The Eli Lilly and Company Bonus Plan

(as amended effective January 1, 2014)

- 1 -

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

TABLE OF CONTENTS

SECTION 1. PURPOSE1
SECTION 2. DEFINITIONS1
SECTION 3. ADMINISTRATION6
SECTION 4. PARTICIPATION IN THE PLAN7
SECTION 5. DEFINITION AND COMPUTATION OF COMPANY BONUS7
SECTION 6. TIME OF PAYMENT11
SECTION 7. ADMINISTRATIVE GUIDELINES12
SECTION 8. MISCELLANEOUS12
SECTION 9. AMENDMENT, SUSPENSION, OR TERMINATION14

- i -

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

The Eli Lilly and Company Bonus Plan
(as amended effective January 1, 2014)

- 1 -

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

SECTION 1. PURPOSE

The purpose of The Eli Lilly and Company Bonus Plan is to encourage and promote
eligible employees to create and deliver innovative pharmaceutical-based health
care solutions that enable people to live longer, healthier and more active
lives, to outgrow our competitors through a constant stream of pharmaceutical
innovation, and to materially increase shareholder value. The Plan is designed
to accomplish the following key objectives:

a.
motivate superior employee performance through the implementation of a
performance-based bonus system for all eligible management employees, United
States employees (including those in Puerto Rico) and other employees as may be
designated from time to time;

b.
create a direct relationship between key company measurements and individual
bonus payouts; and

c.
enable the Company to attract and retain employees that will be instrumental in
driving sustained growth and performance of Eli Lilly and Company by providing a
competitive bonus program that rewards outstanding performance consistent with
the Company’s mission, values and increased shareholder value.

SECTION 2. DEFINITIONS

The following words and phrases as used in this Plan will have the following
meanings unless a different meaning is clearly required by the context.
Masculine pronouns will refer both to males and to females:

2.1
Applicable Year means the calendar year immediately preceding the year in which
payment of the Company Bonus is payable pursuant to Section 6. For example, the
Applicable Year for 2015 payout is January 1, 2014 through December 31, 2014.

2.2
Bonus Target means the percentage of Participant Earnings for each Participant
as described in Section 5.6(a) below.

2.3
Code means the Internal Revenue Code of 1986, as amended from time to time.

2.4
Committee means (i) with respect to the Executive Officers of Lilly, the
Compensation Committee, the members of which will be selected by the Board of
Directors of Lilly, from among its members; and (ii) with respect to all other
Eligible Employees, the Compensation Committee of the Board of Directors or its
designee.

2.5
Company means Eli Lilly and Company and its subsidiaries.

- 2 -

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

2.6
Company Bonus means the amount of bonus compensation payable to a Participant as
described in Section 5 below. Notwithstanding the foregoing, however, the
Committee may determine, in its sole discretion, to reduce the amount of a
Participant’s Company Bonus if such Participant becomes eligible to participate
in such other bonus program of the Company as may be specifically designated by
the Committee. Such reduction may be by a stated percentage up to and including
100% of the Company Bonus.

2.7
Company Performance Bonus Multiple means the amount as calculated in Sections
5.3 and 5.4 below.

2.8
Disabled means a Participant who (i) has become eligible for a payment under The
Lilly Extended Disability Plan, assuming eligibility to participate in that
plan, or (ii) for those employees ineligible to participate in The Lilly
Extended Disability Plan, has become otherwise “disabled” under the applicable
disability benefit plan or program for the Participant, or, in the event that
there is no such disability benefit plan or program, has become disabled under
applicable local law.

2.9
Earnings Per Share (EPS) means the diluted earnings per share of the Company as
reported in the Company’s “Consolidated Statements of Income” in accordance with
generally accepted accounting principles and Section 3.4 below.

2.10
Earnings Per Share Change (EPS Change) means the percentage increase or decrease
in EPS in the Applicable Year compared to the prior year.

2.11
Effective Date means January 1, 2004, as amended from time to time.

2.12
Eligible Employee means:

a.
with respect to employees of Lilly, Lilly USA, LLC., ImClone Systems LLC or
Lilly’s subsidiaries with operations in Puerto Rico, a person (1) who is
employed as an employee by the Company on a scheduled basis of twenty (20) or
more hours per week and is scheduled to work at least five (5) months per year;
and (2) who is receiving compensation, including temporary illness pay under
Lilly’s Illness Pay Program or similar short-term disability program, from the
Company for services rendered as an employee. Notwithstanding anything herein to
the contrary, the term “Eligible Employee” will not include:

(1)
a person who has reached Retirement with the Company;

(2)
a person who is Disabled;

(3)
a person who is a “leased employee” within the meaning of Section 414(n) of the
Internal Revenue Code of 1986, as amended, or whose basic compensation for
services on behalf of the Company is not paid directly by the Company;

- 3 -

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

(4)
a person who is classified as a “Fixed Duration Employee”, as that term is used
by Lilly, except as otherwise designated by the Committee;

(5)
a person who is classified as a special status employee because his employment
status is temporary, seasonal, or otherwise inconsistent with regular employment
status;

(6)
a person who is eligible to participate in the Eli Lilly and Company Prem1er
Rewards Plan, a bonus or incentive plan for eligible employees of Elanco Animal
Health or such other Company bonus or incentive program as may be specifically
designated by the Committee or its designee; or

(7)
a person who submits to the Committee in writing a request that he not be
considered eligible for participation in the Plan or is a member of the Board of
Directors of Lilly unless he or she is also an Eligible Employee.

(8)
any other category of employees designated by the Committee in its discretion
with respect to any Applicable Year.

b.
with respect to those employees who are employed by the Company, but not by
Lilly, Lilly USA, LLC., or a Puerto Rican subsidiary, an employee of the Company
designated by the Committee as a Participant in the Plan with respect to any
Applicable Year. In its discretion, the Committee may designate Participants
either on an individual basis or by determining that all employees in specified
job categories, classifications, levels, subsidiaries or other appropriate
classification will be Participants.

c.
Notwithstanding anything herein to the contrary, the term Eligible Employee will
not include any person who is not so recorded on the payroll records of the
Company, including any such person who is subsequently reclassified by a court
of law or regulatory body as a common law employee of the Company. Consistent
with the foregoing, and for purposes of clarification only, the term employee or
Eligible Employee does not include any individual who performs services for the
Company as an independent contractor or under any other non-employee
classification.

2.13
Executive Officer Incentive Plan means The Eli Lilly and Company Executive
Officer Incentive Plan, as approved by the Board of Directors of Lilly,
effective January 1, 2011. The Executive Officer Incentive Plan has been
established to comply with the provisions of Section 162(m) of the Internal
Revenue Code; provided, however, participation in such plan is not limited to
"covered employees" within the meaning of Code Section 162(m)(3).

2.14
Lilly means Eli Lilly and Company.

2.15
Lilly Executive Officer or Section 162(m) Participant means a Participant who
has been designated by the Board of Directors of Lilly as an executive officer
pursuant to

- 4 -

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

Rule 3b‑7 under the Securities Exchange Act of 1934, as amended, and who either
has remained in an executive officer position through the end of the Applicable
Year or is otherwise a participant in the Executive Officer Incentive Plan on
the last day of the Applicable Year. For purposes of this Plan, a Lilly
Executive Officer will be considered a Section 162(m) Participant whether or not
he is a "covered employee" under Section 162(m).

2.16
Participant means an Eligible Employee who is participating in the Plan.

2.17
Participant Earnings means (A) those amounts described below that are earned
during the portion of the Applicable Year during which the employee is a
Participant in the Plan:

(i)
regular compensation (including applicable deferred compensation amounts),
overtime, shift premiums and other forms of additional compensation determined
by and paid currently pursuant to an established formula or procedure;

(ii)
salary reduction contributions to The Lilly Employee 401(k) Plan or elective
contributions under any similar tax-qualified plan that is intended to meet the
requirements of Section 401(k) of the Internal Revenue Code or similar Company
savings program;

(iii)
elective contributions to any cafeteria plan that is intended to meet the
requirements of Section 125 of the Internal Revenue Code or other pre-tax
contributions to a similar Company benefit plan;

(iv)
payments made under the terms of Lilly’s Illness Pay Program or other similar
Company or government-required leave program during an Applicable Year to a
Participant who is on approved leave of absence and is receiving one hundred
percent (100%) of his base pay; and

(v)
other legally-mandated or otherwise required pre-tax deductions from a
Participant’s base salary.

(B)
The term "Participant Earnings" does not include:

(i)
compensation paid in lieu of earned vacation;

(ii)
amounts contributed to the Retirement Plan or any other qualified plan, except
as provided in clause (A)(ii), above;

(iii)
payments made under the terms of Lilly’s Illness Pay Program or other similar
Company or government-required leave program during an Applicable Year to a
Participant who is on approved leave of absence and is receiving less than the
full amount of his base pay;

(iv)
amounts paid under this Plan or other bonus or incentive program of the Company;

(v)
payments made under The Lilly Severance Pay Plan, The Severance Pay Plan for Eli
Lilly Affiliate Employees in Puerto

- 5 -

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

Rico or any other severance-type benefit (whether company-sponsored or mandated
by law) arising out of or relating to a Participant’s termination of employment;
(vi)
payments based upon the discretion of the Company;

(vii)
in the case of a person employed by a Lilly subsidiary, foreign service, cost of
living, or other allowances that would not be paid were the person employed by
Lilly;

(viii)
amounts paid as commissions, sales bonuses, or Market Premiums (as defined under
the Retirement Plan); or

(ix)
earnings with respect to the exercise of stock options, vesting of restricted
stock units or vesting of restricted stock.

2.18
Performance Benchmarks mean the amounts as calculated in Section 5.3 below. The
Performance Benchmarks will be established based on Lilly’s internal business
plan as reviewed and approved by the Board of Directors of the Company and based
on performance measures as described in Section 5.2.

2.19
Pipeline Metrics mean the measurements of the Company’s research and development
pipeline established and approved by the Compensation Committee in consultation
with the Science and Technology Committee of the Board of Directors of Lilly to
be used for purposes of bonus calculations as described below. Such measures may
include, but are not limited to, the number and type of product approvals within
an Applicable Year, the number of new molecular entities that enter Phase III
clinical trials during an Applicable Year, the assessed progress of the
Company’s portfolio against predicted outcomes (i.e., delivery reliability) and
the assessed quality of the pipeline products, as determined by the Company.

2.20
Plan means The Eli Lilly and Company Bonus Plan as set forth herein and as
hereafter modified or amended from time to time. The Plan is an incentive
compensation program and is not subject to the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), pursuant to Department of Labor
Regulation Section 2510.3.

2.21
Plant Closing means the closing of a plant site or other Company location that
directly results in termination of employment.

2.22
Reduction in Workforce means the elimination of a work group, functional or
business unit or other broadly applicable reduction in job positions that
directly results in termination of employment.

2.23
Retirement means the cessation of employment upon the attainment of age
fifty-five with at least ten years of service (55 and 10), age sixty-five with
at least five years of service (65 and 5) or at least eighty (80) points, as
determined by the provisions of the Retirement Plan as amended from time to
time, assuming eligibility to participate in that plan. For persons who are not
participants in the Retirement Plan, Retirement means the cessation of
employment as a retired employee under the applicable retirement benefit plan or
program as provided by the Company or applicable law.

- 6 -

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

2.24
Retirement Plan means The Lilly Retirement Plan.

2.25
Revenue means, for any Applicable Year, the consolidated net revenue of the
Company as set forth in the “Statements of Operations” as reported by the
Company in accordance with generally accepted accounting principles and Section
3.4 below.

2.26
Revenue Change means the percentage increase or decrease in Revenue in the
Applicable Year compared to the prior year.

2.27
Service means the aggregate time of employment of an Eligible Employee by the
Company.

SECTION 3. ADMINISTRATION

3.1
Committee. The Plan will be administered by the Compensation Committee of the
Board of Directors of Eli Lilly and Company or, if the name of the Compensation
Committee is changed, the Plan will be administered by such successor committee.
For all Eligible Employees other than Lilly Executive Officers, the Compensation
Committee may delegate all or a portion of its responsibilities within its sole
discretion by resolution. Any reference in this Plan to the Committee or its
authority will be deemed to include such designees (other than with respect to
Lilly Executive Officers or a member of the Board of Directors or for purposes
of Section 9).

3.2
Powers of the Committee. The Committee will have the full power and authority in
its discretion to

a.
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;

b.
adopt, amend and rescind rules consistent with the Plan;

c.
make exceptions in particular cases to the rules of eligibility for
participation in the Plan (except with respect to Lilly Executive Officers);

d.
determine whether, to what extent, and under what circumstances payments made or
to be made should be recovered or forfeited under the Company’s Executive
Compensation Recovery Policy as in effect from time to time; and

e.
delegate authority for administration of the Plan with respect to any Eligible
Employee except for Lilly Executive Officers or a member of the Board of
Directors. The Committee will take all necessary action to establish annual
Performance Benchmarks and approve the timing of payments, as necessary.

- 7 -

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

3.3
Certification of Results. Before any amount is paid under the Plan, the
Committee will certify in writing the calculation of EPS, EPS Change, Revenue,
Revenue Change and Pipeline Metrics (or other applicable performance measures)
for the Applicable Year and the satisfaction of all other material terms of the
calculation of the Company Performance Bonus Multiple and Company Bonus.

3.4
Adjustments for Significant Events. Not later than 90 days after the beginning
of an Applicable Year, the Committee may specify with respect to Company Bonuses
for the Applicable Year that the performance measures described in Section 5.2
will be determined before the effects of acquisitions, divestitures,
restructurings or special charges or gains, changes in corporate capitalization,
accounting changes, and/or events that are treated as extraordinary items for
accounting purposes.

3.5
Finality of Committee Determinations. Any determination by the Committee of
Revenue, Revenue Change, EPS, EPS Change, Pipeline Metrics, any other
performance measure, Performance Benchmarks and the level and entitlement to
Company Bonus, and any interpretation, rule, or decision adopted by the
Committee under the Plan or in carrying out or administering the Plan, will be
final and binding for all purposes and upon all interested persons, their heirs,
and personal representatives. The Committee may rely conclusively on
determinations made by Lilly and its auditors to determine Revenue, Revenue
Change, EPS, EPS Change and related information for administration of the Plan,
whether such information is determined by the Company, auditors or a third-party
vendor engaged specifically to provide such information to the Company. This
subsection is not intended to limit the Committee’s power, to the extent it
deems proper in its discretion, to take any action permitted under the Plan.

SECTION 4. PARTICIPATION IN THE PLAN

4.1
General Rule. Only Eligible Employees may participate in and receive payments
under the Plan.

4.2
Commencement of Participation. An Eligible Employee will become a Participant in
the Plan as follows: (i) in the case of Eligible Employees under Section
2.12(a), on the date on which the individual completes at least one hour of
employment as an Eligible Employee within the United States or Puerto Rico, and
(ii) in the case of Eligible Employees under Section 2.12(b), the later of the
date on which the individual completes at least one hour of employment as an
Eligible Employee or the date as of which the Committee has designated the
individual to become a Participant in the Plan.

4.3
Termination of Participation. An Eligible Employee will cease to be a
Participant upon termination of employment with the Company for any reason, or
at the time he otherwise ceases to be an Eligible Employee under the Plan;
provided, however, a terminated Participant shall be eligible for a Company
Bonus to the extent provided in Section 5.9.

- 8 -

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

SECTION 5. DEFINITION AND COMPUTATION OF COMPANY BONUS

5.1
Computation for Eligible Employees. Company Bonus amounts will depend
significantly on Company performance as well as whether Participants met their
job expectations for certain Eligible Employees. As more specifically described
below, a Participant’s Company Bonus is calculated by multiplying the
Participant’s Bonus Target by his Participant Earnings and the Company
Performance Bonus Multiple. For eligible management and Lilly employees and
those Participants designated by the Committee, whether an individual met their
job expectations will also impact the Company Bonus calculation, as described in
Section 5.6(c) below. Company Bonuses are paid out to eligible Participants in
the manner provided below.

5.2
Establishment of Performance Measures. Not later than 90 days after the
beginning of each Applicable Year, the Committee will, in its sole discretion,
determine appropriate performance measures for use in calculating Company Bonus
amounts. These performance measures may include, but are not limited to, Revenue
Change, EPS Change, growth in net income, return on assets, return on equity,
Pipeline Metrics, total shareholder return, EVA, MVA or any of the foregoing
before the effect of acquisitions, divestitures, accounting changes,
restructurings and special charges or gains. Unless otherwise specified pursuant
to a written resolution adopted by the Committee for the Applicable Year, the
Committee will use as performance measures EPS Change, Revenue Change and
Pipeline Metrics, in each case before the effect of acquisitions, divestitures,
accounting changes, restructurings and special charges or gains (determined as
described above) as performance measures.

5.3
Establishment of Performance Benchmarks. Not later than 90 days after the
beginning of each Applicable Year, the Committee will establish Performance
Benchmarks for the Company based on the performance measures described in
Section 5.2 above. Unless otherwise specified pursuant to a written resolution
adopted by the Committee for the Applicable Year, the Performance Benchmarks
will correspond with EPS Change and Revenue Change amounts for the Applicable
Year, established with reference to Lilly’s internal business plan as reviewed
and approved by the Board of Directors of the Company, and Pipeline Metrics as
approved by the Committee in consultation with the Science and Technology
Committee. The Performance Benchmarks will correspond to EPS Change, Revenue
Change and Pipeline Metric multiples equal to 1.0. The Committee will also adopt
a formula that will determine the extent to which the performance measure
multiples will vary as the Company’s actual results relative to the internal
plan approved by the Board of Directors of the Company vary from the Performance
Benchmarks. Notwithstanding the foregoing, each performance measure multiple
established above will be no less than 0.0 or greater than 2.0 in any Applicable
Year, regardless of the Company’s actual results.

5.4
Company Performance Bonus Multiple. Unless otherwise specified pursuant to a
written resolution adopted by the Committee not later than 90 days after the
beginning of the Applicable Year, the Company Performance Bonus Multiple is
equal to the product of the EPS Change multiple and 0.50 plus the product of the
Revenue Change multiple and 0.25

- 9 -

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

plus the product of the Pipeline Metrics multiple and 0.25 (i.e., Company
Performance Bonus Multiple = (EPS Change multiple * 0.50) + (Revenue Change
multiple * 0.25) + (Pipeline Metrics multiple * 0.25)).

5.5
Company Performance Bonus Multiple Threshold and Ceiling; Committee’s Downward
Discretion. Notwithstanding Sections 5.3 and 5.4, the Company Performance Bonus
Multiple will not be less than 0.25 or greater than 2.0 in an Applicable Year.
If the calculations described in Sections 5.3 and 5.4 above result in a number
that is less than 0.25, the Company Performance Bonus Multiple will equal 0.25
for the Applicable Year. Notwithstanding the foregoing Sections 5.3, 5.4, and
5.5, at any time prior to certification as described in Section 3.3, the
Committee in its discretion may

a.
reduce the Company Performance Bonus Multiple (including but not limited to a
reduction below 0.25) for some or all Eligible Employees, or

b.
increase one or more Performance Benchmarks.

5.6
Participant Company Bonus.

a.
Bonus Target. Not later than 90 days after the beginning of the Applicable Year,
the Bonus Target for each Participant, whether such Participant is designated on
an individual basis or by specified job categories, classifications, levels,
subsidiaries or other appropriate classification, will be determined by the
Committee on a basis that takes into consideration a Participant's pay grade
level and job responsibilities. The Bonus Target for each Participant for the
Applicable Year will be expressed as a percentage of Participant Earnings as of
December 31 of the Applicable Year. No later than early in the Applicable Year,
each Participant will receive information regarding the Participant’s Bonus
Target. In the event that a Participant’s pay grade level changes during the
Applicable Year (e.g., because of promotion, demotion or otherwise), the
Participant’s Bonus Target will be prorated based on the Bonus Target applicable
to each pay grade level (with related job responsibilities) and the percentage
of time that the Participant is employed at each pay grade level during the
Applicable Year.

b.
Company Bonus Calculation. Except as described in Section 5.6(c) below, a
Participant’s Company Bonus will equal the product of the Company Performance
Bonus Multiple and the Participant’s Bonus Target and the Participant’s
Earnings.

c.
Adjustment for Individual Performance Multiplier, if Applicable.

Notwithstanding anything herein to the contrary, all eligible management
employees (except Lilly Executive Officers), United States employees and other
employees as may be designated from time to time by the Committee are subject to
individual performance multipliers. For all such Participants subject to an
individual performance multiplier, the amount calculated in Section 5.6(b) above
will be adjusted based on whether the Participant met job expectationsas
determined by the Company at the end of the Applicable Year. If a Participant
does not meet such job

- 10 -

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

expectations, the Participant will receive an individual performance multiplier
equal to either 0.0 or 0.5, as determined by the Company. In that event, the
individual performance multiplier will be multiplied by the amount described in
Section 5.6(b) above to calculate the Participant’s Company Bonus. If a
Participant meets job expectations, the Participant’s Company Bonus will equal
the amount calculated in Section 5.6(b) above. In addition, if a Participant
meets job expectations, the Company may increase the Participant’s Company Bonus
by an additional amount based on its determination of the Participant’s
individual performance and related factors. Not later than 90 days after the
beginning of the Applicable Year, the Committee will determine applicable
multipliers for meeting job expectations or ranges for the applicable rating
system in effect for the Participant. For each such Participant, such rating
will be determined by the Participant’s supervision.

In the event that a Participant does not receive a year-end performance rating,
but is otherwise eligible for a Company Bonus, the amount calculated in Section
5.6(b) will be multiplied by 1.0 so that the Participant’s actual Company Bonus
will be the amount calculated in Section 5.6(b) above.

5.7
Conditions on Company Bonus. Payment of any Company Bonus is neither guaranteed
nor automatic. A Participant’s Company Bonus is not considered to be any form of
compensation, wages, or benefits, unless and until paid.

5.8
Special Limitations and Conditions Applicable to Lilly Executive Officers. Any
Company Bonus to a Lilly Executive Officer shall be subject to the terms of the
Executive Officer Incentive Plan. As a result, no Company Bonus shall be paid to
a Lilly Executive Officer, unless the Executive Incentive Bonus Plan is approved
by Lilly shareholders at their annual meeting in April, 2011, in accordance with
the applicable provisions of Code Section 162(m), and the amount of any Company
Bonus to a Lilly Executive Officer for an Applicable Year shall under no
circumstances exceed the amount payable for such Applicable Year pursuant to the
Executive Officer Incentive Plan.

5.9
Required Employment. Except as provided below in this Section 5.9, required by
applicable law or as otherwise designated by the Committee, if a Participant is
not employed by the Company on the last day of the Applicable Year, or is
otherwise not an Eligible Employee on that date, the Participant is not entitled
to any Company Bonus payment under this Plan for that Applicable Year.

a.
Leaves of Absence. A Participant who, on the last day of the Applicable Year, is
on approved leave of absence under the Family and Medical Leave Act of 1993,
military leave under the Uniformed Services Employment and Reemployment Rights
Act, or such other approved leave of absence will be considered to be an
Eligible Employee on that date for purposes of this Plan.

b.
Transfer. An employee who is a Participant in this Plan for a portion of the
Applicable Year and then transfers to a position within the Company in which he
is ineligible to participate in this Plan, but who remains employed by the

- 11 -

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

Company on the last day of the Applicable Year, will be treated as satisfying
the last-day-of-Applicable Year requirement for purposes of this Plan. In that
event, his Company Bonus will be based on his Participant Earnings for the
portion of the Applicable Year in which the employee was a Participant in the
Plan.

c.
Retirement, Disability or Death. Except as described below, a Participant who
was an Eligible Employee for some portion of the Applicable Year and then takes
Retirement, becomes and remains Disabled through the end of the Applicable Year,
or dies during the Applicable Year will be considered to satisfy the
last-day-of-Applicable-Year requirement described in this Section 5.9 for
purposes of this Plan. Notwithstanding the foregoing, an Eligible Employee in
the United States who has not received a year-end performance rating and (1) is
on employment probation (or its equivalent outside the United States) and takes
Retirement in lieu of a termination of employment; or (2) takes Retirement in
lieu of termination of employment because of an immediately terminable offense
(e.g. absence of three days without notice, insubordination, violation of drug
policy, possession of firearms, misconduct) will not be considered to satisfy
the last day of Applicable Year requirement.

d.
Reallocation, Medical Reassignment, Plant Closing or Reduction in Workforce. A
Participant who was an Eligible Employee for some portion of the Applicable Year
and whose employment is terminated as a result of his failure to locate a
position following his reallocation or medical reassignment in the United
States, or a Plant Closing or Reduction in Workforce will be considered to
satisfy the last-day-of-Applicable Year requirement described in this Section
5.9 for purposes of this Plan. The Committee or its designee’s determination
regarding whether a Participant’s termination is a direct result of either a
Plant Closing or a Reduction in Workforce will be final and binding.

e.
Expiration of Contract: A Participant who was an Eligible Employee for some
portion of the Applicable Year and is subject to an agreement that describes a
specific end date of employment and whose employment ends as a direct result of
the expiration (not termination) of the agreement prior to the end of the
Applicable Year will be considered to satisfy the last-day-of-Applicable Year
requirement described in this Section 5.9 for purposes of this Plan. The
Committee or its designee’s determination regarding whether a Participant’s end
of employment is a direct result of the expiration of the individual’s agreement
will be final and binding.

f.
Notice of Resignation. In addition, a Participant who submits a notice of
resignation from employment with the Company prior to the end of the Applicable
Year and whose effective date of resignation is two (2) weeks or less from the
date of notice of resignation (or as otherwise required by law) will be
considered employed by the Company for purposes of this Plan until the end of
his specified notice period.

- 12 -

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

5.10
New Participants. If an Eligible Employee began participation in the Plan during
an Applicable Year and is eligible for a Company Bonus, his Company Bonus will
be based on Participant Earnings earned after the employee became a Participant.

SECTION 6. TIME OF PAYMENT

6.1
General Rule. Payment under the Plan will be made in the year following the
Applicable Year on or prior to March 15 of such year.

6.2
Terminated Employee. Except as provided in Section 5.9 above, in the event an
Eligible Employee’s employment with the Company ends for any reason prior to the
last day of the Applicable Year, he will not receive any Company Bonus for the
Applicable Year.

6.3
Deceased Eligible Employee. In the event an Eligible Employee dies before
payment under the Plan is made, the Committee may, in its sole discretion,
authorize the Company to pay to his personal representative or beneficiary an
amount not to exceed the amount established by the Committee to reflect the
payment accrued at the date of death. Any such payment would be paid consistent
with the timing requirements described in subsection 6.1 above.

SECTION 7. ADMINISTRATIVE GUIDELINES

7.1
Establishment and Amendment by the Committee. The Committee may establish
objective and nondiscriminatory written guidelines for administering those
provisions of the Plan that expressly provide for the determination of
eligibility, Company Bonus or benefits on the basis of rules established by the
Committee. The Committee may, from time to time, amend or supplement the
administrative guidelines established in accordance with this subsection 7.1.
The administrative guidelines established or amended in accordance with this
subsection 7.1 will not be effective to the extent that they materially increase
the Plan's liability, or to the extent that they are inconsistent with, or
purport to amend, any provision of the Plan set forth in a document other than
such administrative guidelines.

7.2.
Amendment by Board of Directors. Any administrative guidelines established by
the Committee pursuant to subsection 7.1 may be amended or revoked by the Board
of Directors, either prospectively or retroactively, in accordance with the
general amendment procedures set forth in section 9 below.

SECTION 8. MISCELLANEOUS

8.1
No Vested Right. No employee, participant, beneficiary, or other individual will
have a vested right to a Company Bonus or any part thereof until payment is made
to him under Section 6.

- 13 -

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

8.2
No Employment Rights. No provision of the Plan or any action taken by the
Company, the Board of Directors of the Company, or the Committee will give any
person any right to be retained in the employ of the Company. The right and
power of the Company to dismiss or discharge any Participant for any reason or
no reason, with or without notice, is specifically reserved.

8.3
No Adjustments. After the certification of the calculation of EPS, EPS Change,
Revenue, Revenue Change, Pipeline Metrics and any other material terms of the
calculation of the Company Performance Bonus Multiple and Company Bonus for the
Applicable Year as described in Section 3.3 above, no adjustments will be made
to reflect any subsequent change in accounting, the effect of federal, state, or
municipal taxes later assessed or determined, or otherwise.

8.4
Executive Compensation Recovery Policy. Notwithstanding any other provision of
the Plan, including Section 8.3, all payments made or to be made pursuant to the
Plan are subject to the Company's Executive Compensation Recovery Policy, as in
effect from time to time. In addition, nothing herein shall limit the Company’s
power to take such action as it deems necessary to remedy any misconduct,
prevent its recurrence and, if appropriate, based on all relevant facts and
circumstances, punish the wrongdoer in a manner that it deems appropriate.

8.5
Other Representations. Nothing contained in this Plan, and no action taken
pursuant to its provisions, will create or be construed to create a trust of any
kind, or a fiduciary relationship between the Company and any employee,
participant, beneficiary, legal representative, or any other person. Although
Participants generally have no right to any payment from this Plan, to the
extent that any Participant acquires a right to receive payments from the
Company under the Plan, such right will be no greater than the right of an
unsecured general creditor of the Company. All payments to be made hereunder
will be paid from the general funds of the Company and no special or separate
fund will be established, and no segregation of assets will be made, to assure
payment of such amount.

8.6
Tax Withholding. The Company will make such provisions and take such steps as it
may deem necessary or appropriate for the withholding of all federal, state,
local, and other taxes required by law to be withheld with respect to Company
Bonus payments under the Plan, including, but not limited to, deducting the
amount required to be withheld from the amount of cash otherwise payable under
the Plan, or from salary or any other amount then or thereafter payable to an
employee, Participant, beneficiary, or legal representative.

8.7
Currency. The Company Bonus will be based on the currency in which the highest
portion of base pay is regularly paid. The Committee will determine the
appropriate foreign exchange conversion methodology in its discretion.

- 14 -

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

8.8
Effect of Plan on other Company plans. Nothing contained in this Plan is
intended to amend, modify, terminate, or rescind other benefit or compensation
plans established or maintained by the Company. Whether and to what extent a
Participant’s Company Bonus is taken into account under any other plan will be
determined solely in accordance with the terms of such plan.

8.9
Construction. This Plan and all the rights thereunder will be governed by, and
construed in accordance with, the laws of the state of Indiana, without
reference to the principles of conflicts of law thereof.

8.10
Notice. Any notice to be given to the Company or Committee pursuant to the
provisions of the Plan will be in writing and directed to Secretary, Eli Lilly
and Company, Lilly Corporate Center, Indianapolis, IN 46285.

SECTION 9. AMENDMENT, SUSPENSION, OR TERMINATION

The Board of Directors of the Company will have the right to amend, modify,
suspend, revoke, or terminate the Plan, in whole or in part, at any time and
without notice, by written resolution of the Board of Directors. The Committee
also will have the right to amend the Plan, except that the Committee may not
amend this Section 9.

- 15 -