Exhibit 10.8
The Eli Lilly and Company Bonus Plan
(as amended January 1, 2009)
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.   encourage eligible employees to take
greater ownership of the company and provide “Answers that Matter” daily by
creating 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.

The Plan is intended to satisfy the requirements for providing
“performance-based” compensation under Section 162(m) of the Internal Revenue
Code.
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 2010 payout is January 1, 2009 through
December 31, 2009.   2.2   Bonus Target means the percentage of Participant
Earnings for each Participant as described in Section 5.6(a) below.   2.3  
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. Each member of the Compensation Committee will, to the extent deemed
necessary or appropriate by the

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    Board of Directors, satisfy the requirements of an “outside director” within
the meaning of Section 162(m) of the Internal Revenue Code.   2.4   Company
means Eli Lilly and Company and its subsidiaries.   2.5   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.   2.6   Company Performance Bonus Multiple means the amount as
calculated in Sections 5.3 and 5.4 below.   2.7   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.   2.8  
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.   2.9   Earnings
Per Share Growth (EPS Growth) means the percentage increase in EPS in the
Applicable Year compared to the prior year.   2.10   Effective Date means
January 1, 2004, as amended from time to time.   2.11   Eligible Employee means:

  a.   with respect to employees of Lilly, Lilly USA, LLC. or Lilly’s Puerto
Rican subsidiaries, 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

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      compensation for services on behalf of the Company is not paid directly by
the Company;     (4)   a person who is classified as a “Fixed Duration
Employee”, as that term is used by Lilly;     (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 Premier
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.

2.12   Lilly means Eli Lilly and Company.   2.13   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 Rule 3b-7 under
the Securities Exchange Act of 1934, as amended. 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).   2.14   Participant
means an Eligible Employee who is participating in the Plan.

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2.15   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 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 or vesting of restricted stock.

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2.16   Performance Benchmarks mean the amounts as calculated in Section 5.3
below. The Performance Benchmarks will be established after considering expected
pharmaceutical peer group performance and based on performance measures as
described in Section 5.2.   2.17   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.   2.18   Plant Closing means the
closing of a plant site or other Company location that directly results in
termination of employment.   2.19   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.  
2.20   Retirement means the cessation of employment upon the attainment of age
fifty-five with ten years of service (55 and 10), age sixty-five with 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.   2.21   Retirement Plan means The Lilly
Retirement Plan.   2.22   Sales means, for any Applicable Year, the consolidated
net sales of the Company as set forth in the “Consolidated Statements of Income”
as reported by the Company in accordance with generally accepted accounting
principles and Section 3.4 below.   2.23   Sales Growth means the percentage
increase in Sales in the Applicable Year compared to the prior year.   2.24  
Section 162(m) means Section 162(m) of the Internal Revenue Code of 1986, as
amended.   2.25   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).

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3.2   Powers of the Committee. The Committee will have the right 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. The Committee will have authority to adopt, amend and
rescind rules consistent with the Plan, to make exceptions in particular cases
to the rules of eligibility for participation in the Plan (except with respect
to Lilly Executive Officers), and to delegate authority for approval of
participation of 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.   3.3   Certification of Results. Before any amount is paid under
the Plan, the Committee will certify in writing the calculation of EPS, EPS
Growth, Sales and Sales Growth (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; provided that such adjustments shall be made only to the
extent permitted by Section 162(m) in the case of Lilly Executive Officers.  
3.5   Finality of Committee Determinations. Any determination by the Committee
of Sales, Sales Growth, EPS, EPS Growth, 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 Sales, Sales Growth, EPS, EPS Growth 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 2.11(a), on the date

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    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 2.11(b), on 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.

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 Participants’ individual
performance 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, individual performance 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 Sales Growth, EPS
Growth, growth in net income, return on assets, return on equity, total
shareholder return, EVA, MVA or any of the foregoing before the effect of
acquisitions, divestitures, accounting changes, restructurings and special
charges or gains (determined according to objective criteria established by the
Committee not later than ninety (90) days after the beginning of the Applicable
Year). Unless otherwise specified in a written resolution adopted by the
Committee for the Applicable Year, the Committee will use EPS Growth and Sales
Growth, 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
in a written resolution adopted by the Committee for the Applicable Year, the
Performance Benchmarks will correspond with EPS Growth and Sales Growth amounts
for the Applicable Year, established after considering expected pharmaceutical
peer group performance. The Performance Benchmarks will correspond to EPS Growth
and Sales Growth 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 vary from the Performance Benchmarks.   5.4
  Company Performance Bonus Multiple. Unless otherwise specified in a written
resolution adopted by the Committee not later than 90 days after the beginning
of the

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    Applicable Year, the Company Performance Bonus Multiple is equal to the
product of the EPS Growth multiple and 0.75 plus the product of the Sales Growth
multiple and 0.25 (i.e., Company Performance Bonus Multiple = (EPS Growth
multiple * 0.75) + (Sales Growth multiple * 0.25)).   5.5   Company Performance
Bonus Multiple Threshold and Ceiling: 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. If the calculations described
in Sections 5.3 and 5.4 above result in a multiple greater than 2.0, the Company
Performance Bonus Multiple will equal 2.0 for the Applicable Year.
Notwithstanding the foregoing, the Committee may reduce the Company Performance
Bonus Multiple (including but not limited to a reduction to below 0.25) for some
or all Eligible Employees, in its discretion.   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 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 the Participant’s performance rating at the end of the
Applicable Year as described below. Not later than 90 days after the beginning
of the Applicable Year, the Committee will determine applicable performance
multipliers for the applicable performance rating system in effect for the
Participant. For each such Participant, the performance rating will be
determined by the Participant’s supervision.

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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  
Required Employment. Except as provided below in this Section 5.8 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.     a.   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 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.     b.   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 5.8 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) for unsatisfactory performance 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 substance abuse policy,
possession of firearms, misconduct) will not be considered to satisfy the last
day of Applicable Year requirement.     c.   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

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      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 5.8 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.     d.   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 will be considered
employed by the Company for purposes of this Plan until the end of his specified
notice period.

5.9   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. An Eligible Employee who became assigned to a position eligible for
a Company Bonus at any time other than the first of the month will become a
Participant the first of the following month.   5.10   Section 162(m)
Requirements, Bonus Maximum. In the case of Lilly Executive Officers, all
determinations necessary for computing a Company Bonus for the Applicable Year,
including establishment of all components of EPS, EPS Growth, Sales, Sales
Growth, Company Performance Bonus Multiple and Bonus Target percentages, shall
be made by the Committee not later than 90 days after the commencement of the
Applicable Year. As and to the extent required by Section 162(m), the terms of a
Company Bonus for a Lilly Executive Officer must state, in terms of an objective
formula or standard, the method of computing the amount of compensation payable
to the Lilly Executive Officer, and must preclude discretion to increase the
amount of compensation payable that would otherwise be due under the terms of
the award. Notwithstanding anything elsewhere in the Plan to the contrary, the
maximum amount of the Company Bonus that may be payable to a Lilly Executive
Officer in respect of any Applicable Year will be $7 million.

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 5.8 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

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    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.   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 Growth, Sales, Sales Growth 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.
Notwithstanding the foregoing, the Company reserves the right to and, in
appropriate cases, will, seek restitution of any Company Bonus awarded to a
Lilly Executive Officer if:

  a.   The amount of the Company Bonus was calculated based upon the achievement
of certain financial results that were subsequently the subject of a restatement
of all or a portion of the Company’s financial statements;

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  b.   The Lilly Executive Officer engaged in intentional misconduct that caused
or partially caused the need for such a restatement; and     c.   The amount of
the Company Bonus that would have been awarded to the Lilly Executive Officer
had the financial results been properly reported would have been lower than the
amount actually awarded.

    This subsection is not intended to limit the Company’s power to take such
action as it deems necessary to remedy the misconduct, prevent its recurrence
and, if appropriate, based on all relevant facts and circumstances, punish the
wrongdoer in a manner it deems appropriate.   8.4   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.   8.5  
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.   8.6   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.   8.7   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.   8.8   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.   8.9   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.

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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. Solely to the extent deemed necessary or advisable by the
Board (or the Committee) for purposes of complying with Section 162(m), the
Board (or the Committee) may seek the approval by the Company’s stockholders of
the Plan or any amendments to the Plan or any aspect of the Plan or Plan
amendments. Any such approval shall be obtained in a separate vote of
stockholders, with approval by a majority of the votes cast on the issue,
including abstentions to the extent abstentions are counted as voting under
applicable state law and the Articles of Incorporation and By-laws of the
Company. To the extent deemed necessary or advisable by the Board of Directors
to comply with Section 162(m), the material terms of the performance measures
used in calculating Company Bonus amounts will be disclosed to and reapproved by
the stockholders of the Company no later than the Company’s 2014 annual meeting.

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