive Bonus
Plan or the Lilly Executive Bonus Plan (the EVA Bonus Plan) of the Company or
any other similar compensation plan as may from time to time be designated by
the Committee.

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2.6. Bonus Year. The term "Bonus Year" means each calendar year in which a Bonus
deferred under the Plan is earned by a Participant.

2.7. Committee. The term "Committee" means the committee designated in
subsection 9.1 hereof to administer the Plan.

2.8. Company. The term "Company" means Eli Lilly and Company and its affiliates
and subsidiaries.

2.9. Company Credit. The term "Company Credit" means an amount computed and
credited each calendar year or part thereof to Participants' accounts as
described in Section 5 at a rate that is equal to one hundred twenty percent
(120%) of the applicable federal long-term rate, with compounding (as prescribed
under Section 1274(d) of the Internal Revenue Code) that was in effect for the
month of December immediately preceding the calendar year.

2.10. Disability. The term "Disability" means a condition that the Committee
determines (i) is attributable to sickness, injury, or disease and (ii) renders
a Participant incapable of engaging in any activity for remuneration or profit
commensurate with the Participant's education, experience, and training.

2.11. Eligible Employee. The term "Eligible Employee" means a management
employee of the Company who is designated by the Committee as eligible to defer
a Bonus earned in the following year.

2.12. Lilly. The term "Lilly" means Eli Lilly and Company.

2.13. Participant. The term "Participant" means an Eligible Employee who has
elected to defer all or part of a Bonus pursuant to the Plan in accordance with
Section 3.1 hereof or an SEC Executive Officer who has elected to defer all or
part of Base Salary pursuant to the Plan in accordance with Section 3.2 hereof.

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2.14. Plan. The term "Plan" means "The Lilly Deferred Compensation Plan" as set
forth herein and as it may be amended from time to time.

2.15. Retirement. The term "Retirement" means the first day of the month next
following the Participant's last day of work for the Company, but only if such
first day of the month occurs on or after the first to occur of (i) the day on
which the Participant attains age 65 or (ii) the day on which the Participant is
eligible to commence receiving a monthly retirement benefit under a funded,
defined benefit retirement plan maintained by the Company and covering the
Participant.

2.16. SEC Executive Officers. The term "SEC Executive Officers" shall mean those
officers and employees from time to time designated as Executive Officers for
purposes of the proxy statement and Form 10-K.

SECTION 3.  PARTICIPATION.

3.1. Bonuses. Prior to the beginning of each Bonus Year, the Committee shall
select those Eligible Employees who may elect to defer Bonuses pursuant to the
Plan. Upon selection by the Committee and before the beginning of the applicable
Bonus Year, an Eligible Employee may defer the receipt of a Bonus pursuant to
the Plan by filing a written election with the Committee, in a form satisfactory
to the Committee, that

     (i)  defers payment of a designated amount (of One Thousand Dollars
          ($1,000) or more) or percentage of the Bonus, if any, to be earned in
          the Bonus Year, and

     (ii) specifies the payment option selected by the Participant pursuant to
          subsection 6.1 hereof.

The amount deferred may not exceed the amount of the Bonus. Except as provided
in subsections 6.1 and 6.3 hereof, any election made pursuant to this Section 3
(including any

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election made pursuant to paragraphs (i) and (ii), above) with respect to a
Bonus Year shall be irrevocable when made.

Selection of an Eligible Employee for deferral of a Bonus during one year does
not confer upon the Eligible Employee a right to defer Bonuses for subsequent
years. The Eligible Employees who shall be permitted to defer Bonuses pursuant
to the Plan shall be selected annually by the Committee. If an Eligible Employee
is also an SEC Executive Officer as of the beginning of the Bonus Year, the
Eligible Employee may also defer the receipt of Base Salary as provided in
Section 3.2.

3.2. Base Salary. Subject to the right of the Committee to limit deferrals
described below, prior to the beginning of each Compensation Year, an SEC
Executive Officer may defer the receipt of up to one hundred percent (100%) of
Base Salary pursuant to the Plan by filing a written election with the
Committee, in a form satisfactory to the Committee, that

     (i)  defers payment of a designated amount of One Thousand Dollars ($1,000)
          or more or a percentage of Base Salary, and

     (ii) specifies the payment option selected by the Participation pursuant to
          subsection 6.1 hereof.

The amount deferred may not exceed the amount of Base Salary. Except as provided
in subsections 6.1 and 6.3 hereof, any election made pursuant to this Section 3
(including any election made pursuant to paragraphs (i) and (ii), above) with
respect to a Bonus Year shall be irrevocable when made and shall not be affected
by the Participant's ceasing to be an SEC Executive Officer after the beginning
of the Bonus Year.

The Committee reserves the right to limit the amount of Deferrals of Base Salary
to assure that the Company has sufficient funds to cover taxes, benefit
payments, and other necessary and appropriate deductions.

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SECTION 4.  INDIVIDUAL ACCOUNT.

The Treasurer of Lilly shall maintain an account in the name of each
Participant. In the year following the Bonus Year or Base Salary Year, each
Participant's account shall be credited, as of the first day of the month in
which Bonuses or Base Salary are paid, with the amount that the Participant has
elected to defer hereunder. Each Participant shall be given an annual statement,
as of December 31 of each year, showing for each year (i) the amount of Bonuses
or Base Salary deferred and (ii) the amount of the Company Credit to the
Participant's account.

SECTION 5.  ACCRUAL OF COMPANY CREDIT.

The Treasurer of Lilly shall determine the applicable annual rate of Company
Credit on or before December 31 of each calendar year. This rate shall be
effective for the following calendar year. The Company Credit shall accrue
monthly, at one-twelfth of the applicable annual rate, on all amounts credited
to the Participant's account, including the Company Credits for prior years. The
Company Credit shall not accrue on any amount distributed to the Participant (or
to the Participant's Beneficiary) during the month for which the accrual is
determined, except where an amount is distributed to a Beneficiary in the month
of the Participant's death. The Company Credit for each year shall be credited
to each Participant's account as of December 31 of that year and shall be
compounded annually.

SECTION 6.  PAYMENT.

6.1. Payment Options. The Participant shall select a payment election from the
payment options described below. A Participant may elect that his final payment
election control over all prior payment elections. The payment option selected
by a Participant shall provide for payment to the Participant of the amount
credited to the Participant's account in

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     (i)  a lump sum in January of the second calendar year following the
          calendar year in which the Participant's employment terminates by
          reason of Retirement or Disability; or

     (ii) annual installments over a period of two to ten years commencing in
          January of the second calendar year following the calendar year in
          which the Participant's employment terminates by reason of Retirement
          or Disability;

provided, that in no event shall a lump sum be paid or installment payments
begin under any payment option before the first January that begins after any
Bonus that has been deferred under the payment option has been determined. The
Company shall pay the aggregate amounts deferred, together with a proportionate
part of the aggregate Company Credit accrued to the date (or dates) of payment,
in the manner and on the date(s) specified by the Participant. If a payment
option described in paragraph (i), above, has been elected, the amount of the
lump sum shall be equal to the amount credited to the Participant's account as
of the December 31 next preceding the date of the payment. If the payment option
described in paragraph (ii), above, has been elected, the amount of each
installment shall be equal to the amount credited to the Participant's account
as of the December 31 next preceding the date of the installment payment divided
by the number of installment payments that have not yet been made. If the
Participant fails to elect a payment option, the amount credited to the
Participant's account shall be distributed in a lump sum in accordance with the
payment option described in paragraph (i), above. If the amount credited to the
Participant's account is less than $25,000 at any time following the year in
which the Participant's employment terminates by reason of Retirement of
Disability, the Committee, in its sole discretion, may pay out the amount
credited to the Participant's account in a lump sum.

6.2. Payment upon Death. Within a reasonable period of time following the death
of a Participant, the balance in the Participant's account shall be paid in a
lump sum to the Participant's Beneficiary. For purposes of this subsection 6.2,
the balance in the Participant's account shall be determined as of the date of
payment. A Participant may designate the Beneficiary, in writing, in a form
acceptable to the Committee, and filed with the Committee

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before the Participant's death. A Participant may, before the Participant's
death, revoke a prior designation of Beneficiary and may also designate a new
Beneficiary without the consent of the previously designated Beneficiary,
provided that such revocation and new designation (if any) are in writing, in a
form acceptable to the Committee, and filed with the Committee before the
Participant's death. If the Participant does not designate a Beneficiary, or if
no designated Beneficiary survives the Participant, any amount not distributed
to the Participant during the Participant's life shall be paid to the
Participant's estate in a lump sum in accordance with this subsection 6.2.

6.3. Resignation or Dismissal. Within a reasonable time following termination of
a Participant's employment by resignation or dismissal, the balance in the
Participant's account shall be paid in a lump sum to the Participant. For
purposes of this subsection 6.3, the balance in the Participant's account shall
be determined as of a date determined by the Cormittee in its sole discretion.

6.4. Payment on Unforeseeable Emergency. The Administrator may, in its sole
discretion, direct payment to a Participant of all or of any portion of the
Participant's Account balance, notwithstanding an election under Section 6.1.
above, at any time that it determines that such Participant has an unforeseeable
emergency and then only to the extent reasonably necessary to meet the
emergency. For purposes of this rule, "unforeseeable emergency" means severe
financial hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of a dependent of the Participant,
loss of the Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. The circumstances that will constitute an
unforeseeable emergency will depend upon the facts of each case, but, in any
case, payment may not be made to the extent that such hardship is or may be
relieved --

     (i)  Through reimbursement or compensation by insurance or otherwise,

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     (ii) By liquidation of the Participant's assets, to the extent the
          liquidation of such assets would not itself cause severe financial
          hardship, or

     (iii) By cessation of deferrals under the Plan.

Examples of what are not considered to be unforeseeable emergencies include the
need to send a Participant's child to college or the desire to purchase a home.

6.5. Cash Payments. All payments under the Plan shall be made in cash.

SECTION 7.  PROHIBITION AGAINST TRANSFER.

The right of a Participant to receive payments under the Plan may not be
transferred except by will or applicable laws of descent and distribution. A
Participant may not assign, sell, pledge, or otherwise transfer any amount to
which he is entitled hereunder prior to transfer or payment thereof to the
Participant.

SECTION 8.  PARTICIPANT'S RIGHTS UNSECURED.

The Plan is unfunded. The right of any Participant to receive payments under the
Plan shall be an unsecured claim against the general assets of the Company.

SECTION 9.  ADMINISTRATION.

9.1. Committee. The Plan shall be administered by the Compensation and
Management Development Committee of the Board of Directors,the members of which
shall be selected by the Board of Directors from among its members. No member of
the Committee may be a salaried employee of the Company.

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9.2. Powers of the Committee. The Committee's powers shall include, but not be
limited to, the power

     (i)  to select Eligible Employees for participation in the Plan,

     (ii) to interpret the terms and provisions of the Plan and to determine any
          and all questions arising under the Plan, including, without
          limitation, the right to remedy possible ambiguities, inconsistencies,
          or omissions by a general rule or particular decision,

     (iii) to adopt rules consistent with the Plan, and

     (iv) to limit the deferrals of SEC Executive Officers to assure that the
          Company has sufficient funds to cover taxes, benefit payments, and
          other necessary or appropriate deductions.

9.3. Finality of Committee Determinations. Determinations by the Committee and
any interpretation, rule, or decision adopted by the Committee under the Plan or
in carrying out or administering the Plan shall be final and binding for all
purposes and upon all interested persons, their heirs, and personal
representatives.

9.4. Claims Procedures. Any person making a claim for benefits hereunder shall
submit the claim in writing to the Committee. If the Committee denies the claim
in whole or in part, it shall issue to the claimant a written notice explaining
the reason for the denial and identifying any additional information or
documentation that might enable the claimant to perfect the claim. The claimant
may, within 60 days of receiving a written notice of denial, submit a written
request for reconsideration to the Committee, together with a written
explanation of the basis of the request. The Committee shall consider any such
request and shall provide the claimant with a written decision together with a
written explanation thereof. All interpretations, determinations, and decisions
of the committee in respect of any claim shall be final and conclusive.

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9.5. Withholding. The Company shall have the right to deduct from all payments
hereunder any taxes required by law to be withheld from such payments. The
recipients of such payments shall bear all taxes on amounts paid under the Plan
to the extent that no taxes are withheld thereon, irrespective of whether
withholding is required.

9.6. Incapacity. If the Committee determines that any person entitled to
benefits under the Plan is unable to care for his or her affairs because of
illness or accident, any payment due (unless a duly qualified guardian or other
legal representative has been appointed) may be paid for the benefit of such
person to such person's spouse, parent, brother, sister,or other party deemed by
the Committee to have incurred expenses for such person.

9.7. Inability to Locate. If the Committee is unable to locate a person to whom
a payment is due under the Plan for a period of twelve (12) months, commencing
with the first day of the month as of which the payment becomes payable, the
total amount payable to such person shall be forfeited.

9.8. Legal Holidays. If any day on (or on or before) which action under the Plan
must be taken falls on a Saturday, Sunday,or legal holiday, such action may be
taken on (or on or before) the next succeeding day that is not a Saturday,
Sunday,or legal holiday; provided, that this subsection 9.8 shall not permit any
action that must be taken in one calendar year to be taken in any subsequent
calendar year.

SECTION 10. NO EMPLOYMENT RIGHTS.

No provision of the Plan or any action taken hereunder by the Company, the Board
of Directors, or the Committee shall give any person any right to be retained in
the employ of the Company, and the right and power of the Company to dismiss or
discharge any Participant is specifically reserved.

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SECTION 11. AMENDMENT, SUSPENSION, AND TERMINATION.

The Board of Directors shall have the right to amend, suspend, or terminate the
Plan at any time. The Committee shall also have the right to amend the Plan,
except for subsection 9.1 hereof and this Section 11.

SECTION 12. APPLICABLE LAW.

The Plan shall be governed by, and construed in accordance with, the laws of the
State of Indiana, except to the extent that such laws are preempted by Federal
law.

SECTION 13. EFFECTIVE DATE.

This amendment and restatement of the Plan is effective as of January 1, 2004.
Nothing herein shall invalidate or adversely affect any previous election,
designation, deferral, or accrual in accordance with the terms of the Plan that
were then in effect.

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